PEORIA — The City Council will look closer at businesses that offer video gaming and consider doubling fees for taverns and restaurants that offer such terminals.  If the proposal to raise fees from $500 to $1,000 a terminal is approved, City Hall expects to raise an additional $400,000 a year from the increase in license fees.

Peoria now has 268 gaming terminals, according to the Illinois Gaming Board. That ranks seventh in the state among cities with video gaming machines. Springfield tops the list with 630 machines, while Rockford is second with 468 terminals.

Video gambling revenue, up 75 percent in the past three years, is the state’s gambling success story, producing $1.4 billion in net income in the fiscal year that ended on June 30.

But not much of that revenue goes to individual communities in Illinois. Revenues are split between business owner (35 percent), terminal operator (35 percent) and state (25 percent). The municipality gets only 5 percent.
City Manager Patrick Urich noted citizens had expressed concerns regarding the business model of proposed video gambling cafes where food and beverage was secondary to the gambling opportunities being offered.
“This turns upside down the purpose of the Video Gaming Act (enacted in 2012) which was to allow video gaming machines in qualified liquor-licensed businesses, not to add a very minuscule sale of alcohol as an accessory to gambling establishments,” he said.

Under the proposal to be introduced on Tuesday, a new applicant must generate 80 percent of its revenue from the sale of food and/or beverages for two years prior to obtaining a video license. Secondly, in order to maintain a video gaming license, the license holder must make at least 60 percent from food and beverage sales.
City staff is recommending the number of gaming terminals be linked to a percentage of food and beverage sales. An applicant seeking approval for two video gaming terminals, for example, can generate less from food and beverage sales than an applicant seeking approval for five terminals.

“The circumstance that brings this ordinance revision to our attention is unique,” said At Large Councilman Sid Ruckriegel. “First, it may have existed for only a couple of years and the problem is not believed to be widespread. We are charged with monitoring so many compliance needs under the liquor code and, if properly attended to, can remedy most concerns. Finally, we really need to take a timeout and assess the full impact of the proposed change to determine if we really need to do this at all.”

While video gaming has grown dramatically in recent years, Peoria’s share of gaming revenue from the Par-A-Dice Riverboat Casino has declined by more than 30 percent since video gaming was introduced in 2012. The rise of video gaming has not covered that decline in revenue, according to city records.