Elgin game for more gaming?
By Mike Danahey mdanahey@stmedianetwork.com June 8, 2012 7:02PM
Bartender Sonja Summers serves a customer Thursday at the Loyal Order of Moose Lodge 799 in Elgin. The State of Illinois Video Gaming Act will be a topic of discussion at next week’s Elgin Council meeting. June 7, 2012 | Michael Smart~Sun-Times Media
Updated: July 11, 2012 10:13AM
The Grand Victoria Casino in Elgin has been a cash cow for the city, and more betting could be coming under the state’s Video Gaming Act.
The city council this week is scheduled to discuss allowing video gaming machines in bars and other establishments in Elgin.
Mayor Dave Kaptain said he is not in favor of such a move, which is consistent with his views on curbing gambling expansion that currently is under consideration in Illinois.
The Illinois General Assembly passed the Video Gaming Act in 2009 as part of how it would pay for a $31 billion capital improvement program. The law allows establishments where alcohol is served for consumption (as opposed to carry-out), plus licensed fraternal and veterans establishments, and truck stops to offer video gambling. It also allows municipalities to opt out and ban it.
There is no deadline for municipal bodies to decide on the issue. In the towns that will allow video gambling, terminals could be installed as early as August, pending background checks on applicants.
The machines are powered with software that will report all games and winnings to the state, with the state responsible for turning winnings back to the liquor-serving business and to the local units of government. The act allows the machines “to play or simulate the play of a video game, including but not limited to video poker, line-up, and blackjack” but cannot pay out coins. No payout for a single hand or game can exceed $500.
Revenue makers
The act calls for the gaming vendor and the host establishment to each get 35 percent of profits, with the state getting 25 percent and the local municipality 5 percent.
Proponents estimate that between $375 million and $500 million a year in tax revenue could come from up to 75,000 machines statewide — although some are skeptical of those numbers, particularly since municipalities can opt out of allowing gaming.
According to the Illinois Gaming Board website, more than 250 towns thus far have either decided to opt out of the current act or have had laws banning the machines in place prior to the current legislation.
In this area, both Hampshire and Bartlett remain undecided on issues. Algonquin and Lake in the Hills have decided to allow video gambling; and Huntley is leaning toward allowing it.
In November, the South Elgin Village Board decided to allow video gambling. Village Administrator Larry Jones said applicants must come to village hall for a $25 permit — something no establishment has done so far.
“I think that is only because the state doesn’t have the infrastructure in place yet” to collect from those games, Jones said.
In May, the Kane County Board reversed an earlier vote and agreed to allow video gaming at places in the unincorporated parts of the county. Video gaming is not allowed in unincorporated Cook, DuPage and McHenry counties.
According to the IGB site, Campton Hills, Carpentersville, East and West Dundee, Sleepy Hollow, St. Charles and Streamwood all have opted out or put rules in place to that effect since 2009. The site also notes that Huntley still has an older ban in place, as does Elgin.
House Bill 4466, which is in limbo, would require that bans would have had to have been made after July 13, 2009, to apply to the gaming act. If the legislation becomes law, it would mean Huntley’s and Elgin’s bans would not apply.
As is, to have video gambling, city officials say the council would have to rescind what’s on the books, then create a new ordinance opting into the state’s program.
Who’s applied
The gaming board began taking applications for video poker licenses from businesses in May. According to information provided by the city of Elgin, thus far Carmina’s Restaurant and Banquets, 1055 N. Randall Road; Eaton’s Redwood Inn, 118 W. Chicago St.; Elgin Buffet, 300 S. McLean Blvd.; Gasthaus zur Linde, 11-15 N. Grove Ave.; Hoppe’s Corner, 1075 N. Liberty St.; and Islas Marias, 938 E. Chicago St. have applied, with others expressing interest including the Loyal Order of Moose Lodge 799, 925 S. McLean Blvd.
Elgin Moose Administrator Harry Deitz explained that as a fraternal organization, the lodge could only be making such gambling available to its 1,800 members. The club has been waiting on the matter in part because of the costs associated with the license: $100 for the establishment, $100 for a terminal, and more than $1,000 Deitz said he expects legal fees would be for getting the license.
The money raised could help fund Moose causes, including Mooseheart Child City & School near Batavia. Allowing video gambling also would help the club offset the 3 percent tax on alcoholic beverages that goes into effect in Elgin on July 1, Deitz said.
Mayor against
But Kaptain said he feels there already is enough gambling in Illinois and that the state should look for other means to fund projects.
Gov. Pat Quinn has a bill on his desk — which he appears reluctant to sign — that would allow casinos to be built in Chicago, Danville, Lake County, Rockford and the south suburbs; let existing casinos add more gambling spots; and have slot machines at Arlington Park racetrack.
Last summer and by a unanimous vote, the Elgin council passed a resolution calling for new gaming legislation “with protections that will require such new gaming licenses to be issued in depressed economic areas of the State and in markets that are not adequately being served by an existing riverboat casino.”
It also opposed gaming at horse tracks, calling the introduction of slot machines there at odds with the “overarching purpose of the Riverboat Gambling Act — to enhance the economically depressed regions of the state — but rather confers a substantial benefit on a discrete industry.”
Elgin’s declaration also states that “Illinois cities and regions with riverboat casinos should not be subject to cannibalization of their markets by race tracks that have been long afforded the privilege of wagering by the state.”
However, “the city of Elgin is not opposed to the proposed gaming expansion within the city of Chicago — recognizing Chicago’s stature as a first-level ‘world’ city and that the addition of gaming to Chicago’s diverse, international economy will enhance that city’s appeal in the global marketplace,” the resolution stated.
As for video gaming in Elgin, Kaptain said that although the Grand Victoria Casino originally told the city that would have little or no impact on its bottom line, now the casino feels it would.
“And unless it would help, I’m not in favor,” Kaptain said.
Still deciding
Elgin council members are reviewing further background information and a staff analysis provided to them Friday to mull over in time for this week’s meeting.
“I want to make sure that I fully understand the pros and cons before I officially take a position,” council member Tish Powell said.
Council member Anna Moeller said, “It’s disappointing that gaming expansion is one of the state’s main solutions to economic development and means to fund infrastructure. And it’s my understanding that the local share rate generated by these machines is much smaller than the share rate we receive from the boat. Would we be cannibalizing local revenues generated by the boat by allowing the machines?”
At the same time, Moeller noted, “The machines are already out there to a limited extent, so why not let the state take a cut? Also, if there is a market for these machines, why not let adults who want to spend their money on them do so? I am supporter of sensible government regulation but also believe in the free market and the freedom of people to decide how they spend their money on legal activities. Those are the arguments I am weighing right now.”
Courier-News correspondent Janelle Walker and Sun-Times Media contributed to this story.
