Video gambling's spread raising cash, eyebrows
Since video gambling began in Illinois two years ago, the slot-like terminals have been showing up in places lawmakers never imagined - floral shops, laundromats, liquor stores and gas stations. They're also now the main attraction at dozens of storefront bistros and cafes geared toward women.
Video gambling has become big business for the state, but it's also raised some second thoughts in the process.
Since the first terminal was turned on in 2012, it has generated $210.8 million in tax revenue for the cash-strapped state government and $42.2 million for local governments on more than $3 billion in wagered cash, according to the Illinois Gaming Board.
The terminals also have meant significant money for businesses, such as the Arabian Knights Farms and Training Center, an equestrian center in Willowbrook. The horse barn makes most of its money on weddings and parties for income, some of which can be seasonal, owner Michael Vena said.
"There's no money in horses. ... In the middle of winter, this will help," Vena said, talking about the three gambling terminals tucked into a red-carpeted, plywood-walled room in his barn. They bring him $1,750 a month in profit.
One of the sponsors of the video-gambling bill when it was approved in Springfield in 2009 says the spread of the machines into some of these places isn't what he had in mind.
"It was never our intention to turn florists' shops into places for gambling," said Rep. Lou Lang, a Skokie Democrat. "And so, it's something that needs to be looked at, for sure."
The intent was to legalize and regulate a business already operating illegally in many bars and social clubs. Under the law, the key requirement is a liquor license, with each license-holder eligible for three to five machines.
"The liquor distinction was something we put in there to keep some control over the amount (of terminals)," Lang said.
As of October, there were 18,669 terminals scattered across 4,570 businesses, according to the Gaming Board, with several hundred being added every month. Among them are a scuba shop and laundromat in Winnebago County's Loves Park, a florist in Oak Lawn, and a Champaign apartment complex, among others.
Blackhawk Restaurant Group is one of several companies that have opened chains of storefront gambling businesses that also sell food and drinks. They operate under names like Betty's Bistro, Penny's, Emma's and Jena's, and promote their "higher-end demographic segment" and "aspirational experience."
A company official declined to talk, but according to its website, Blackhawk has 43 locations in the Chicago suburbs and nine others open or planned in the Champaign area, Peoria and elsewhere.
Four of the Blackhawk outlets are in Elk Grove Village, northwest of Chicago, where Mayor Craig Johnson said they are the leading revenue generators among the town's 16 businesses with video gambling terminals.
"They gear their businesses toward women between the ages of 35 and 65, and they tell you that," Johnson said.
The suburb has set up hurdles to other operations that officials feared would become "mini-casinos" - requiring food service and setting a minimum business size. "It couldn't be like a 500 square-foot storefront and a guy would hand you a can of beer," the mayor said.
Elected officials in other towns are becoming uneasy about video gambling's growth.
Peoria enacted a temporary moratorium on new gambling locations over concerns that some may offer little but gambling. The city council recently rejected several measures that would have permanently restricted further expansion, but Councilwoman Beth Akeson hopes for some kind of limit.
"We have what we have, but I would not like to see any more," she said.
The state's casino industry also is concerned that the growth of video gambling isn't generating new gamblers but turning the casino's customers into their own.
A report by the state Commission on Government Forecasting and Accountability found that in the fiscal year that ended in June, eight of the state's 10 casinos had revenue drops of at least 9 percent. It concluded that new gambling businesses were siphoning off casino customers.
"If our revenues and admissions are dropping because of video gaming parlors, the taxes we're paying are going to start decreasing," said Tom Swoik, the Illinois Casino Gaming Association's executive director.