Video gambling will not be offered in convenience stores and gas stations any time soon after city council members said Tuesday night that they did not want to create a new liquor license that would expand gaming to corner stores.
CHAMPAIGN — Video gambling will not be offered in convenience stores and gas stations any time soon after city council members said Tuesday night that they did not want to create a new liquor license that would expand gaming to corner stores.
That direction leaves the city with a bit of a hole in its liquor rules. They do not have a good legal rationale to deny liquor licenses that would open convenience stores to video gambling, but they also do not have great rules to regulate it.
City officials will need to figure out how to fix that. Already six convenience stores had approached the city about wanting to offer video gambling in their stores, but the 2012 state law that legalized video gambling requires that businesses must be able to serve alcohol for on-site consumption before they're eligible to get the gaming machines.
Those six had applied for an existing class of liquor license, and city officials would be hard-pressed to deny them. City Manager Dorothy David said those applications will not be processed while officials look at modifying the liquor laws.
Before the city council rejected administrators' plan on Tuesday night, the solution was to create a new kind of liquor license for convenience stores and gas stations that would have allowed them to serve beer and wine under certain conditions and let people gamble at machines in the stores.
That didn't go over well with city council members or members of the public who commented on Tuesday night. Some said they felt it subverts the intent of the state law, which allowed gambling at businesses like bars and fraternal establishments that were already regulated under local liquor laws that predated the state's video gambling law.
Council member Paul Faraci said he was not comfortable "changing the complexion of convenience stores in our neighborhood." He and others were worried about the prospect of rolling out gambling and alcohol service in businesses frequented by children.
"It just escapes me," Faraci said. "I'm sorry, I don't see how this makes sense. It's not organic. It's not what the convenience store set out to be."
Tom Fiedler, the president of Melody Gaming, which manages 108 of Champaign's 134 video machines at dozens of locations, said moving video gambling into convenience stores would actually be harmful to his industry.
The state gaming law was designed for responsible adult entertainment, he said, in places where there were existing, natural controls.
"The industry was not designed for this," Fiedler said.
He added that trodding video gambling out for public display in convenience stores has generated bad press in other states and has put an end to video gambling in other places.
"We don't want this out in front of the public and where kids are going by on a regular basis," Fiedler said.
John Kindt, an emeritus professor of business at the University of Illinois, said proposals to expand video gambling are likely, and suggested city council members put an end to it before it gets going.
"What is driving this is a huge amount of money, and you're going to see proposals to expand this to all kinds of convenience stores," Kindt said. "It's actually called convenience gambling."
Eric Meyer, who owns Pia's where video gambling has been the most successful in Champaign, said the proposal is an "exploitation really of a loophole in our current law." He said he owns two other bars where he hasn't brought in video gambling.
"Games aren't necessarily good for every location," Meyer said.
City council members on Tuesday night also rejected a proposal to add a $500 annual fee to each of the 134 existing video gambling machines in the city. It would have added at least $67,000 in new revenue for the city, but Faraci and council member Karen Foster said it would be unfair to impose a new fee so soon after the machines started coming online.
"It is coming on after the fact," Foster said. "I didn't see any rationale tonight to explain why we're asking for a $500 fee as opposed to $200 or $1,000."