Grocery store's video gambling opens new wagering frontier in suburbs

There's more than just booze behind the new bar inside Antioch's Piggly Wiggly grocery store.

Shoppers can find four video gambling machines there, too.

Last month, the Piggly Wiggly became one of the first full-service grocery stores in the state to offer video gambling, potentially opening a new wagering frontier for northeastern Illinois.

As more grocery stores seek liquor licenses, often to allow sales of beer and wine along with prepared food in dining areas, they also become eligible under state law for video gambling licenses.

Piggly Wiggly owner David Karczewski says it's a way for him to compete with big grocery store chains and Wisconsin's tax-free groceries.

But critics say video gambling in grocery stores was never the intention of the state legislature.

“That's what they have in Las Vegas,” said Anita Bedell, executive director of the Illinois Church Action on Alcohol & Addiction Problems.

Some Antioch leaders say adding gambling machines wasn't their intention, either. Karczewski told the village board Jan. 11 that he had no plans to install gambling machines as he applied for a new liquor license to serve alcohol inside his store.

“I don't think I'd use the word 'duped.' I would say I was misled,” Trustee Mary Dominiak said.

Dominiak said she thought the board was just helping a local business stay afloat, not adding to the proliferation of video gambling locations in town.

Less than a week after Karczewski told village trustees he wasn't planning to offer video gambling but noted it was always an option under state law, Piggly Wiggly's new liquor license was unanimously approved.

It cost Karczewski $250 a year in addition to the $2,000 he pays for the license to sell alcohol for off-site consumption, according to village officials.

On March 9, the Illinois Gaming Board received Karczewski's application to install video gambling machines, and by the end of May the license was approved. The machines went live in June, Karczewski said.

“The gambling machines weren't really part of the plan, but I'd say we're pleasantly surprised,” Karczewski said. “I haven't had any negative response from any shoppers.”

Gaming board records show two other full-service grocery stores downstate have video gambling licenses, but none in the suburbs. Many suburban grocers like Mariano's and Whole Foods offer on-site liquor service but do not have video gambling machines.

A representative of Mariano's said the grocer does not plan to add the machines, noting the stores don't sell lottery tickets or tobacco products, either.

The Illinois Gaming Board fought video gambling in “nontraditional” locations like grocery stores but lost a court case, agency officials said. The state's vague law allows for the machines at “any licensed retail establishment where alcoholic liquor is drawn, poured, mixed, or otherwise served for consumption on the premises.”

While the law does single out fraternal clubs, veterans organizations and truck stops as locations suitable for the machines, there are few limits otherwise. Once a municipality or county that allows video gambling issues a liquor license for on-site consumption, there's nothing those government boards can do to stop the establishment from installing up to five video gambling machines.

That should change, Bedell said. Gambling in grocery stories “is going way beyond what the legislature intended and takes it mainstream. You can choose to go to a bar or video gambling parlor, but this is a place where families and children shop. These machines are triggers for gambling addicts, so where are you going to go to get away from it?”

The Antioch board passed a resolution in early May asking the state to modify the law to give local governments greater oversight of what type of businesses can get video gambling licenses.

“The (Piggly Wiggly) proposal itself was a unique thing that was intended to help a local business stay afloat in difficult times,” said Antioch Mayor Larry Hanson. “I would have preferred to add a clause that prevented gaming, but ... that was not an option. Overall, I think the business benefits the community, despite the gaming.”

Revenue from video gambling is split four ways between business owners, the state, local governments and the companies that actually own the machines, called terminal operators. Terminal operators and business owners each get 35 percent of all revenue, the state gets 25 percent, and the local government gets 5 percent.

From June 2016 through May 2017, the most recently reported 12 months, the 61 machines inside 13 Antioch businesses netted nearly $3.5 million. Antioch received less than $175,000 of that. There are dozens of other machines in unincorporated Lake County with Antioch mailing addresses that generated millions more, but that revenue goes to the county, gaming board records show.

Piggly Wiggly's terminal operator is former state Sen. Michael Bond, who now owns Tap Room Gaming LLC, according to records kept by Secretary of State Jesse White's office. Tap Room Gaming operates machines in more than 200 establishments in the region, generating millions of dollars annually. Attempts to reach Bond for comment were unsuccessful.

Tap Room Gaming donated $1,000 to Antioch Trustee Jay Jozwiak's failed mayoral campaign weeks after the village board voted to grant the grocer the liquor license that allows video gambling, according to state campaign finance records.

Jozwiak said he and Bond are old friends and that the contribution had nothing to do with the liquor license vote. Some of Jozwiak's board colleagues said Jozwiak did not lobby them to approve the license, and there is no record in the minutes of either board meeting when the matter was discussed of Jozwiak even speaking. Dominiak said the matter was never discussed in closed session.

Piggly Wiggly revenue records from its first month offering video gambling aren't available yet. Karczewski said the machines have been “busy.”

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  Antioch Piggly Wiggly owner David Karczewski revamped his store to sell liquor for on-site consumption, which also allowed him to get a license for video gambling machines. Jake Griffin/
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