As video gambling expands, legislation in works to give towns control
By Mike Nolan email@example.com March 28, 2014 6:52PM
A customer plays Thunderhorn at Penny's Place, a gambling cafe that opened last month in Crestwood. Blackhawk Restaurant Group plans to have 60 outlets in the Chicago area within the next few years and plans openings locally in Chicago Heights, Matteson and Oak Lawn. | Mike Nolan~Sun-Times Media
Full-year 2013 amounts wagered and municipal revenue tied to video gambling for selected Southland communities.
Blue Island — $7.16 million wagered last year, with the city getting $96,176 in tax revenue.
Chicago Heights — $2.68 million wagered; city took in $35,184.
Chicago Ridge — $7.59 million gambled; $109,514 to village.
Crestwood — $4.14 million gambled; $55,138 to village.
Hickory Hills — $3.14 million wagered; $41,960 to city.
Lemont — $3.22 million wagered; $44,765 to village.
Midlothian — $4.18 million gambled, $55,332 to village.
Oak Forest — $8.56 million gambled; $120,281 to city.
Oak Lawn — $11.23 million wagered; $161,700 to village.
Orland Hills — $2.88 million wagered; $42,366 to village.
Source: Illinois Gaming Board
Updated: May 1, 2014 6:08AM
As video gambling continues to expand in her community, Oak Lawn Mayor Sandra Bury freely admits she’s no fan, despite the thousands of dollars in tax revenue coming to the village.
“I have issues with it,” she said.
As legislators weigh the possibility of more casinos, including one in the Southland, hundreds of mini gaming establishments dot the south and southwest suburbs, and tens of millions of dollars are being wagered.
With some 1,300 video gambling terminals operating in the region as of last month, and more on the way, that has Bury and a local state legislator concerned about whether the spread can be controlled.
“You don’t want to turn into ‘little Las Vegas,’ ” Bury said.
To cater to customers who want something a bit more exciting than scratch-off lottery tickets or can’t regularly trek to an area casino, bars and restaurants have embraced video gambling.
In Bury’s community, there were 122 terminals last month, compared with 79 last July, and applications from two more businesses are pending with state gaming officials.
Homer Glen had no gambling devices operating in November, while there were 10 terminals in December and 25 by February. License applications that could bring as many as 15 more machines are awaiting state approval.
In Matteson, the eight terminals up and running in November had swelled to 30 by February.
Communities do have a level of control because they can restrict who is issued a liquor license, but while some communities have ordinances putting caps on how many liquor licenses they will issue, others do not. A community can also expose itself to a potential legal challenge if it grants a license to one and denies another without a compelling reason.
State Sen. Bill Cunningham, D-Chicago, is working on legislation, at the behest of Bury and Orland Park Mayor Dan McLaughlin, that would, through the issuance of liquor licenses, enable communities to restrict how many of those license holders could also offer video gambling.
Cunningham said the measure is still “a work in progress,” and that for now “it’s either all in or all out” for towns on the video gambling issue.
Municipalities “have no say at all on the issue” as far as limits, but the gambling legislation was crafted that way to try to remove local politics or favoritism from the process of issuing gambling licenses, Cunningham said.
“There are very few areas of (business) licensing outside of video gaming where the local municipality has little or no control,” the senator said.
Some communities that at first decided to opt out of the state law and bar video gambling have since reversed their position, such as Tinley Park, where two businesses have so far installed machines while about a dozen others are awaiting state approval. Voting in January to allow the terminals, village officials said they were lobbied by some business owners who said they were at a competitive disadvantage because gambling was allowed in neighboring communities.
Orland Park opted out of the gambling law and is surrounded by towns that allow video gambling, including Homer Glen, Oak Forest and now Tinley Park. McLaughlin said he’s heard from “probably a half-dozen (business owners) who have expressed a strong desire” to offer it as well.
However, McLaughlin said, without an element of local control, the village won’t budge from its position.
Bury wonders if, at some point, a saturation level will be reached that will itself limit existing or new businesses from wanting to offer gambling.
“If they’re on every corner, what’s special about it?” she said. “It will lose the novelty.”
While the amounts of money being wagered in video gambling are substantial, what the communities themselves are getting is, by comparison, small.
Oak Lawn, for example, last year saw just under $162,000 in video gambling tax revenue, or a bit more than the $150,000 in liquor license fees the village expects this budget year. Still, as the numbers of businesses offering gambling rose through the year, amounts wagered and tax revenue also increased, meaning the full-year total for 2014 could be significantly higher.
Yet there’s no easy way to tell whether video gambling is bringing new revenue into a community, or just borrowing it from somewhere else.
Working under the assumption that a given household’s budget allows just so much money for entertainment, video gambling might mean a shift of some of those dollars, according to Michael Williams, an assistant professor of finance with Governors State University’s college of business and public administration.
Money spent on entertainment as a whole “would probably stay about the same, but there would be some transfer” to video gambling, he said.