Elk Grove Village businesses betting on video gambling
After 50 years of catering to Elk Grove Village families, Elk Grove Bowl is struggling to stay relevant in a troubled economy in which people have less discretionary income and plenty of entertainment options.
The business has seen its worst two years since its opening in 1963 -- a year after Elk Grove Village was incorporated, said Debbie Handler, a third-generation proprietor whose father and grandfather built the bowling center off South Arlington Heights Road.
Handler is betting that video gambling machines will help the bowling center turn the corner.
"Not that this is going to make or break us, but this is going to help us," Handler said. "Ultimately, we are a bowling center, so we need bowlers. I would like the opportunity to at least make the decision whether to have (video gambling) or not. I don't see it as being a big disruption to the community."
The Elk Grove Village Board will decide June 19 whether to allow video gambling.
Handler said she needs at least $100,000 to keep the 40-lane bowling center operating through the summer. That's with it being closed for two weeks in July, which she started doing last year.
"This is a 50-year-old building," she said. "To keep it maintained and running takes a lot. We've just made budget cuts."
Handler already has begun working on her video gambling license application, though she still needs approval from the remaining owners of the bowling center before submitting it to the state.
Like Handler, several other Elk Grove Village business owners view video gambling as a windfall in tough economic times.
While many suburban communities have banned video gambling since the state legalized it in 2009 to raise $31 billion for capital improvements, Elk Grove Village might now be open to embracing it.
That would require reversal of an existing village ordinance that prohibits video gambling but allows bingo, lottery sales, off-track betting and casino nights.
In May, the Elk Grove Village Board conducted a public hearing on video gambling. A majority of the residents who attended voiced support for allowing the machines, while many business owners said their survival depended on them.
The biggest argument for allowing video gambling machines in town is the potential of losing business to neighboring communities.
"Not knowing what's going to happen with the other suburbs ... say Hoffman Estates allows it, our bowlers could easily then join a league and go there," Handler said.
Handler said Elk Grove Village businesses took a hit once before when the village became one of the first communities to ban smoking a year before the state went smoke-free.
"We did lose leagues because Elk Grove wanted to go first," Handler said. "The bowlers knew Elk Grove was going smoke-free and a lot of them moved to other bowling centers."
Handler said liquor sales also have gone down significantly at the center. To make up for the losses, the business started selling lottery tickets.
"We just put in the lottery this last year with the hopes that somebody would win big and we would get a percentage," Handler said. "We are trying everything we can to bring in some added revenue. We want to keep our bowlers at our center a little bit longer. We need this as a lifeline. Either that or people need to get jobs and be able to have some disposable income."
It's not only for-profit businesses that are interested in video gambling. The nonprofit Elk Grove Village Veterans Club Inc. is pegging the survival of VFW Post 9284 on it.
The 40-year-old building along Devon Avenue needs significant improvements that could be funded through video gambling revenues, said Merle Crumb, Veterans Club president.
The VFW post's aging membership is slowly dying out, and a majority of its roughly 230 members can't climb stairs to get to monthly board meetings, which are held on the second floor.
"This opportunity to have video gambling would be a great monetary value to us to upgrade the building," Crumb said. "We'd like to put an elevator in to get to the second floor, upgrade our parking lots, bathrooms. It's just that we have not generated any kind of a profit to maintain the building or anything else. We have not been able to maintain any type of a contingency fund."
Crumb said an elevator system could cost anywhere from $95,000 to $140,000, and the estimate for resurfacing the parking lot and bring it up to village code is $90,000.
Video gambling is small stakes compared to casinos. Gamblers can make bets starting at 1 cent to a maximum of $2, with a maximum payout of $500.
"We're hoping it will generate enough money to help start a fund for other things we need that we haven't been able to do," Crumb said. "If we had five (machines), I would venture to say our take would be $35,000 to $40,000 yearly."
Though estimates vary, the payoff from having the maximum five video gambling machines allowed in any one establishment could significantly improve a business' bottom line, said Rick Cotini, owner of Ringside OTB Sports Bar & Grill.
"All the experts say it could be somewhere in the neighborhood of $40,000 to $60,000 a year," said Cotini, adding that his business has declined 30 percent since 2008.
"It's pretty dire," he said. "We used to stay up until 2 in the morning on weekdays. We are averaging about midnight now. Disposable income and the economy the way it is, is really making it rough for people to go out often. I definitely think we would get some new clientele (with video gambling). The municipality and state will get some additional food and beverage revenue. It would be a win-win for everybody."
By law, video gambling machines are not allowed in the same business as off-track betting terminals. However, Cotini believes he would be eligible for an exemption since his business only leases space to operators of the off-track betting parlor.
Cotini said though rent from the off-track betting business helps, if he had to choose between the two, he would likely go with video gambling because he believes it's more lucrative.
OTB competition has increased with several parlors within a 15-mile radius, including in Arlington Heights, Glen Ellyn and Villa Park.
"The horse racing is still great, (but) it's more of an older person's vice," Cotini said. "There's not a lot of young people. It's just too slow for them, especially with riverboat gambling. It's a new breed of gamblers."
Suburbs that have banned video gambling include Arlington Heights, Barrington, Buffalo Grove, Hanover Park, Roselle and Schaumburg. Some towns that had gambling bans are reviewing lifting them, while others, including Bartlett, have yet to take a stance on the issue.
Machine distributors say if Elk Grove Village doesn't act now, its businesses could lose out and be at the bottom of the list of the nearly 15,000 locations statewide that are expected to apply for licenses.
The Illinois Gaming Board is expected to start handing out licenses Aug. 1 after spending years working out rules and investigating businesses that supply the machines.
Elk Grove Village has 29 restaurants with licenses to serve liquor for on-site consumption that would qualify for the video gambling machines.
Mayor Craig Johnson said many of those businesses have been asking about getting video gambling for three years now, and while their argument is persuasive, he also needs to take residents' views into consideration.
"I'm still weighing both the pros and the cons," Johnson said. "The ironic part is how little we are hearing from the residents of the community."
He said the village board heard more public outcry against off-track betting when that was first being considered five years ago.
Johnson has promised the village would have strict rules, such as mandatory carding.
"People know Elk Grove is a very tough community on liquor licenses. Most people feel comfortable that if (video gambling) does come, we will provide the right oversight to make it safe for the community."
He added that if the village allows video gambling, many neighboring towns might follow suit.
"They are not going to sit by and watch businesses be drawn away by another community," he said.