Urbana Legion post tops state for video gambling

URBANA — Gamers in November played more than $1 million at video gambling machines at the American Legion Post 71, making it the first and only business in Illinois to crack seven figures and the most lucrative to state and local government.

The overall figures are pretty paltry for the cities of Champaign and Urbana after the machines have been up and running for three months, but local officials say they will be watching to see how much they can expect to receive from the games.

For the Urbana American Legion, 107 N. Broadway Ave., it's big business.

"Everything's tripled," said Post Commander Bruce Brown. "The bar business has tripled."

The machines were made legal this summer, and the state taxes players' losses at 30 percent. Video gambling terminals known as "gray machines" had existed before the new state law took affect, but those were supposed to be for amusement only and not to pay out winnings to players.

When the state legalized video gambling, it gave local governments the option to outlaw gaming at special terminals at bars, restaurants, truck stops and fraternal organizations. The city of Champaign chose not to prohibit video gambling, and Urbana approved a limited form of gaming.

The Urbana City Council's decision was to Brown's approval, because he said the loss of video gaming at the American Legion would have put him out of business.

"We're making more than we ever did on the old machines," Brown said.

Players put $1,066,459 into five machines at the American Legion in November, and they lost $71,193 of it, according to a report from the Illinois Gaming Board.

The state takes 30 percent of what players lose in the machines; 25 percent goes for state capital projects and the remaining 5 percent is distributed to the local government. That is $49,835 for the American Legion, $17,798 for state capital projects and $3,560 for the city of Urbana — just in the month of November.

October was a better month for the American Legion and the city — players put a bit less money into the machines, but they didn't do as well, losing $72,884. That meant $51,019 for the American Legion, $18,221 for the state and $3,644 for the city. Numbers were smaller in September, when the machines had just barely come online.

That money will continue to come in — the machines are designed so that players lose, over the long run, as much as 20 cents of every dollar they play.

While others have expressed interest in getting licenses from the city, the American Legion is the only business in Urbana with the machines lit up. Brown expects that he is drawing business from other establishments that do not have video gambling machines, and he said he has had visitors from places like Sadorus and Paxton just to play.

"They come from all over just to play the machines," Brown said.

In Champaign, four businesses are licensed for video gambling: Firehaus, Legends, Murphy's and the Road Ranger truck stop.

In the three months video gambling has been legal, the four businesses have netted $1,384 in new revenue for the city of Champaign. That is because some of the machines were not online for the entire time — Murphy's gathered $9 for the city in November and Firehaus only $3.

Scott Cochrane, who owns Firehaus and a few other bars throughout Champaign-Urbana, said the new video gambling machines are "a totally different beast" than the old "gray machines" that were sometimes operated illegally.

"We've got very strict rules," Cochrane said. "You have to be 21 to play, and you can't go in the area unless you're 21."

He said he has heard concerns about college students gambling, but said he does not see that as an issue and has seen players of all ages sitting at the machines.

The income on the three machines at Firehaus has been far from jarring — only a net income of $48 for the business so far, according to the Illinois Gaming Board — but Cochrane expects that to pick up.

Cochrane was one of a number of business owners who told the Urbana City Council that video gambling was an integral part of their businesses — in some cases, the differences between keeping the doors open and going out of business.

He said on Tuesday that is still the case. In fact, he is remodeling the old Mug Shotz location at 604 N. Cunningham Ave., U. When it reopens early next year as Tin Roof Tavern, he expects video gambling will be an important part of the business.

"It's going to be a nice little place," Cochrane said. "Everyone's welcome, but it's meant to be a working man's place."

As businesses continue to get licenses from the state, city officials say they do not know yet how much revenue to expect from the new machines.

"We're just going to have to watch it," said Champaign Budget Officer Molly Talkington. "We only have two months of data, so we'll have to see where it goes."

Video gambling in Illinois

State and local government revenues and business incomes continue to grow from video gambling machines in Illinois. The machines started coming online in September, and more have continued to be licensed through November.

Based on early forecasts, the state expects players to lose anywhere between $58 million and $108 million monthly in the machines when the dust settles.
 
Month Total machines Amount played Amount lost Business income State revenue City revenue
September 61 $1,077,935 $90,071 $62,943 $22,607 $4,521
October 714 $17,916,699 $1,387,961 $971,634 $346,939 $69,388
November 1,439 $50,193,228 $3,829,324 $2,680,525 $957,408 $191,481

Source: Illinois Gaming Board

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antigambler wrote on December 19, 2012 at 6:12 pm

"and has seen players of all ages sitting at the machines" 

If they're under 21, they're not allowed to sit at the machines!

Reykjavik wrote on December 19, 2012 at 7:12 pm

Pretty disappointing to hear that the American Legions are homes for such loser activities.

They are welcome to waste their own money, but one wonders if these guys can really afford the luxury.