Cary approves ordinance allowing gambling push tax but can't enact it
Cary village trustees approved an ordinance Sunday allowing the village to enact a penny-per-play fee on video gambling machines to get ahead of an Illinois bill that would restrict municipalities' abilities to do so, but because Cary is not a home-rule community, it does not have the power to implement such a tax.
Instead, village administrator Jake Rife said, this ordinance is meant as more of a placeholder to make sure it was on the books while staff did a review of House Bill 3136.
The bill, which passed the General Assembly on Oct. 28 and still needs Gov. JB Pritzker's signature, includes a provision prohibiting home-rule communities from imposing push and other amusement taxes after Nov. 1.
A push tax refers to the one-cent fee a player is charged every time they make a wager on a video gambling terminal. If a player made 100 wagers, or "pushes," the tax would be $1 in total.
Because of the fast-moving nature of the state Legislature, village staff wanted to ensure they had time to do a complete, thorough analysis of amendments made to the bill late last week, Rife said.
"We ended up completing that review here early this week, and unfortunately, it looks like we're out of luck and this push tax will only apply to home-rule communities," he said.
Still, trustees during an emergency Sunday meeting approved the ordinance unanimously with the understanding that they might not have the authority to implement the push tax, Rife said.
Municipalities with a population of more than 25,000 are automatically given home-rule authority, though smaller municipalities can become one through a referendum. There are 217 home-rule communities in Illinois, per the Illinois Municipal League's website.
The purpose of home rule is to "allow for local solutions to local issues and problems," according to the Illinois Municipal League. Home-rule municipalities can exercise any power and perform any function unless specifically forbidden from doing so by state law, as House Bill 3136 would do.
Four McHenry County municipalities that are home rule successfully passed the push tax on Sunday. Officials in Algonquin, McHenry, Lake in the Hills, and Woodstock all unanimously passed ordinances to enact the fee.
During Algonquin's meeting, Police Chief John Birk said it would be the terminal operators who are liable for collecting the push tax and transmitting it to the city, not the businesses where they are located.
Crystal Lake approved the tax earlier in October, but they have yet to officially enact it yet, as City Council members wanted to work out the mechanics of the fee.
Local officials estimate the tax could bring in several hundred thousand dollars in revenue each year for their communities, as previously reported by the Northwest Herald.
This revenue would be on top of the cut municipalities and the state receive from video gambling profit. The state receives 25% of the terminal's net income while municipalities receive 5%.
Cary, as of October of this year, has nine establishments that offer video gaming, with 49 total terminals. In fiscal year 2020-21, Cary received a little more than $87,729 in revenue from these machines.
Had the village been able to impose the push tax, it would have taken in an estimated $55,000 to $225,000 annually, depending on how many wagers were made.