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HomeMy WebLinkAbout3. Video Gaming Terminal Discussion 06/09/2015Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM TO: DAVID STRAHL, ACTING VILLAGE MANAGER FROM: ALEX BERTOLUCCI, ADMINISTRATIVE ANALYST DATE: JUNE 5, 2015 SUBJECT: VIDEO GAMING TERMINAL DISCUSSION PURPOSE. To offer information to the Village Board regarding local video gaming terminals. Village ordinance currently prohibits placement of video gaming terminals within the community. BACKGROUND: The Illinois Video Gaming Act (Act) was signed into law in 2009. At the September 8, 2009 Committee of the Whole meeting the Village Board (Board) discussed the Act and subsequently adopted Ordinance 5761 that established a moratorium on the use of Video Gaming Terminals (VGTs) within Mount Prospect until the State Gaming Board (SGB) issued final rules pursuant to the Act. In 2012, the SGB published the administrative rules and after further review the Board adopted Ordinance 6018 to prohibit video gaming within the Village on July 17, 2012. DISCUSSION: A Video Gaming Terminal (VGT) is an electronic machine that plays video games authorized by the SGB that include, but are not limited to, video poker, line up and blackjack. The Act provides the opportunity for licensed liquor establishments, truck stops, and veterans or fraternal establishments to apply to be a licensed VGT establishment. Liquor licenses classifications eligible for VGTs are limited to retail establishments where alcoholic liquor is drawn, poured, or otherwise served for consumption on premise. Also the licensed establishment cannot be located within 100 feet of a school or place of worship under the Religious Corporation Act and 1,000 feet of a facility operated by an organization licensed under the Illinois Horse Race Act of 1975 or Riverboat Gambling Act. If the business meets the necessary requirements, then the Act allows the placement of up to five VGTs within a licensed establishment. The Act and SGB require the owner of the licensed VGT establishment, or his agent, to enter into a written use agreement with the Terminal Operator (owner of the terminals) regarding the placement and maintenance of the terminals. Also, the VGTs must be tested, approved and conform to a standard model. The maximum wager per hand is capped at $2.00 and the maximum cash award for a single hand is $500. Additionally, the value of Video Gaming Terminal Discussion June 5, 2015 Page 2 each credit is limited to 5 cents, 10 cents or 25 cents. VGTs may only be played during the hours allowed for the consumption of alcoholic beverages and dispense "receipt tickets" that can be later redeemed for cash payable by the establishment. The Act and SGB prohibits VGT use by minors and set requirements for terminal placement within a licensed establishment. The Act requires VGTs be located in an area restricted to persons 21 years of age and over. However, if the licensed establishment restricts admittance to patrons 21 years or older, a separate restricted area is not required. When a restricted area is necessary, a physical barrier to the gaming area is required which may consist of a short partition, gate, rope, or other means of separation. The barrier must not visually obscure the entrance to the gaming area, because the VGTs or the entrance to the VGT area must be within view of at least one employee who is over 21 years of age during VGT operation. The Act provides that the SGB has jurisdiction over and shall supervise all gaming operations. If any gambling device is in violation of the Act, then it will be seized, confiscated and destroyed. In addition, the establishment's state liquor license shall be immediately revoked and the owner of the establishment is subject to a Class 4 Felony, meaning the owner could get up to a $25,000 fine and subject to up to 3 years in jail. The SGB 2014 annual report states that there were 41 disciplinary complaints issued against video gaming licenses for conduct in violation of the Act and Rules. Discipline has ranged from the revocation of licenses to the imposition of fines. Additionally, the SGB investigates persons with financial or institutional ties to video gaming applicants and licensees. For reference, the total number of licensed establishments within the state was 4,675 in December 2014. For additional information regarding the Act, VGTs and municipal licensing authority please review Attachment A - Video Gaming FAQ. Municipalities and Video Gaming Most of the Village's neighboring communities exclude video gaming as shown in Table 1. Municipalities have the option to either avail themselves to the opt -out provision of the Act or approve an ordinance prohibiting gambling in the municipality. Table 1: Surrounding Communities that Prohibit Video Gaming as of April 2015 Arlington Heights (Ord.) Northbrook (Opt-Out/Ord.) Rolling Meadows - (Ord.) Buffalo Grove (Ord.) Palatine — (Ord.) Schaumburg (Ord.) Des Plaines (Ord.) Park Ridge (Opt -Out) Skokie (Ord.) Glenview (Opt-Out/Ord.) Note: Listed municipalities are Village comparable communities. Video Gaming Terminal Discussion June 5, 2015 Page 3 In the April 2015 Consolidated Election, Palatine placed an advisory referendum question on the ballot that asked, "Should the Village of Palatine consider video gaming at restaurants and bars that hold a liquor license?" The election results reported that 60% or 2,660 voted "No". On the other hand, the Village of Schiller Park had a referendum in March 2014 which 66% or 401 voted "Yes" and ultimately resulted in the approval of video gaming within the community. Table 2 lists the surrounding communities that permit video gaming. It also references the number of establishments and VGTs in each municipality. Table 2: Surrounding Communities that Permit Video Gaming as of April 2015 Bartlett (9-39) Hoffman Estates* (16-79) Schiller Park (8-32) Elk Grove* (18-77) Morton Grove (9-45) Streamwood (5-25) Hanover Park (5-25) Prospect Heights (9-45) Wheeling* (11-46) (#Est. - #VGTs) = Total number of licensed establishments - Total number of VGTs in municipality as of April 2015. * = Listed municipality is Village Comparable Note: These nine communities were used to compute revenue averages. One concern with allowing video gaming is the potential of new issues that Police Departments would be called on to address. Police Chief Janowick surveyed his colleagues in these communities regarding their experiences with video gaming. The communities that responded reported they have experienced absolutely no increase in criminal activity of licensed VGT establishments. In addition, it was noted by one respondent that the presence of the video poker machines had a positive effect on identification checks and enforcement of the minimum liquor consumption age in establishments serving alcoholic beverages. Revenues: The Act outlines revenue distribution of VGT income. Gamblers' losses are taxed by the state at a rate of 30% and the remaining 70% is divided equally between the VGT operator and licensed establishment. The 30% state tax is then subdivided so that 25% is allocated to the state's Capital Improvement Fund and 5% is placed into the Local Government Video Gaming Distributive Fund. Municipalities shall receive revenues in proportion to the tax revenue generated from video gaming within the eligible municipality and these revenues may be used for any general corporate purpose. Figure 1 provides a visual representation of the revenue breakdown. Video Gaming Terminal Discussion June 5, 2015 Page 4 Figure 1 - Video Gaming Revenue Distribution MunlcIpall Share 1/6th or 16.67% Establishment 359E Taxes 34% VGT Operator 359E b. - State State Sha 5/6th or 83.,339E At the time of the Board's previous discussions on video gaming actual VGT revenue data was limited. Estimates for potential new municipal revenue ranged from $130,000 to $400,000 annually. Today, the SGB has VGT wagering and income data available from 2012 to April 2015 and the following estimates are based on the state's data from the nine communities listed in Table 2. • In 2014, the total average municipal revenue was $84,912, state revenue was $424,561, and total average revenue received by VGT operators and licensed establishments totaled $1.2 million. • Since 2012 Wheeling has collected a total of $193,864, Elk Grove collected a total of $205,105, and Hoffman Estates collected a total of $305,885. • For every one VGT placed in a municipality, the annual average municipal revenue received is $1,280, the state revenue is $6,400, and $17,920 would be split by the VGT operator and the licensed establishment. • The revenue tabulation from the nine communities in Table 2 is provided as Attachment B. In addition to tax revenues, municipalities are allowed to implement a license fee per VGT, since the Act lacks an express preemption of local government video gaming regulation. Also, Section 6(a) of Article VII of the Illinois Constitution provides municipalities the authority to, "perform any function pertaining to its government and affairs including, but not limited to, the power to regulate for the protection of the public health, safety, morals and welfare; to license; to tax; and to incur debt." Table 3 presents municipal license fees from the nine local communities that permit video gaming. Home rule municipalities license fees are unrestricted per the Act, but amounts Video Gaming Terminal Discussion June 5, 2015 Page 5 must bear some relationship to the costs incurred related to local regulation. On the other hand, the Act does set non -home rule municipalities VGT license fees at $25. Table 3 - Municipal Video Gaming Licensing Fees # of 2014 Municipality Annual License Fee Establish- VGT Fee Notes: ments Count Totals Bartlett $25 per terminal 10 41 $1,025 $17,00 Elk Grove* $1,000 per establishment 17 73 0 $500 Initial Fee $12,50 Hanover Park $500 per terminal 5 25 0 Hoffman Estates* $100 per terminal 17 84 $8,400 $10,50 Morton Grove $250 per terminal 9 42 0 Non -Home Rule Prospect Heights $25 per terminal 8 40 $1,000 Fee limited to $25 $25,00 Schiller Park $1,000 per terminal 7 25 0 Streamwood $150 per terminal 4 20 $3,000 Developed specific $42,00 Liquor Licenses for VGT Wheeling* 1 $1,000 per terminal 1 10 1 42 1 0 establishments. * = Listed municipality is Village Comparable Eligible Establishments in Mount Prospect The Village's Geographic Information System (GIS) Analyst and staff utilized GIS software to determine if current liquor license holder's establishments are within 100 feet of a school or place of worship. Mount Prospect has 48 liquor license holders eligible to be a VGT licensed establishment and the complete list is provided as Attachment C. These 48 license holders only include F -Class and S -Class classifications, because Package Liquor stores are not eligible for a video gaming license. 2015 Mount Prospect Public Survey Online surveys were conducted during the 2009 and 2012 video gaming discussions. The purpose was to gauge public opinion on allowing video gaming in the Village. In preparation for the June 9 Committee of the Whole discussion the online video gaming survey was refreshed and reissued. The survey was opened on May 13, 2015 and collected responses through June 1, 2015. The survey was posted on the Village's website, Facebook and Twitter pages. Also, a letter was sent to all 48 eligible liquor license holders inviting them to participate in the survey and notifying them of the upcoming Committee of the Whole discussion. Additionally, local newspapers publicized the survey's Video Gaming Terminal Discussion June 5, 2015 Page 6 availability. The survey had a total response count of 546. This response count is significant and Table 4 places it in context of the 2009 and 2012 video gaming surveys. For further comparison, the July 2011- Flood Event Damage Assessment online survey received 664 responses and the 2013 Police Department Citizen Survey received 398 completed surveys. The 2015 Video Gaming Survey provided respondents with a new answer option to allow non-resident stakeholders with an opportunity to identify their responses. Survey design limited responses to one per computer. In the previous surveys a majority (over 60%) of respondents voted they would not be in favor of Table 4 - Number of Respondents per Video Gaming Survey Survey Year 2009 2012 2015 Response Count Resident 163 57 498 Business 9 7 16 Non -Resident n/a n/a 41 /Business Patron Total 170 62 546 *The sum of response counts is greater than total count, because survey design allowed for multiple responses (i.e. business owner who is also a resident). allowing video gaming in the Village. Public opinion did not change when presented with the scenario that if surrounding communities allowed video gaming, it would potentially put eligible Mount Prospect businesses at a competitive disadvantage. The 2015 survey results reflect a substantial shift in public opinion. Respondents are now overwhelmingly (about 90%) in support of allowing video gaming in the Village. Table 5 shows how respondents have responded to the question of allowing video gaming in the three video gaming surveys conducted. The same survey questions were used in all three surveys. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Table 5 - Survey Response to the Question, "Would you favor the Village allowing video gaming in eligible establishments?" 2009 2012 2015 ■ Yes ■ No Video Gaming Terminal Discussion June 5, 2015 Page 7 The 2015 survey shows a higher than average response rate and a theoretical major shift in public opinion. The 2009 and 2012 surveys required residents to submit an address and in the 2015 survey this question was optional. The 2015 survey responses were sorted to extract data from only respondents that submitted an address. This process reduced total response count from 546 to 425 and still showed the theoretical major shift in public option. The percentage in favor of the Village allowing video gaming reduced from 90% to 85%. Subsequently, the sample was further filtered to exclude non-residents that provided an address and the percentage in favor of the Village allowing video gaming was again about 85%. Attachment D includes a complete summary of the 2015 survey results with comments. CONCLUSION: Staff offers no specific recommendation on this topic. However, staff recommends that if there is any change in current policy, such policy include a local licensing fee per establishment and per VGT in order to capture the additional staff time to monitor the state licensing and local code compliance. Alex Bertolucci Administrative Analyst Attachment A —Video Gaming FAQ Attachment B — Video Gaming Revenues Tabulation Attachment C — Video Gaming Establishment Possibilities Attachment D — Survey Results Attachment E — 230 ILCS 40/ Video Gaming Act AttachmentAVideoGamingFAQ Q.WhatqualifiesasavideogamingterminalΛͻDͼΜͪ A.AͻźķĻƚGamingĻƩƒźƓğƌͼΛͻDͼΜisanelectronicvideogamingmachinethatplays orsimulatestheplayofavideogameauthorizedbytheStateGamingBoard,upon video theinsertionofcash.Authorizedvideogamesinclude,butarenotlimitedto, poker,lineup,andblackjack.TheVGTmustutilizeavideodisplayand microprocessorinwhichtheplayermayreceivefreegamesorcreditsthatcanbe redeemedforcash.VGTdoesnotincludeamachinethatdirectlydispensescoins, cash,ortokensorisforamusementpurposesonly. Q.AretheVGTssubjecttoanyrequirements? A.Yes.TheActsetsforthminimumrequirementsforeachVGT.Theyallmustbe tested,approvedandconformtoastandardmodelthatmustconformtoallfederal lawsandregulations,abidebypayoutandcomputationrequirements,andmeet certaindataandelectronicrequirements. Q.Dothemachinespayoutcoinsorcashwhenyouwin? A.No.TheVGTsauthorizedundertheActonlydispenseͻƩĻĭĻźƦƷƷźĭƉĻƷƭͼthatcanbe laterredeemedforcashpayablebytheestablishment.Theticketisavailableaftera turniscompleteandwillindicatethetotalamountofcreditsandthecashaward, thedateandtime,theterminalserialnumber,thesequentialticketnumberandan encryptedvalidationnumber. Q.IstherealimitonhowmuchyoucanwinorbetonaVGT? A.Yes.TheActprovidesbothmaximumwagersandmaximumearnings.Themaximum wagerperhandiscappedat$2.00andthemaximumcashawardforasinglehandis $500.00.Additionallythevalueofeachcreditislimitedto5¢,10¢or25¢. Q.WhatarethehoursofoperationforVGTs? playedduringthelegalhoursofoperationallowedforthe A.VGTsmayonlybe consumptionofalcoholicbeveragesatthelicensedpremise. Q.HowmanyVGTswillbeallowedateachsite? A.Illinoislawallowsuptofivemachinestobeplacedateachlicenseestablishment. Q.WhattypesofestablishmentsareeligibleforVGTs? A.AͻƌźĭĻƓƭĻķĻƭƷğĬƌźƭŷƒĻƓƷͼͲlicensedtruckstops,oralicensedveteransandfraternal establishments. ͻ\[źĭĻƓƭĻķĻƭƷğĬƌźƭŷƒĻƓƷͼisdefinedasanylicensedretailestablishmentwhere alcoholicliquorisdrawn,poured,mixed,orotherwiseservedforconsumptionon premises,whethertheestablishmentoperatesonanonprofitorforprofitbasis. 1of7 AttachmentAVideoGamingFAQ Q.ArethereanylocationrestrictionsforVGTlicensedestablishments? A.AVGTestablishmentcannotbelocatedwithin1,000feetofafacilityoperatedbyan organizationlicenseelicensedundertheIllinoisHorseRacingActorhomedockofa worshipundertheReligious riverboator100feetofaschoolorplaceof CorporationAct TheActdefinesaͻƭĭŷƚƚƌͼasapublicorprivateelementaryorsecondaryschool registeredorrecognizedbytheStateBoardofEducation. Q.Whatifaschoolorplaceofworshipwastomovewithin100feetofaVGT qualifiedliquorlicenseestablishment? A.VGTapplicationswillnotbeacceptedifaschoolorplaceofworshipmovestooris establishedwithintherestrictedareaafteralicensedestablishmentbecomes licensedunderthisact. Alsoapplicationswillnotbeacceptedifaschoolorplaceofworshipmovestooris establishedwithintherestrictedareaafteralicensedestablishmentobtainsits originalliquorlicense. Q.DoVGTsneedtobeplacedinaspecificareainsidealicensedestablishment?Ifso, howisthearearestricted?Isitsupervised? A.Yes.AllVGTsmustbelocatedinanarearestrictedtopersonsover21yearsofage. Foralllicensedvideogaminglocationsthatrestrictadmittancetopatrons21years ofageorolder,aseparaterestrictedareaisnotrequired.Inlicensedvideogaming locationswhereseparationfromminorsunder21isrequired,aphysicalbarrierto gamingareaisalsorequired.Thephysicalbarriermayconsistofashort the partition,gateorropeorothermeansofseparationandshallnotvisuallyobscure theentrancetothegamingareafromanemployeeofthelicensedvideogaming locationwhoisovertheageof21. owner,manageroremployeeofthelicensedvideogaminglocationwhoisover The 21yearsofageshallbepresentduringallhoursofoperation,andtheVGTsorthe entrancetotheVGTareamustbewithintheviewofatleastoneowner,manageror employee.Whilealocationmayutilizeclosedcircuittelevisiontomonitorthe entrancetotheareainadditiontoanemployee,itmaynotutilizeclosedcircuit televisioninlieuofanemployee. Anotherdutyofthelicensedvideogaminglocationistopreventaccesstoorplayof VGTsbypersonswhoarevisiblyintoxicated. Q.AreVGTsmonitoredbytheStateandcantheyberemotelydeactivated? A.VGTsarelinkedbyacentralcommunicationssystemtoprovideauditinginformation asapprovedbytheStateGamingBoard.Thecentralcommunicationssystemshall useastandardindustryprotocol,asdefinedbytheGamingStandardsAssociation, 2of7 AttachmentAVideoGamingFAQ andshallhavethefunctionalitytoenabletheStateGamingBoardoritsdesigneeto activateordeactivateindividualgamingdevicesfromthecentralcommunications system. Q.Howdoesanestablishmentgetalicense? A.Inordertooffervideogaming,theActrequiresanestablishmenttoobtainalicense issuedbytheStateGamingBoard.Inordertoobtainalicense,theestablishment mustpossessavalidliquorlicenseatthetimeofapplicationandatalltimestheVGT isavailabletothepublic.Uponapplyingforalicense,theestablishmentissubjectto abackgroundinvestigationandmustdiscloseallpersons,associations,trustsor corporationswhowillhavemorethan1%pecuniaryinterestinthevideogaming operation.TheStateGamingBoardwilldenylicensestoestablishmentsthathavea backgroundthatposesathreattothepublicinterestsoftheStateorthesecurity andintegrityofvideogaming.Thisincludesestablishmentswithacriminalrecordor abadreputation,habits,socialstigmaorbusinessassociations. Q.Isaliquorlicenserequired?Ifyes,whathappenstoVGTsiftheylosetheirliquor license? A.Yes,unlessthevideogaminglocationisatruckstoporaveteransorfraternal establishment.Allothervideogaminglocationsmustbealicensedretail establishmentwherealcoholicliquorisdrawn,poured,mixed,orotherwiseserved forconsumptiononpremises,whethertheestablishmentoperatesonanonprofitor forprofitbasis. TheStateGamingBoardrulesstatealicensedvideogaminglocationistocommit Ɠƚ violationsregardingalcoholicbeveragesthatresultsinsuspensionorrevocationof anyliquorlicenseheldbyorassociatedwithalicensedvideogaminglocation. Additionally,alicensedvideogaminglocationistopromptlyreporttotheState liquorlicenseheldbythe Administratoranyactiontakenonorrelatedtoany licensedvideogaminglocation. Q.IsalicensetheonlyrequirementtohaveaVGT? A.No.TheActalsorequiresthattheowneroftheestablishment,orhisagent,must enterintoawrittenuseagreementwiththeterminaloperatorregardingthe placementandmaintenanceoftheterminals.Thisagreementmustbekeptonfile bytheownerandavailablefortheStateGaming.ƚğƩķ͸ƭinspection. Q.Whoisaterminaloperator? A.Anindividual,partnership,corporation,orlimitedliabilitycompanythatislicensed undertheActandthatowns,services,andmaintainsVGTsforplacementinlicensed establishments,licensedtruckstopestablishments,licensedfraternal establishments,orlicensedveteransestablishments. 3of7 AttachmentAVideoGamingFAQ Q.IstheVillageresponsibleforconductingbackgroundchecksand/orlicensinganyof thelicensees? A.TheVillageisNOTresponsibleforconductingbackgroundchecksand/orlicensing anyofthelicensees.TheresponsibilityisplacedontheStateGamingBoard. ThoughtheBoardmaydelegatesomeofthisresponsibility,eithertothe municipalityoranappointedinvestigator,theVillagewillfirstbeprovidedwithdue noticeofthisdelegation.Furthermore,theburdenoncomplianceisplacedonthe licensees,toensuretheyareabidingbytheirrespectivedutiesandobligations. Q.Whohasjurisdictionoverthegamingoperations? A.TheActprovidesthattheStateGamingBoardhasjurisdictionoverandshall superviseallgamingoperationsundertheAct. Q.Doesthemunicipalityhavetocommunicatewiththestateregardinglicensing? A.PerSection1800.1110StateLocalRelations: a)WhenevertheStateGamingBoardtakesanyactionauthorizingorprohibitingthe licensing,operation,oruseofVGTs,itshallnotifythepolicedepartmentorsheriff's officewhosejurisdictionincludesthepremisesonwhichtheVGTsareauthorizedor prohibited. b)Anymunicipality,countyorlawenforcementagencythattakesactionrelatingtothe operationoruseofaVGT,whetherlicensedorunlicensed,shallnotifytheState GamingBoardandspecifytheextentoftheactiontakenandthereasonsforthe action.TheBoardshallthereupontakewhateveractionisnecessaryundertheAct. AnylawenforcementagencythatconfiscatesVGTsorterminalincomeshall,assoon circumstances,turnovertheVGTsandterminalincometo aspracticableunderthe theBoardunlessotherwiseorderedbyacourtofcompetentjurisdiction. Q.WhatifanestablishmentviolatestheAct? A.AccordingtotheAct,anygamblingdeviceinviolationofthisActwillbeseized, ƌźƨǒƚƩƌźĭĻƓƭĻŅƚƩƷŷĻĻƭƷğĬƌźƭŷƒĻƓƷ confiscatedanddestroyed.Inaddition,ƷŷĻƭƷğƷĻ ƭŷğƌƌĬĻźƒƒĻķźğƷĻƌǤƩĻǝƚƉĻķ andtheowneroftheestablishmentissubjecttoa Class4Felony,meaninghe/shecouldgetuptoa$25,000.00fineandbejailedforup to3years. Q.HowareVGTrevenuesdistributed? A.ThenetterminalincomeͻDğƒĬƌĻƩƭ\[ƚƭƭĻƭͼissubjecttoa30%statetax.Ofthattax, fivesixthsisdepositedintotheStateCapitalProjectsFundandonesixthis depositedintotheLocalGovernmentVideoGamingDistributiveFund.The DepartmentofRevenuewillallocateonamonthlybasisthefundsavailabletopay eacheligiblemunicipalityandcountyandthenwilldistributetheseamountsfrom theLocalGovernmentVideoGamingDistributiveFund.Themoneycanbeusedfor anygeneralcorporatepurpose.Theallocationoffundsshallbeinproportiontothe 4of7 AttachmentAVideoGamingFAQ taxrevenuegeneratedbyvideogamingfromtheeligiblemunicipalitiesandcounties ascomparedtothetaxrevenuegeneratedfromvideogamingstatewide. Q.WhendoestheStatedepositLocalGovernmentVideoGamingDistributiveFund amountstomunicipalities?Arethedepositsontime? A.Thevideogamingmoneyistransferredmonthlytothelocalmunicipalitiesaround th the20ofeachmonth.Todatedepositshavebeenontime. Q.IsthereanynewsiftheLocalGovernmentVideoGamingDistributiveFundwillbe reducedliketheLocalGovernmentDistributiveFund? A.Currently,thereisnonewsandstaffwillmonitorthisfurther. Q.DolocalmunicipalitieshaveadditionaloptionstoregulateVGTslocations? A.Homerulemunicipalitiescanlikelyimposedadditionalrestrictionsonthelocationof videogamingmachinesthatarereasonableanddesignedtomeetarational objective. Q.Canamunicipalityhavealocallicensefee?Ifyes,isthereamaximumthefeecan be?Isthefeeperestablishmentorvideogamingterminal? A.Yes.Nonhomerulemunicipalitiescanonlychargealicensefeeof$25.00peryear pervideogamingterminal.Homerulemunicipalitiesdonothaveafeeamount limit;however,thefeemusthavearationalrelationshiptothecostincurredbythe Village. Q.HowcanamunicipalityregulateestablishmentswithVGTs? A.Thelicensedvideogamingestablishmentswouldhavealiquorlicense;theVillage couldexerciseeffectivecontroloveranysuchestablishmentthroughitsliquor licensingauthority.(i.e.ifoneoftheseestablishmentsbecameaproblembecause videogaming,theLocalLiquorCommissionercouldtreatitlikeanyotherproblem of theCommissioneraddresseswithaliquorlicenseholder. Q.Canmunicipalitieslimitthenumberofvideogaminglicensedestablishments? A.TheVideoGamingActissilentonhomerulepreemption;thustheVillagehasthe abilitytoregulatethenumberofvideogamingestablishments. AtrialcourtopinionissuedbyJudgeKennedyinacaseinvolvingElmwoodPark videogaminglicensefeesin2014specificallyheldthattheVideoGamingActdoes notpreempthomeruleauthority.Thecaseisuponappeal.TheVillageAttorneys willmonitoritsprogresstodetermineiftheappellatecourttakesthesameview. Thenumberofvideogaminglicensescanbelimitedthroughtheissuanceof dedicatedliquorlicenses.TheVillagecouldlimitthetypesofliquorlicensesthatare eligibleforavideogaminglicense.TheVillagecouldalsorequireapplicantsfor liquorlicensestoprovideinformationaboutvideogamingintheirestablishments. 5of7 AttachmentAVideoGamingFAQ Finally,theVillagecouldcreateaspecialclassofliquorlicenseforvideogamingor videogamingcafes.Afewmunicipalitieshavechosentolimitvideogamingtoonly certainliquorlicenseclassifications. ThebestexampleistheCityofSycamorewhichonlyallowsvideogaminginliquor establishmentswhichholdaClassB,CorEliquorlicense.Thisallowsbars,clubs, bowlingalleysandgolfcoursestohavevideogaming.Excludedfromvideogaming arerestaurants,whichareaClassAliquorlicenseinSycamore.UndertheCityof {ǤĭğƒƚƩĻ͸ƭregulations,avideogamingcafecouldnotlikelyopenbecausethe definitionofaͻĬğƩͼrequiresthat80%ofthegrosssalesmustbefromalcoholic liquor. Similar,GraniteCity,IllinoishaslimitedvideogamingtoClassAliquorlicenses, whichislimitedtobarswherehalfthesalesarealcohol. Incontrast,thecurrentliquorregulationsinHoffmanEstatesdonotallowbarsor tavernstoobtainvideogaminglicenses.Therefore,anestablishmentwishingto havevideogamingwouldhavetomeetthedefinitionofrestaurant,whichmeans ͻğƓǤpublicplacekept,used,maintained,advertisedandheldouttothepublicas aplacewheremealsareservedprimarilyforsitdowndiningwhichofferspatrons meals,includingdinnerand/orluncheonmenuatwhichtheserviceofalcoholic beveragesisincidentalandcomplementarytotheserviceofsuchmeals.Food service,suchasprovidedbyluncheonettes,diners,coffeeshops,driveins,fast foodoperations,andsimilaruses,donotsatisfytherequirementsofthis ķĻŅźƓźƷźƚƓ͵ͼAcafélocationmaynotmeetthedefinitionofarestaurant,depending onhowitisinterpreted. TheVillageofElginusesitsliquorlicenseapplicationproceduretogather informationaboutbusinessesseekingtoprovidevideogaming.Allfloorplans attachedtoliquorlicenseapplicationshavetoidentifyproposedvideogaming areasandapplicantsfornewlicenseshavetostatewhethertheywillalsoapplyfor avideogaminglicense.Giventhatvideogamingisnowassociatedwithaliquor license,itisanadditionalconsiderationforamunicipalitytoconsiderwhen determiningwhethertoincreasethenumberofliquorlicenses.Thesetypesof liquorcoderegulationswouldhelplimitthetypesofestablishmentsthatcan obtainvideogamelicenses.Further,itensurescurrentliquorlicenseholdershave theabilitytoobtainavideogaminglicense. Anotheroptionistocreateaspecificliquorlicenseforvideogamingorvideogaming cafes.ThiswouldallowtheVillagetocraftspecificrulesandregulationsforvideo gamingwithintheVillageandlimitthenumberofliquorlicensesforvideogaming. TheVillageofLakeZurichhascreatedaClassVliquorlicenseforliquor establishmentswithbothacurrentliquorlicenseandavideogaminglicense.A businessoperatingavideogamingterminalisrequiredtohaveaClassVlicensein 6of7 AttachmentAVideoGamingFAQ conjunctionwithandinadditiontotheliquorlicensealreadyrequiredtobeheld andthereisanadditional$250feeforaClassVliquorlicense.However,the numberofClassVliquorlicensesisintandemwiththeunderlyingliquorlicense. TheVillageofShermancreatedaspecialclassofliquorlicenseforvideogaming andonlypermittedfourlicenses.TheVillageofShermanchargesa$500annual feeforthevideogamingliquorlicenseandcharges$250perterminal. VillageofLakeintheHillsamendeditsLiquorCodetospecificallyaddressvideo gamingcafésbymakingcaféstheirownspecificclassofliquorlicense(A2)and onlyauthorizedoneA2liquorlicense. TheVillageofWheelinghasenactedchangestoitsLiquorLicenseCoderequiringa specifictypeofliquorlicensetoallowforvideogaminginanytypeofvideogaming eligibleestablishment. Q.Canmunicipalitiesfurtherlimitthenumberofvideogamingterminals? A.Usingitshomeruleauthority,itappearsthatatthistimeamunicipalitycanlimitthe maximumnumberofunitsperestablishmentbelowthestatutorymaximumof5. Thisnumbershouldbedeterminedusingarationalbasisanditshouldbethesame foranylicensedestablishment. Q.Isvideogaminganallornothingproposition?Ifweallowvideogaming,canwe decidenottodoitatafuturedate? gaminginthe A.Oncevideogamingisallowed,amunicipalitywillbeabletobanvideo future;howeversuchacommunitywilllikelyfacesignificantlitigation.Contractual rightsbetweenvendorsofvideogamingmachinesandvideogamingestablishments willariseoutofthepassageofvideogaminginacommunity.Banningvideogaming inthefuturewillimpactthoserightsandthuslikelycauselitigationtoensue.While videogamingcanlikelybebannedinthefutureitwillhavetobeforgoodreason andwillpossiblycomeatgreatexpense.Thedecisiontoallowgamingshouldbe madewiththeeyethatitispermanent.Thebetteroptionistocreatecontrolover videogamingestablishmentsthroughyourliquorlicensingprocess.Asstated above,themunicipalitycansuspendorrevokeaproblemvideogaming ĻƭƷğĬƌźƭŷƒĻƓƷ͸ƭliquorlicense. Q.WhatistheprocessfortheVillagetoinstitutevideogaming? A.TheVillagewouldpassanordinancemodifyingtheVillagecodetoallowforgaming. Thenewordinanceonceadoptedwouldthenbesentbyfax(312)8144602ormail itto: IllinoisGamingBoard LegalCounsel JamesPellum 160NorthLaSalleSuite300 ChicagoIllinois60601 7of7 Attachment B —Video Gaming Revenues Tabulation 1of3 Calendar Year # of Establish ments VGT Count VGT Wagering Activity Amount Played Amount Won "Total Bet in VGT" "VGT Winnings" Net Wagering Activity "Gamblers' Losses" Bartlett As of April 2015 2012 2 9 $ 783,177.69 $ 723,844.63 $ 59,333.06 2013 6 22 $ 9,579,652.70 $ 8,881,131.48 $ 698,521.22 2014 10 41 $ 21,961,189.58 $ 20,303,308.49 $ 1,657,881.09 2015 9 39 $ 10,604,406.85 $ 9,757,030.49 $ 847,376.36 Total Elk Grove Village Comparable As of April 2015 2012 No Revenue Results 2013 4 19 $ 3,712,966.56 $ 3,426,013.11 $ 286,953.45 2014 17 73 $ 29,042,916.10 $ 26,669,627.48 $ 2,373,288.62 2015 18 77 $ 18,011,838.69 $ 16,570,177.63 $ 1,441,661.06 Hanover Park As of April 2015 2012 No Revenue Results 2013 4 20 $ 2,185,280.02 $ 2,002,467.93 $ 182,812.09 2014 5 25 $ 17,735,269.32 $ 16,311,936.30 $ 1,423,333.02 2015 5 25 $ 9,114,406.38 $ 8,374,493.14 $ 739,913.24 Total Hoffman Estates Comparable As of April 2015 2012 1 5 $ 951,730.73 $ 877,253.41 $ 74,477.32 2013 6 29 $ 14,082,587.65 $ 12,963,347.46 $ 1,119,240.19 2014 17 84 $ 39,653,855.38 $ 36,364,708.38 $ 3,289,147.00 2015 16 79 $ 20,334,496.83 $ 18,699,732.76 $ 1,634,764.07 Total Morton Grove As of April 2015 2012 2 10 $ 1,302,532.73 $ 1,210,548.58 $ 91,984.15 2013 6 28 $ 11,919,901.19 $ 11,045,086.31 $ 874,814.88 2014 9 42 $ 30,460,589.01 $ 28,170,802.47 $ 2,289,786.54 2015 9 45 $ 15,305,108.96 $ 14,132,210.70 $ 1,172,898.26 Total Prospect Heights As of April 2015 2012 No Revenue Results 2013 4 18 $ 3,877,297.89 $ 3,535,418.23 $ 341,879.66 2014 8 40 $ 16,017,168.51 $ 14,744,700.59 $ 1,272,467.92 2015 9 45 $ 9,135,204.34 $ 8,420,300.76 $ 714,903.58 Total Schiller Park As of April 2015 2012 No Revenue Results 2013 No Revenue Results 2014 7 25 $ 4,176,569.34 $ 3,801,775.03 $ 374,794.31 2015 8 32 $ 3,495,693.82 $ 3,187,018.29 $ 308,675.53 Total Streamwood As of April 2015 2012 No Revenue Results 2013 1 5 $ 108,965.74 $ 99,468.65 $ 9,497.09 2014 4 20 $ 5,540,638.47 $ 5,076,896.36 $ 463,742.11 2015 5 25 $ 5,319,237.64 $ 4,893,610.53 $ 425,627.11 Total Wheeling Comparable As of April 2015 2012 No Revenue Results 2013 5 18 $ 9,242,944.33 $ 8,552,783.56 $ 690,160.77 2014 10 42 $ 26,806,540.13 $ 24,667,349.40 $ 2,139,190.73 2015 11 46 $ 12,754,225.94 $ 11,706,297.71 $ 1,047,928.23 Total 1of3 Attachment B —Video Gaming Revenues Tabulation 2of3 Calendarp Year Funds In "Actual Money Gamblers Spends" VGT Income Funds Out "Actual Money Gamblers Wins" Net Total Income "Gamblers' Losses" Bartlett As of April 2015 2012 $ 197,704.00 $ 138,370.94 $ 59,333.06 2013 $ 2,485,993.00 $ 1,787,471.73 $ 698,521.27 2014 $ 6,189,797.00 $ 4,531,915.85 $ 1,657,881.15 2015 $ 3,100,359.00 $ 2,252,982.17 $ 847,376.83 Total $ 3,263,112.31 Elk Grove Village Comparable As of April 2015 2012 2013 $ 954,239.00 $ 667,285.32 $ 286,953.68 2014 $ 8,296,218.00 $ 5,922,737.65 $ 2,373,480.35 2015 $ 5,183,958.00 $ 3,742,307.47 $ 1,441,650.53 $ 4,102,084.56 Hanover Park As of April 2015 2012 2013 $ 656,281.00 $ 473,426.49 $ 182,854.51 2014 $ 5,117,593.00 $ 3,694,203.48 $ 1,423,389.52 2015 $ 2,667,453.00 $ 1,927,539.76 $ 739,913.24 Total $ 2,346,157.27 Hoffman Estates Comparable As of April 2015 2012 $ 255,519.00 $ 181,021.28 $ 74,497.72 2013 $ 3,837,361.00 $ 2,718,120.79 $ 1,119,240.21 2014 $ 11,294,425.00 $ 8,005,262.19 $ 3,289,162.81 2015 $ 5,797,576.00 $ 4,162,800.48 $ 1,634,775.52 Total $ 6,117,676.26 Morton Grove As of April 2015 2012 $ 334,667.00 $ 252,682.85 $ 91,984.15 2013 $ 3,327,668.00 $ 2,452,853.12 $ 874,814.88 2014 $ 7,932,276.00 $ 5,642,422.87 $ 2,289,853.13 2015 $ 3,956,674.00 $ 2,783,736.40 $ 1,172,937.60 Total $ 4,429,589.76 Prospect Heights As of April 2015 2012 2013 $ 1,275,708.00 $ 933,828.02 $ 341,879.88 2014 $ 4,799,321.00 $ 3,526,833.04 $ 1,272,487.96 2015 $ 2,661,004.00 $ 1,946,100.45 $ 714,903.55 Total $ 2,329,271.39 Schiller Park As of April 2015 2012 2013 2014 $ 1,355,029.00 $ 980,114.08 $ 374,914.92 2015 $ 1,079,781.00 $ 771,226.08 $ 308,554.92 Total $ 683,469.84 Streamwood As of April 2015 2012 2013 $ 30,502.00 $ 21,502.91 $ 9,497.09 2014 $ 1,722,425.00 $ 1,258,682.59 $ 463,742.41 2015 $ 1,518,553.00 $ 1,092,926.07 $ 425,626.93 Total $ 898,866.43 Wheeling Comparable As of April 2015 2012 2013 $ 2,809,349.00 $ 2,119,188.18 $ 690,160.82 2014 $ 7,913,986.00 $ 5,774,795.25 $ 2,139,190.75 2015 $ 3,771,521.00 $ 2,723,592.77 $ 1,047,928.23 Total $ 3,877,279.80 2of3 Attachment B —Video Gaming Revenues Tabulation Bartlett As of April 2015 Elk Grove Village Comparable As of April 2015 Hanover Park As of April 2015 Hoffman Estates Comparable As of April 2015 Morton Grove As of April 2015 Prospect Heights As of April 2015 Schiller Park As of April 2015 Streamwood As of April 2015 Wheeling Comparable As of April 2015 VGT Tax Distribution 11 Calendar Year Net Total Income Tax Rate (30%) "Tax on Gamblers' Losses" State Share of Tax Municipality Share of Tax Remaining 70 % of Net Total Income " Establishment and VGT Operator Revenues" 2012 $ 17,799.95 $ 14,833.29 $ 2,966.66 $ 41,533.11 2013 $ 209,556.76 $ 174,630.65 $ 34,926.11 $ 488,964.51 2014 $ 497,367.54 $ 414,473.06 $ 82,894.48 $ 1,160,513.61 2015 $ 254,214.63 $ 211,845.55 $ 42,369.08 $ 593,162.20 Total $ 978,938.88 $ 815,782.55 $ 163,156.33 $ 2,284,173.43 2012 $ - 2013 $ 86,086.22 $ 71,738.52 $ 14,347.70 $ 200,867.46 2014 $ 712,051.28 $ 593,376.22 $ 118,675.06 $ 1,661,429.07 2015 $ 432,497.70 $ 360,414.79 $ 72,082.91 $ 1,009,152.83 $ 1,230,635.20 $ 1,025,529.53 $ 205,105.67 $ 2,871,449.36 2012 $ $ - 127,998.08 2013 $ 54,856.43 $ 45,713.73 $ 9,142.70 2014 $ 427,019.64 $ 355,849.83 $ 71,169.81 $ 996,369.88 2015 $ 221,974.76 $ 184,979.01 $ 36,995.75 $ 517,938.48 Total $ 703,850.83 $ 586,542.57 $ 117,308.26 $ 1,642,306.44 2012 $ 22,349.37 $ 18,624.48 $ 3,724.89 $ 52,148.35 2013 $ 335,772.33 $ 279,810.31 $ 55,962.02 $ 783,467.88 2014 $ 986,755.94 $ 822,296.87 $ 164,459.07 $ 2,302,406.87 2015 $ 490,435.33 $ 408,696.21 $ 81,739.12 $ 1,144,340.19 Total $ 1,835,312.97 $ 1,529,427.87 $ 305,885.10 $ 4,282,363.29 2012 $ 27,595.28 $ 22,996.07 $ 4,599.21 $ 64,388.87 2013 $ 262,444.72 $ 218,703.90 $ 43,740.82 $ 612,370.16 2014 $ 686,960.22 $ 572,467.10 $ 114,493.12 $ 1,602,892.91 2015 $ 351,883.38 $ 293,236.17 $ 58,647.21 $ 821,054.22 Total $ 1,328,883.60 $ 1,107,403.24 $ 221,480.36 $ 3,100,706.16 2012 $ - 2013 $ 102,564.12 $ 85,470.11 $ 17,094.01 $ 239,315.76 2014 $ 381,750.79 $ 318,125.73 $ 63,625.06 $ 890,737.17 2015 $ 214,472.48 $ 178,727.09 $ 35,745.39 $ 500,431.07 Total $ 698,787.39 $ 582,322.93 $ 116,464.46 $ 1,630,484.00 2012 $ 2013 $ 2014 $ 112,476.31 $ 93,730.38 $ 18,745.93 $ 262,438.61 2015 $ 92,567.54 $ 77,139.65 $ 15,427.89 $ 215,987.38 Total $ 205,043.85 $ 170,870.03 $ 34,173.82 $ 478,425.99 2012 $ 2013 $ 2,849.13 $ 2,374.28 $ 474.85 $ 6,647.96 2014 $ 139,123.56 $ 115,936.35 $ 23,187.21 $ 324,618.85 2015 $ 127,689.16 $ 106,407.62 $ 21,281.54 $ 297,937.77 Total $ 269,661.85 $ 224,718.25 $ 44,943.60 $ 629,204.58 2012 $ - 2013 $ 207,048.38 $ 172,540.30 $ 34,508.08 $ 483,112.44 2014 $ 641,760.83 $ 534,800.82 $ 106,960.01 $ 1,497,429.92 2015 $ 314,379.90 $ 261,983.31 $ 52,396.59 $ 733,548.33 Total I $ 1,163,189.11 $ 969,324.43 $ 193,864.68 $ 2,714,090.69 3of3 AttachmentCΑVideoGamingEstablishmentPossibilities Locatedwithin100feetofaschoolorplaceof worship ClassEstablishmentAddress F1ChipolteMexicanGrill102E.KensingtonRoadNo F1ChungKiwaRestaurant1658W.AlgonquinRd.No F1IzakayaSankyu1176SouthElmhurstRoadNo F1LePeepCafé10E.NorthwestHighwayNo F1LosArcos(Fadadias4)1707W.AlgonquinNo F1MiRestaurant1742E.KensingtonNo 1144SouthElmhurstRoadNo F1NewPusanRestaurant F2ArnieSalerno'sPizzeria1716EastKensingtonRoadNo F2AvantiCafé&SandwichBar1900SouthElmhurstRoadNo F2Frankie'sFastFoods720EastRandRoadNo F2Mr.Beef&Pizza1796SouthElmhurstRoadNo F2PeiWeiAsianDiner1021N.ElmhurstRdNo F2Photo'sHotDogs1706EastKensingtonRoadNo F2Qulinarnia1730W.GolfRoadNo F2TortasLocas1827W.AlgonquinRoadNo F2YupinThai1652W.AlgonquinNo F3BalkanTaste2354S.ElmhurstRoadNo F3BarLouie200EastRandRoadNo F3BlackFinn157RandhurstVillageDriveNo F3BuffaloWildWings301EastEuclidAvenueNo F3CantaNapoliPizzeria90EastBusseNo F3CravePizza106W.NorthwestHwyNo Kum1747W.GolfRoadNo F3DaeJang F3DraftPicks912S.BusseRoadNo F3E&O125RandhurstVillageDriveNo F3ElSombreroRestaurant1100SouthElmhurstRoadNo F3Emerson'sAleHouse113S.EmersonStreetNo F3FelliniRestaurant1729WestGolfRoadNo F3Jameson'sCharhouse1702WestAlgonquinRoadNo F3KampaiJapaneseSteakHouse2330SouthElmhurstRoadNo 3Langostino'sNayarit1590SouthBusseRoadNo F F3Mia'sCantina143ProspectAvenueNo F3MinaRestaurant1724W.GolfRoadNo F3Mrs.P&MeRestaurant100EastProspectAvenueNo F3NinaRestaurant1774W.GolfRoadNo F3Pap'sUltimateGrill&Bar1904SouthElmhurstRoadNo F3RetroBistro1746WestGolfRoadNo F3RokudenashiRestaurant1750WestGolfRoadNo 15WestProspectAvenueNo F3Sam'sPlace F3Truco211RandhurstVilageDriveNo F4ProspectMooseLodge#660601NorthMainStreetNo F5BristolPalace828E.RandRoadNo n1700S.ElmhurstNo F5CrystalPalaceBanquets(EmeraldBa F6MountProspectParkDistrict1000W.CentralNo F6ProspectHeightsParkDistrict110CampMcDonaldRd.No S2BrunswickZoneMountProspect824EastRandRoadNo S3Moretti's1799S.BusseNo S5AMCTheatreRandhurst200RandhurstVillageDriveNo bh9ʹtğĭƉğŭĻ\[źƨǒƚƩ\[źĭĻƓƭĻ9ƭƷğĬƌźƭŷƒĻƓƷƭğƩĻƓƚƷ9ƌźŭźĬƌĻŅƚƩźķĻƚDğƒźƓŭ Vide® Gaming Survey -allay 2015 Questi®n 1: Attachment D - Survey Results Would you favor allowing video gaming in eligible establishments? Answer Options Response Response Percent Count Yes 89.2% 487 No 10.8% 59 Comments 18 answered question 546 skipped question 0 1 of 6 Video Gaming Survey -allay 2015 Question 1: Attachment D - Survey Results # Would you favor allowing video gaming in eligible establishments? 1 Be a leader and do it. You can't generate revenue on your own merits. 2 The "cons" of gambling far outweigh the "pros". 3 Video gaming is just a polite way to say gambling. I oppose the expansion of gambling here in my home town for two reasons: We already have a large casino quite close by in Des Plaines if people wish to gamble. Also, gambling is so widespread on the internet, in many business establishments as video gaming, at casinos and racetracks like Arlington Race Track. This poses a great amount of risk for people who are addicted to gambling. I think all forms of gambling should be kept at a minimum in authorized gambling / enterntainment establishments where people must go to gamble. Gambling addiction and gambling has ruined many people's lives, so the less there is the better our residents' lives will be. 4 there is no net gain when all is factored in and no need to give addicts more temptation to ruin their lives 5 yes 6 Video gaming/gambling, as any other adult entertainment, has pros and cons. But I don't think that the pros outweigh the cons in this instance. Plus, it only dilutes the gaming that other communities have created. We'd be competing against our neighbors for an activity that can only degrade our reputation over time. 7 Video gaming has been called the crack cocaine of gambling. Do we want that in Mount Prospect? 8 Businesses that allow video gaming in surrounding communities seem seedy (Prospect Heights). I have numerous times avoided these businesses because they do not seem family -friendly or safe after dark. 1 would never go to these places alone, I do not feel safe there. 9 people want to spend thier money, city and taxpayers benefit 10 go somewhere else 11 yes we are loosing money to other comunities that have it 12 We have high standards. 13 it's time to catch up with the real world 14 Why send customers to surrounding Villages to play? 15 1 would rather spend my money gambling in Mount Prospect than in any other city surrounding here. 16 It has grown to the point that we might as well obtain some of the revenue that other cities are generating 17,1 believe they would bring in more business for that establishment. 181 please fix the typo in this question, it should say gamBling, not gaming. 2 of 6 Video Gaming Survey - May 2015 Question 2: Attachment D - Survey Results Would you favor allowing video gaming in eligible establishments if surrounding communities allowed video gaming, potentially putting eligible Mount Prospect Answer Options Response Response Percent Count Yes 89.6% 489 No 10.4% 57 Comments 23 answered question 546 skipped question 0 Would you favor allowing video gaming in eligible establishments if surrounding communities allowed video gaming, potentially putting eligible Mount Prospect businesses at a competitive disadvantage? 100.0% 89.6% 80.0% 60.0% 40.0% 3of6 Video Gaming Survey -May 2015 Question 2: Attachment D - Survey Results # Comments 1 Everyone else is doing it. Just do it 2 HUGE disadvantage. we do not come to mt. prospect as much anymore because surrounding suburbs have gaming and we play at 3 least 4 times a week. This is a loaded question. Des Plaines next door has a casino, so should we in order to be competitive? The 4 answer is still NO. I am not opposed to limited gambling (see above), but let's face it, easy access to it creates big problems for many older lonely people who spend their pensions down at the local gaming facilities that are easy to walk to. Our fair town should be working together with businesses to help improve their profits and boost their clients in ways that are directly related to their businesses such as creating a "Mount Prospect Top Twenty Business" website link that would be updated every two weeks on our city webpage to increase our resident use of local businesses rather than adding an unrelated gambling parlor to current businesses just because 5 other cities have done this. 6 please correct "gaming" to "gambling"... they are quite different. This question should omit "potentially putting eligible Mount Prospect businesses at a competitve 7 disadvantage," as it paints the subject in a negative light. This is far from un -biased wording in a survey. The wording on this is confusing. MP would definitely be at a disadvantage if we didn't allow it and other 8 communities did. So I am in favor of video gaming in MP. I am proud that our village government has resisted, as other local govts have not. Gambling may bring in tax revenue, but with the addiction and other problems that come with it, I believe it is a net -loss to any community 9 that allows it. Keep the faith, Mt. Prospect! We don't need to do this just because other communities are. You are putting a certain number of establishments at a extreme disadvantage due to your restrictions on this matter. I have seen it all too often that once a business closes it's literally years before another opens in the same location. Throwing away tax dollars that al suburbs are in need of. I think it's time for you to reexamine 10 your position on this matter. Thanks. I'm reminded of what moms frequently say to their children to help them combat peer pressure: If all your 11 friends were jumping off a cliff to their death, would you follow? People who want this type of entertainment would go somewhere else anyway. It is a different clientele and 12 not the average customer. 13 keep the tax money home 14 Let's keep Mt Prospect standards, even if we have to be leaders, and not followers 15 question confusing 16 Their isn't enough parking sometimes now at some of these establishments No. But, I might be willing to reconsider if (and only if) all the surrounding communities did allow video 17 gaming, AND we determined that was having a negative impact on our finances. 18 The surrounding Villages already have video games. The place I frequent in mount prospect is ready to close its doors after 20 years in business beacause of lack 19 of customers 20 Our Business is down because my customers go to Elk Grove now yes, the bars are already in a disadvantage because I know customers leave to gamble in De's plainest and 21 prospect heights. 22 see No. 1 above 1231 please fix the typo in this question, it should say gamBling, not gaming. 4 of 6 Vide® Gaming Survey -May 2015 Questi®n 3: Are you a Mount Prospect: Answer Options Resident Business Business Patron and Nonresident Comments Attachment D - Survey Results Response Response Percent Count 91.2% 498 2.9% 16 7.5% 41 17 answered question 546 skipped question 0 *The sum of response counts is greater than total count, because survey design allowed for multiple responses (i.e. business owner who is also a resident). Are you a Mount Prospect: 100.0% 91.2% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 2.9% 7.5% 0.0% Resident Business Business Patron and Nonresident 5 of 6 Video Gaming Survey -alley 2015 Question 3: Attachment D - Survey Results # Comments 1 Help reduce our taxes by bringing in more revenue. Get rid of deputy manager position 2 we frequent many establishments and enjoy video gaming. It would be a great advantage for business owners and patrons!! 3 Homeowner who also grew up here. 4 Keep Mount Prospect a Family Town 5 love living here 6 Great source of tax revenue 7 this is not going to benefit me or services -only more $$$$ for the gov employees 8 Any gambling does not belong in our village. 9 We have been residents since Memorial Weekend 1978. 10 Gambling belongs in recognized, regulated and supervised casinos, not in small restaurants and bars. The only casino gambling that makes sense should be held in attractive and impressive facilities. 11 less money I have to tax for 12 All of the small businesses that this was set up to help are struggling. 13 My tips have gone down so much I had to get second job 14 our village is losing revenue, do not raise my taxes anymore. 15 I frequent a establishment in Mount Prospect but I gamble in Elk Grove. So it's a disadvantage to the Mount Prospect bar I frequent. 16 We already have lost much needed revenues to surrounding communities. 17 please fix typos on the mt prospect site and in this survey. video gamBling is very different from video gaming. 6of6 230 ILCS 40/ Video Gaming Act. Page 1 of 16 Information maintained by the Legislative Reference Bureau Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process. Recent laws may not yet be included in the ILCS database, but they are found on this site as Public Acts soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the Guide. Because the statute database is maintained primarily for legislative drafting purposes, statutory changes are sometimes included in the statute database before they take effect. If the source note at the end of a Section of the statutes includes a Public Act that has not yet taken effect, the version of the law that is currently in effect may have already been removed from the database and you should refer to that Public Act to see the changes made to the current law. GAMING (230 ILCS 40/) Video Gaming Act. (230 ILCS 40/Art. 5 heading) ARTICLE 5. (Source: P.A. 96-34, eff. 7-13-09.) (230 ILCS 40/1) Sec. 1. Short title. This Article may be cited as the Video Gaming Act. Any references in this Article to "this Act" mean this Article. (Source: P.A. 96-34, eff. 7-13-09.) (230 ILCS 40/5) Sec. 5. Definitions. As used in this Act: "Board" means the Illinois Gaming Board. "Credit" means one, 5, 10, or 25 cents either won or purchased by a player. "Distributor" means an individual, partnership, corporation, or limited liability company licensed under this Act to buy, sell, lease, or distribute video gaming terminals or major components or parts of video gaming terminals to or from terminal operators. "Electronic card" means a card purchased from a licensed establishment, licensed fraternal establishment, licensed veterans establishment, or licensed truck stop establishment for use in that establishment as a substitute for cash in the conduct of gaming on a video gaming terminal. "Electronic voucher" means a voucher printed by an electronic video game machine that is redeemable in the licensed establishment for which it was issued. "Terminal operator" means an individual, partnership, corporation, or limited liability company that is licensed under this Act and that owns, services, and maintains video gaming terminals for placement in licensed establishments, licensed truck stop establishments, licensed fraternal establishments, or licensed veterans establishments. "Licensed technician" means an individual who is licensed under this Act to repair, service, and maintain video gaming terminals. "Licensed terminal handler" means a person, including but not limited to an employee or independent contractor working for a manufacturer, distributor, supplier, technician, or terminal operator, who is licensed under this Act to possess http://www.ilga.gov/legislation/ilcs/ilcs5.asp?DocName=&ActID=3095 &ChapterID=25&S... 6/5/2015 230 ILCS 40/ Video Gaming Act. or control a video gaming terminal or to have access to the inner workings of a video gaming terminal. A licensed terminal handler does not include an individual, partnership, corporation, or limited liability company defined as a manufacturer, distributor, supplier, technician, or terminal operator under this Act. "Manufacturer" means an individual, partnership, corporation, or limited liability company that is licensed under this Act and that manufactures or assembles video gaming terminals. "Supplier" means an individual, partnership, corporation, or limited liability company that is licensed under this Act to supply major components or parts to video gaming terminals to licensed terminal operators. "Net terminal income" means money put into a video gaming terminal minus credits paid out to players. "Video gaming terminal" means any electronic video game machine that, upon insertion of cash, electronic cards or vouchers, or any combination thereof, is available to play or simulate the play of a video game, including but not limited to video poker, line up, and blackjack, as authorized by the Board utilizing a video display and microprocessors in which the player may receive free games or credits that can be redeemed for cash. The term does not include a machine that directly dispenses coins, cash, or tokens or is for amusement purposes only. "Licensed establishment" means any licensed retail establishment where alcoholic liquor is drawn, poured, mixed, or otherwise served for consumption on the premises, whether the establishment operates on a nonprofit or for-profit basis. "Licensed establishment" includes any such establishment that has a contractual relationship with an inter -track wagering location licensee licensed under the Illinois Horse Racing Act of 1975, provided any contractual relationship shall not include any transfer or offer of revenue from the operation of video gaming under this Act to any licensee licensed under the Illinois Horse Racing Act of 1975. Provided, however, that the licensed establishment that has such a contractual relationship with an inter -track wagering location licensee may not, itself, be (i) an inter -track wagering location licensee, (ii) the corporate parent or subsidiary of any licensee licensed under the Illinois Horse Racing Act of 1975, or (iii) the corporate subsidiary of a corporation that is also the corporate parent or subsidiary of any licensee licensed under the Illinois Horse Racing Act of 1975. "Licensed establishment" does not include a facility operated by an organization licensee, an inter -track wagering licensee, or an inter -track wagering location licensee licensed under the Illinois Horse Racing Act of 1975 or a riverboat licensed under the Riverboat Gambling Act, except as provided in this paragraph. The changes made to this definition by Public Act 98-587 are declarative of existing law. "Licensed fraternal establishment" means the location where a qualified fraternal organization that derives its charter from a national fraternal organization regularly meets. "Licensed veterans establishment" means the location where a qualified veterans organization that derives its charter from a national veterans organization regularly meets. "Licensed truck stop establishment" means a facility (i) Page 2 of 16 http://www.ilga.gov/legislation/ilcs/ilcs5.asp?DocName=&ActID=3095 &ChapterID=25&S... 6/5/2015 230 ILCS 40/ Video Gaming Act. that is at least a 3 -acre facility with a convenience store, (ii) with separate diesel islands for fueling commercial motor vehicles, (iii) that sells at retail more than 10,000 gallons of diesel or biodiesel fuel per month, and (iv) with parking spaces for commercial motor vehicles. "Commercial motor vehicles" has the same meaning as defined in Section 18b-101 of the Illinois Vehicle Code. The requirement of item (iii) of this paragraph may be met by showing that estimated future sales or past sales average at least 10,000 gallons per month. (Source: P.A. 97-333, eff. 8-12-11; 98-31, eff. 6-24-13; 98- 582, eff. 8-27-13; 98-587, eff. 8-27-13; 98-756, eff. 7-16- 14.) (230 ILLS 40/15) Sec. 15. Minimum requirements for licensing and registration. Every video gaming terminal offered for play shall first be tested and approved pursuant to the rules of the Board, and each video gaming terminal offered in this State for play shall conform to an approved model. For the examination of video gaming machines and associated equipment as required by this Section, the Board may utilize the services of one or more independent outside testing laboratories that have been accredited by a national accreditation body and that, in the judgment of the Board, are qualified to perform such examinations. Every video gaming terminal offered in this State for play must meet minimum standards set by an independent outside testing laboratory approved by the Board. Each approved model shall, at a minimum, meet the following criteria: (1) It must conform to all requirements of federal law and regulations, including FCC Class A Emissions Standards. (2) It must theoretically pay out a mathematically demonstrable percentage during the expected lifetime of the machine of all amounts played, which must not be less than 800. The Board shall establish a maximum payout percentage for approved models by rule. Video gaming terminals that may be affected by skill must meet this standard when using a method of play that will provide the greatest return to the player over a period of continuous play. (3) It must use a random selection process to determine the outcome of each play of a game. The random selection process must meet 99% confidence limits using a standard chi -squared test for (randomness) goodness of fit. (4) It must display an accurate representation of the game outcome. (5) It must not automatically alter pay tables or any function of the video gaming terminal based on internal computation of hold percentage or have any means of manipulation that affects the random selection process or probabilities of winning a game. (6) It must not be adversely affected by static discharge or other electromagnetic interference. (7) It must be capable of detecting and displaying the following conditions during idle states or on demand: power reset; door open; and door just closed. (8) It must have the capacity to display complete play history (outcome, intermediate play steps, credits Page 3 of 16 http://www.ilga.gov/legislation/ilcs/ilcs5.asp?DocName=&ActID=3095 &ChapterID=25&S... 6/5/2015 230 ILCS 40/ Video Gaming Act. available, bets placed, credits paid, and credits cashed out) for the most recent game played and 10 games prior thereto. (9) The theoretical payback percentage of a video gaming terminal must not be capable of being changed without making a hardware or software change in the video gaming terminal, either on site or via the central communications system. (10) Video gaming terminals must be designed so that replacement of parts or modules required for normal maintenance does not necessitate replacement of the electromechanical meters. (11) It must have nonresettable meters housed in a locked area of the terminal that keep a permanent record of all cash inserted into the machine, all winnings made by the terminal printer, credits played in for video gaming terminals, and credits won by video gaming players. The video gaming terminal must provide the means for on - demand display of stored information as determined by the Board. (12) Electronically stored meter information required by this Section must be preserved for a minimum of 180 days after a power loss to the service. (13) It must have one or more mechanisms that accept cash in the form of bills. The mechanisms shall be designed to prevent obtaining credits without paying by stringing, slamming, drilling, or other means. If such attempts at physical tampering are made, the video gaming terminal shall suspend itself from operating until reset. (14) It shall have accounting software that keeps an electronic record which includes, but is not limited to, the following: total cash inserted into the video gaming terminal; the value of winning tickets claimed by players; the total credits played; the total credits awarded by a video gaming terminal; and pay back percentage credited to players of each video game. (15) It shall be linked by a central communications system to provide auditing program information as approved by the Board. The central communications system shall use a standard industry protocol, as defined by the Gaming Standards Association, and shall have the functionality to enable the Board or its designee to activate or deactivate individual gaming devices from the central communications system. In no event may the communications system approved by the Board limit participation to only one manufacturer of video gaming terminals by either the cost in implementing the necessary program modifications to communicate or the inability to communicate with the central communications system. (16) The Board, in its discretion, may require video gaming terminals to display Amber Alert messages if the Board makes a finding that it would be economically and technically feasible and pose no risk to the integrity and security of the central communications system and video gaming terminals. The Board may adopt rules to establish additional criteria to preserve the integrity and security of video gaming in this State. The central communications system vendor may be licensed as a video gaming terminal manufacturer or a video gaming terminal distributor, or both, but in no event shall Page 4 of 16 http://www.ilga.gov/legislation/ilcs/ilcs5.asp?DocName=&ActID=3095 &ChapterID=25&S... 6/5/2015 230 ILCS 40/ Video Gaming Act. the central communications system vendor be licensed as a video gaming terminal operator. The Board shall not permit the development of information or the use by any licensee of gaming device or individual game performance data. Nothing in this Act shall inhibit or prohibit the Board from the use of gaming device or individual game performance data in its regulatory duties. The Board shall adopt rules to ensure that all licensees are treated and all licensees act in a non-discriminatory manner and develop processes and penalties to enforce those rules. (Source: P.A. 98-31, eff. 6-24-13; 98-377, eff. 1-1-14; 98- 582, eff. 8-27-13; 98-756, eff. 7-16-14.) (230 ILLS 40/20) Sec. 20. Direct dispensing of receipt tickets only. A video gaming terminal may not directly dispense coins, cash, tokens, or any other article of exchange or value except for receipt tickets. Tickets shall be dispensed by pressing the ticket dispensing button on the video gaming terminal at the end of one's turn or play. The ticket shall indicate the total amount of credits and the cash award, the time of day in a 24- hour format showing hours and minutes, the date, the terminal serial number, the sequential number of the ticket, and an encrypted validation number from which the validity of the prize may be determined. The player shall turn in this ticket to the appropriate person at the licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment to receive the cash award. The cost of the credit shall be one cent, 5 cents, 10 cents, or 25 cents, and the maximum wager played per hand shall not exceed $2. No cash award for the maximum wager on any individual hand shall exceed $500. (Source: P.A. 96-34, eff. 7-13-09; 96-1410, eff. 7-30-10.) (230 ILLS 40/25) Sec. 25. Restriction of licensees. (a) Manufacturer. A person may not be licensed as a manufacturer of a video gaming terminal in Illinois unless the person has a valid manufacturer's license issued under this Act. A manufacturer may only sell video gaming terminals for use in Illinois to persons having a valid distributor's license. (b) Distributor. A person may not sell, distribute, or lease or market a video gaming terminal in Illinois unless the person has a valid distributor's license issued under this Act. A distributor may only sell video gaming terminals for use in Illinois to persons having a valid distributor's or terminal operator's license. (c) Terminal operator. A person may not own, maintain, or place a video gaming terminal unless he has a valid terminal operator's license issued under this Act. A terminal operator may only place video gaming terminals for use in Illinois in licensed establishments, licensed truck stop establishments, licensed fraternal establishments, and licensed veterans establishments. No terminal operator may give anything of value, including but not limited to a loan or financing arrangement, to a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment as any incentive or inducement to Page 5 of 16 http://www.ilga.gov/legislation/ilcs/ilcs5.asp?DocName=&ActID=3095 &ChapterID=25&S... 6/5/2015 230 ILCS 40/ Video Gaming Act. locate video terminals in that establishment. Of the after-tax profits from a video gaming terminal, 50% shall be paid to the terminal operator and 50% shall be paid to the licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment, notwithstanding any agreement to the contrary. A video terminal operator that violates one or more requirements of this subsection is guilty of a Class 4 felony and is subject to termination of his or her license by the Board. (d) Licensed technician. A person may not service, maintain, or repair a video gaming terminal in this State unless he or she (1) has a valid technician's license issued under this Act, (2) is a terminal operator, or (3) is employed by a terminal operator, distributor, or manufacturer. (d-5) Licensed terminal handler. No person, including, but not limited to, an employee or independent contractor working for a manufacturer, distributor, supplier, technician, or terminal operator licensed pursuant to this Act, shall have possession or control of a video gaming terminal, or access to the inner workings of a video gaming terminal, unless that person possesses a valid terminal handler's license issued under this Act. (e) Licensed establishment. No video gaming terminal may be placed in any licensed establishment, licensed veterans establishment, licensed truck stop establishment, or licensed fraternal establishment unless the owner or agent of the owner of the licensed establishment, licensed veterans establishment, licensed truck stop establishment, or licensed fraternal establishment has entered into a written use agreement with the terminal operator for placement of the terminals. A copy of the use agreement shall be on file in the terminal operator's place of business and available for inspection by individuals authorized by the Board. A licensed establishment, licensed truck stop establishment, licensed veterans establishment, or licensed fraternal establishment may operate up to 5 video gaming terminals on its premises at any time. (f) (Blank) . (g) Financial interest restrictions. As used in this Act, "substantial interest" in a partnership, a corporation, an organization, an association, a business, or a limited liability company means: (A) When, with respect to a sole proprietorship, an individual or his or her spouse owns, operates, manages, or conducts, directly or indirectly, the organization, association, or business, or any part thereof; or (B) When, with respect to a partnership, the individual or his or her spouse shares in any of the profits, or potential profits, of the partnership activities; or (C) When, with respect to a corporation, an individual or his or her spouse is an officer or director, or the individual or his or her spouse is a holder, directly or beneficially, of 50 or more of any class of stock of the corporation; or (D) When, with respect to an organization not covered in (A), (B) or (C) above, an individual or his or her spouse is an officer or manages the business affairs, or the individual or his or her spouse is the owner of or otherwise controls 100 or more of the assets of the Page 6 of 16 http://www.ilga.gov/legislation/ilcs/ilcs5.asp?DocName=&ActID=3095 &ChapterID=25&S... 6/5/2015 230 ILCS 40/ Video Gaming Act. organization; or (E) When an individual or his or her spouse furnishes 50 or more of the capital, whether in cash, goods, or services, for the operation of any business, association, or organization during any calendar year; or (F) When, with respect to a limited liability company, an individual or his or her spouse is a member, or the individual or his or her spouse is a holder, directly or beneficially, of 50 or more of the membership interest of the limited liability company. For purposes of this subsection (g), "individual" includes all individuals or their spouses whose combined interest would qualify as a substantial interest under this subsection (g) and whose activities with respect to an organization, association, or business are so closely aligned or coordinated as to constitute the activities of a single entity. (h) Location restriction. A licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment that is (i) located within 1,000 feet of a facility operated by an organization licensee licensed under the Illinois Horse Racing Act of 1975 or the home dock of a riverboat licensed under the Riverboat Gambling Act or (ii) located within 100 feet of a school or a place of worship under the Religious Corporation Act, is ineligible to operate a video gaming terminal. The location restrictions in this subsection (h) do not apply if (A) a facility operated by an organization licensee, a school, or a place of worship moves to or is established within the restricted area after a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment becomes licensed under this Act or (B) a school or place of worship moves to or is established within the restricted area after a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment obtains its original liquor license. For the purpose of this subsection, "school" means an elementary or secondary public school, or an elementary or secondary private school registered with or recognized by the State Board of Education. Notwithstanding the provisions of this subsection (h), the Board may waive the requirement that a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment not be located within 1,000 feet from a facility operated by an organization licensee licensed under the Illinois Horse Racing Act of 1975 or the home dock of a riverboat licensed under the Riverboat Gambling Act. The Board shall not grant such waiver if there is any common ownership or control, shared business activity, or contractual arrangement of any type between the establishment and the organization licensee or owners licensee of a riverboat. The Board shall adopt rules to implement the provisions of this paragraph. (i) Undue economic concentration. In addition to considering all other requirements under this Act, in deciding whether to approve the operation of video gaming terminals by a terminal operator in a location, the Board shall consider the impact of any economic concentration of such operation of video gaming terminals. The Board shall not allow a terminal operator to operate video gaming terminals if the Board determines such operation will result in undue economic Page 7 of 16 http://www.ilga.gov/legislation/ilcs/ilcs5.asp?DocName=&ActID=3095 &ChapterID=25&S... 6/5/2015 230 ILCS 40/ Video Gaming Act. concentration. For purposes of this Section, "undue economic concentration" means that a terminal operator would have such actual or potential influence over video gaming terminals in Illinois as to: (1) substantially impede or suppress competition among terminal operators; (2) adversely impact the economic stability of the video gaming industry in Illinois; or (3) negatively impact the purposes of the Video Gaming Act. The Board shall adopt rules concerning undue economic concentration with respect to the operation of video gaming terminals in Illinois. The rules shall include, but not be limited to, (i) limitations on the number of video gaming terminals operated by any terminal operator within a defined geographic radius and (ii) guidelines on the discontinuation of operation of any such video gaming terminals the Board determines will cause undue economic concentration. (j) The provisions of the Illinois Antitrust Act are fully and equally applicable to the activities of any licensee under this Act. (Source: P.A. 97-333, eff. 8-12-11; 98-31, eff. 6-24-13; 98- 77, eff. 7-15-13; 98-112, eff. 7-26-13; 98-756, eff. 7-16-14.) (230 ILLS 40/26) Sec. 26. Residency requirement. Each licensed distributor, terminal operator, and person with a substantial interest in a licensed distributor or terminal operator must be an Illinois resident. However, if an out-of-state distributor or terminal operator has performed its respective business within Illinois for at least 48 months prior to the effective date of this Act, the out-of-state person may be eligible for licensing under this Act, upon application to and approval of the Board. The Board shall adopt rules to implement this Section. (Source: P.A. 96-38, eff. 7-13-09.) (230 ILLS 40/27) Sec. 27. Prohibition of video gaming by political subdivision. A municipality may pass an ordinance prohibiting video gaming within the corporate limits of the municipality. A county board may, for the unincorporated area of the county, pass an ordinance prohibiting video gaming within the unincorporated area of the county. (Source: P.A. 96-34, eff. 7-13-09.) (230 ILLS 40/30) Sec. 30. Multiple types of licenses prohibited. A video gaming terminal manufacturer may not be licensed as a video gaming terminal operator or own, manage, or control a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment, and shall be licensed to sell only to persons having a valid distributor's license or, if the manufacturer also holds a valid distributor's license, to sell, distribute, lease, or market to persons having a valid terminal operator's license. A video gaming terminal distributor may not be licensed as a video gaming terminal operator or own, manage, or control a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans Page 8 of 16 http://www.ilga.gov/legislation/ilcs/ilcs5.asp?DocName=&ActID=3095 &ChapterID=25&S... 6/5/2015 230 ILCS 40/ Video Gaming Act. establishment, and shall only contract with a licensed terminal operator. A video gaming terminal operator may not be licensed as a video gaming terminal manufacturer or distributor or own, manage, or control a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment, and shall be licensed only to contract with licensed distributors and licensed establishments, licensed truck stop establishments, licensed fraternal establishments, and licensed veterans establishments. An owner or manager of a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment may not be licensed as a video gaming terminal manufacturer, distributor, or operator, and shall only contract with a licensed operator to place and service this equipment. (Source: P.A. 96-34, eff. 7-13-09; 96-1410, eff. 7-30-10.) (230 ILLS 40/35) Sec. 35. Display of license; confiscation; violation as felony. (a) Each video gaming terminal shall be licensed by the Board before placement or operation on the premises of a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment. The license of each video gaming terminal shall be maintained at the location where the video gaming terminal is operated. Failure to do so is a petty offense with a fine not to exceed $100. Any licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment used for the conduct of gambling games in violation of this Act shall be considered a gambling place in violation of Section 28-3 of the Criminal Code of 2012. Every gambling device found in a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment operating gambling games in violation of this Act shall be subject to seizure, confiscation, and destruction as provided in Section 28-5 of the Criminal Code of 2012. Any license issued under the Liquor Control Act of 1934 to any owner or operator of a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment that operates or permits the operation of a video gaming terminal within its establishment in violation of this Act shall be immediately revoked. No person may own, operate, have in his or her possession or custody or under his or her control, or permit to be kept in any place under his or her possession or control, any device that awards credits and contains a circuit, meter, or switch capable of removing and recording the removal of credits when the award of credits is dependent upon chance. Nothing in this Section shall be deemed to prohibit the use of a game device only if the game device is used in an activity that is not gambling under subsection (b) of Section 28-1 of the Criminal Code of 2012. A violation of this Section is a Class 4 felony. All devices that are owned, operated, or possessed in violation of this Section are hereby declared to be public nuisances and shall be subject to seizure, confiscation, and destruction as provided in Section 28-5 of the Criminal Code of 2012. Page 9 of 16 http://www.ilga.gov/legislation/ilcs/ilcs5.asp?DocName=&ActID=3095 &ChapterID=25&S... 6/5/2015 230 ILCS 40/ Video Gaming Act. Page 10 of 16 The provisions of this Section do not apply to devices or electronic video game terminals licensed pursuant to this Act. A video gaming terminal operated for amusement only and bearing a valid amusement tax sticker shall not be subject to this Section until 30 days after the Board establishes that the central communications system is functional. (b) (1) The odds of winning each video game shall be posted on or near each video gaming terminal. The manner in which the odds are calculated and how they are posted shall be determined by the Board by rule. (2) No video gaming terminal licensed under this Act may be played except during the legal hours of operation allowed for the consumption of alcoholic beverages at the licensed establishment, licensed fraternal establishment, or licensed veterans establishment. A licensed establishment, licensed fraternal establishment, or licensed veterans establishment that violates this subsection is subject to termination of its license by the Board. (Source: P.A. 97-1150, eff. 1-25-13; 98-111, eff. 1-1-14.) (230 ILLS 40/40) Sec. 40. Video gaming terminal use by minors prohibited. No licensee shall cause or permit any person under the age of 21 years to use or play a video gaming terminal. Any licensee who knowingly permits a person under the age of 21 years to use or play a video gaming terminal is guilty of a business offense and shall be fined an amount not to exceed $5,000. (Source: P.A. 96-34, eff. 7-13-09.) (230 ILLS 40/45) Sec. 45. Issuance of license. (a) The burden is upon each applicant to demonstrate his suitability for licensure. Each video gaming terminal manufacturer, distributor, supplier, operator, handler, licensed establishment, licensed truck stop establishment, licensed fraternal establishment, and licensed veterans establishment shall be licensed by the Board. The Board may issue or deny a license under this Act to any person pursuant to the same criteria set forth in Section 9 of the Riverboat Gambling Act. (a-5) The Board shall not grant a license to a person who has facilitated, enabled, or participated in the use of coin- operated devices for gambling purposes or who is under the significant influence or control of such a person. For the purposes of this Act, "facilitated, enabled, or participated in the use of coin-operated amusement devices for gambling purposes" means that the person has been convicted of any violation of Article 28 of the Criminal Code of 1961 or the Criminal Code of 2012. If there is pending legal action against a person for any such violation, then the Board shall delay the licensure of that person until the legal action is resolved. (b) Each person seeking and possessing a license as a video gaming terminal manufacturer, distributor, supplier, operator, handler, licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment shall submit to a background investigation conducted by the Board with the assistance of the State Police or other law enforcement. To the extent that http://www.ilga.gov/legislation/ilcs/ilcs5.asp?DocName=&ActID=3095 &ChapterID=25&S... 6/5/2015 230 ILCS 40/ Video Gaming Act. Page 11 of 16 the corporate structure of the applicant allows, the background investigation shall include any or all of the following as the Board deems appropriate or as provided by rule for each category of licensure: (i) each beneficiary of a trust, (ii) each partner of a partnership, (iii) each member of a limited liability company, (iv) each director and officer of a publicly or non -publicly held corporation, (v) each stockholder of a non -publicly held corporation, (vi) each stockholder of 50 or more of a publicly held corporation, or (vii) each stockholder of 50 or more in a parent or subsidiary corporation. (c) Each person seeking and possessing a license as a video gaming terminal manufacturer, distributor, supplier, operator, handler, licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment shall disclose the identity of every person, association, trust, corporation, or limited liability company having a greater than 1% direct or indirect pecuniary interest in the video gaming terminal operation for which the license is sought. If the disclosed entity is a trust, the application shall disclose the names and addresses of the beneficiaries; if a corporation, the names and addresses of all stockholders and directors; if a limited liability company, the names and addresses of all members; or if a partnership, the names and addresses of all partners, both general and limited. (d) No person may be licensed as a video gaming terminal manufacturer, distributor, supplier, operator, handler, licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment if that person has been found by the Board to: (1) have a background, including a criminal record, reputation, habits, social or business associations, or prior activities that pose a threat to the public interests of the State or to the security and integrity of video gaming; (2) create or enhance the dangers of unsuitable, unfair, or illegal practices, methods, and activities in the conduct of video gaming; or (3) present questionable business practices and financial arrangements incidental to the conduct of video gaming activities. (e) Any applicant for any license under this Act has the burden of proving his or her qualifications to the satisfaction of the Board. The Board may adopt rules to establish additional qualifications and requirements to preserve the integrity and security of video gaming in this State. (f) A non-refundable application fee shall be paid at the time an application for a license is filed with the Board in the following amounts: (1) Manufacturer................................$5,000 (2) Distributor.................................$5,000 (3) Terminal operator...........................$5,000 (4) Supplier....................................$2,500 (5) Technician....................................$100 (6) Terminal Handler...............................$50 (g) The Board shall establish an annual fee for each license not to exceed the following: (1) Manufacturer...............................$10,000 http://www.ilga.gov/legislation/ilcs/ilcs5.asp?DocName=&ActID=3095 &ChapterID=25&S... 6/5/2015 230 ILCS 40/ Video Gaming Act. Page 12 of 16 (2) Distributor................................$10,000 (3) Terminal operator...........................$5,000 (4) Supplier....................................$2,000 (5) Technician....................................$100 (6) Licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment ....................$100 (7) Video gaming terminal .........................$100 (8) Terminal Handler...............................$50 (h) A terminal operator and a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment shall equally split the fees specified in item (7) of subsection (g) (Source: P.A. 97-1150, eff. 1-25-13; 98-31, eff. 6-24-13; 98- 587, eff. 8-27-13; 98-756, eff. 7-16-14.) (230 ILLS 40/50) Sec. 50. Distribution of license fees. (a) All fees collected under Section 45 shall be deposited into the State Gaming Fund. (b) Fees collected under Section 45 shall be used as follows: (1) Twenty-five percent shall be paid, subject to appropriation by the General Assembly, to the Department of Human Services for administration of programs for the treatment of compulsive gambling. (2) Seventy-five percent shall be used for the administration of this Act. (c) All licenses issued by the Board under this Act are renewable annually unless sooner cancelled or terminated. No license issued under this Act is transferable or assignable. (Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09.) (230 ILLS 40/55) Sec. 55. Precondition for licensed location. In all cases of application for a licensed location, to operate a video gaming terminal, each licensed establishment, licensed fraternal establishment, or licensed veterans establishment shall possess a valid liquor license issued by the Illinois Liquor Control Commission in effect at the time of application and at all times thereafter during which a video gaming terminal is made available to the public for play at that location. Video gaming terminals in a licensed location shall be operated only during the same hours of operation generally permitted to holders of a license under the Liquor Control Act of 1934 within the unit of local government in which they are located. A licensed truck stop establishment that does not hold a liquor license may operate video gaming terminals on a continuous basis. A licensed fraternal establishment or licensed veterans establishment that does not hold a liquor license may operate video gaming terminals if (i) the establishment is located in a county with a population between 6,500 and 7,000, based on the 2000 U.S. Census, (ii) the county prohibits by ordinance the sale of alcohol, and (iii) the establishment is in a portion of the county where the sale of alcohol is prohibited. A licensed fraternal establishment or licensed veterans establishment that does not hold a liquor license may operate video gaming terminals if (i) the http://www.ilga.gov/legislation/ilcs/ilcs5.asp?DocName=&ActID=3095 &ChapterID=25&S... 6/5/2015 230 ILCS 40/ Video Gaming Act. Page 13 of 16 establishment is located in a municipality within a county with a population between 8,500 and 9,000 based on the 2000 U.S. Census and (ii) the municipality or county prohibits or limits the sale of alcohol by ordinance in a way that prohibits the establishment from selling alcohol. (Source: P.A. 96-34, eff. 7-13-09; 96-1410, eff. 7-30-10; 97- 594, eff. 8-26-11.) (230 ILLS 40/57) Sec. 57. Insurance. Each terminal operator shall maintain liability insurance on any gaming device that it places in a licensed video gaming location in an amount set by the Board. (Source: P.A. 96-34, eff. 7-13-09; 96-1410, eff. 7-30-10.) (230 ILLS 40/58) Sec. 58. Location of terminals. Video gaming terminals must be located in an area restricted to persons over 21 years of age the entrance to which is within the view of at least one employee, who is over 21 years of age, of the establishment in which they are located. The placement of video gaming terminals in licensed establishments, licensed truck stop establishments, licensed fraternal establishments, and licensed veterans establishments shall be subject to the rules promulgated by the Board pursuant to the Illinois Administrative Procedure Act. (Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09.) (230 ILLS 40/60) Sec. 60. Imposition and distribution of tax. (a) A tax of 30% is imposed on net terminal income and shall be collected by the Board. (b) Of the tax collected under this Section, five -sixths shall be deposited into the Capital Projects Fund and one- sixth shall be deposited into the Local Government Video Gaming Distributive Fund. (c) Revenues generated from the play of video gaming terminals shall be deposited by the terminal operator, who is responsible for tax payments, in a specially created, separate bank account maintained by the video gaming terminal operator to allow for electronic fund transfers of moneys for tax payment. (d) Each licensed establishment, licensed truck stop establishment, licensed fraternal establishment, and licensed veterans establishment shall maintain an adequate video gaming fund, with the amount to be determined by the Board. (e) The State's percentage of net terminal income shall be reported and remitted to the Board within 15 days after the 15th day of each month and within 15 days after the end of each month by the video terminal operator. A video terminal operator who falsely reports or fails to report the amount due required by this Section is guilty of a Class 4 felony and is subject to termination of his or her license by the Board. Each video terminal operator shall keep a record of net terminal income in such form as the Board may require. All payments not remitted when due shall be paid together with a penalty assessment on the unpaid balance at a rate of 1.5% per month. (Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09.) http://www.ilga.gov/legislation/ilcs/ilcs5.asp?DocName=&ActID=3095&ChapterlD=25&S... 6/5/2015 230 ILCS 40/ Video Gaming Act. Page 14 of 16 (230 ILLS 40/65) Sec. 65. Fees. A non -home rule unit of government may not impose any fee for the operation of a video gaming terminal in excess of $25 per year. (Source: P.A. 96-34, eff. 7-13-09.) (230 ILLS 40/70) Sec. 70. Referendum. Upon the filing in the office of the clerk, at least 90 days before an election in any municipality or county, as the case may be, of a petition directed to such clerk, containing the signatures of not less than 250 of the legal voters of that municipality or county, the clerk shall certify such proposition to the proper election officials, who shall submit the proposition at such election to the voters of such municipality or county. The proposition shall be in the following form: -------------------------------------------------------------- Shall video gaming YES be prohibited in .................? NO -------------------------------------------------------------- If a majority of the voters voting upon such last mentioned proposition in any municipality or county vote "YES", such video gaming shall be prohibited in such municipality or county. The petition mentioned in this Section shall be a public document and shall be subject to inspection by the public. (Source: P.A. 96-34, eff. 7-13-09.) (230 ILLS 40/75) Sec. 75. Revenue sharing; Local Government Video Gaming Distributive Fund. (a) As soon as may be after the first day of each month, the Department of Revenue shall allocate among those municipalities and counties of this State that have not prohibited video gaming pursuant to Section 27 or Section 70 the amount available in the Local Government Video Gaming Distributive Fund, a special fund in the State Treasury, as provided in Section 60. The Department shall then certify such allocations to the State Comptroller, who shall pay over to those eligible municipalities and counties the respective amounts allocated to them. The amount of such funds allocable to each such municipality and county shall be in proportion to the tax revenue generated from video gaming within the eligible municipality or county compared to the tax revenue generated from video gaming Statewide. (b) The amounts allocated and paid to a municipality or county of this State pursuant to the provisions of this Section may be used for any general corporate purpose authorized for that municipality or county. (c) Upon determination by the Department that an amount has been paid pursuant to this Section in excess of the amount to which the county or municipality receiving such payment was entitled, the county or municipality shall, upon demand by the Department, repay such amount. If such repayment is not made within a reasonable time, the Department shall withhold from future payments an amount equal to such overpayment. The Department shall redistribute the amount of such payment to the county or municipality entitled thereto. http://www.ilga.gov/legislation/ilcs/ilcs5.asp?DocName=&ActID=3095&ChapterlD=25&S... 6/5/2015 230 ILCS 40/ Video Gaming Act. Page 15 of 16 (Source: P.A. 96-34, eff. 7-13-09.) (230 ILLS 40/78) Sec. 78. Authority of the Illinois Gaming Board. (a) The Board shall have jurisdiction over and shall supervise all gaming operations governed by this Act. The Board shall have all powers necessary and proper to fully and effectively execute the provisions of this Act, including, but not limited to, the following: (1) To investigate applicants and determine the eligibility of applicants for licenses and to select among competing applicants the applicants which best serve the interests of the citizens of Illinois. (2) To have jurisdiction and supervision over all video gaming operations in this State and all persons in establishments where video gaming operations are conducted. (3) To adopt rules for the purpose of administering the provisions of this Act and to prescribe rules, regulations, and conditions under which all video gaming in the State shall be conducted. Such rules and regulations are to provide for the prevention of practices detrimental to the public interest and for the best interests of video gaming, including rules and regulations (i) regarding the inspection of such establishments and the review of any permits or licenses necessary to operate an establishment under any laws or regulations applicable to establishments, (ii) to impose penalties for violations of this Act and its rules, and (iii) establishing standards for advertising video gaming. (b) The Board shall adopt emergency rules to administer this Act in accordance with Section 5-45 of the Illinois Administrative Procedure Act. For the purposes of the Illinois Administrative Procedure Act, the General Assembly finds that the adoption of rules to implement this Act is deemed an emergency and necessary to the public interest, safety, and welfare. (Source: P.A. 98-31, eff. 6-24-13.) (230 ILLS 40/79) Sec. 79. Investigators. Investigators appointed by the Board pursuant to the powers conferred upon the Board by paragraph (20.6) of subsection (c) of Section 5 of the Riverboat Gambling Act and Section 80 of this Act shall have authority to conduct investigations, searches, seizures, arrests, and other duties imposed under this Act and the Riverboat Gambling Act, as deemed necessary by the Board. These investigators have and may exercise all of the rights and powers of peace officers, provided that these powers shall be (1) limited to offenses or violations occurring or committed in connection with conduct subject to this Act, including, but not limited to, the manufacture, distribution, supply, operation, placement, service, maintenance, or play of video gaming terminals and the distribution of profits and collection of revenues resulting from such play, and (2) exercised, to the fullest extent practicable, in cooperation with the local police department of the applicable municipality or, if these powers are exercised outside the boundaries of an incorporated municipality or within a http://www.ilga.gov/legislation/ilcs/ilcs5.asp?DocName=&ActID=3095 &ChapterID=25&S... 6/5/2015 230 ILCS 40/ Video Gaming Act. Page 16 of 16 municipality that does not have its own police department, in cooperation with the police department whose jurisdiction encompasses the applicable locality. (Source: P.A. 97-809, eff. 7-13-12.) (230 ILLS 40/80) Sec. 80. Applicability of Illinois Riverboat Gambling Act. The provisions of the Illinois Riverboat Gambling Act, and all rules promulgated thereunder, shall apply to the Video Gaming Act, except where there is a conflict between the 2 Acts. All provisions of the Uniform Penalty and Interest Act shall apply, as far as practicable, to the subject matter of this Act to the same extent as if such provisions were included herein. (Source: P.A. 96-37, eff. 7-13-09.) (230 ILLS 40/85) Sec. 85. Severability. The provisions of the Video Gaming Act are severable pursuant to Section 1.31 of the Statute on Statutes. (Source: P.A. 96-37, eff. 7-13-09; P.A. 96-38, eff. 7-13-09.) (230 ILCS 40/Art. 800 heading) ARTICLE 800. (The Capital Spending Accountability Law is compiled at 20 ILCS 3020/) (Source: P.A. 96-34, eff. 7-13-09.) (230 ILCS 40/Art. 900 heading) ARTICLE 900. (Amendatory provisions; text omitted) (Source: P.A. 96-34, eff. 7-13-09; text omitted.) (230 ILCS 40/Art. 9999 heading) ARTICLE 9999. (Source: P.A. 96-34, eff. 7-13-09.) (230 ILLS 40/9999) Sec. 9999. Effective date. This Act takes effect July 1, 2009, except that the changes to Sections 15-102, 15-107, 15- 111, 15-112, 15-113, 15-306, 15-307, and 16-105 of the Illinois Vehicle Code take effect January 1, 2010; but this Act does not take effect at all unless House Bill 312 of the 96th General Assembly, as amended, becomes law. (Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09.) http://www.ilga.gov/legislation/ilcs/ilcs5.asp?DocName=&ActID=3095&ChapterlD=25&S... 6/5/2015