Champaign considers expansion of video gambling
CHAMPAIGN — Video gambling is proving to be very profitable locally and across the state, and city officials are looking to make it easier for businesses to bring the gaming machines into their shops.
Serving drinks at gas stations? Let Tom Kacich know your opinion here
Since the machines first started lighting up primarily in bars a little more than 18 months ago under a new state law, legalized video gambling has grown into a operation that grossed more than $44 million across the state in February alone.
It sure didn't hurt business in Champaign, either, where 134 machines offering games like video poker and slots pulled in $526,880 last month.
Here's a report of video gambling statewide, from the Illinois Gaming Board.
"It's very lucrative for the businesses," said Assistant to the City Manager Elliott Nelson.
It's big business for the state and local governments, too. The income is taxed at 30 percent, and Champaign city officials are seeing more dollars as the machines become more popular: $26,344 last month from the city's 5 percent cut. Another $131,721 went to the state's 25 percent portion.
But somebody has to lose: That $44 million came from gamblers, and the monthly total is growing as the video machines grow more numerous. Illinois players are on pace to lose well in excess of $500 million this year if the numbers hold up, and more than $6 million of that would come from Champaign players.
You can tack on thousands more if the Champaign City Council signs off on legislation it will see for the first time tonight. Gas stations and convenience stores would be the latest businesses to be eligible for video gambling under new licensing rules, and that could spill over into even less-likely candidates.
Already, five Circle K's and a Mach 1 store have approached city officials about lighting up video gambling machines, Nelson said. But there's a hitch — state law requires that video gambling sites be allowed to serve alcohol for on-premise consumption before they are eligible to have the machines.
City officials Tuesday night will propose that council members agree to create a new video gambling license that would make it OK under certain conditions for shop owners to serve wine or beer to customers in convenience stores and gas stations while they play games like video poker or slots.
They are also proposing a $500 annual fee on each machine operating in the city — another $67,000 in new revenue to the city.
It's not about the liquor, according to a memo to the city council. That's just what is required by state law, and the business owners have been "very frank" with city officials about what they intend to do.
"They are not interested in serving abundant amounts of alcohol," according to the memo. "In fact, their business plan is to attract customers with a primary interest in gambling at video gaming terminals but not interested in patronizing a traditional bar."
Those customers, they think, would be more comfortable gambling at a convenience store over a bar.
It's still not entirely clear how many new businesses would line up to get the video gambling machines, Nelson said. But the way the rules are written, it wouldn't just be limited to gas stations and convenience stores.
Nelson pointed out that similar licenses have been granted to a pool supply store in Loves Park and a flower shop in Oak Lawn.
"It's really, really dependent on the marketplace," Nelson said. "I think that there's an appetite out there for video gaming right now and there are a lot of types of business that want it."
The owners of The Neighbors At The Ice House on North Prospect Avenue were hesitant to bring video gambling machines into their bar.
"We waited a year to get the machines because we weren't sure exactly sure how it would affect our business, and we had worked really hard to change our business, change the way it looked," said managing partner Diane Bennett. "We were a little hesitant."
But after getting the machines more than a month ago, Bennett said she is excited. They produced about $5,600 after taxes in February, and that's money that can go to a good cause.
"We're looking more to helping some more charities and things like that," Bennett said.
Some Champaign locations are cashing in quite a bit more. Pia's on West Springfield Avenue grossed $53,811 in February and Jupiter's At The Crossing brought in $45,738 before taxes.
The Urbana American Legion at one point early on was the highest-grossing location in the state. Its monthly income has since tapered a bit to $56,972.
That's just what players lost. Altogether, Champaign customers gambled with more than $2 million across the city last month, and Urbana players put $763,769 into 37 machines in that city. Gamblers in Urbana lost a total $189,055.
By the end of the year, players across the state will have gambled around $2 billion.
Worries about hooking new problem gamblers were prevalent when the machines started popping up a year and a half ago, but Nelson said city officials in Champaign haven't heard any complaints.
Bennett said she has not noticed any problems at her bar, either. Neighbors At The Ice House has "a lot of regulars who play," she said. "It's been good. We've met a lot of new people."
If Bennett thought there was a problem with one of the players, she said she would do something about it.
"We're small enough that we would notice," she said.