Chicago Video Lottery Terminal (VLT) Fees to Increase

Chicago VLT Taxes - Illinois Video Gambling Machines 2018

Video lottery terminal taxes are a key revenue source for the state, county, and city governments in Illinois.

Chicago plans a tax hike on video gambling machines, which its leaders say will bring the video lottery terminal (VLT) tax rates in line with taxes and fees throughout Illinois. Chicago conducted a survey of 25 communities to assess fees and found its suburbs were the lowest in the state.

Currently, Chicago suburbs charge a $250 application fee and a $50 video gambling business license fee. The real money comes from the registration fee, which is $150 per machine.

Soon, the registration fee for video gambling machines will be $1000 per machine. Village Administrator John Lobaito said officials plan a vote on a new ordinance before the annual May 1 application deadline, so operators will have to pay a higher fee upon their next application.

Lobaito said, “We surveyed 25 communities and based on that survey it shows that our fees are a bit low.”

Dawn Abernathy Agrees with Joe Lopaito

Village Trustee Dawn Abernathy agrees with the tax increase. Abernathy said other communities charge a $1000 registration fee for each VLG machine, so the Chicago area communities are only bringing their taxes in line with other communities.

After researching how much restaurants with video gambling machines and the operators themselves making in a year, Abernathy decided to support the measure. Abernathy said, “They’re not doing too bad. I agree, go to $1,000 per machine.”

Illinois VLT Revenues Increase

The Chicago Tribune reported in January 2017 that most south and southwest Chicago suburbs saw increases in tax revenues, meaning the operators had big revenue increases. Much of that growth came from a rapid increase in the number of gambling machines in each venue.

In 2016 alone, the number of video gambling terminals (VGTs) increas by 2,706 machines. By the end of 2016, Illinois had 24,841 video gambling terminals placed throughout the state. The turnover on such machines was $4.2 billion in 2016. while the losses to gamblers was $1.1 billion. Over 25% of the money wagered on VGTs were winnings.

Cook County VLT Amendment

In 2018, expansion continues apace. Cook County’s Board of Commissioners voted in August 2018 to expand video gambling machines into unincorporated areas of the county. Any establishment with a liquor license in the unincorporated areas of Cook County were given the right to host video gambling machines, or “video gaming on automated gambling machines”.

The Cook County Board of Commissioners estimates that roughly 60 local businesses will be affected by the vote. VLTs are a reliable source of income to restaurants, bars, and taverns. In many cases, they help small businesses remain in operation.

Illinois Video Gambling Machine Controversies

Over the past few years, video gambling machines have become a hot-topic debate in Illinois. State law allows any community to legalize VLTs. Many city councils have done so, as the machines bolster revenues for small business owners.

Other communities have taken the opposite tack, refusing to legalize video gambling machines. Some community leaders think VLTs cause problem gambling in their communities. Other towns and communities respond to local church groups, which believe gambling in any form is a sin.

VLTs have created a moral dilemma for some community leaders, because they hear both sides of the debate. Some municipalities have seen most of the other towns in their counties legalize video gambling machines. They hear concerns from residents about legalizing gambling in the community, but also hear complaints from local business owners who see customers drive 5 to 10 miles to restaurants and bars in the next town over, because they can enjoy video gambling along with a meal and drinks.

In such circumstances, there is no easy answer or way to please both sides, so local politicians have vented to the Illinois media about the dilemma they face. More than one Illinois politician has called for the VLT law to be rolled back, but there is little chance of that happening, because VLT revenues are a prop to local businesses and city governments across the state. This week’s tax hike in the Chicago area is another indication of how accepted Illinois video gambling machines are.