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Illinois - About 5000 Shops use Video Gambling Terminals

Published on October 25, 2014, 4:32 pm

by Jeff Grant Twitter account Jeff Grant LinkedIn account

In 2009, the Video Gaming Act of Illinois authorized the operation of video gambling terminals, or VGTs, in any licensed Illinois business. The types of businesses that were permitted to obtains VGTs were primarily bars, truck stops, and restaurants. At that time, less than 100 establishments in the cities and suburbs of Illinois chose to open up their floors to video gaming terminals. Now, five years later, close to 6,000 businesses in the state hold licenses to operate the machines.

Indeed, the popularity of VGTs in Illinois has exploded over the past two years. Casino video terminals notwithstanding, experts estimate that approximately 18,000 VGTs dot the business landscape of Illinois. This landscape includes primarily bars, restaurants, and other fraternal establishments. It's easy for residents in many areas to find a place to drop a few coins and play a few games without having to walk into a casino.

Illinois video gaming report at September 2014
Illinois video gaming report at September 2014 (Illinois Gaming Board)

Municipalities Have a Choice

In spite of its growing popularity, not all areas of Illinois permit the use of VGTs. Each municipality may choose whether or not this type of casual gambling is allowed in its businesses. At this point in time, over 920 municipalities have chosen to permit the activity, whereas over 175 have chosen to forbid it.

Last summer, when officials in the Illinois town of Lake Zurich decided to permit video gambling machines, they gave their go-ahead with this caveat: Lake Zurich must not turn into a “mini Las Vegas” with glitzy signs and promises of big money. Rather, the proprietors of businesses with VGTs must display their offerings in a “tasteful” manner. “We won't tolerate the Las Vegas look. We're a much higher class community than that,” said Thomas Poynton, Lake Zurich's mayor.

Jason Justen, owner of J's Sports Bar and Grill in Fox Lake, says that video gambling machines may have “saved” his bar from closing. According to Justen, the machines have stimulated his bar's bottom line to the tune of around $6,500 per month. Many local establishments have had similar experiences. Hence, VGTs are very popular with the small business community in Illinois.

Casino Owners Not Happy About VGTs

Tom Swoik (Illinois Casino Gaming Association)
Illinois Casino Gaming Association's executive director, Tom Swoik

Although VGTs may be a saving grace for the small business population of Illinois, they're a headache for casino operators. At present, 10 brick-and-mortar casinos operate in Illinois. When the Video Gaming Act was first approved in 2009, casino officials did little to stop its passage.

However, the machines have become so popular that casino advocates are now voicing their opinions against them. According to Tom Swoik of the Illinois Gaming Association, the competition between the two entities is fierce. Casino operators are starting to feel that they simply can't compete with the allure of local VGTs.

Considering Illinois' recent gambling revenue figures, it's not surprising that casino operators are starting to voice their displeasure. State casino profits in 2013 were at $1.55 billion. Comparatively, local VGT profits were at $300 million. Although $300 million is a small chunk of change compared to $1.55 billion, the casino industry in Illinois suffered a five percent drop in profits overall during 2013.

This profit drop makes the success of VGTs sting all the more. On top of that, an increasing number of VGTs are created and installed every day. It's estimated that close to 12,000 new machines are set up in businesses per year. According to Swoik, that's the equivalent of a new casino sprouting up in the state each month.

Swoik: Please Re-Word the Gaming Act

In attempt to curb the competition that's so fiercely eating into casino revenues, Swoik has called attention to flaws in the original Video Gaming Act. He claims the act is worded too broadly and that more local establishments are gaining access to VGTs than originally intended. In addition, Swoik points out that the proprietors of businesses with VGTs don't adhere to the same code that casino proprietors do. There is no way a local VGT operator can know, for example, if a patron has put him or herself on a voluntary exclusion list.

Looking Out for Problem Gamblers

All casino patrons have the option of adding their name to a voluntary exclusion list. It's a “thinking ahead” tactic in which people who know they have a problem and shouldn't be betting money can ask casino proprietors to please not let them in during a moment of weakness. Unfortunately, small business owners who operate VGTs don't have access to this list. Therefore, a problem gambler seeking a fix could easily visit a VGT, even if his or her name has been placed on an official casino exclusion list.

FAQ of the Voluntary Self-Exclusion Program of Illinois
The FAQ of the Voluntary Self-Exclusion Program of Illinois for problem gamblers, shows no evidence of exclusion from the local Video Gambling Terminals.

Another complaint from Swoik: Casino operators, unlike small business operators, must adhere to strict rules when sending out their mailings. Problem gamblers and those on the exclusion list are not to receive casino mailings that might tempt them with upcoming specials, giveaways, and so on. Business proprietors are not restricted in this way and could unwittingly be bombarding problem bettors with gaming advertisements that are detrimental to their health.

Swoik Gets His Hand Slapped

Aaron Jaffe, chariman of the Illinois Gaming Board, recently conceded that Swoik's concerns are valid. At the same time, Jaffe reprimanded Swoik and the Illinois Gaming Association for not recognizing the potential for these problems before they occurred. “Your organization,” Jaffe told Swoik, “did not take the lead in stopping anything (that would hurt others.)” Jaffe wagged his finger at the organization's former attitude, which basically said, “Well, it won't hurt us."

Swoik agreed that he and his commission “underestimated” the problems the Video Gaming Act of 2009 could potentially create. Nevertheless, he's asking for law changes that would help rectify the situation. Although the commission's first goal would probably be to improve its bottom line, improvements in the law would also help protect problem gamblers in the state of Illinois, as Swoik has so aptly pointed out.


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