The five video gaming terminals that sit near the entrance of the Main Gate Bar & Grill have been a boon for part-owner Bill Tinsley.
“It’s huge,” Tinsley said. “I took over the bar in February and August was our best month for video gaming and sales overall.”
Since the machines were installed in 2012, more than $11.7 million has been wagered at the bar, which sits just across the street from the main gate to the Illinois State Fair, resulting in about $10.8 million in winnings and more than $1 million in net terminal income split between the business, the terminal operator, the state and the city.
In August alone, Tinsley’s cut was more than $7,500.
Having this steady stream of income each month is what convinced him to follow through on his goal of opening a kitchen and beginning food service, which will eventually result in the hiring of three additional employees.
“I’m putting all the money back into the building and the operation, get the kitchen going by the end of the year,” Tinsley said. “… I probably could not do it without video gaming. But I’m glad it’s here and it’s here to stay.”
Since 2012, video gaming terminals have cut into the business of brick-and-mortar casinos while becoming a welcome revenue source for the restaurants, bars, convenience stores and truck stops they have come to occupy — not to mention being a helpful revenue source for the state and participating municipalities.
In Springfield, video gaming has rapidly proliferated during the past seven years, with the most recent count being 621 video gaming terminals located at 133 establishments. The terminals generated about $32.8 million in net terminal income in 2018, and have produced $20.4 million through July of this year.
That puts the capital city first in the state in number of video gaming terminals, and second only to Rockford in income generated from the machines.
While by all accounts a positive for business owners like Tinsley, questions have been raised over whether Springfield has reached a saturation point. And, with updates needed to the city’s gaming ordinance to comply with the gaming expansion bill signed in June by Gov. J.B. Pritzker, some city officials are eyeing additional changes to video gaming in town.
Possible City Council action
While much of the focus of Illinois’ new casino gaming law has been locked in on the buffet of new casinos authorized around the state and the legalization of sports betting, slipped in was a bone for operators of video gaming terminals: The right to install an additional sixth terminal per location. State law had previously limited establishments to five terminals.
But, for Springfield business owners to add that additional terminal, City Council must first to update its ordinance. And while they are doing that, additional changes could be forthcoming.
“With the change of the gaming bill at the legislature, I think our city code has it where each participant, each restaurant or bar, can have up to five,” Mayor Jim Langfelder said. “So we will have to change that. But while we’re changing it, we need to take a harder look at it to see how we can make the ordinance better than it is today.”
The ordinance is being drafted and could be ready for debate as soon as October. Besides adding language allowing the sixth terminal, other changes that have been discussed include putting a cap on the number of locations allowed to have video gaming, and beefing up enforcement of a 2014 ordinance requiring new licensees earn at least 60 percent of annual revenue from food and drink.
“We’re doing very well with gaming, but at some point, we need to kind of slow it down,” Ward 10 Ald. Ralph Hanauer said. “We’re getting a lot of requests for gaming and people are trying to disguise a gaming parlor with restaurants or a bar or something like that, when they’re truly just a gaming parlor.”
Indeed, while video gaming has helped many local businesses as intended, a side effect has been the rise of storefront parlors that sell minimal food or alcohol. The 2014 ordinance was passed to put a stop to such “gaming-first” establishments.
Of the capital city’s top 20 video gaming establishments, 17 were either a gaming parlor or truck stop. The three others were Godfather’s Pizza, Franny’s Bar and Butternut Hut.
Hanauer said council members are looking for better enforcement of the 60 percent requirement for locations that are not grandfathered in. Currently, the ordinance is complaint-driven. Possible changes could include a system of random audits to ensure compliance.
Langfelder said it is easier to “change it all at once instead of piecemealing it.”
“So really, the intent of video gaming I think when it was first rolled out was to support the economy with regards to businesses in existence, not to create new ones just because they want gaming,” Langfelder said. “So I think, in a way, it’s kind of gone in a different direction.”
Helping local business
Yet even with some unintended consequences, many business owners say gaming has achieved the intended effect of helping their business and that they would welcome the opportunity to install a sixth terminal.
“It helps us tremendously, especially with the upcoming minimum wage increases and all that stuff,” said Stewart Conn, owner of Abe’s Hideout on Dirksen Parkway. “The gaming is definitely going to help us keep the business going and be able to pick up some of that room.”
Conn said the extra revenue allows him to advertise more, pay his back-of-the-house staff a higher wage, keep his equipment updated and have more flexibility overall with his business, which opened at that location in 2014.
“There’s always room for improvement,” Conn said. “It’s months up and down, it just depends on how everything goes. But in the beginning, when you open a brand new business, the gaming really helped us get our heads above water to an established business.”
However, there was no firm agreement on whether or not capping the number of locations would be a good idea. Conn supports the idea, believing that it will help smaller bars and restaurants remain competitive.
“If we keep expanding and expanding, it takes away from their revenue and we’ll start losing the mom and pop little bars on the corner, we’ll start losing clubs, and I don’t want to see that,” Conn said. “I’m in a strip center, I’m doing pretty well, but I’d hate to see to lose the small guys the more it increases.”
But Tinsley, who is located along a Sangamon Avenue corridor that features a significant concentration of gaming terminals, says the more, the merrier.
“I’m not in favor of any more moratoriums,” Tinsley said. “I think let businesses flourish. I believe you sink or swim. We already have 10 or so places along Sangamon Avenue and if somebody wants to bring in more, it’s a race to provide the coziest gaming room, the most rewards for the players. That’s good for the economy.”
Julie Quinn, who along with her husband operates Gold Dust Gaming, a grandfathered-in video gaming parlor just a few doors down from Abe’s Hideout, said adding the sixth terminal is a “great idea” and that a cap was not necessary.
Quinn, who notes that they are in “friendly competition,” said she sends customers to other places when all her machines are occupied and vice versa.
“I think the market will adjust,” Quinn said.
But other changes aside, business owners are eager to install that sixth terminal.
“It’s going back into the business, flourishing the local economy, three additional full-time jobs,” Tinsley said. “It’s good all the way around.”