Eleven years after Illinois passed the Video Gaming Act, Edwardsville is now interested in participating.
The city’s finance committee discussed a plan Tuesday that would use the extra revenue as four different funding mechanisms. No votes were taken.
“We have been kicking around some ideas,” said City Administrator Kevin Head. “Our businesses are struggling.”
City officials know that their businesses need financial help, are facing steep revenue losses and have for months. Some businesses have already closed permanently. Leaders see this as a way to generate new revenue and attract customers.
Head defined it as “very regulated video gaming” and the city would not directly profit at all from this; all of the taxes would be for businesses.
As comparables, Belleville has 161 gaming terminals in 35 establishments. Last year, that city received $40,250 from licensing fees plus $312,066 from its share of tax on the net terminal income, or $352,316. In Alton, there are 146 terminals over 34 establishments. In 2019, the city received $36,500 in permit fees plus $354,593 as its share of the tax, or $391,093 in revenue.
The four revenue streams initially proposed in Edwardsville are business façade improvement grants (30 percent), historic preservation grants (commercial) 20 percent, business start-ups (10 percent) and capital improvements to the city’s water system (40 percent) to help offset future water rate increases.
Alderman Chris Farrar said he was open to the idea but he would like to see more than 10 percent go to business start-ups. Alderman Craig Louer disagreed.
“I don’t believe we should allocate anything to business start-up grants and it’s not because I’m not in favor of businesses starting up,” he said. “I think it poses a lot of problems with us. For instance, we are then in the process of picking winners and losers; we’re going to have to decide who gets it and who doesn’t get it.”
Below are the Illinois and Edwardsville regulations that would take effect if the city allow video gaming within its borders:
State regulations
• Issue licenses, which is $100 per terminal, per year
• There is a background check, including audits of business and staff, drug tests and arrest records
• The business must have a valid liquor license or be considered a truck stop
• A limit of six terminals per location
• Maximum bet and maximum cash awards set
• Area separated and restricted with barriers to customers 21 years old or older; staff must monitor game room
• Restricts locations to more than 100 feet from schools or places of worship
Local regulations
• Establishes Class V (video gaming) Liquor License, supplemental to Classes B (on-premises consumption) and D (fraternal organizations and clubs) – $500 annually
• Any Class A (retail sale; not for on-premise consumption) licensee that is within 1,500 feet of an interstate highway
• Six terminals per location
• Per terminal fee of $250 for frat/vet orgs; $750 for others (paid by establishment or third-party gaming operator)
• Operator fee of $500 per terminal (paid by third-party video gaming operator)
• Set square footage minimums and maximums
• Signage limited to one two feet by three feet – no dynamic displays, no flashing lights, no flags and no additional exterior signage
• 100 feet between establishments
He said another subjective area is where would the city council start when considering a new business versus an existing one.
He thinks sinking revenue from this into city infrastructure like its water and sewer system would reduce those costs, be fair and benefit all city businesses.
“I do have some reservations,” said Alderwoman Janet Stack. “When I first came to council, we went through this whole mess. At that time and because we have the university here and with the research I did at that time, I didn’t think it was appropriate for us to do it. I know that it hurt our fraternal organizations. I’m sorry about that but I have some real concerns.”
Video gaming revenue would go into a special account earmarked for these purposes. There would be a grant application process; approval by finance committee and city council; the finance director would manage tax revenue and fees; any unspent funds in the city’s general fund would be allocated to water system improvements.
Since former Governor Pat Quinn signed the act on July 13, 2009, 90 percent of all municipalities in the state permit video gaming. Edwardsville, Glen Carbon and Maryville are among those that chose not to take part.
After doing research, Finance Director Jeanne Wojcieszak said it was interesting to learn that among the eight area municipalities that allow gaming, the gambled losses versus pay-out are less than 10 percent. She added that public opinion views video gaming is seen as a source of entertainment.
The next step is to put this up for first reading before the administrative and community service (ACS) committee Thursday, then it goes to city council on Sept. 1 for first reading. Next, it will return as an ordinance at ACS on Sept. 10 for second reading before going to the full city council for second reading and action on Sept. 15.
Between Tuesday and Sept. 10, Alderman Craig Louer suggested aldermen share opinions on the topic with each other as well as with Head, the city administrator, and City Attorney Jeff Berkbigler.
If the city council approves it next month, officials would repeal the current ordinance prohibiting video gaming and replace it with a new ordinance covering video gaming guidelines, provisions, requirements and restrictions.
