Back in September 2012 — the first month of legal video gambling in Illinois — there were a mere 61 machines in operation at 13 establishments in all 102 counties.
One of those establishments was American Legion Post 71 in Urbana, which generated $7,875 in income that month from its machines.
Amazingly, not all the establishments made money at the beginning.
“There was actually one establishment that lost money in that operating month. They paid out ($355) more than they brought in,” said Eric Noggle, a revenue analyst with the Illinois Commission on Government Forecasting and Accountability.
Now, the machines can be found at 22 establishments in Urbana, most of which have the maximum of five each.
In 2019, they generated $7.2 million in revenue, paying $2.25 million in taxes. The state received $1.9 million, while the city collected $358,000.
The Legion post has been a big part of the increase. From its humble beginning of $7,875 in September 2012, its video-gambling income skyrocketed to $517,623 in the 12 months of 2019. Those numbers are emblematic of the strong growth predicted less than 10 years ago for video gambling in Illinois.
“… insiders estimated that the state would plateau at around 20,000 video-gaming terminals,” according to a state financial report.
That estimate is a useful reminder that when it comes to predicting the future, nobody knows anything. In fact, by the end of 2019, there were 33,294 gambling machines available at 7,180 locations throughout the state.
Further, the General Assembly has set the stage for a further explosion in video gambling.
Here’s just one example of how. The state limited the number of gambling machines to five per establishment. But in approving a massive gambling expansion approved last year, the Legislature authorized an increase in that limit from five to six machines.
State officials say 115 establishments have taken advantage of that option, but more will follow, setting the stage for another 7,000 gambling machines.
No one can say what the number will be before the as-yet-unsaturated market becomes saturated. For example, Chicago does not allow video gambling, but there are 5,873 gambling machines outside Chicago but within Cook County.
A recent analysis by the state’s Commission on Government Forecasting and Accountability said “it is expected that this figure will increase significantly in 2020, thereby adding additional revenues for the upcoming year.”
Remember, it’s all about the money. In 2019, those thousands of terminals generated income of $1.676 billion, of which $503 million went to state and local governments. Of that $503 million, the state’s share was $419 million, while local governments took in $83.8 million.
Those are huge sums of cash that fall out of the sky on state and local officials.
But in the context of the financial catastrophe that’s strangling the state of Illinois, they’re helpful but hardly transformative.
Legislators, of course, continue to pray that more gambling revenue will bail them out of the financial hole they’ve dug.
In addition to more casino gambling and the initiation of sports betting, they’re also relying on marijuana legalization to ease the financial pain. They’ve piled so many taxes on cannabis sales that comparison shoppers can get a far better financial deal on the black market.
That’s one reason why they raised taxes on video gambling by 10 percent on July 1, 2019. The rate jumped from 30 percent to 33 percent and will increase to 34 percent on July 1, 2020.
Downstate Illinois has rushed to jump on the video-gambling bandwagon. Of the 20 counties with the most gambling machines, six are nearby. They include Peoria (719 machines), Champaign (673), Macon (565), Tazewell (536), Kankakee (516), McLean (511) and Vermilion (388).
Of the municipalities with the largest number of gambling machines, five of the top 10 are local. Springfield is No. 1 — it has 652. Decatur has 440, Champaign 290, Peoria 276 and Bloomington 271.