Video Gambling, Sweepstakes Machines Generate Controversy in Illinois

Posted on: April 6, 2020, 07:50h. 

Last updated on: April 6, 2020, 10:13h.

Ed Silverstein @casinoorgedsilv Read More

Expertise: Legal, Tribal Gaming.

The Chicago suburb of Rolling Meadows, Illinois is considering limiting the number of video gambling locations to about a dozen, as the nearby Windy City could legalize the machines, according to news reports. Chicago still is pushing for its own large casino.

In 2009, video gambling was legalized in Illinois. Town and cities could choose to opt out.

Before 2018, video gambling was prohibited in Rolling Meadows. Now, officials may want to restrict not only the number of devices allowed, but limit them to certain neighborhoods, according to a proposal from Alderman Kevin O’Brien.

Also, the suggested ordinance would restrict any strip mall to having just one business with video gambling. As of now, 10 businesses in the city feature video gambling. Two other businesses want to get video gaming.

The feeling is that we are very near capacity for gaming in the city of Rolling Meadows,” O’Brien told the Daily Herald. “Residents are in support of it, but they don’t want one of our thoroughfares to turn into the Las Vegas Strip.”

In nearby Schaumburg, there are different licenses for existing or planned restaurants where video gambling is proposed. Gambling cafes have a different license.

Rolling Meadows Alderman Lara Sanoica wants to see a similar approach in that city. Also, Alderman Jenifer Vinezeano favors a six-month waiting period for a new business to apply for a video gaming license.

City officials have yet to vote on a final bill. As of last November, city rules required video gaming establishments to partition gambling areas.

Tables are located next to machines and a required grill, according to local rules explained in Journal & Topics.

During the 2019 fiscal year, statewide gambling terminals led to $478 million in tax revenue for state and local governments, according to the Better Government Association. There were an estimated 32,000 video gambling terminals in operation, and play on the terminals raised close to $1.6 billion in revenue.

Sweepstakes Machines Popular in Chicago

Chicago has continued to ban video gambling terminals. Instead, Chicago has seen more sweepstakes machines, which are like the terminals, the association said.

The sweepstakes devices pay out coupons, not cash, the association adds. The coupons can be exchanged for cash or can be used for merchandise.

Because they operate in a grey area of the gambling legislation, sweepstakes machines are able to escape regulation and taxation. Profits directly benefit only the machine operators and the businesses that house them,” the association explained.

But last year’s approved gambling expansion bill allows Illinois to increase the number of video gambling machines. There is pressure on Chicago to permit the machines, given financial conditions. Still, Chicago is also considering opening a large casino, and sweepstakes machines would be competition.

In February, Chicago Mayor Lori Lightfoot predicted revenue from a Chicago casino to total $1.2 billion, with changes recommended from earlier proposals, according to Crain’s Chicago. Earlier attempts to get a casino in Chicago failed because taxes would be “too onerous,” the Chicago Sun-Times reported.

In August, a feasibility study conducted by Union Gaming and commissioned by the Illinois Gaming Board concluded that no casino operator would be interested in investing in an integrated resort in Chicago due to the excessive tax structure. The firm said that under the state’s current gaming expansion law, gaming revenue at the Chicago casino would be effectively taxed at 72 percent.

Beyond tax concerns over a Chicago casino, the state Commission on Government Forecasting and Accountability said in a February report that total revenue from Illinois’ 10 casinos declined for the seventh successive year in 2019, the Sun-Times reported.

Sports Betting in Illinois Gets Slow Start

Illinois sports betting was supposed to be operational for the March Madness college basketball tournament. But the NCAA tournament was canceled due to the coronavirus outbreak.

Last month, Rivers Casino in Des Plaines opened the first legal sports book in Illinois.