Video gambling has created a substantial cash windfall for thousands of businesses in Illinois since the state legalized the machines in 2009.
Gambling revenue keeps rising in Bloomington even though the city issued a moratorium on licenses amid concerns gambling had spread too widely in the city. The city lifted the moratorium six months ago. Some businesses feel the city's new cap on licenses is arbitrary and getting a license is its own game of chance.
When Don Jones and his business partner opened JP's Wheel and Ale House on Hershey Road last fall, they got in line to get a gambling license. They first applied to the Illinois Gaming Board, and then they waited and waited. They are still waiting.
“The state is always on their own time, they don’t have any competition,” Jones said.
The state has to inspect the business before approving a permit. That's required before the business can seek a city license.
The moratorium in Bloomington lasted a year and a half. The city council voted six months ago to end the hold on new video gambling. The council also capped the number of licenses at 60, seven more than it already had.
Jones said he worries that by the time he gets state approval, the city will have reached its limit.
Since the city lifted the cap, applications have trickled in. The city has issued four new licenses since September. Mayor Tari Renner says he figured the number would be higher.
“I’m actually quite surprised by that,” Renner conceded. “I was expecting that there would be more of a mad rush toward getting the remaining licenses. Some of it is for a variety of reasons, but one may very well be you have to be in business for at least a year before you can apply for one.”
JP's hasn't reached a year in business. There is an exemption to that rule. It has become a bone of contention. Any business the city deems to be a replica of an existing business that has a gambling license doesn't have to wait. The argument is they have a proven business model.
Jones believes Dr. McKay's Bar and Grill meets that definition. Jones also owns McKay’s. City clerk Leslie Yocum issues the licenses. She said those two businesses are not the same.
“I’ve met with them before and then also talked with it through (the city’s legal department) as well,” Yocum said. “At this point, based on the square footage and the type of business they are operating, we are not seeing that as a replication. We would be looking for 12 months.”
So, JP's is left waiting. The next state gaming board meeting is March 12. The city still has three licenses up for grabs. Yocum is preparing for a line outside her office, something she anticipated after the last gaming board meeting in January.
“I had a Disneyland-style line set up in case they came, so they’d be one by one,” Yocum said. “They’d be reviewed, if everything was in line, time and date stamped and they’d be processed in that order.”
While the city has tried to slow roll its gambling expansion, it made an exception for one business. LuLu's Pizza and Gaming in Decatur wanted to open a second location in Bloomington, just east of downtown in a lot left vacant for two decades.
City Manager Tim Gleason said some city council members didn't want gaming in the name. The city worked out a deal to promise LuLu's a licenseif it opens on schedule and drop gaming from the title.
“If it had just been LuLu’s Pizza, there would have been no side agreement that was brokered with the Lulu’s owners,” Gleason explained.
Lulu's getting a gaming license even before construction doesn't sit well with JP’s owner Don Jones.
“They decided that 60 was the number, to give them one you are just breaking a new rule you made,” Jones said. “It didn’t make a whole lot of sense to me.”
If Jones misses out on a license while waiting for the state, Renner said the city could consider granting another exemption.
“That is a possible scenario,” Renner said “I would personally as liquor commissioner and as mayor be supportive of somebody under those circumstances but that would require five votes on the city council and I don’t know if there are five votes to pass something like that.”
Renner wasn't a fan of the license cap at 60. Some council members wanted no cap. Others wanted no more licenses. This was a compromise.
The mayor said the number is arbitrary, but firm for now.
“But I don’t think the council right now is going to change,” Renner said. “At some point that that 60 number is going to be revisited and it could be a decade from now.”
The number of gambling machines in Bloomington hasn't changed much. It's 271, but gambling revenue continues to rise.
Players wagered $202 million on machines in Bloomington last year. Over $16 million of that was profit, split between the businesses, the state and the city.
The city's share of gambling revenue topped $830,000 last year, up more than $30,000 from the year before.
City manager Gleason said the city doesn't set aside the take from gambling for any particular purpose. Gleason said he can't count on it being a stable source.
“There’s no guarantee that I’m going to have this revenue,” Gleason said. “There is also the possibility that number is reduced through attrition. So I think it would be a wrong move on my part to expect this revenue.”
Gambling also has costs, either through law enforcement or social services to treat addiction. Gleason said those are hard to quantify.
“I think it would be foolish to think there aren’t some impacts and the revenue we are receiving do in fact help with those challenges,” Gleason said.
Bloomington gets additional money from a$500 annual fee it charges each terminal. That brought in $125,000 last year. The city uses that funding to pay for police department public security cameras.
The city has made clear it doesn't want gambling parlors. It limits the percentage of revenue from gaming machines to 50% of total sales.
Normal has 16 gaming establishments. Those machines made close to $5 million last year. The state gets about a quarter of that. The town got close to $244,000.
Restaurant owner Don Jones said he doesn't want gaming to dominate his business. He said the money helps him hire more staff and keep prices down.
“Everyone sees those big numbers and depending which ones you are looking at they do real well,” Jones said. “They just think it’s free money, but it allows you to stay competitive in products and prices for the services you offer and still pay your bills.”
The company Around the Corner brought in $706,000 from five gaming terminals at Dr. McKay's last year. After taxes, the company cleared $484,000.
Jones said his new business JP's will survive with or without gaming machines. He says he is frustrated not knowing when or if the city will let him have terminals at his business. For now, he can't bet on it.
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