The Illinois Gaming Machine Operators Association announces resolution of a lawsuit ending a local fee on video gaming terminals.
PEKIN — When is a fee really a tax? Ask the Illinois Gaming Machine Operators Association and the City of Pekin.
The two were in a recent dispute over a local effort to get more money out of the owners of video gaming machines. A local court has resolved the issue. Read more about the ruling from the IGMOA here:
Tazewell County Circuit Court Judge Paul E. Bauer has ruled that the City of Pekin’s ordinance taxing video gaming is unlawful and barred by state law resulting in a major victory for Illinois small businesses and their customers.
Pekin officials in October approved a city ordinance assessing a “fee” worth 2.5 percent of net revenues received by any video gaming machine registered to do business in the city. The ordinance called for proceeds from the fee to be split between the City’s police and fire pension funds. Violations could trigger fines of up to $750 a day. Two members of the Illinois Gaming Machine Operators Association, which represents the companies that provide video gaming terminals in thousands of small businesses across the state, sued the City of Pekin late last year in Tazewell County Circuit Court.
The IGMOA members — J&J Ventures Gaming, LLC, and Accel Entertainment Gaming, LLC – argued that the City’s so-called “fee” is in reality an illegal tax on terminal operators. Such a tax is “unauthorized, is unlawful and unenforceable” because the state’s Video Gaming Act bars them, the plaintiffs argued in their lawsuit filed in December 2022.
The companies made a clear distinction between a fee and a tax. A fee is charged for a specific service or benefit provided, and it must be proportional to that benefit or service provided by the municipality. Because the City was using the revenue for public safety pensions and not in any relation to video gaming, the law considers it a tax – no matter what the City actually calls it – and any such tax is barred by state law, they argued.
The companies also noted they were provided no way to pay the assessed taxes in November 2022 under the new structure because they were caught in the middle — make the payments and they lose any legal remedy to get those funds back if the law is struck down, or refuse to make the payments and face local prosecution, fees and other legal penalties. They asked for a declaratory judgment that the tax is unauthorized and should be voided. Judge Bauer agreed, and issued an order on May 24 barring Pekin from applying and enforcing the illegal tax.
“This is an important win for our members, and for the small businesses and customers we serve in Pekin and across Illinois,” said Ivan Fernandez, IGMOA Executive Director. “We work well with our local government partners in the communities we serve around the state, but sometimes, they seek to ask for a greater piece of the video gaming pie than the law allows. This ruling sends a strong message that Illinois communities should work with our members to draw in more customers and play, not drive them away with unnecessary taxing schemes, and we will take these arguments to other communities where these local taxes are being considered and pursued.”
City is in ‘strongest financial position’ in more than a decade, city administrator says
This section of the McHenry Riverwalk, from the Route 120 bridge to the Pearl Street bridge, is one option for the McHenry City Council to fund with excess revenue. (Gregory Shaver — gshaver@shawmedia.com/Gregory Shaver for Shaw Media )
Video gaming in McHenry added $940,000 to the city’s coffers in the last year, doubling its contribution to city since 2016-17, City Administrator Derik Morefield said.
With higher-than-expected revenue from that and other areas – including income tax and state and local sales taxes – the last year brought in $4.5 million more than the city had initially planned for, Morefield said.
Overall, Morefield said, the city is in its “strongest financial position that it has been in the last 12 years, and probably the last 25.”
The proposed 2023-24 budget sits at about $29.3 million in expenditures and $29.5 million in revenue, according to city documents. Set for final board approval on April 17, Morefield included a conservative $3 million in new revenues, about 11.5% more than the previous budget calls for.
Those additional revenues do not include any increase in the city’s property tax levy, as approved by the board late last year.
Morefield gave the McHenry City Council a review of the current budget and an outline for the 2023-24 budget at the March 20 meeting.
Morefield said city staff used figures provided by the Illinois Municipal League to estimate what its 2022-23 revenue would be. The increase comes, in part, as the result of higher consumer spending and wages, he said.
There was “no way could have guessed we would be here today, with what could have happened and what did happen during (COVID-19),” Morefield said of the revenue.
McHenry now has a fully funded reserve balance of $9.7 million that could keep the city running for 120 days, in addition to money set aside for the Route 31 widening project, upgrades to its emergency dispatch center, and other capital projects.
“We don’t simply add overage to our coffers. We first ensure that we meet our 120-day reserve policy and then reinvest the rest to needed capital projects,” Morefield said.
Morefield expects having $637,070 in unallocated revenues for use at the council’s discretion for capital projects in the upcoming budget year.
He suggested using those unallocated funds for funding the sea wall in phase 4 of the McHenry Riverwalk. Phase 4 extends the pedestrian pathway from the Pearl Street bridge to the Route 120 bridge and is the “last link in the Riverwalk,” Morefield said.
Bids are currently being solicited to move power lines and a transformer box behind businesses for that stretch of the project, Parks and Recreation Director Bill Hobson said.
Another option proposed by Morefield would be to pay to resurface and then rent a portion of a parking lot owned by the Riverside Residences at 3516 Waukegan Road. The privately owned senior housing complex has 61 excess parking spots which could be used by Riverwalk visitors, he said.
Both options were attractive, Ward 7 Alderwoman Sue Miller said. “We will have parking problem. There is not a lot of parking for Miller Point” but added the Riverwalk was also a priority.
The council could also allocate more funds into the account set up to fund its portion of a planned Route 31 widening project. Once the Illinois Department of Transportation begins that project, McHenry’s portion is estimated to cost $8 million.
McHenry currently has $3.6 million reserved for that, Morefield said.
(PANA) — Without debate and no opposition, the Pana City Council voted to establish a Class “P” liquor license which will be for establishments which derive its main income from video gaming machines. The action came during the Pana City Council meeting on Monday night in the Council Chambers of Pana City Hall.
Cost of the license will be $5,000.
Currently, the highest liquor license fees for establish with gaming machines is $650 for convince stores. The vote was 7-0 to approve.
Three establishments – two of them on Poplar St. – Pana Gaming (in the former Harper’s gas station) and the yet-to-open Roasted Bean at Washington and Poplar and the Lucky Jackpot on the east side of town on Jackson St. – are the only places where such a license would be appropriate. Those already open will have to renew their license as Class “P.”
Currently, the two businesses in operation have Class “A-1” licenses with a yearly fee of $800. The new $5,000 fee is an increase of 625% over the old amount.
First reading of an ordinance to add recreational vehicles to the Pana Motor Vehicle Code was approved. Final presentation will come at the next meeting.
Also given preliminary approval was an ordinance for intergovernmental agreements to participate in the Mutual Aid Box Alarm System. It allows emergency series to be shared between other local municipalities. It is an update to the current ordinance.
There was a resolution approving a letter of understanding between the city and Work Shop Market, Inc, of San Diego, Calif., for development of several properties on the south side of the 100 block of East Second St. The agreement calls for plans to be submitted to the Council for approval before construction; the issuance of building permits before work begins; an estimate and plans for roof repairs and masonry work to be done on several buildings within 120 days; and the transfer of property to Work Shop Market to be completed on Mar. 17, 2023.
The company plans to rehabilitate the former music store and George’s Candy Shop and the vacant lots where Bob’s Steak House used to stand and an empty lot off Locust St. south of the former George’s.
Facade improvement grants from the city’s TIF Fund were approved to eight organizations. There were a total of 31 applications filed. Most of the work will involve tuck-pointing, painting and lighting. The grants will go to Dr. Joe Marcin, Knights of Columbus, Hair Razors, Sparrow Bicycle, Cutz and Curlz, Creatureplica, BW Rental and Southern Illinois Mission.
The Council approved the Mayor Nathan Pastor’s appointment of Mike Suter, Third Ward and Cheryl Swenny, Fourth Ward to the Pana Planning and Zoning Commission.
Addressing the Council during the public portion of the session, Lawrence Scoles of the 500 block of Elizabeth St. asked members to reconsider the ban on chickens inside the city limits. He said he has been recently served with an ordinance violation for having chickens on his property. He said his choice was to pay the fine or get rid of the chickens.
The chickens are important to him since he and his wife have eight children between them and the eggs are part of their diet. Scores said they do not have any roosters and their property sits at the end of the city limits on Elizabeth.
He implored the Council to rethink the ordinance. Mayor Pastor said the idea of updating the ordinance has been talked about in committee and he would also discuss the situation with City Ordinance Officer Justin Dudra who issued the citation.
At 7:19 p.m., the Council entered into executive session to discuss purchase of property. City Engineer Greg Holthaus and City Development Director Kirby Casner were invited to join the session at 7:26 p.m. The session ended at 8:02 p.m. with the announcement no action was taken.
The meeting adjourned immediately following the executive session. Next meeting of the Pana City Council is Monday, Apr. 10, 2023 at 7:00 p.m. in the Council Chambers of Pana City Hall, 120 E. Third St.
DeKalb City Hall along Lincoln Highway (route 38) in DeKalb, IL on Thursday, May 13, 2021. (Mark Black for Shaw Local/)
DeKALB – After deliberating for months, DeKalb city leaders voted this week to impose restrictions on video gambling in town.
Under an ordinance amended by the DeKalb City Council in a pair of 5-0 votes, restrictions will prohibit video gambling establishments in current and future restaurants, in gas stations, food and fuel establishments and liquor stores but not video gambling terminals in businesses holding a bar liquor license in town.
The City Council’s decision comes on the heels of delays in state license issuance to CJ’s Gaming Bar and years-long deferrals of Blue Ridge, LLC and its request for a license, which officials say complicates the city’s efforts to cap video gambling establishments at 10.
DeKalb Mayor Cohen Barnes said he believes the amended video gambling ordinance is a win-win for the city and the restriction deliberations weren’t rushed.
“This is a great compromise for, I think, everyone concerned that we are still allowing this to move forward,” Barnes said. “We’re just restricting a certain number of it. Future councils can always change it, absolutely. This is just what we’re deciding right now is what we believe is best for the city of DeKalb.”
Also under the amended ordinance, there are five businesses – Keg and Kernel by Tangled Roots Brewing Company, La Calle Bar and Music Venue, Lord Stanley’s and the Annex, Tapa La Luna and The Grove Tavern – that would become eligible for a video gambling license.
DeKalb resident Duane Brown urged the Council to make the city more business-friendly.
“We don’t need unnecessary and restrictive regulations regarding the number of video gaming establishments in the city,” Brown said. “This is already a highly regulated industry by the state. Don’t put a cap on the number of establishments. This has cost and will cost prospective businesses to seek permits in other cities. Quite frankly, the free market does a much better job of determining a proper number than the City Council does.”
Discussion on this topic previously arose at the council’s meeting held earlier this month. During that meeting, the City Council extended a request made by Jeff Dobie of Blue Ridge LLC for a liquor and video gambling license in order to operate a proposed 6,090 square-foot building, across from Fatty’s Pub and Grill. Action taken by city leaders at the time provides that there will be 11 video gambling establishments allowed in town.
At a maximum, a licensed establishment is allowed to have up to six video gambling terminals for patrons to use, according to city documents.
In 2022, the city took in $391,000 in tax revenue from the terminals, the highest annual revenue to date, according to city records. License fees brought in $96,000 for the terminals in 2022.
Sixth Ward Alderman Mike Verbic questioned where all the money generated from the city’s video gambling would go.
“Will this be a part of a budget discussion then, or we will direct you to carve out a specific amount of future proceeds from gaming?” Verbic asked.
City Manager Bill Nicklas replied, saying revenue generated from area video gambling goes to city’s general fund. He expressed some hesitancy about setting aside funding to area social service agencies to address the issues with gambling.
“We don’t know yet about quality, what they’re bringing and if they’re successful and all that,” Nicklas said.
Verbic, who said he’s opposed to video gambling, said he supports the council’s decision but believes more action is needed for people susceptible to gambling addictions.
“I feel like we should be dedicating a portion of whether it’s monies we’ve already collected or future monies to address that issue specifically,” Verbic said. “We don’t provide counseling from the city of DeKalb but how can we be a better partner to help people that are taken by this gambling.”
La Grange Park Village Hall and police station, at 447 N. Catherine Ave., in La Grange Park, Ill. (Kimberly Fornek / Pioneer Press)
Some restaurant owners in La Grange Park are calling for the repeal of the Village ordinance banning video gaming and passing a new ordinance to allow the practice in the Village.
At issue are the lingering effects of the pandemic on the restaurant industry and revenue lost to neighboring municipalities that allow video gaming.
Vito Francese, representing Mattone Restaurant, 9 E. 31st Street, spoke to the Village Board at the Nov. 22, 2022 meeting and sought to ease concerns some had about the quality of life issues video gaming might cause.
“As far as advertising, there would be nothing loud or obnoxious in regards to that,” he said. “And as far as the surrounding towns, we haven’t seen any uptick in crime.”
Francese also said that Mattone’s hours would not change to accommodate video gaming.
The owner of Bill’s Place, 1146 N. Maple Ave., identified only as “Bill,” told Trustees that he was in the position of a business owner trying to survive.
“I don’t need favors,” he said. “I just need your understanding. I need to try and survive, and I don’t know how long. Things have been difficult.”
Christopher Chin, a lifelong La Grange Park resident who works for the Village of Forest Park, a municipality that prohibits video gaming, sympathized with the two business owners.
“They’re fighting for their lives,” he told Trustees, stressing that the way state law was written, responsibility for running the business rests with the State law and the business owners.
“It’s a passive revenue stream,” Chin said.
Trustees were generally sympathetic to the plight of local business owners missing out because customers were taking their business to neighboring municipalities.
“In light of the comments tonight, I do feel that the businesses are terribly suffering,” Karen Koncel said, that with their costs continuing to climb “they were lucky to have the employees that they have.”
In light of the financial peril some of the business owners faced, Robert Lautner spoke of the need for action in a timely fashion.
“I consideration of our business community, we do need to move a little more rapidly,” he said, noting that he saw no need for a nonbinding referendum on the issue.
But Jamie Zaura pointed out that details of allowing video gaming were yet to be worked out.
“I need to know how this is going to work if it’s approved,” she said. “I will say that I’m not going to approve it if I don’t know how it’s going to work.”
Village staff, responding to public interest on the subject, prepared a report on video gaming that it presented to the Board at its Nov. 9, 2022 workshop. The report outlined the general history in Illinois, and can be found on the La Grange Park website under the agenda for that meeting.
The Illinois General Assembly passed the Video Gaming Act in 2009 (VGA), but in 2010 the Village of La Grange Park passed an ordinance prohibiting the practice in the Village.
Since then, Illinois has added 8,107 video gaming establishments operating a total of 44,110 Video Gaming Terminals (VGTs) state wide.
A key provision of the VGA is that any organization operating a VGT must have a valid liquor license. It also mandates other restrictions, including not operating within 100 feet of a school or place of worship, not operating within 1,000 feet of a racetrack or a riverboat casino, and limits the number of VGTs to 6 to an establishment.
Moreover, municipalities are allowed to prohibit video gaming within the municipality, or limit the number of licensed establishments through available liquor licenses.
La Grange Park currently has 9 establishments that have the proper liquor license to host video gaming if approved, meaning there could be up to 54 VGTs throughout the Village without new establishments.
The staff’s report shows the municipal tax share of neighboring municipalities roughly comparable to La Grange Park for the period ending September 2022. Among them are Brookfield, (80 total VGTs with $265,000 as the municipal share), Woodridge, (53 VGTs with $198,000 municipal share), and Schiller Park (69 VGTs with a $211,000 municipal share).
But not all business owners are on board with bringing video gaming to La Grange Park.
At the Dec. 13 meeting, Jason Korinek, owner of Posto 31, 1017 E. 31st Street, spoke forcefully against allowing the practice in the Village.
“Video gaming is not what this Village needs,” he told the Board during public comment, stressing that it would deter people from visiting La Grange Park. “These are family restaurants.”
Korinek also said that even during the height of the pandemic, Posto 31 “kept its entire staff.”
At the same meeting, Planning and Zoning Commission Chair Caroline Domagalski also spoke against video gaming.
Speaking of neighboring villages La Grange and Western Springs, she said “they do not have video gaming. That’s part of the reason these places are so attractive to visit.”
While the matter has been discussed at the last several board meetings, as the Doings goes to press, no decision has been made about formulating an ordinance to repeal the existing ban on video gaming or allowing it.
More discussion is planned for the next meeting at 7:30 p.m. Tuesday, Jan. 10 at the Village Board Room, 447 N. Catherine Ave.
Hank Beckman is a freelance reporter for Pioneer Press.
The year ended up being the best for gambling tax collections.
Eleven Darien restaurants and bars have video gambling machines. The one making the most money with its machines is Stella’s. (David Giuliani/Patch)
DARIEN, IL – Darien collected nearly $285,000 in video gambling money last year, excluding December.
That number is 9 percent above the income during the entire year of 2021, which was almost $260,000.
Overall, though, 2022’s income was nearly 30 percent higher than 2019’s, according to state numbers.
In Illinois, 5 percent of video gambling proceeds go to local governments.
Eleven restaurants and bars in Darien have video gambling machines. The top five city tax generators in 2022, excluding December, were Stella’s ($63,527), Dotty’s ($50,634), Zazzo’s Pizza ($35,306), Q Bar ($30,306) and Darien VFW ($26,623).
Darien has used sources such as video gambling money to help keep its property tax levy the same for more than a decade. In 2020, gambling tax collections plunged in Darien, with the city getting $136,324. Because of the pandemic, the state suspended video gambling for five months that year.
Many suburbs do not allow video gambling. They include Burr Ridge, Hinsdale, Clarendon Hills, La Grange, Western Springs and Elmhurst.
Here’s what Darien collected in video gambling money over the last decade:
Video gaming machines at Little Joe’s Pizza in Tinley Park were closed Friday after a Cook County judge refused to stay a village suspension for nonpayment of a 1-cent push tax. (Little Joe’s Pizza)
J&J Ventures Gaming is protesting a decision by the village of Tinley Park to suspend its license to operate its gaming machines in three businesses this weekend over payment of a push tax.
The company filed three complaints in Cook County Circuit Court in hopes the Tinley Park businesses can continue to operate their video gaming machines instead of serving a three-day suspension.
Two of the three judges sided with J&J’s in three separate virtual hearings Thursday and Friday regarding gaming terminals at Betty’s Bistro, Little Joe’s and Pad Thai restaurants in Tinley Park. Judges hearing the cases for Betty’s Bistro and Pad Thai said they would allow them to operate, citing potential loss of income and reputation damage.
Only the judge hearing a case for Little Joe’s, a pizza restaurant, denied the measure, and the machines there were shut down Friday afternoon, the owner said.
J&J’s complaint is over the village’s push tax, which was approved by the Village Board in June 2021 and went into effect April 30 of this year. The village’s ordinance imposes a 1-cent tax on players for every play of a video gaming terminal.
The terminal operators of the video gaming terminal are considered tax collectors for the village, according to the village’s ordinance. Village documents said the push tax payments accompanied by tax returns shall be remitted to the village on or before of the 20th of each month.
J&J attempted to put out receptacles to collect the push tax payments from the players of its video gaming machines as well as a sign that alerts players to the village’s 1-cent per play policy, which it says is a tax on the players. The signs say the tax is not collected from the money deposited into the gaming machines, but players should keep track of their plays and deposit the tax owed to the village in a receptacle marked Push Tax Deposit Box, according to the court complaints.
J&J’s operates 13 video gaming machines in the three Tinley Park businesses.
They collected and paid $4.05 for the push tax for the May 2022 tax period at both Little Joe’s and Pad Thai and paid it to the village in mid-June, according to their court documents, which assert the village issued violations at the establishments for failure to collect the push tax from each person playing video games in May.
J&J attempted to install a receptacle for collecting the push tax at Betty’s Bistro with signs, but was rejected by the business and no players paid for the push tax for May, according to court documents. They also received a violation letter from the village in July, court documents said.
At Zoom hearings Thursday and Friday, attorney Kim Walberg, who represents J&J, said the process of suspending the license punishes the state and the village from collecting gaming taxes, hurts the businesses’ livelihoods and causes damage to J&J’s reputation in the gaming industry.
Customers who want to enjoy gambling over the weekend would go somewhere else if the businesses had to shut down their machines, and employees, who work for hourly wages at these establishments, wouldn’t have an income, Walberg said. Having the machines shut down inflicts the greatest harm on the businesses, she said.
“This is taking much needed money out of their pockets when they can least afford it,” Walberg said, calling the punishment excessive.
Instead of shutting down gaming machines, they could have issued a fine, she said.
Jennifer Turiello, an attorney representing Tinley Park, said the village has a right to enforce its ordinances and said the businesses don’t have to close their doors because their gaming machines are temporarily shut down.
Tinley Park’s ordinance states the push tax provides revenue to promote the general health, safety and welfare of the village and its residents and provide adequate funds to offset the adverse effects of gambling within the village.
Judge Pamela Meyerson on Thursday approved J&J’s request to stay the suspension at Betty’s Bistro. Meyerson said the penalty was greater to J&J’s and Betty’s Bistro, and the village would have to wait at least three weeks to impose a penalty while the legal questions work through the court system.
Hearing the case regarding Pad Thai, Judge Caroline Moreland also granted a 21-day stay. Moreland also said putting off the suspension was necessary until a court can rule on the merits of the case. She cited the loss of income to the establishment and potential reputation damage and said there are conflicting rulings among the judges in these three incidents.
A sign posted Friday at Little Joe’s Pizza in Tinley Park after video gaming machines were shut down after a Cook County judge refused to stay a village suspension for nonpayment of a 1-cent push tax. (Little Joe’s Pizza)
Judge Eve Reilly earlier Friday denied J&J’s motion to stay the suspension for Little Joe’s pizza restaurant, Turiello said.
Sue Vazquez, owner of Little Joe’s, said COVID-19 and inflation raising the cost of her purchases has hurt her business. Gaming machines help pay the rent, she said.
The push tax has been confusing, but she said she feels as if she has abided by all the rules.
“COVID has been hurtful for everyone,” Vazquez said. “We were closed, gaming was closed. We are all just trying to survive.”
Her customers want to enjoy a meal and gambling, and trying to collect a penny-per-play from customers isn’t right, Vazquez said.
“They want to have fun and escape their problems,” she said. “We shouldn’t have to come down on the customers.”
Michelle Mullins is a freelance reporter for the Daily Southtown.
Aurora has delayed any fee increase for video gambling machines in the city. (David Sharos / The Beacon-News)
It appears discussion of any change in fees for video gambling machines in Aurora has been delayed for at least a year, possibly longer.
Aldermen during a recent City Council meeting, discussing the issue because it had been tabled from another council meeting, let the issue die.
But because the issue of any change in fees actually involves two distinct issues, it could come back at a later date.
One of the issues in making an ordinance change is that state law has changed, and city officials wanted to change their ordinance to match the state. The state has said that the terminal operator – which in the state law is called a distributor but either way is the entity supplying the machines – and the establishment must split the fees charged by local jurisdictions.
Most city laws across the state had a structure that charged the machine providers, or terminal operators, more than the establishment.
For instance, in Aurora’s fee structure, the terminal operator pays an application fee of $250 and an annual citywide license fee of $1,000.
A licensed establishment pays only a fee of $25 for each machine, each month.
Mayor Richard Irvin has pointed out that the city intended to favor the establishments, having them pay less.
Because many city laws across the state were like that, the state decided to change statewide law to mandate that the fees be shared equally between terminal operators (which the state calls distributors) and licensed establishments.
The law does allow for the terminal operators to pay the licensed operators’ fees for them, provided a written, signed agreement is reached between the two.
Christopher Minick, the city’s chief financial officer, told aldermen that in talking with Illinois Gaming Board officials, they are not ready to begin implementing the new state language requiring terminal operators and establishments to split the fees.
“The board needs to engage a rules-making process that has not yet begun,” Minick said. “So it may be some time before we know what those procedures would be.”
City Council members were content to let changing the ordinance die at the full council. But aldermen also had discussed a second issue, actually raising the fees themselves.
Owners of both for-profit restaurants and bars that have video gambling, and not-for-profit private clubs, told City Council members that changes in the fees would be a hardship right now, particularly coming out of the coronavirus pandemic shutdown, and the resultant hiring difficulties and inflationary pressures.
So aldermen also let that die for the time being, although that, too, could be revisited in a year. October is when fees are renewed, so if the city does not change things by then, it would go to October 2023.
The issue of the fees themselves had been referred to the council’s Finance Committee, which discussed the fees recently. Nothing was voted on, but discussion showed two differing viewpoints of the fee question.
Ald. Sherman Jenkins, at large, said he thinks the city “should maintain the current fee structure” because input from the business and not-for-profit community clearly showed that changing the fees would be a hardship.
“We love to say COVID’s over, but, well, we know it isn’t,” he said.
Jenkins said the not-for-profit agencies have been in the city for many years, and they are the ones that supply funding for social service organizations, as well as sponsorships of sports teams and other community groups.
“These are organizations that give back to the community,” he said.
Ald. Carl Franco, 5th Ward, Finance Committee chairman, pointed out that the only reason for raising fees is to cover the city’s costs. He said if the fees do need to increase to cover costs, then the city should do it.
“Otherwise we subsidize gambling,” he said. “Gambling should be subsidized by those who take part in gambling. If we didn’t get money from gambling, the state of Illinois wouldn’t even have gambling.”
He said he would like to see the Finance Committee revisit the question at a later date “because I think we need to talk about that.”
The Aurora City Council this week further delayed consideration of any increases in video gambling device fees.
Aldermen this week delayed both routine changes in the ordinance to match a change in state gaming law, and also a proposed change in fees for the video gambling devices.
The delay in changing city code to match the state is for at least two weeks, and will come back to the full City Council at its Aug. 23 meeting.
The delay in increasing the fees was referred back to the City Council Finance Committee, because aldermen agreed there are several issues involving the actual fees that need to be discussed.
Because the agenda already is set for this week’s Finance Committee, it won’t be discussed until the Aug. 25 meeting.
Aldermen made the moves during discussion of the gaming fee ordinance, and after hearing from some local establishments that have video gambling machines.
Jay Wessells, owner of AC’s Pub on the far West Side, said the higher fees would be a hardship because his establishment suffered a fire last December, right after going through problems connected to the coronavirus pandemic.
While the bar and restaurant is getting set to reopen Sept. 1, insurance did not cover all the damage, he said, and the fee increase would be difficult.
“We really don’t need a hit like that,” he said.
Joe Lusk, of the Luxemburger Club on High Street on the East Side, presented another side to the issue. Unlike AC’s, the Luxies Club is a not-for-profit, which uses a lot of the money it raises to donate to social service agencies throughout the city.
He suggested the city adopt lower fees for non-profits than for regular businesses.
“We give money to many organizations, so we’re not just a bar,” Lusk said. “I understand a lot of businesses profit from this; we’re not one of them.”
That suggestion was one reason City Council members wanted to send the fee question back to the Finance Committee.
“We might want to take a look at that,” said Ald. Edward Bugg, 9th Ward, a Finance Committee member.
Ald. Sherman Jenkins, at large, said one reason the council delayed the fee question two weeks ago was to hold a meeting between the city and interested parties, such as bars, restaurants and clubs.
Aurora Ald. Sherman Jenkins. (The Beacon-News)
“That did not happen,” Jenkins said. “We need to consider (them) before we take a vote on this. We need at least to have a meeting of the minds.”
Under the city’s current fee structure, the terminal operator – which in the state law is called a distributor but either way is the entity supplying the machines – pays an application fee of $250 and an annual citywide license fee of $1,000.
A licensed establishment pays only a fee of $25 for each machine, each month.
Mayor Richard Irvin pointed out that the city’s “intent was to give favor” to the licensed establishments.
“Our intention was to have the licensed establishments pay a lot less,” he said.
Many city laws across the state were like that, and the state decided to change statewide law to mandate that the fees be shared equally between terminal operators (which the state calls distributors) and licensed establishments.
The law does allow for the terminal operators to pay the licensed operators fees for them, provided a written, signed agreement is reached between the two.
Aurora’s proposed changes to the fees, which would take effect Oct. 1, would change the $1,000 citywide license fee to a license for each location of $1,000, to be shared between the terminal operators and the licensed establishment.
The monthly terminal fee of $125, which had been allocated $100 for the terminal operator and $25 for the licensed establishment, would be evenly apportioned as well.
City officials estimated that for a licensed establishment, it would represent an annual cost of $750 for each machine, or an increase of $450 for each device. The total impact to a licensed establishment as a result of these changes would be between $950 and $2,750 each year, depending on the number of machines on site, officials estimated.
The fees would change again Oct. 1, 2023. The annual license fee would increase by $100 for each location and the monthly operational fee would increase by $50 a machine.
Officials estimated this would be an increase, for each machine, of $600, to be split evenly between the terminal operator and the licensed establishment. With the $100 location fee, it would increase that fee by between $350 and $1,500 annually, depending on the number of terminals.
City officials said this week a second proposal was simpler – to increase the fee to $4,250 for each machine, which would be split between the operators and establishments.
“We decided to make one change, to have one fee, that would be required to be split,” said Richard Veenstra, the city’s corporation counsel.
All of those proposed fees will be looked at by the Finance Committee.
Utica could get four to six new video gaming terminals, increasing the village total to 50 or more. (Matthew Apgar)
July 08, 2022 at 5:25 am CDT
Utica could get four to six new video gaming terminals, increasing the village total to 50 or more.
Thursday, the Utica Planning Commission unanimously recommended a special use be granted to Dale Senica to operate a bar with video gaming. His bar, Alley Cat’s, would be in the rear of 142 Mill St. — between Mill Street Market and Canal Port — accessible through the alley.
“I just want to bring back a neighborhood bar where a guy can come through the back alley and have a beer,” Senica said, adding later, “It’s going to look great when I get done.”
Thursday’s vote was only a recommendation; Senica needs the approval of the Utica Village Board, which meets Thursday, July 14. If approved, gaming terminals in Utica would climb by 10%.
The Illinois Department of Revenue reported Utica had 10 establishments with 46 gaming terminals, as of May 2022. Last year, the village collected a revenue share of more than $70,000.
Separately, the Planning Commission continues to tweak the sign ordinance and advanced two proposals.
One is intended to limit flashing or illuminated signs. The commission proposes that any sign with a “changing message” — an LED sign, for example — requires a special use before it can be raised anywhere in the village.
The commission also modified the rules governing murals or wall signs. The ordinance now governs any wall facing a public street or alley.
Palatine Village Council voted unanimously on Monday (June 20) to approve the first nine applications for the recently created Class VG liquor licenses, which will allow bars to install video gaming machines.
Village council legalized video gambling on April 11 after years of resistance as the state allowed fraternal organizations, such as the American Legion, to have the machines no matter what bans might be in place.
Village Manager Reid Ottesen told the council that 12 establishments applied for the license, but the remaining three still need to make modifications to comply with state and village regulations before they can go before the council. The list is a who’s-who of downtown bars including Durty Nellie’s and Lamplighter Inn as well as Gators Wing Shack and Alley 64 in the northeast Palatine, and south Palatine’s Donkey Inn and P’s & Q’s Restaurant and Lounge.
Now that the village approved the license, the bars will need to gain approval from the state. Village staff will then complete the final review. The process is expected to take at least another two months or longer, depending on how quickly the state processes applications.
Legalizing video gambling was part of the larger package of liquor license changes that sought to address overcrowding issues by reducing downtown bar hours. Many bars that ended up applying at the first opportunity have been arguing for years that video gambling revenue would help them invest back in the business, and it was offered as a way to make up for revenue losses stemming from reduced hours.
Aside from the aforementioned bars, other downtown applicants include JL’s Pizza & Sports Bar, Schnell’s Brauhaus and T.J. O’Brien’s.
Under the video gaming regulations the village council approved in lieu of the ban, gaming terminals can’t be visible from the outside. Each establishment can have no more than six video gaming terminals located in an area “separated [from the rest of the business] by a permanent opaque barrier with a minimum height of four (4) feet.”
Ottesen told the council on Monday that Lamplighter Inn, T.J. O’Brien’s and JL’s plan to locate the terminals in spaces separate from the bars, so they didn’t have to build any new partitions.
All applicants do need to upgrade and/or install new video cameras to comply with state and village security requirements. Most notably, Ottesen said, the security systems will need to store 30 days worth of footage, and cameras must be able to see within 25 feet of the entrance. He said that per Palatine municipal code, the bars will have signs alerting customers that they are under video surveillance.
He also said that, since the gaming terminals can’t be visible from the outside, one of the conditions for letting the terminals go live is that the windows the terminals would be visible through would need to have screenings.
The fee for a VG liquor license is $5,000 a year, plus $1,000 per terminal. The nine applicants are expected to bring in a total of $99,000 in revenue from the combination of license fees, a portion of user fees and percentages of winnings.
Under the current regulations, video gaming licenses would “terminate” effective July 1, 2024 unless the village council repeals that language. Ottesen told the council that what he heard so far has been promising.
“I was very pleased when I’ve met with [the applicants], because they were already discussing some of the renovations, investing back in their properties,” he said. “I don’t anticipate we’re going to have any problems. They’ve been very responsible through all of this.”
Mayor Jim Schwantz said that he was glad to hear this.
“Having a liquor license is a privilege, having a VG license is an ultra-privilege, and I think the owners here, the establishments, recognize that,” he said.
The city of St. Charles will no longer require businesses to wait a year in order to apply for a video gaming license.
At Monday’s meeting, the St. Charles City Council voted 7-3 to drop the one year waiting period. Voting “no” were 2nd Ward Alderperson Rita Payleitner, 4th Ward Alderperson Bryan Wirball and 1st Ward Alderperson Ron Silkaitis.
The state legalized video gaming in 2009 and St. Charles alderpersons in 2015 narrowly voted to allow video gaming. There currently are 107 gaming terminals inside 20 establishments in the city, St. Charles Police Chief James Keegan told alderpersons during the meeting.
Prior to the change, the city’s ordinance stipulated that businesses must operate for a one-year period before obtaining a video gaming license from the city. The issue had been discussed during the City Council winter workshop earlier this year.
“At the retreat, staff was directed to enhance opportunities for gaming operators and operations within St. Charles with some very narrow guidelines,” Keegan said.
The new rules prohibit video gaming cafes. Video gaming is allowed as an ancillary use only.
Should city officials suspect somebody is operating a video gaming cafe, St. Charles Mayor Lora Vitek – who is the city’s liquor control commissioner – can require a license holder to provide financial, tax and operational records to the city.
While Payleitner said she was confident Keegan would help ensure that “everybody stays above board,” she voiced concerns about video gaming.
“I still see a great determent in video gaming,” she said. “For sure I don’t support expanding it.”
She is concerned that more people have been experiencing gambling problems since the introduction of video gaming.
“That’s the determent I’m talking about,” Payleitner said. “It’s not fights breaking out at machines. It’s just the addictive nature of it.”
Third Ward Alderperson Paul Lencioni applauded the changes.
“I applaud you for finding a way to get through this,” he said, in addressing Keegan.
Fifth Ward Alderperson Steve Weber also supported the changes.
“I think it’s important for everyone to realize that these business owners, most of them are local and live local,” Weber said. “They’re investing in our city, investing lots of money in our city to make it better. I think it’s OK for the city to help the businesses and provide them some flexibility within the ordinance.”
Flagship on the Fox opened in downtown St. Charles in June 2019 and has had video gaming since last December. Owner Steve Mayer said his restaurant hasn’t seen any problems since video gaming started.
“It doesn’t bring in a bad clientele and ideally it helps out the small business owner, it helps out the municipality and it helps out the state,” Mayer said.
Christina Barrutia, owner and manager of The Hive Tavern and Eatery in downtown St. Charles, said the new rules will help her business compete with other businesses that already have video gaming.
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Internet Gambling is a major threat to over 8200 local small business throughout Illinois. Please send a message to lawmakers to protect your neighborhood taverns, restaurants, veteran, and fraternal clubs and vote NO on Internet Gambling!
If Internet Gambling is legalized, many current patrons would be lured away from local taverns, restaurants, veteran, and fraternal clubs and instead play their favorite VGT games on their cell phones or computers, just to bolster the profits of online gambling companies. Internet Gambling will mean fewer patrons at local small businesses, and undoubtedly, result in lower revenue from food and beverage sales, in addition to video gaming. Please sign the petition and let your voice be heard!
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Guidelines to Safely Reopen Additional Businesses and Industries as State Advances to Next Phase of Restore Illinois
