Waukegan (Illinois) approves new video gambling regulations

New rules aimed at stopping the proliferation of video gambling cafes were approved by the Waukegan City Council (Illinois) last week.

The council had put in place a moratorium on video gambling licenses, set to expire March 1, while it worked on the new regulations.

The ordinance approved last Monday evening requires new businesses seeking a video gambling license to be at least 1,500 feet, or about three blocks, from each other. Businesses with existing licenses will be grandfathered in.

Aldermen had been hearing from the public that “there’s just too much of it,” said Ald. Lisa May, 7th, who heads the judiciary committee that initially reviewed the proposal.

The ordinance will prevent two or three establishments with video gambling from opening in a single strip mall, but the council could still grant exceptions in business districts like Waukegan’s downtown, May said.

“It leaves us a lot of discretion,” she said.

The new ordinance also mirrors the state’s regulations, giving the city the local authority to enforce those rules and to revoke a license if the holder fails to pay taxes or any bills it owes to the city, or doesn’t take adequate steps to prevent crimes from occurring at the location.

“There’s really not a lot of new regulation in here for local business owners,” City Attorney Douglas Dorando said.

The ordinance was approved in a 5-3 vote, with Ald. Sylvia Sims Bolton, 1st, Patrick Seger, 2nd, and Edith Newsome, 5th, voting no. Ald. Bill Valko, 8th, was absent.

Attempts by the News-Sun to reach Newsome, Bolton and Seger were unsuccessful.

The proposed ordinance would have also upped the fee businesses pay per machine to $1,500 from $1,000 to help cover the added administrative costs of having to take each application to the council for review, as well as the new enforcement efforts, Durando said. But, a 50-percent increase was just too much for May and Ald. Greg Moisio, 3rd.

Moisio said he would be in favor of gradually increasing the fee each year, and he also backed May’s suggestion of a rebate program where, perhaps, businesses that reach a certain amount in food and beverage tax would be partially reimbursed.

Video gambling, something May said she’s generally not a fan of, has helped some of Waukegan’s struggling businesses stay open, she said. She doesn’t want a fee increase to hurt those businesses.

What she’s more concerned about are video gambling cafes, especially franchises that are not locally owned, she said. They offer limited menus, employ very few people and are “strictly a place for people to gamble.”

Video gambling cafes offer players a “calm, cool environment” to play, said Bridget Weber, the manager for the locally owned Lucky Jack’s Gaming Café.

Unlike some restaurants where the games are just an extra feature thrown in a back corner, video gambling cafes strictly monitor who’s playing and ensure a safe environment, Weber said.

“It’s not the casino,” she said. “It’s more intimate in a gaming café. It’s less of a crowd. It’s more quiet. We can cater more one on one with people.”

May suggested keeping the fee the same for now and sending the issue to the council’s finance committee for consideration, though the new ordinance provides for a 3-percent increase in the fee each year.

The finance committee is led by Valko, who has been a strong advocate for revisiting how much the city charges and regularly points to how much money some businesses are earning off the machines.

For example, one of Waukegan’s biggest earners for video gambling is Lucky Jack’s where nearly $900,000 was gambled in December, according to city records. That resulted in $80,000 in taxable income, of which the city got $4,000 and the state took $20,000. The business also operates locations in Zion, Park City and North Chicago.

But those numbers don’t reflect the business’s other costs — payroll, utilities, rent, taxes, phone bills and alarms — which all add up, Weber said.

Source: chicagotribune.com