Town, City Take $1 Million In Video Gambling Revenue | WGLT

Town, City Take $1 Million In Video Gambling Revenue

Apr 16, 2019

Editor's note: This is the second of a two-part GLT series on how video gambling has played out in Central Illinois. From Monday: Gambling experts and a recovering addict discuss the social costs of gambling.

One million dollars. That’s the combined revenue Bloomington and Normal city governments received last year from video gambling terminals.

The Town of Normal general fund sits at around $67 million each fiscal year. That money covers the majority of municipal operations, like police, fire, and public works.

The town expects its 61 video gambling terminals will bring in $220,000 in local tax revenue this year. City Manager Pam Reece said that might sound like a lot, but she offers some perspective.

The town’s park maintenance division is one of the smaller municipal units. Reece said that division operates on roughly $3.4 million per year. Video gambling revenue equals about 6% of that.

She put it simply: Video gambling revenue is nice to have, but it’s not a large sum.

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The First Terminals

The town’s first video gambling terminals arrived in 2013—only four businesses were licensed. That number has gradually grown to 15.

Reece said there’s a reason for the small number of businesses allowed to have video gambling terminals.

“Since our video gaming licenses are linked to liquor licenses, they have the same kind of restrictions as a liquor license holder,” Reece said.

She said the businesses have to be a certain distance from residential areas, schools, and churches.

Bloomington could not be more different.

The city welcomed its first video gambling terminals a year ahead of Normal. Seven licensed businesses with a combined total of 35 terminals brought in about $8,600. That was in 2012.

Today Bloomington licenses 57 businesses to operate nearly 260 video gambling terminals. Players spent over $60 million on Bloomington’s terminals last year, and won a combined $47 million. Of the net revenue, the city claimed hold of nearly $800,000.

Similar to Normal, that share is merely a drop in the bucket of Bloomington’s $100 million general fund. In fact, it’s less than 1%.

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Drawing The Line

ISU professor and gambling addiction researcher Cindy Kerber said not only is the revenue small, but gambling comes at a cost.

“The gambling industry oftentimes advertises that there’s going to be tax benefits, or new employment opportunities as a benefit of gambling venues,” Kerber said. “It’s important also to consider the lost taxes when dollars are shifted away from other businesses.”

Kerber pointed out other business related costs like loss of job productivity and increased unemployment.

Normal City Manager Reece said it’s a communitywide issue that should be paid attention to as the state eyes a gambling expansion. But the town doesn’t track the direct costs of video gambling terminals.

“There’s a lot of research that’s been done on the impact of gambling and gambling addiction on a community, but a lot of different formulas and different ways to calculate that impact,” she said. “So I’m not even sure the town could put a reasonable dollar amount to what gambling and gambling addictions do to a community.”

She said the town does its part to lessen the impact.

“The Town of Normal I think has done a good job in terms of managing the number,” Reece said. “We only have 66 (61), I believe, video gaming terminals. I think we’re doing a pretty good job of trying to keep a handle on that.”

With 258 terminals and consistently ranking in the top 10 Illinois cities with the most terminals, Bloomington can’t say the same.

The city extended a moratorium earlier this year, essentially buying time while the state pulls together the proposed gambling expansion legislation. That means no new terminals are allowed in the city until after Sept. 1.

The city first placed the moratorium last year after realizing nearly $16 million was pulled from the local economy due to the machines.

Four weeks after extending the moratorium, the city council approved a $500 per terminal fee, estimated to generate $125,000 annually.

Normal charges $200 to license each terminal. If you’re doing the math, that’s a $12,200 check from the town’s 61 terminals.

Still, Reece said the combined local gambling revenue isn’t hugely impactful.

Statewide Expansion

But Gov. JB Pritzker hopes a gambling expansion will bring in an additional $200 million to the state next fiscal year. The legislation is not clear yet, but Pritzker hopes his Democratic-led general assembly will have a bill on his desk before the spring session ends.

Republican State Sen. Jason Barickman sits on the Commission on Government Forecasting and Accountability, which studies gambling trends across the state.

“I think every year that I’ve been in the legislature, there have been serious proposals about some kind of a gambling expansion,” he said. “A few years ago it was about new land-based casinos. This year I think there’s going to be a lot of attention on sports betting and online betting.”

Barickman said he considers legislation on a case-by-case basis.

“My approach is always, you look at those in the context of what the economics are, the supply and demand piece,” Barickman said. “You recognize that I don’t think for us as Illinoisans, situated in the Midwest here, we don’t envision ourselves as being a Las Vegas style environment.”

He said the needs of his district, which includes parts of Bloomington-Normal, are always in the back of his head when weighing a proposal. But with no clear legislation on the table, Pritzker’s expansion plans are lacking a blueprint.

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