Elgin looking at video gambling fees to fund social services

 
 
Posted10/11/2018 5:33 AM
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  • Elgin might create a new, annual video gambling fee to be charged to distributors. Pictured here are video gambling machines at an establishment in South Elgin in 2014.

      Elgin might create a new, annual video gambling fee to be charged to distributors. Pictured here are video gambling machines at an establishment in South Elgin in 2014. Rick West | Staff Photographer

The city of Elgin will be looking at establishing an annual fee for video gambling, and the proceeds would fund grants for social service agencies.

Members of the liquor control commission said Wednesday they would want the new fees to be charged to the distributors that lease video gambling machines to bars and restaurants, rather than burden the latter with additional costs.

The liquor commission comprises the entire city council. The proposal to earmark the money came from Mayor David Kaptain, who pointed out that video gambling has chipped away at gambling revenues from Grand Victoria Casino.

There are 33 establishments with a total of 144 video gambling machines in Elgin, with a maximum five machines per establishment. Video gambling can only be an accessory service restricted to 10 percent or less of the space of an establishment, so video gambling cafes are not allowed in Elgin.

Kaptain ventured that the new fee, to be associated with a license, could be $1,000 per video gambling machine. He pointed to Aurora, which charges distributors an annual $1,200 fee per machine, in addition to charging a fee to the establishments.

The exact amount will be determined after further discussion by the liquor commission in the next couple of months. The final decision will be up to the city council.

The goal would be to implement the new fees starting May 1, mirroring the annual cycle for liquor licenses and fees.

According to data from the Illinois Gaming Board, video gambling in Elgin netted $4.234 million from January to August, of which 5 percent, or about $211,000 went to the city, and 25 percent, or about $1 million, went to the state. The rest went to the establishments, who in turn pay their distributors.

According to research by Elgin's legal department, West Dundee and East Dundee charge $1,000 annual licenses or permits per establishment and $250 for each video gambling machine.

Carpentersville charges annual fees of $500 per video gambling machine through Dec. 31, and that will go up to $750 starting Jan. 1. South Elgin charges an annual $25 fee for each video gambling machine.

"We are by far and away the weakest community (in this regard)," Kaptain said.

Elgin has allowed video gambling since 2013. The city used to allocate about $200,000 in casino revenues to fund grants for social services agencies, but that stopped in 2016 due to budget constraints.

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