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Lobbying effort puts video gaming on the table for Elgin

Committee member Bill Freiberg Owls Athletic Club talks about reasons for video gaming local bars restaurants social clubs Tuesday during

Committee member Bill Freiberg of the Owls Athletic Club talks about the reasons for video gaming in local bars, restaurants and social clubs Tuesday during a Elgin Video Gaming Committee meeting at The American Legion in Elgin. February 19, 2013 | Michael Smart~Sun-Times Media

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Updated: March 22, 2013 9:52AM

ELGIN — Owners and patrons of some local bars, restaurants and social clubs say they learned a lesson in recent months about the value of banding together.

Due in large part to their efforts, the city council is set — possibly as soon as next week — to move along rules that would allow video gaming at qualifying places in town.

Last summer, the council had decided by consensus not to opt into the state’s Video Gaming Act.

The law allows video gambling at establishments where alcohol is served for consumption (as opposed to packaged goods liquor stores), truck stops and licensed fraternal and veterans establishments. Payouts are capped at $500 on any one play, and the number of terminals at any one place limited to five.

The act calls for the gaming vendor and the host establishment each to get 35 percent of profits, with the state getting 25 percent and the local municipality 5 percent.

In June, Councilwoman Tish Powell said she didn’t want Elgin to become another Las Vegas, while Councilman John Prigge noted that the gaming could hurt the take at the Grand Victoria Casino.

Rather than being discouraged, Jill Hoppe of Hoppe’s Corner said she and others formed the Elgin Video Gaming Committee. The group, with a core representing a dozen places, claims support from more than 28 other establishments in town. Members say 54 places in Elgin could qualify for each having up to five video gambling machines.

“We decided we needed to be organized,” Hoppe said.

Forming strategy

Bill Freiberg, who is a member of the Owls Athletic Club and the American Legion, noted that the group’s strategy was to meet one-on-one with the council members, then with the mayor and city manager.

American Legion Post 57 Commander Norm Bellows said that grew out of Prigge visiting the post in August and talking with some members who said about how the establishment would be negatively impacted by Elgin not allowing the video gaming.

Frank Gumma said that last summer, the council didn’t realize the repercussions for local businesses of not allowing the gaming, particularly as most of the towns surrounding Elgin decided to allow the machines. Gumma owns Ideal Gaming in East Dundee. He and Kevin Gelatka of G3 Gaming in Lansing have been serving as advisers to the gaming committee.

Illinois has set up a system where a licensed manufacturer sells machines through a distributor that in turn leases or distributes them to a licensed vendor such as Ideal and G3. The vendor then places the equipment in a licensed establishment.

Jim McGrath opened McGruder’s on the city’s far-east side last year and said he comes from the world of auto sales “where you can’t get two car dealers together on anything.” Thus, he was wary at first of joining the effort but later became an impressed member of the gaming committee.

“The council didn’t know how bad business was. We got it across to them that it’s still tough out there,” McGrath said.

Freiberg, a retired Elgin deputy fire chief, said the group became well-prepared for its lobbying efforts. “We were in education mode and remained positive. We never had anything bad to say,” Freiberg said.

Crunching numbers

Mike Flannagan got involved in the cause by being a member of Elgin’s Riverside and Moose clubs and American Legion and VFW posts. He is chairman of the group and its unofficial gatherer of information.

Among Flannagan’s findings were that, through a ZIP code study, a significant portion of patrons were coming to Elgin establishments from out of town and that a many of them were likely to go elsewhere if video gaming were offered there.

Flannagan also was able to extrapolate data from other states and early numbers from Illinois. That showed that if all 54 eligible sites in Elgin had gambling, it could bring in more than $640,000 annually for the city’s take.

“Of course, there will be peaks and valleys, and the numbers will eventually level off. But it will still be extra money,” Flannagan said.

“It it’s just enough money to pay a bill, it’s a plus,” said Mike Cook, who is a member of the Riverside Club.

Members said that their “every little bit helps” attitude stems from dealing with tax, fee and utility increases in recent years, along with soaring food, liquor and fuel costs.

“Nobody’s making a penny serving food right now,” Freiberg said. “On top of that, there are fuel surcharges on deliveries from some vendors.”

Impact already

Backers say allowing video gaming will level the playing field for Elgin spots facing competition from places in other towns. Although only about a half-dozen establishments close to Elgin currently have the gaming, committee members say that is already impacting city businesses.

“The most compelling argument for me was the fact that they are losing business to neighboring communities where video gaming has already been approved,” Councilwoman Anna Moeller said. “I don’t want to put our businesses at a competitive disadvantage.”

Gumma said the state is approving gaming licenses at a rate of 150 to 350 a week, but waits of six months or more for approval are typical.

In Elgin, the committee said they have been told the city’s legal department is working on clarification from the state if local clubs such as the Owls and the Riverside can have the gambling, given that the rules seem to allow it at places with national charters.

And beyond gaming, the group plans to stay together under a different name, Freiberg said, to keep abreast of other business-related issues and to serve as a springboard for the city council and staff to use for small-business issues.

The group also has invited the Grand Victoria to supply a member but has yet to hear back on the offer.

In a move that thrilled and surprised video gaming committee members, at the Feb. 13 council meeting, after a video touting the casino’s positive impact on Elgin, casino general manager Jim Thomason spoke in terms implying the Grand Victoria would not stand in the way of allowing video gaming elsewhere in Elgin.

Flannagan called Thomason’s presentation amazing and said he never knew the casino did as much as it does for the Elgin area.

“Thomason and his team truly are leaders in the community and a great asset to the city,” Flannagan said.

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