VIDEO GAMBLING - The Bad Bet

"How Illinois Bet on Video Gambling and Lost" by Jason Grotto and Sandhya Kambhampati (ProPublica Illinois) and Dan Mihalopoulos (WBEZ), ProPublica 1/16/2019

Legalizing video poker and slots was supposed to generate billions of dollars for the state.  A decade later, that hasn’t happened.  Now, legislators want to double down on gambling.

This story is a collaboration between ProPublica Illinois and WBEZ Chicago, co-published with the Chicago Sun-Times.

WITH THE LAST STREAKS OF DAYLIGHT fading on a mild October evening, the cars pulled up in waves at Piero’s Italian Cuisine, an old-school Las Vegas hotspot known for its osso buco.

Cadillacs with tinted windows.  Taxis and rideshares.  A black Bentley limousine and a white minivan.  Men and women emerged, most casually dressed, there for the first of a series of posh, private events hosted by the video gambling industry during the 2018 Global Gaming Expo, North America’s largest gambling trade show.  They included gambling executives, lobbyists — and about a dozen Illinois lawmakers.

The politicians had flown to Las Vegas to learn about the latest developments in the gambling industry and to discuss its expansion in Illinois, including proposals that would, among other items, license six new casinos in the state, legalize sports betting and increase the wagering limit on video gambling machines.  The plans, lawmakers have said, would brighten the state’s gloomy financial picture without having to raise taxes or cut spending.

It wouldn’t be the first time Illinois has placed a big bet on gambling.  Nearly a decade ago, state lawmakers legalized video gambling.  Today, more than 30,000 video slot and poker machines operate outside casinos here, more than any other state in the country.

The machines, which legislators said would generate billions of dollars in revenue for the cash-strapped state, are spread out over 6,800 establishments, dotting highways and towns from Winnebago County in the north to Alexander County in the south.  Step outside the borders of Chicago, where video gambling remains illegal, and you will see feather flags, billboards and neon signs advertising video slots and poker in bars and restaurants, truck stops and storefront gambling parlors.

Illinois now has more locations to legally place a bet than Nevada.

But the meteoric rise of video gambling has proven to be little more than a botched money grab, according to a ProPublica Illinois investigation of a system that has gone virtually unchecked since its inception.  Based on dozens of interviews, a review of thousands of pages of state financial records and an analysis of six years of gambling data, this unprecedented examination found that far from helping to pull the state out of its financial tailspin, the legalization of video gambling instead accelerated it and saddled Illinois with new, unfunded regulatory and social costs.

Meanwhile, video gambling companies have exploited the deeply flawed legislation to reap hundreds of millions of dollars in profits, while the cities and towns that bear the brunt of the social costs related to gambling receive a fraction of those proceeds.

At every key point, state officials made decisions that undercut taxpayers and helped the companies that market video gambling.  Lawmakers accepted a far smaller share of the profits than what’s charged in other states, giving the companies a much larger piece.  They went forward with the program assuming the machines could be installed in Chicago — they couldn’t.  They ignored the inevitable regulatory and social costs.  And they did not anticipate the extent to which video gaming would cut into casino profits, which are taxed at a higher rate.  The net effect: People in Illinois gambled a lot more, but most of the additional money ended up in the coffers of the companies behind video gambling.

As states and cities across the country consider gambling expansions to stabilize wobbly finances, Illinois’ experience with video gambling stands as a cautionary tale, a lesson that has become even more urgent since the U.S. Supreme Court in May opened the door to the spread of legalized sports betting.

Illinois lawmakers from both parties passed the Video Gaming Act in 2009 with little debate and unrealistic revenue projections.  They did so during the depths of the worst financial crisis since the Great Depression, promising video gambling would help fund a $31 billion building program to create jobs and upgrade the state’s infrastructure.

Within months of the law’s passage, the state began borrowing hundreds of millions of dollars against the anticipated revenue.  Bond documents claimed video gambling machines would raise $300 million each year to help cover the debt payments.

It wasn’t until 2017, eight years after the legalization of video gambling, that the state came close to collecting that amount.  By then, video gambling had brought in less than $1 billion to pay the bond debt, $1.3 billion short of what lawmakers anticipated.

But the costs of video gambling had already exacted a heavy toll on the state.

As gambling moved outside casinos, tax revenue earmarked for state education funding dropped, resulting in a $70 million decline in education funding between 2013 and 2017.

The regulatory expenses for video gambling proved far higher than anticipated, forcing the state to divert $83 million from casino taxes to support the work of the Illinois Gaming Board, run by five part-time members.

In recent years, the gaming board has been plagued by accusations of questionable conduct, including bid-rigging and violations of the Open Meetings Act.  Current board officials said that their legal issues stem from conflicting and often vague statutes and that there was never an intent to violate the law.

Not surprisingly, problem gambling has become a major issue in the state, one that affects hundreds of thousands of people with little response from Springfield.  Numerous studies from around the world have found that access and density of gambling options drive addiction.  Yet Illinois is one of only two states with legalized video gambling — the other is West Virginia — that has never conducted research to measure the prevalence of gambling addiction.

Despite pledges to increase funding for addiction services to match the massive growth in gambling outlets, the state spends less today than it did before legalizing tens of thousands of algorithm-driven machines so adept at making people play faster and longer they have earned nicknames like “electronic morphine” and “the crack cocaine of gambling.”

More often than not, these machines are found in lower-income communities, according to a ProPublica Illinois analysis of demographic and gaming board data.  Devices can be found in Berwyn but not Oak Park, Waukegan but not Lake Forest, Harvey but not Palos Park.  In fact, as the average income level of a municipality decreases, the average number of machines increases.

The companies that own and operate the machines, called terminal operators, have reaped nearly $2 billion in revenue since video gambling went live in September 2012.  Recently, that largess has become concentrated in a handful of companies, with the top five terminal operators controlling nearly 50 percent of the video gambling market, according to internal gaming board reports.

The companies have made those profits in no small part because their trade group, the Illinois Gaming Machine Operators Association — which picked up the tab for the Las Vegas dinner — wrote the Video Gaming Act.  The group declined comment for this story.

The General Assembly passed the legislation without scrutinizing the details, including the low tax rate on the machines.  At 30 percent, with 25 percent going to the state and 5 percent to local governments, it’s much lower than most other states with video gambling.  In West Virginia and South Dakota, video gambling is taxed at 50 percent.  In Oregon, where the state owns and operates video gambling machines through the state lottery, the tax rate is 73 percent.  Pennsylvania, which recently legalized video gambling but hasn’t yet gone live, has set a tax rate of 52 percent.

Even casino gambling here is taxed at a higher rate, with a progressive formula that can reach as high as 50 percent.

State and local politicians have benefited from video gambling.  In 2010, the year after the Video Gaming Act passed, the industry’s lobbying arm contributed $131,205 to political campaigns, five times that of the previous election cycle.  The group’s donations now total more than $830,000 since 2009.  One company, Effingham-based terminal operator J&J Ventures, has contributed an additional $600,000 to state and local races, the most of any terminal operator, according to an analysis of state campaign contribution records.

Video gambling has been a boon for bars, restaurants, truck stops and some fraternal organizations as well, providing additional revenue that has undoubtedly helped proprietors and created or maintained service industry jobs.  But while some individual businesses have made money from video gambling, the municipalities that have welcomed it haven’t fared as well.

That’s because the Video Gaming Act allocates just 5 percent of the revenue from the machines to local governments, even though they shoulder the bulk of the social costs related to gambling.  Since 2012, the roughly 1,000 towns, cities and counties with video gambling have received $283 million in tax revenue, according to an analysis of gaming board data.

A ProPublica Illinois review of local financial records shows that even in towns saturated with video slot and poker machines, the devices in most cases accounted for roughly 1 percent to 3 percent of local revenue in 2017.

Rockford, for example, brought in nearly $1.6 million in tax revenue from the machines that year, more than any other local government.  That amounted to about 1.3 percent of the city’s $129 million in general revenue, according to financial data submitted to the comptroller’s office.

In 2013, 63 percent of the state’s population lived in communities that banned the industry, mirroring statewide polls that repeatedly showed a solid majority of residents were opposed to it.  By 2017, industry lobbying efforts and tight local finances had flipped the percentages so that 63 percent of the state’s population lived in communities with video gambling.

Despite all the broken promises of video gambling, some lawmakers are now pushing for another big bet on the industry, with some members of the General Assembly eyeing an expansion vote in the early days of Gov. J.B. Pritzker’s administration.  Many Chicago politicians also want to open the city to gambling; all the front-runners in the city’s Feb. 26 mayoral primary support some version of a casino, and some want to bring in video gambling as well.

That’s why the crowd gathered at Piero’s in October, enjoying dinner at the iconic, white tablecloth restaurant featured in the Martin Scorsese mobster film “Casino.”  Among them was the co-owner of the industry’s primary lobbying firm, which shepherded the Video Gaming Act through the legislature in 2009: Joseph Berrios, former chairman of the Cook County Democratic Party and the longtime county assessor until being voted out of office last year.

Berrios is an ally of House Speaker Michael Madigan, the lead sponsor of the Video Gaming Act in the House before ceding that role to Democratic Skokie Rep. Lou Lang.  Lang was a staunch gambling proponent before he resigned from the General Assembly this month.

As he stepped from the cab that October night, wearing a white guayabera, Berrios paused for a moment before entering the restaurant.

“We’re an industry running strong,” he said.  “After January, we’re going to be looking at a bunch of things to make us a lot stronger and a lot better.”

A Rushed New Law

On the afternoon of May 21, 2009, the crowd packing the gallery overlooking the ornate Illinois House chambers, with its gilded ceiling and crystal chandeliers, became so raucous that Rep. Art Turner, the Chicago Democrat presiding over the session, had to issue an admonishment.

“I’d like to ask if we could tone down the noise and also remind the guests in the gallery that we do not allow clapping and shouting,” he reprimanded the gambling supporters and labor leaders who had gathered to watch the final vote on a bill to generate revenue for a $31 billion spending plan, dubbed Illinois Jobs Now!

Less than 48 hours earlier, a five-page proposal tinkering with an obscure provision of estate tax law had morphed into the 280-page bill now before the House.  Included in the revenue-generating legislation was the Video Gaming Act, the largest gambling expansion in Illinois since the creation of the state lottery in 1974.  Lawmakers were counting on video gambling to generate nearly a third of the revenue for Illinois Jobs Now!

It was a critical period for the state and its politicians.

For more than a decade, Illinois’ fiscal issues had prevented the General Assembly from funding infrastructure projects.

The 2010 election loomed, and the state was reeling amid the worst economic downturn since the Great Depression.  Unemployment had reached double digits.  Homes were being foreclosed.  Public sentiment across the country had soured on incumbents, giving rise to the Tea Party movement and making politicians from both parties skittish.

Months earlier, Gov. Rod Blagojevich had been arrested on corruption charges and impeached, becoming the fourth governor since the 1970s — both Democrat and Republican — to be indicted.

Supporters of the gambling law told their colleagues it would help fund the $31 billion building program to create jobs while repairing roads, constructing schools and completing other infrastructure projects across the state.

Illinois Jobs Now! gave incumbents positive news to run on.

Introduced by Senate President John Cullerton, a Chicago Democrat, the bill represented a rare display of bipartisanship in Springfield, with Republican leaders signing onto the proposal as lawmakers heaped praise upon one another for working across party lines.

The bill passed both chambers by large margins.

Along with legalizing video gambling, the bill increased sales taxes on a host of products, including candy and liquor, while boosting fees for vehicle licenses and registrations.  Bond documents show that legislators projected $1 billion overall in annual revenue, with $300 million coming from video gambling.

The gambling industry had spent years lobbying to legalize video gaming, but opponents — a coalition made up largely of church leaders — had managed to block previous efforts.  This time, the lobbyist for anti-gambling forces only learned of the bill that day, leaving opponents just an hour before the measure was introduced.

The Illinois Gaming Board, the state agency tasked with regulating the new industry, didn’t receive much more notice.  It had learned about the legislation the week before — even though the law would increase the complexity of its work and exponentially expand the number of entities it oversees without providing any additional funding or staff to do it.

“We were not consulted prior to its passage, so we had no knowledge of what was in the bill,” said Aaron Jaffe, a former state legislator and Cook County Circuit Court judge who was then the board’s chairman.

Madigan declined a request for an interview for this article.  Cullerton could not be reached.  Tom Cross, the House minority leader when the Video Gaming Act passed, said he voted for it but is not a staunch supporter of video gambling.

“It’s not something that I think is good for the state,” he said.

Former Senate Minority Leader Christine Radogno, who was part of the leadership team that negotiated the Illinois Jobs Now! legislation, said lawmakers should have spent more time examining the video gambling industry.

“Certainly, in hindsight, it should have been studied more,” she said in an interview.  “My personal assessment is that it seems like a very lonely and unhealthy thing to be doing.  I have no doubt that it preys on problem gamblers and vulnerable people.”

Pat Quinn, who had become governor less than six months earlier, after Blagojevich’s impeachment, had previously denounced video gambling as “a bad bet.”

Running for re-election, Quinn reversed course and signed the bill into law on July 13, 2009.

In a recent interview, Quinn said the need to stimulate Illinois’ economy during a historic economic downturn trumped his reservations about video gambling.  He added that he insisted on an “opt-out” clause that would allow municipalities to block video gambling in their towns.

“I wasn’t particularly excited about video gambling,” he said.  “It’s very hard to get legislators to vote for funding.  I had to make a decision, and it was imperative to get people back to work.”

Unintended Consequences, Immediate Shortfalls

The speed and lack of planning that marked the legalization of video gambling created a cascading series of unintended consequences that continue to plague the state today.

The legislature assumed video gambling would be up and running within a year of the bill’s passage, to quickly begin generating revenue.  Instead, it took three years.

The liquor industry, which bristled at the tax increase for alcohol also contained in the bill, tied up the legislation in court, claiming the General Assembly had violated the state constitution by passing multiple substantive measures in a single bill.  Regulatory hurdles also contributed to delays.

And lawmakers had counted on tens of thousands of machines being installed in Chicago to meet their revenue projections.  But they somehow failed to take into account a century-old ordinance that banned gambling in the city without a referendum, which then-Mayor Richard M. Daley never embraced.

The General Assembly borrowed against the projected revenues anyway.  Within a year, Illinois had issued nearly $2.5 billion in general obligation bonds — loans backed by state revenues — before it had received a single penny from video gambling.

By the time video gambling machines were turned on and players could start betting, in September 2012, the state had borrowed more than $5 billion.  Debt payments reached about $340 million that year.  Yet video gambling brought in just $30 million to cover them.  The shortfalls meant the state had to draw from other sources.

With the budget already running massive operating deficits, the failure of video gambling to generate projected revenues exacerbated the state’s fiscal woes.  Credit rating agencies began downgrading Illinois’ debt.  That increased borrowing costs as pension payments and unpaid bills butchered the state’s balance sheet.

The state’s financial picture became so bleak it borrowed more than $1 billion between 2010 and 2013 to cover debt payments for capital projects that had been completed years earlier, spending future tax dollars to pay old bills — plus interest.

“The way the General Assembly constructed the capital program, by relying on video gambling revenue that failed to materialize, accelerated the state’s financial crisis,” said Laurence Msall, president of the nonpartisan Civic Federation, a government research organization.

Though lawmakers said money from video gambling and other new taxes and fees for Illinois Jobs Now! would fund $31 billion in building projects, those revenue streams have accounted for $10.5 billion in spending.

Video gambling revenue, plus other taxes and fees included in the law, was supposed to go into a special fund to pay down debt from Illinois Jobs Now! Legislators even passed a separate measure that required it.  But records from the state comptroller’s office show that through 2017, just over half of the $4.8 billion collected in the capital projects fund actually went to cover the debt for Illinois Jobs Now!

Legislators wrote other laws to divert more than $600 million to pay down debt for an earlier building program, Build Illinois, which itself was supposed to be covered by sales tax revenue.  An additional $1.5 billion went directly to the general fund, which is used to pay for the state’s day-to-day operations.

The legalization of video gambling also triggered another shift in the state’s revenues, one that led to a drop in education funding.  While the bulk of video gambling revenue goes to fund Illinois Jobs Now!, most of the state’s casino revenue flows into the Education Assistance Fund, which provides grants to public elementary and secondary schools, colleges and universities for building projects and other expenses.

But when video gambling became legal, gamblers no longer had to travel to the state’s 10 casinos to place a bet.  Between 2013 and 2017, state revenue from casinos in Illinois declined 15 percent, from $462 million to $393 million, as income from video gambling machines grew nearly 900 percent, from $30 million to $300 million, state records show.

The cannibalization of casino revenue contributed to a 22 percent decline in the amount of money going to the Education Assistance Fund between 2013 and 2017, leaving fewer dollars for the state’s struggling schools.

In fact, video gambling has caused the overall percentage of gambling industry profits going to the state to fall.  That’s because the state levies a progressive tax on casinos that can reach as high as 50 percent.  The more casinos make, the higher their tax rate.

Video gambling is taxed at a flat rate of 30 percent regardless of how much the industry makes.  As more gamblers turned to video slots and poker, the state’s cut of gambling profits dropped.

In 2007, when casino revenue peaked at $1.9 billion, the industry paid about $819 million in taxes, a rate of 42 percent.  By 2018, revenue from casinos and video gambling brought in $2.8 billion, up 42 percent, but the state’s share of the money was $891 million, up just 9 percent.

Much of the growth in gambling revenue came as the country began one of the longest economic expansions in U.S. history and as video slot and poker machines saturated the state, more than tripling between 2013 and 2018.

Researchers say it is unwise to count on gambling revenue to remain steady over time because it is a form of discretionary spending.  That’s especially true if the economy slows.

“You cannot count on revenues from gambling; they are highly volatile and often deteriorate quickly,” said Lucy Dadayan, a senior research associate with the Urban-Brookings Tax Policy Center at the Urban Institute, who has spent years examining state and local gambling revenue around the country.  “If we hit another recession, then definitely gambling revenue is going to be one of the first to be hit hard.”

Underfunded, Overwhelmed Regulators

Before the introduction of video gambling, the Illinois Gaming Board’s duties were limited to licensing and regulating the state’s 10 casinos.  Each casino has a cap of 1,200 “positions,” the number of places to make a bet inside, including slot and poker machines.

Six years later, the board oversees more than 30,000 additional positions, the equivalent of 25 more casinos.  And those positions are scattered across more than 6,800 locations in nearly every corner of the state.

Yet when the General Assembly passed the Video Gaming Act, it set aside no money for additional staff or resources to implement the law and oversee the industry.

Jaffe, then the chairman of the gaming board, opposed video gambling, in no small part because he felt there was no way to regulate the industry, he said.

“It’s just too big of a job,” Jaffe said.  “In order to regulate it, you need a bigger board and more people.  It’s absolutely ridiculous to think you can do a proper job with the resources available.”

Long before a handful of legislators and lobbyists decided it was time to legalize — and tax — video gambling, the industry had been thriving illegally.

For decades, bars, restaurants, bowling alleys and fraternal organizations housed video slot and poker machines billed as “simulated gambling devices.”  Most had amusement tax stamps from the state revenue department and didn’t pay out.  Instead, the machines produced printed slips showing how much was “won” or “lost.”

But the machines were widely known to be used for illegal gambling, with payouts coming from envelopes of cash stashed under the table or behind the bar.  In most cases, operators split profits 50-50 with establishment owners, just as they do under the Video Gaming Act.

Known as “gray” machines, for their nebulous legal status, video gambling had long been associated with Chicago-area organized crime.  Less known were the tight-knit groups of amusement companies from other parts of the state that ran “gray” machines while providing establishments with jukeboxes, pool tables and other coin-operated devices.

Lobbyists for these amusement operators drafted the Video Gaming Act, according to industry insiders and lawmakers, creating licensing guidelines and determining how profits would be divided among operators, establishments, local governments and the state.

Those operators also began entering into video gambling contracts with their existing clients well before the board could set up a regulatory structure or conduct the thousands of investigations needed to make licensing decisions.

Once the law passed, the gaming board was tasked with sorting out these relationships while attempting to keep unsavory operators — including those with ties to organized crime — out of the industry.

The board estimated it would need a staff of 350 to do the job, according to internal agency reports.  Yet the number of workers has never topped 286 and dipped as low as 233 in the past three years, even as the industry has grown.  At one point, the board had a single lawyer to help regulate what has become a highly litigious industry.

Often, the board must face off against companies that have more resources, time and expertise than the state.  One reason for the lack of resources: The Video Gaming Act fails to provide enough money to cover the regulatory costs.

The law designates 75 percent of licensing and administrative fees to pay for investigators and attorneys to vet licensing applications as well as write and enforce rules.  But those fees are much lower than other jurisdictions.  Pennsylvania, for example, charges $25,000 to apply for a terminal operator’s license.  The price in Illinois: $5,000.

The owners of licensed establishments, such as bars and restaurants, pay just $100 annually to maintain a license and, until December, paid nothing at all to apply for it, even though the board expends extensive resources on licensing decisions.  Last month, legislators passed a law instituting a $100 application fee.

“We clearly have some fees that are shockingly low,” said Illinois Gaming Board Chairman Donald Tracy, a Springfield attorney, appointed by former Gov. Bruce Rauner in 2015.  “Why would you do that if you’re trying to get revenue for the state? I guess you have go back and ask who drafted this legislation.  If it’s gaming lobbyists, maybe that explains why the fees are so low.”

Lang, the Skokie Democrat who sponsored the bill, overestimated how much fees would bring in, telling fellow lawmakers they would provide $4.5 million a year for regulatory expenses.  Instead, fees have never generated more than $3.4 million.  Lang did not respond to a request for comment.

Even if the administrative fees had met projections, regulating video gambling has turned out to cost far more.  Legislators never studied how much it would cost to regulate video gambling, even though board members say the industry now makes up the vast majority of the agency’s work.

In 2013, the first full year of legalized video gambling, state financial reports show the board spent $15 million regulating the industry.  Those costs reached $17 million by 2017.  Yet fees set aside for regulatory expenses averaged just $2.9 million during that time, leaving a total shortfall of more than $83 million over five years.

Filling in the funding gap: casino revenue.  Yet casino revenue has been in decline.  That decline, coupled with the state’s budget woes, caused the gaming board’s budget to fall more than 6 percent between 2013 and 2017, despite rapid growth in the number of video gambling machines and locations around the state.

“My view is that there should be some kind of professional study to review the licensing fees and the taxes, and I have suggested that,” Tracy said.

What’s more, a month before the Video Gaming Act passed, Quinn signed an executive order removing the board from under the Illinois Department of Revenue and making it a stand-alone agency.

Jaffe, then the board chairman, had requested the move, arguing the Revenue Department’s control of the gaming board slowed hiring and other moves the board wanted to make.  But when he made the request, Jaffe was unaware the board’s responsibilities would soon greatly expand.

One of state government’s largest agencies, the Revenue Department provided oversight and supplemented policy decisions with an army of analysts, lawyers and technical experts.

Without that support, an underfunded agency overseen by five part-time board members — who receive $300 a meeting — found itself regulating a sprawling industry with little supervision.  The vague law and its weak administrative rules made licensing and contract decisions seem arbitrary, leading to a series of missteps.

In at least two cases, the board reversed decisions to permanently bar people from the industry whom it deemed unfit, after court challenges claimed the moves exceeded the board’s legal authority.

A ProPublica Illinois review of meeting minutes and interviews with two board members, including Tracy, found the board’s former administrator entered into a legal agreement with a video gambling operator from Louisiana without board knowledge or approval.  The former administrator, who left his position in March after 16 years, declined to comment.

And in May, a Cook County Circuit Court judge ruled in a lawsuit that the board had violated the Open Meetings Act by improperly going into a closed session, then misrepresented what happened in meeting minutes.

ProPublica Illinois has filed a Freedom of Information Act lawsuit seeking a recording of the closed session at the center of that case.

In a statement, Tracy disputed the judge’s ruling but said the board has changed its procedures for going into closed session.  He also said that conflicts between the Video Gaming Act and the Open Meetings Act have made the board vulnerable to lawsuits from the well-funded industry.

“We have a statute that is somewhat sparse, to be kind.” Tracy said in an interview.  “And we’re talking about high-stakes licenses that have tremendous potential value.  As a result, when we say no, we get sued.”

In another lawsuit, a Cook County judge froze an exclusive state contract to test video gambling machines and ordered the board to reconsider the contract after evidence suggested gaming board staff gave preferential treatment to a New Jersey-based company.  The contract was rebid, though Tracy denied the board had shown preferential treatment.

The board’s government attorneys often have little expertise in gambling litigation compared to the industry’s more experienced, high-priced lawyers, Tracy said.

“There’s just so much money in this industry,” he said.  “We are litigating against people with the very best lawyers, companies that can put unlimited amounts of time into these cases and spend hundreds of thousands of dollars litigating against us.”

Another Push to Expand

The rush to legalize video gambling in hopes of generating quick, painless revenue battered the state’s finances, left unfunded social and regulatory costs and exposed the gaming board to a barrage of legal challenges.

None of that has stopped some members of the General Assembly from pushing yet another massive gambling expansion bill as they continue to forage for ways to bring in revenue without raising taxes or cutting spending.

In the more than nine years since the Video Gaming Act passed, the influence of the industry has only increased.  And lawmakers seem ready to make many of the same mistakes.  At hearings last fall on a new gambling expansion bill, there was no discussion about whether the gaming board can handle a larger workload and little acknowledgment of the social costs of gambling.

Now, as newly sworn-in legislators open the 101st General Assembly, with a rookie, billionaire governor who was a longtime investor in Elgin’s Grand Victoria Casino, here’s what lies on the table: sports gambling; six new casinos; and, for the video gambling industry, higher wagering, bigger payouts and even more machines.

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FACT CHECK - Watching the Watchdog

"'Independent' Watchdog's Secret Funder: Conservative Small-Government Group" by Mick Dumke (ProPublica) and Dan Mihalopoulos (Chicago Sun-Times), ProPublica 1/18/2018

Project Six, led by the former City Council inspector general, got 98 percent of its startup money from the right-leaning Illinois Policy Institute.

When former Chicago City Council inspector general Faisal Khan launched his not-for-profit anti-corruption group close to two years ago, he insisted that it was independent and nonpartisan.

At the same time, Khan refused to disclose who was funding the organization, which he called Project Six — a reference to the group of civic leaders who led the fight against Al Capone during Prohibition.

Now, records obtained by the Chicago Sun-Times and ProPublica Illinois show almost all the money to launch Khan's Chicago-based watchdog organization came from a right-leaning group that is leading a crusade against government regulations, state spending and labor unions in Illinois.

The most recent federal tax filing for the Illinois Policy Institute shows it gave $623,789 to Project Six in 2016 — accounting for 98 percent of the group's first-year budget.  The records don't reveal — and Project Six officials haven't said — where the rest of its money comes from.

The Illinois Policy Institute, in turn, has received extensive support from foundations tied to some of the country's biggest Republican contributors, including the Koch, Mercer and Uihlein families, as well as Illinois Gov. Bruce Rauner and first lady Diana Rauner's charitable foundation.

The tax records offer a glimpse of how money often moves among nonprofit groups focused on politics and public policy.  Under federal and state laws, most charitable organizations — unlike political campaigns — are not required to publicly disclose all of their donors.

The Illinois Policy Institute, which identifies itself as an independent entity committed to free-market reforms, has close ties to conservative lawmakers and worked with Rauner for much of his first term.  It has also attacked the politics and policies of Michael Madigan, the longtime Illinois House speaker and Democratic Party chairman.

Since Project Six launched, promising to investigate cases of government waste and fraud across Illinois, its leaders have said it's necessary to hide the identities of the group's funding sources.  They cite the state's long history of entrenched corruption and the potential for retaliation.

Khan, meanwhile, said Project Six had “no political or ideological bent,” and he pledged to keep publishing reports of wrongdoing no matter the origin.  Reports appear on the Project Six website.

Tax records for Project Six and the Illinois Policy Institute are not yet available for 2017.  But in interviews last week, Khan said the Illinois Policy Institute continued to provide support for Project Six.

Khan said he wasn't certain how much the institute gave Project Six in 2017 because it hasn't completed its tax returns, but he estimated it was “significant” and in the “hundreds of thousands” of dollars.

In the interviews, Khan offered shifting accounts of Project Six's financial support.  He initially denied the Illinois Policy Institute was among his group's primary funding sources.

“We're not getting the money from IPI,” he said.  “We get money from all sorts of donors but we don't release their names because they fear reprisal from the city of Chicago.”

Later, though, he acknowledged the support of the institute, and said he was “overzealous” in trying to protect its identity as a financial backer.  In helping Project Six get started, the Illinois Policy Institute also provided the group with office space and helped Khan assemble his board of directors, according to Khan and the board members.

Khan said Project Six's connections to the institute do not affect its investigations, which have primarily focused on Chicago aldermen and Mayor Rahm Emanuel.  The mayor and all but one member of the City Council are Democrats; the other alderman has described himself as an independent conservative.

Four of the 12 reports Project Six has posted on its site targeted Chicago aldermen with ties to Madigan.  One investigation focused on spending by 13th Ward Ald.  Marty Quinn, who shares a ward office with Madigan.  Another centered on a lobbyist who was also a former staffer and consultant for 42nd Ward Ald.  Brendan Reilly, a former Madigan aide.

The institute reported the Project Six findings on its own website and Facebook page without noting that it funds the watchdog organization.

Two other Project Six reports zeroed in on city regulations for Airbnb and ridesharing companies.  The institute has fought to loosen rules for both industries.

Khan said Project Six staffers initiated the investigations and were not influenced by the institute.

“Absolutely not,” he said, arguing that most Chicago elected officials have some link to Madigan.

The real point, Khan said, is what his team has found.

“Where are we wrong in our work?” he asked.  “Every investigation we have done has been accurate and vetted.”

Some of Khan's targets dispute that.  Reilly said Project Six “mischaracterized” the role of the consultant who was working for his office.  Her lobbying work had nothing to do with issues in his ward, he said.

Reilly criticized Project Six for not revealing all its donors.

“It's a bit hypocritical for a group dedicated to transparency,” he said.

Last March, Project Six accused Ald. Proco Joe Moreno of abusing his influence over zoning in his First Ward.  Moreno says Khan's group selectively used facts to push a conservative agenda.

“Project Six is coming off as an independent investigative body that gets press,” Moreno says.  “But it's a right-wing, agenda-driven organization with dark money that is anything but independent.”

Project Six has also issued a report on questionable spending by the mayor of south suburban Markham, also a Democrat-led municipality.  The organization has not released any investigations into Republican officials or conservative strongholds.

“Regardless of who our contributors are, it doesn't affect our integrity, our work, or our investigations,” Khan said.  “We've only gone after people we've received credible information about.”

Khan was the Chicago City Council's first and last legislative inspector general, serving four years.  The office was dissolved in 2015, and Khan lost his position with the city.  The inspector general's office that oversees the executive branch at City Hall took over responsibility for investigating wrongdoing by aldermen or their aides.

A spokeswoman for the Illinois Policy Institute said her group's leaders “do not have any influence” over what investigations are pursued by Khan and his organization.

The spokeswoman, Hilary Gowins, said the institute would not provide funding for Project Six in 2018.

“We are very proud to have supported Faisal in his efforts to bring transparency to Chicago and the state of Illinois in an effort to end public corruption,” said John Tillman, the Illinois Policy Institute's chief executive.  “Faisal and Project Six remain an independent organization.”

But the tax return revealing the contributions from the Illinois Policy Institute “clearly shows that Project Six is far from the independent government watchdog that it claims to be and seriously calls into question Khan's motivation for establishing the group,” said David Armiak, a researcher with the Madison, Wisconsin-based Center for Media and Democracy, which has tracked funding to the institute and similar conservative organizations.

Major contributors to the Illinois Policy Institute have included:

• Foundations funded by Charles and David Koch, the billionaire, industrialist brothers who long have been among the largest supporters of conservative causes in the country.

• The Mercer family, which made its money in hedge funds, is a significant political contributor to President Donald Trump and has invested in the right-wing Breitbart news website once led by Steve Bannon — although the family recently broke with Bannon over his criticism of Trump in a new book.

• Richard Uihlein, the Lake Forest businessman who has been a big financial backer of Rauner.  Uihlein, who has donated to many other Republicans as well as to conservative causes, gave $100,000 last year to a super PAC backing Roy Moore's losing Republican campaign for a U.S. Senate seat from Alabama.

The Rauner Family Foundation contributed to the Illinois Policy Institute before Rauner became governor in 2014, and former institute officials briefly moved into high-level roles in Rauner's administration last year, including as chief of staff and communications director.  But Rauner had a falling-out with the institute.

The institute was instrumental in launching Project Six, according to Khan and his group's early board members.  After leaving City Hall, Khan said, he talked with “a lot of people” about what to do next and wondered if he should continue the work he started as legislative inspector general.  One of the people he met with was Tillman.

Tillman, according to Khan, encouraged him to continue investigating fraud and waste in local government.  The institute offered Khan space in its office as Khan was setting up his new organization.

“Project Six is still my idea, my organization, but people like John Tillman and other business leaders helped me put it together and create a working model,” Khan said in last week's interviews.

Khan hired Illinois Policy Institute staffer Nate Hamilton as Project Six's director of marketing and communications.  And three of the organization's initial board members also had connections to the institute.

Businessman and former state GOP chairman Gary MacDougal, a contributor to the institute, said Tillman recruited him to the Project Six board.

“I got a call one day from John Tillman, who said 'I've got a really good guy who cares a lot about shining light in the dark corners and I'd like you to meet him,'” MacDougal said in an interview.  “I had a few strategy sessions with Faisal and, in fact, I'm still having strategy sessions with Faisal.”

After Project Six got up and running, MacDougal left the board because of other commitments, but he said he continues to talk with Khan and just donated to Project Six.  “I believe his heart and his focus are in the right place,” MacDougal said.

He said he's not worried about the new organization's independence.

Tillman, MacDougal said, “very much wants Faisal to be independent, and he is nudging Faisal in that direction.”

Project Six Board chair Randy Nornes, an executive with Aon, has donated to the Illinois Policy Institute as well as the Illinois Liberty political action committee, which was founded by Tillman and is currently led by Pat Hughes, external relations adviser for the institute.

Nornes said MacDougal and an official at the Illinois Policy Institute approached him about Project Six.  As a Chicago resident interested in good government, Nornes said, “I thought it would be a way to contribute back.”

He noted that he has donated to Democrats as well as Republicans and conservative groups, and said he has worked to recruit a diverse group of board members and donors for Project Six.  New board members include an expert in accounting fraud and a public-policy consultant.

“Our funding base now includes small donors,” Nornes said.  “We're doing a lot of the investigative work that in the old days journalists had the time to do.”

ELECTION THREAT - Russian Hack of Voting System

"FBI WARNS OF ELECTION HACK" by Ellen Nakashima, San Diego Union-Tribune 8/30/2016

NOTE: This is from the online edition of the newspaper, therefore no article link.

Agency alerted Arizona officials that Russians were behind assault on state’s voting system

The FBI is investigating a series of suspected foreign hacks of state election computer systems and websites, and has warned states to be on the alert for potential intrusions.

Hackers have targeted voter registration systems in Illinois and Arizona, and the FBI alerted Arizona officials in June that Russians were behind the assault on the system in that state.

The bureau described the threat as “credible” and significant, “an eight on a scale of one to 10,” Matt Roberts, a spokesman for Arizona Secretary of State Michele Reagan, said Monday.  As a result, Reagan shut down the state’s voter registration system for nearly a week.

It turned out that the hackers had not compromised the state system or even any county system.  They had, however, stolen the user name and password of a single elections official in Gila County.

Roberts said FBI investigators did not specify whether the hackers were criminals or employed by the Russian government.  Bureau officials on Monday declined to comment.

The Arizona incident is the latest indication of Russian interest in U.S. elections and party operations, and follows the discovery of a high profile penetration into Democratic National Committee computers.  That hack produced embarrassing emails that led to the resignation of DNC Chairwoman Debbie Wasserman Schultz and sowed dissension on the eve of Hillary Clinton’s nomination as the party’s presidential candidate.

The Russian campaign is also sparking intense anxiety about the security of this year’s elections.  Earlier this month, the FBI warned state officials to be on the lookout for intrusions into their elections systems.  The “flash” alert, which was first reported by Yahoo News, said investigators had detected attempts to penetrate election systems in several states and listed internet protocol addresses and other technical fingerprints associated with the hacks.  In addition to Arizona, Illinois officials discovered an intrusion into their elections system in July.  Although the hackers did not alter any data, the intrusion marks the first successful compromise of a state voter registration database, federal officials said.

“This was a highly sophisticated attack most likely from a foreign (international) entity,” said Kyle Thomas, director of voting and registration systems for the Illinois State Board of Elections, in a message that was sent to all election authorities in the state.

The Illinois hackers were able to retrieve voter records, but the number accessed was “a fairly small percentage of the total,” said Ken Menzel, general counsel for the Illinois elections board.

State officials alerted the FBI, he said, and the Department of Homeland Security also was involved.  The intrusion in Illinois led to a week-long shutdown of the voter registration system.

The FBI has told Illinois officials that it is looking at foreign government agencies and criminal hackers as potential culprits, Menzel said.

At least two other states are looking into possible breaches, officials said.  Meanwhile, states across the nation are scrambling to ensure that their systems are secure.

Until now, countries such as Russia and China have shown little interest in voting systems in the United States.  But experts said that if a foreign government gained the ability to tamper with voter data — for instance by deleting registration records — such a hack could cast doubt on the legitimacy of U.S. elections.

“I’m less concerned about the attackers getting access to and downloading the information.  I’m more concerned about the information being altered, modified or deleted.  That’s where the real potential is for any sort of meddling in the election,” said Brian Kalkin, vice president of operations for the Center for Internet Security, which operates the MS-ISAC, a multistate information-sharing center that helps government agencies combat cyberthreats and works closely with federal law enforcement.

Nonetheless, the Senate minority leader, Harry Reid of Nevada, asked the FBI Monday to investigate evidence suggesting that Russia may try to manipulate voting results.  In a letter to FBI Director James Comey, Reid wrote that the threat of Russian interference “is more extensive than is widely known and may include the intent to falsify official election results.” Recent classified briefings from senior intelligence officials, Reid said, have left him fearful that President Vladimir Putin’s “goal is tampering with this election.”

Reid argued that the connections between some of Donald Trump’s former and current advisers and the Russian leadership should, by itself, prompt an investigation.  He referred indirectly in his letter to a speech given in Russia by one Trump adviser, Carter Page, a consultant and investor in the energy giant Gazprom, who criticized U.S.  sanctions policy toward Russia.

“Trump and his people keep saying the election is rigged,” Reid said.  “Why is he saying that?  Because people are telling him the election can be messed with.”  Trump’s advisers say they are concerned that unnamed elites could rig the election for Clinton.  Reid argued that if Russia concentrated on “less than six” swing states, it could alter results and undermine confidence in the electoral system.  That would pose challenges, given that most states have paper backups, but he noted that hackers could keep people from voting by tampering with the rolls of eligible voters.

James Clapper, the director of national intelligence, has told Congress that manipulation or deletion of data is the next big cyberthreat — “the next push on the envelope.”  Tom Hicks, chairman of the federal Election Assistance Commission, an agency set up by Congress after the 2000 Florida recount to maintain election integrity, said he is confident that states have sufficient safeguards in place to ward off attempts to manipulate data.  For example, if a voter’s name were deleted and did not show up on the precinct list, the individual could still cast a provisional ballot, Hicks said.  Once the voter’s status was confirmed, the ballot would be counted.

Hicks also said the actual systems used to cast votes “are not hooked up to the internet” and so “there’s not going to be any manipulation of data.”  However, more than 30 states have some provisions for online voting, primarily for voters living overseas or serving in the military.

This spring, a DHS official cautioned that online voting is not yet secure.

“We believe that online voting, especially online voting in large scale, introduces great risk into the election system by threatening voters’ expectations of confidentiality, accountability and security of their votes and provides an avenue for malicious actors to manipulate the voting results,” said Neil Jenkins, an official in the department’s Office of Cybersecurity and Communications.

Private-sector researchers are also concerned about potential meddling by Russians in the U.S. elections system.  Rich Barger, chief information officer at ThreatConnect, said that several of the IP addresses listed in the FBI alert trace back to a website-hosting service called King Servers that offers Russia-based technical support.  Barger also said that one of the methods used was similar to a tactic employed in other intrusions suspected of being carried out by the Russian government, including one this month on the World Anti-Doping Agency.

“The very fact that (someone) has rattled the doorknobs, the very fact that the state election commissions are in the cross hairs, gives grounds to the average American voter to wonder: Can they really trust the results?” Barger said.

Nakashima writes for The Washington Post.  The New York Times contributed to this report.

TRANSFORMATION - Theaster Gates in Chicago

"Artist Theaster Gates turns Chicago’s empty spaces into incubators for culture" PBS NewsHour 4/26/2016

Excerpt

SUMMARY:  An internationally recognized artist, Theaster Gates is well versed on how to shape materials into meaningful forms.  But Gates applies those principles to more than just art -- he’s also a renowned urban developer who shapes downtrodden neighborhoods into community gathering places and low-cost housing.  Gates joins Jeffrey Brown to explore the intersection of art and activism.

JEFFREY BROWN (NewsHour):  So, what is this?

THEASTER GATES, Artist:  So, this is the ceramics studio.

JEFFREY BROWN:  When you make a pot, the artist Theaster Gates told me recently in his studio, you think about the material and how to shape it.

THEASTER GATES:  If it’s clay, then I have to learn a lot about the minerals that are in the earth.  And what happens when two chemicals work together in relationship to heat?  How does heat work in relationship to time?

JEFFREY BROWN:  But, unlike most artists, Gates goes further, into a whole other realm.  Just as we learn to reshape clay into pots, he says, we might learn to reshape buildings and neighborhoods into a revitalized urban life.

THEASTER GATES:  If you were to apply that to a city, you would say, what’s the relationship between a commercial district and a residential area?  And how might those things be a collision at first?  But they need to slowly cool.

JEFFREY BROWN:  Same processes, but different material?

THEASTER GATES:  I think so, in that it implies that one has to also continue to get to know a thing by being directly engaged with the thing.

JEFFREY BROWN:  Gates is a successful commercial artist on the international gallery scene.  But much of the focus of his work is here, on Chicago’s South Side, in neighborhoods filled with vacant lots, abandoned buildings, poor and dangerous streets.

Gates has bought buildings, like these on Dorchester Avenue, refurbished and turned them into community gathering places for music, films, talk.  He’s also developed low-cost housing, including for artists, who contribute hours of community service in return.

EDUCATION - Setting a Higher Bar

"Illinois high school shrinks its achievement gap for minority students by setting a high bar" PBS NewsHour 5/27/2015

Excerpt

SUMMARY:  Evanston Township High School outside of Chicago offers its students nearly 30 Advanced Placement classes.  But despite the plentiful offerings, administrators noticed that minorities were underrepresented in these courses that can be a boost to a college application.  How did the school bridge the gap?  Brandis Friedman of WTTW reports from Chicago.

BRANDIS FRIEDMAN, Special correspondent:  Students here at Evanston Township High School outside Chicago can take anything from automotive service excellence certification to advanced calculus.  They also have their pick of almost 30 advanced placement courses.

Dale Leibforth heads A.P. recruitment.

DALE LEIBFORTH, AP Recruitment and Retention Manager, Evanston Township High School:  Portfolio studio, or Latin or — the list goes on.  We just added an A.P. government course.

BRANDIS FRIEDMAN:  Even though it’s a top-rated school, with a diverse student body, until recently, only certain students were picking A.P. courses.

ERIC WITHERSPOON, Superintendent, Evanston Township High School:  We have students of color and low-income students terribly underrepresented in advanced placement courses.  There’s still a predictability among student achievement in our school district based on race.

BRANDIS FRIEDMAN:  When Eric Witherspoon became superintendent eight years ago, he noticed that A.P. classrooms were filled with mostly white students, while regular classrooms were filled with mostly minority and often low-income students, who make up 41 percent of the student body.

Witherspoon says he realized students were being tracked into A.P. courses through honors classes based on their eighth grade standardized test performance, while other students were tracked into less rigorous courses.

ERIC WITHERSPOON:  It didn’t take rocket scientist to figure out that here we’re getting disparate results, but, in fact, we have a structure that may be even is causing some of those disparate results, but certainly if not causing, certainly not doing anything to change those results.

ILLINOIS - Pension Law, State Supreme Court Decision

"How will the Illinois pension law rejection affect other states?" PBS NewsHour 5/10/2015

Excerpt

SUMMARY:  On Friday, the Illinois Supreme Court voted unanimously to strike down a law passed in December 2013 that was meant to rescue the state's pension system.  For more on the implications of that decision Karen Pierog of Reuters joins Hari Sreenivasan from Washington.

HARI SREENIVASAN, PBS ANCHOR:  There was an important court ruling on Friday.

The Illinois Supreme Court voted unanimously to strike down a law passed in December of 2013 that was meant to rescue the state’s pension system.

For more about the implications of that decision and what it could signal for other states, we are joined now from Chicago by Karen Pierog.  She has been covering the story for Reuters.

So, bring us up to speed here.  If somebody wasn’t paying attention to what the law was in 2013, what did it try to do?

KAREN PIEROG, REUTERS:  Well, the law was aimed at trying to ease Illinois’ $105 billion unfunded pension liability, and also to lower the annual amount of money that Illinois has to pay towards pensions every year.

And Illinois has had a structural budget deficit for decades.  And it’s — it’s — it was having a very hard time trying to come up with money, you know, to pay for essential state services.

HARI SREENIVASAN:  At the time, the legislature said, this is an emergency, a fiscal emergency, they need to act, it is almost like putting out a fire.

They took certain steps, like increasing the retirement age, suspending cost of living adjustments.

COLLEGE - Cutting Costs for Disadvantage Students

"Cutting higher ed costs for Chicago’s disadvantaged students" PBS NewsHour 10/1/2014

Excerpt

HARI SREENIVASAN (NewsHour):  Now, back here at home, some news about college.

Two separate pushes were announced today in Chicago aimed at improving access to higher education among lower-income students.

Jeffrey Brown has the story.

JEFFREY BROWN (NewsHour):  The moves, announced separately, will eliminate costs at one of the nation’s most elite universities and at the city’s community colleges.

University of Chicago President Robert Zimmer announced a plan that will replace loans with grants, simplify the application process, and ensure that some students don’t have to take jobs during the academic year.  University officials said the changes will build on programs for lower-income students at the school, such as Anthony Downer.

ANTHONY DOWNER, Student, University of Chicago:  I knew I wanted to attend a top college, but the question for my family and so many other low-income families was, how will we pay for it?

JEFFREY BROWN:  Chicago’s Mayor Rahm Emanuel also announced a separate plan to provide free community college tuition to all Chicago public high school students who graduate with a 3.0 grade-point average or better and are ready for college-level math and English.

MAYOR RAHM EMANUEL, Chicago:  We live in a time where you earn what you learn.  The big factor in determining whether people complete school, drop out of the school is cost.

JEFFREY BROWN:  The proposals come amid growing pressure on colleges and universities to enroll and graduate more disadvantaged students.  And they follow similar moves around the country.

Tulsa, Oklahoma, and the state of Tennessee, for example, are providing free tuition at community colleges with the hope of raising low graduation rates.  Among top-tier schools, several have policies guaranteeing lower-income families don’t have to pay for college.

Still, disadvantaged students remain poorly represented on many of their campuses.

Here to tell us more about these initiatives are Robert Zimmer, president of the University of Chicago, and Cheryl Hyman, chancellor of City Colleges of Chicago.

CHICAGO - Special Arts Academy Gets Teens to Stay In School

"Special arts academy helps Chicago teens transcend tough streets" PBS NewsHour 6/11/2014

Excerpt

HARI SREENIVASAN (NewsHour):  Little Black Pearl Academy, a public school on the South Side of Chicago, is trying to write a new songbook for success.  It started last fall, when the school’s founder, Monica Haslip, transformed her after-school art center into a full-time public school focused on the arts.

Her students come from some of the highest-crime areas in the city.  The undertaking was born from frustration.

MONICA HASLIP, Founder, Little Black Pearl Academy:  My biggest motivation for this school was about looking at the volume and the number of children that we have in Chicago that are dropping out of school.

HARI SREENIVASAN:  Haslip partnered with Chicago public schools to identify students on the wrong track.

MONICA HASLIP:  A lot of our students that we have had had really poor attendance prior to coming here, so we believe and we have been able to see that by offering them access to the arts, that in itself is the thing that is inviting them to come to school every day.

HARI SREENIVASAN:  The hope is that art can offer students, who may be distracted or even traumatized by violence that surrounds them, a way to return to learning.

Why art?  Why is this the reason that they should come?

GUNS - Last in the Nation Ban on Concealed-Carry Falls

And the slaughter madness will continue.

"Illinois victim who backed concealed carry gets permit" by JIM SUHR (AP), Seattle PI 3/6/2014

A southern Illinois retiree whose legal fight helped bring about an end to the state's last-in-the-nation ban on concealed carry has become among the state's first to get her permit to have a handgun in public.

Mary Shepard, 74, considered the mail she received Tuesday from Illinois State Police a reward — partly for slogging through ice and snow to her mailbox at the end of a long, rural driveway, and partly because of her legal push that followed a 2009 church attack that left her severely beaten while unarmed.

"I flipped through the mail, and there it was," Shepard told The Associated Press by telephone from her home near Cobden.  "I was just so over-the-top thrilled and unbelievably happy.  I had waited so long for this, and I felt like I accomplished something.  And here it was, making everything just worthwhile.  I couldn't wait to tell everyone."

Shepard, whose permit arrival was first reported by WSIL-TV in Harrisburg, Ill., became a gun-rights activist after she was randomly assaulted by an intruder while working as a treasurer at First Baptist Church in Anna.  She has argued that had she not been barred from carrying a gun, she could have thwarted the attack.

After Shepard sued to have the state's concealed carry ban thrown out, the Chicago-based 7th U.S. Circuit Court of Appeals ruled in December 2012 that the prohibition was unconstitutional.  After months of debate, Illinois lawmakers last summer narrowly beat a federal court deadline and adopted the concealed carry law over Gov. Pat Quinn's vehement objections — something Shepard called Thursday "a great victory."

The five-year licenses, which started being sent out last week, largely went to the earliest applicants: firearms instructors and others who submitted electronic fingerprints ahead of the official Jan. 5 launch of the online application process.  Illinois State Police have approved roughly 5,000 concealed-carry applications.

More work lies ahead: Already, about 46,000 applications have been submitted, putting the state on track to field nearly 300,000 applications this year.  That's about some 100,000 fewer than originally projected.

But Shepard and other gun-rights advocates argue the new law is imperfect, citing a long list of places where concealed handguns are not allowed — such properties as schools, child care facilities, courthouses, government buildings, hospitals, nursing homes, and forms of public transit.

While churches have autonomy in deciding whether guns will be allowed on their property, Shepard said Thursday her church hasn't indicated its preference.  To Shepard, that may be because the issue hits too close to home.

"Now it's never talked about, never mentioned (at the church).  It's like it never happened," Shepard said of the attack, which she admits has left her uneasy about going to the church aside from just Sunday mornings.  "I used to be there continually.  I loved that job, that place.  It was my church.  But I thought I was completely safe in that church.

"Then one day, I woke up and found I wasn't."

While unclear about whether she would pack a pistol at church now that she's licensed to carry one, Shepard said she would continue advocating easing the restrictions on where concealed weapons are allowed.

"You never know what's going to happen," she said.  "It's just another case of being told what to do, what not to do."