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4.1 Video Gaming Draft Ordinance Discussion
BoardDocs® ProPage 1 of 4 Agenda Item Details MeetingJun 12, 2018 - COMMITTEE OF THE WHOLE AGENDA Category4. DISCUSSION ITEMS Subject4.1 VIDEO GAMING DRAFT ORDINANCE DISCUSSION AccessPublic TypeDiscussion Public Content Information The Village Board held a Committee of the Whole video gaming discussion on March 13, 2018 to offer local establishments an opportunity to discuss permitting video gaming in Mount Prospect. The discussion concluded with the recommendation that video gaming and a draft ordinance be presented to the Economic Development Commission (EDC) for consideration. The EDC reviewed video gaming at their May 9, 2018 meeting and EDC supports permitting video gaming for licensed establishments to provide eligible local restaurants access to another revenue source which could be used to support operations and improvements. The draft ordinance creates separate liquor licenses for video gaming. This gives the Liquor Commissioner and Village Board an opportunity to review each video gaming licensed establishment. Video gaming liquor licenses are proposed for the following licenses: ?F-1: Restaurant without lounge license. ?F-2: Restaurant, wine and beer only license. ?F-3: Restaurant with lounge license. ?F-4: Private club license. ?F-8: Brewpub license. ?S-2: Bowling alley license. ?Note: This review also highlighted the need to delete the S-3: Tavern classification. The only S-3 license holder, Moretti’s, will be incorporated into F-3: Restaurant with lounge. The S-3 license classification is the only liquor license that does not require full food service. The video gaming liquor licenses include the parent license regulations and adds regulations for video gaming. Regulations discussed by the Village Board on March 13 as well as regulations from Klein, Thorpe & Jenkins based on how other municipalities choose to regulate video gaming are included in the draft ordinance. Attached is a memorandum from Klein, Thorpe & Jenkins introducing the draft ordinance allowing for video gaming. The video gaming regulations for consideration are the same for all proposed video gaming liquor licenses types. Some regulations are restated from the Video Gaming Act while some are specifically local regulations. The following regulations are restated from the Video Gaming Act: ?The restaurant must have a video gaming license issued by the Illinois Gaming Board in accordance with the provisions of the Video Gaming Act, 230 ILCS 40/1 et seq, and shall comply with all provisions of the Illinois Video Gaming Act and all rules, regulations and r egulations imposed by the Illinois Gaming Board. ?The operation of video gaming terminals shall not be permitted during the hours alcoholic liquor sales are prohibited as provided in Section 13.403. ?A video gaming license shall not be issued to any restaurant located within 100 feet of any educational facility as defined in this chapter or within 100 feet of a place of worship. (However, local ordinance can expand definition of educational facility to include day cares, tutoring centers, technical education schools, etc.) ?Video gaming shall be located in an area that is restricted to persons 21 years of age or older. ?The total number of video game terminals located in the restaurant shall not exceed five (5). https://www.boarddocs.com/il/vomp/Board.nsf/Private?open&login6/22/2018 BoardDocs® ProPage 2 of 4 The following local regulations are recommended by staff. ?The percentage of income received from video gaming shall not exceed thirty percent (30%) of the restaurant’s net income. At the Village’s discretion, each licensed establishment shall be subject to an annual audit to verify compliance with this section. ?The restaurant shall comply with all Village sign regulations and it shall be unlawful to advertise for video gaming via a sign visible from any street, alley or public right-of-way within the Village. ?In those licensed video gaming locations where separation from minors under 21 is required, a physical barrier to the gaming area is required and the means of separation will be approved by the Village Manager or designee. No barrier shall visually obscure the entrance to the gaming area from an employee of the licensed video gaming location who is over the age of 21. ?The restaurant must be in good standing with the Village. The following are additional local regulations may be considered: ?The restaurant shall be required to install, operate and maintain a video camera surveillance system capable of recording clear and unobstructed photographic representations of the segregated area of the establishment where the terminals are located and shall retain the video recordings produced therefrom for a minimum of thirty (30) days. Said video recordings shall be subject to inspections by the police department upon request therefor. ?The restaurant shall be equipped with a direct connect burglar alarm system to Northwest Central Dispatch in instances of unpermitted entry into the establishment, which system shall be approved by the Chief of Police. ?If the restaurant operates pursuant to a Conditional Use Permit issued by the Village, a video gaming license shall only be issued after the restaurant completes a six (6) month trial period. The decision to issue a video gaming license following the trial period is at the Village’s full discretion. (This regulation would apply to restaurants that open in Industrial or Office Research zoning districts and not restaurants that require a conditional use as part of a planned unit development or restaurants within the B-2, B-3, B-4, B-5, B-5C zoning districts sine they are permitted by right.) EDC also discussed several of the draft regulations during their May 9, 2018 meeting. The EDC provided a positive recommendation for the following regulations: ?Total number of video gaming terminals located in the restaurant shall not exceed five (5). (It was set at three (3) for discussion purposes.) ?The restaurant shall comply with all Village sign regulations and it shall be unlawful to advertise for video gaming via sign visible from any street, alley or public right-or-way within the Village. (This would also include external facing signs “window signs” from an establishment.) ?The percentage of income received from video gaming shall not exceed thirty percent (30%) of the restaurant’s net income. At the Village’s discretion, each licensed establishment shall be subject to an annual audit to verify compliance with this section. ?Video Gaming Café: An establishment whose primary or major focus is video gaming, with the service of alcohol and food incidental to the operation of video gaming. Video Gaming Cafés are expressly prohibited in the Village of Mount Prospect. (Factors would need to be established to determine if an establishment is a Video Gaming Cafe. Class F Licenses (Food Service) already have restrictions that could be modified to discourage Video Gaming Cafes.) The EDC did not provide a positive recommendation for expanding the definition of educational facility beyond the Illinois Gaming Act definition of “School”. ?Illinois Gaming Act restricts video gaming establishments located within 100 feet of school or a place of worship. “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. ?Expanded Local Restriction - Educational Facility definition: “Any building used for instruction of enrolled students, including but not limited to any day-care center, nursery school, public or private school, tutoring center, college, university, medical school, law school or career and technical education school.” An expanded local definition of "school" could impact possible current restaurant locations ability to obtain a video gaming license. Examples of tutoring facilities neighboring restaurants locations are 70 E. Busse Ave and 100 W. Northwest Hwy. There are currently eight (8) day-care locations operating and strip center locations would be most likely to affect issuance of video gaming licenses. Additionally, per the Video Gaming Act the location restrictions would not apply if a school moves to or is established within the restricted area after the licensed establishment because licensed under the Act. The Village Board Committee of the Whole agenda packet from March 13, 2018 on video gaming is attached for reference. The packet includes; two supporting memos that review video gaming revenue data for municipalities and https://www.boarddocs.com/il/vomp/Board.nsf/Private?open&login6/22/2018 BoardDocs® ProPage 3 of 4 establishments, and local video gaming regulations; a Video Gaming FAQ and a copy of the Video Gaming Act. A map of municipalities that permit/prohibit video gaming. Additionally, Police has provided a memo summarizing feedback from neighboring communities regarding their video gaming experience as it relates to crime. These communities have not experienced an increase in crime. Alternatives 1. Discussion of video gaming regulations. 2. Action at discretion of Village Board. Staff Recommendation The Village Board provide feedback regarding local video gaming regulations to further outline a proposed ordinance. COW_March_13_2018_Video_Gaming_Packet.pdf (917 KB)EDC_May-9_Minutes_Draft.pdf (302 KB) KTJ_Memo.pdf (56 KB) Ordinance Amending Code to Create Liquor Licenses for Establishments with Video Gaming 6-8-18.pdf (158 KB) CHF 18-66 Video Gaming (002).pdf (16 KB) Administrative Content AB: James V Ferolo from KTJ will be present to answer any questions. I modified the following The restaurant shall comply with all Village sign regulations and it shall be unlawful to advertise for video gaming in any street, alley or public right-of-way within the Village. (Local) To read The restaurant shall comply with all Village sign regulations and it shall be unlawful to advertise for video gaming via a sign visible from any street, alley or public right-of-way within the Village. (Local). This is because we don't allow any advertising in the street, alley, etc. That's off site signage. I think the way I worded it is the way we want it. - NB 30 Days of up to (18 hours?) of surveillance seems excessive and a lot of data to store. Is there any support for this/ does Police confirm this is a common or feasible practice? HD quality system with DVR capability to store 30 days for under $1,000. If the restaurant operates pursuant to a Special Use Permit issued by the Village, a F-1-V license shall only be issued after the restaurant completes a six (6) month trial period. The decision to issue a F-1-V license following the trial period is at the Village’s full discretion. (Local) I'll need to review the language for this, but the only restaurants that require a CONDITIONAL USE permit are those in the I-1 and O/R districts. However, it should *not* mean that restaurants operating in a PUD fall under this category, as PUDs are a Conditional Use. AKA all of Randhurst, etc... the underlying zoning district shall apply if this Local regulation should stand. - also, reasoning? _NB I don't love the definition of Video Gaming Cafe. It should not be discretionary. It should be tied to floor area, % of income generated, or the like. NB Did anyone see what would happen if we expanded that definition of school? I have a few concerns with it being very problematic in the future. Example: Mathnasiums and the like move in and out of strip centers all the time. So if they move in next to a restaurant, do we make them remove the machines? Schools are https://www.boarddocs.com/il/vomp/Board.nsf/Private?open&login6/22/2018 BoardDocs® ProPage 4 of 4 a permitted use in Residential districts only. Tutoring schools and day care centers are uses found in Business districts, same as video gaming restaurants. - NB Executive Content https://www.boarddocs.com/il/vomp/Board.nsf/Private?open&login6/22/2018 BoardDocs® Agenda Item: 4.1 Video Gaming Agenda Item Details Meeting Category Subject Access Type Public Content Page 1 of 3 Mar 13, 2018 - COMMITTEE OF THE WHOLE AGENDA — Prior the the meeting, members of the Village Board and Finance Commission will tour the Palatine Police Headquarters, 595 N. Hicks Road, Palatine, Illinois at 4:OOp.m. 4. DISCUSSION ITEMS 4.1 Video Gaming Public Discussion Information Purpose: The purpose of this discussion is to offer local establishments an opportunity to discuss video gaming in Mount Prospect. Village ordinance currently prohibits placement of video gaming terminals within the community. The following information and attached materials are provided as a framework for discussion. Background: A Video Gaming Terminal (VGT) is an electronic machine that plays video games authorized by the State Gaming Board (SGB) that includes, but are not limited to, video poker, line up and blackjack. The Illinois Video Gaming Act (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. If the business meets the necessary requirements, then the Act allows the placement of up to five (5) VGTs within a licensed establishment. The attached Video Gaming Map 2018 shows which neighboring communities permit or prohibit VGTs. Notable changes from the Village Board's previous review in June 2015 are Buffalo Grove and Niles; these communities adopted ordinances to permit video gaming in 2016. For additional background information please review the attached Video Gaming Terminal Discussion Memo with Attachments. This memo originally created for the June 2015 Committee of the Whole discussion was updated to include the SGB 2017 annual report, 2017 VGT revenue data and share new information since 2015. 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. The below table is an overview of 2017 VGT revenue totals for surrounding communities. The attached Video Gaming Terminal Discussion memo provides a more detailed analysis of revenue generated per licensed establishments and VGTs per community (Reference Attachment D: VGT Revenue by Establishment per Municinalitv). Table 1: 2017 Total Video Gaming Terminal Revenue for Surrounding Communities. Municipality I I I State Tax https://www.boarddocs.com/il/vomp/Board.nsf/goto?open&id=AWKRN76B94C5 5/3/2018 BoardDocs® Agenda Item: 4.1 Video Gaming Page 2 of 3 For every one VGT placed in municipalities included in the above table, the annual average license establishment revenue is $21,960.81 and the annual average municipal revenue is $3,137.28. Local Regulations: The attached Video Gaming — Municipal Code Comparison Memo reviews how municipalities permitted and have placed further restrictions on Video Gaming. Overall some municipalities have chosen to: • Add a supplemental video gaming license in addition to an existing liquor license classification, • Modify existing liquor license code, • Implement limits on the number of video gaming liquor licenses issued, • Incorporate the Act or rules promulgated by the SGB into their codes, • Create VGT licenses fees to recover administrative and enforcement costs, and • Include language that restricts video gaming cafes. Local Enforcement: Police Chief Koziol contacted surrounding communities that permit video gaming to find out their service call experience related to video gaming. None have experienced any law enforcement issues nor has there been any increase in calls for service. Wheeling recently completed an extensive analysis which also showed no increase and they have some licensed establishments up and running since 2013. Village of Mount Prospect Community Survey 2016: In 2016 ETC Institute administered a community survey for the Village of Mount Prospect. The seven page survey included a question regarding community priorities asking respondents to rank 18 issues based on priority level. This was followed by a question asking to rank the top five priorities that should receive the most emphasis over the next two years. Allowing video gaming was one of the issues to rank and it scored the lowest priority ranking for both questions out of the other 17 choices. Alternatives 1. Staff offers no specific policy recommendation. 2. Action at discretion of Village Board. Staff Recommendation At this time, staff offers no specific policy recommendation, but does request the board consider various options and provide feedback. If there is a change to the Village's current policy, staff would recommend incorporating a local licensing fee per establishment and/or per video gaming terminal (VGT) in order to recapture costs associated with monitoring and local code compliance. Video_Gaming_Map_2018.pdf (643 KB) Video_Gaming_Municipal_Code_Comparison_03-08-2018_final.pdf (33 KB) Video_Gaming_Memo_03_08_18_final_w_Attachments.pdf (486 KB) https://www.boarddocs.com/il/vomp/Board.nsf/goto?open&id=AWKRN76B94C5 5/3/2018 Net Terminal Licensed Municipal Average Income Establishment/VGT Tax Licensed Operator Share Establishment (70% of total split Revenue 50/50 Buffalo Grove $884,478.33 $619,132.43 $221,121.66 $44,224.24 $38,695.78 Elk Grove $7,131,225.98 $4,991,849.60 $1,782,913.92 $356,562.46 $118,853.56 Hoffman Estates $7,371,420.45 $5,159,983.10 $1,842,864.82 $368,572.53 $122,856.74 Prospect Heights $4,728,194.39 $3,309,729.64 $1,182,054.21 $236,410.54 $118,204.63 Wheeling 1 $4,681,189.07 1 $3,276,825.06 1 $1,170,303.60 1 $234,060.41 1 $109,227.50 For every one VGT placed in municipalities included in the above table, the annual average license establishment revenue is $21,960.81 and the annual average municipal revenue is $3,137.28. Local Regulations: The attached Video Gaming — Municipal Code Comparison Memo reviews how municipalities permitted and have placed further restrictions on Video Gaming. Overall some municipalities have chosen to: • Add a supplemental video gaming license in addition to an existing liquor license classification, • Modify existing liquor license code, • Implement limits on the number of video gaming liquor licenses issued, • Incorporate the Act or rules promulgated by the SGB into their codes, • Create VGT licenses fees to recover administrative and enforcement costs, and • Include language that restricts video gaming cafes. Local Enforcement: Police Chief Koziol contacted surrounding communities that permit video gaming to find out their service call experience related to video gaming. None have experienced any law enforcement issues nor has there been any increase in calls for service. Wheeling recently completed an extensive analysis which also showed no increase and they have some licensed establishments up and running since 2013. Village of Mount Prospect Community Survey 2016: In 2016 ETC Institute administered a community survey for the Village of Mount Prospect. The seven page survey included a question regarding community priorities asking respondents to rank 18 issues based on priority level. This was followed by a question asking to rank the top five priorities that should receive the most emphasis over the next two years. Allowing video gaming was one of the issues to rank and it scored the lowest priority ranking for both questions out of the other 17 choices. Alternatives 1. Staff offers no specific policy recommendation. 2. Action at discretion of Village Board. Staff Recommendation At this time, staff offers no specific policy recommendation, but does request the board consider various options and provide feedback. If there is a change to the Village's current policy, staff would recommend incorporating a local licensing fee per establishment and/or per video gaming terminal (VGT) in order to recapture costs associated with monitoring and local code compliance. Video_Gaming_Map_2018.pdf (643 KB) Video_Gaming_Municipal_Code_Comparison_03-08-2018_final.pdf (33 KB) Video_Gaming_Memo_03_08_18_final_w_Attachments.pdf (486 KB) https://www.boarddocs.com/il/vomp/Board.nsf/goto?open&id=AWKRN76B94C5 5/3/2018 BoardDocs® Agenda Item: 4.1 Video Gaming Page 3 of 3 Administrative Content NB: For Attachment C: It notes "possibilities" but that's based upon state regulations. Should we identify which establishments would be on this list if we do full service bars only? I'm not sure what license type this is, confirm with Doreen. I tweaked the recommendation so the board knows we are looking for feedback (direction for next steps) https://www.boarddocs.com/il/vomp/Board.nsf/goto?open&id=AWKRN76B94C5 5/3/2018 Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM TO: MICHAEL CASSADY, VILLAGE MANAGER FROM: ALEXANDER BERTOLUCCI, ADMINISTRATIVE ANALYST DATE: MARCH 06, 2018 (UPDATE TO NOVEMBER 20, 2015 MEMO) SUBJECT: VIDEO GAMING — MUNICIPAL CODE COMPARISON Mount �M? DISCUSSION The below information provides an overview of municipal video gaming codes and associated alcoholic liquor codes from communities that allow video gaming. The information is presented as excerpts of regulations outlined in municipal codes. The communities included are surrounding municipalities or were identified by attorney James Ferolo from Klein, Thorpe & Jenkins during the preceding video gaming analysis. Special Liquor License Issuance A supplemental video gaming license in addition to an existing liquor license classification is one method of regulating local video gaming. Hanover Park established a supplemental Class X liquor license for video gaming terminals (VGTs). The Class X license can only be attached to their Class A (Sale for consumption on premise only), Class C (Clubs), and Class E (Beer& Wine, only in conjunction with a meal) liquor license. Wheeling created separate video gaming licenses to supplement their existing classifications. For example, the Class N liquor license authorizes the retail sale of alcoholic beverages in cafes for consumption on premise. Wheeling has created a Class N -V license for Class N establishments that operate VGTs. Another method is to modify existing liquor license classifications to allow video gaming. This includes local video gaming regulations that specifically list which liquor licenses could apply for VGTs. Bartlett has provisions in their liquor license code regarding application for initial or renewal of existing liquor license. This section contains requirements for a licensee applying for a video gaming license and states that the video gaming license requirements shall not apply to any applicant seeking a C, C extended, G, H, J, K, L, or M liquor license. Video Gaming — Municipal Code Comparison March 08, 2018 Page 2 Sycamore restricted video gaming to establishments that hold a Class B (Bar), Class C (Club), Class E (Bowling Alley, Golf Course, Theater) or Class VG (Video Gaming Cafe) liquor licenses. Schiller Park has a prerequisite that any VGT License issued by the Village is an establishment that has the following licenses: a valid Class A, AC, L or R liquor license for service of alcoholic liquor on the premises. In addition to a community creating or modifying alcoholic liquor codes they may implement limits on the number of liquor licenses issued. The practice of limiting the number of liquor license in a community predates Illinois allowing local video gaming; however, restricting the number of liquor licenses can also assist to regulate the number of VGTs permitted in a community. • Elmwood Park has limited the total number of locations for VGTs issued to not exceed 20 licenses. Elmwood Park has also placed a limit on the total number of VGTs licensed to not exceed 94. • Bensenville has a supplementary liquor license (Class VG) authorizing the installation and operation of VGTs. There is no limit on the number of Class VG issued; however, the licenses required in conjunction with Class VG have limits on the number of locations. For example, Bensenville's Class A liquor license is limited to no more than six licenses. • Carol Stream has a Class V license that authorizes holders of a Class A, Class B, Class F, Class I or Class N license to operate video gaming; however, not more than 11 Class V licenses shall be issued. • Niles restricts the number of video gaming licensed establishments, for example: o Not more than 25 existing liquor license establishments may obtain video gaming licenses only if named licenses holder was in existence for a minimum of 18 months and in good stead with the Local Liquor Commissioner. o Not more than four new video gaming cafe business owners may obtain video gaming licenses. Video Gaming Municipal Codes.- The odes:The Illinois Gaming Act (Act) limits the VGTs hours of operation, restricts access to person over 21 and limits the number of video gaming terminals per establishment to five. Communities may incorporate portions of the Act into their municipal codes. Some communities choose to incorporate additional language from the rules promulgated by the Illinois Gaming Board. Itasca video gaming code includes general provisions that restate the Act provisions such as, VGT shall not be operated on any premise that is either located within 100 feet of a school or place of worship; not more than five VGTs on any premises licensed to sell liquor; VGTs shall be located in an area that is restricted to persons Video Gaming — Municipal Code Comparison March 08, 2018 Page 3 over the age of 21; and VGTs shall only be operate during the legal hours of operation provided for alcoholic liquor sales. • Wood Dale provides additional detail from the Illinois Gaming Board Rules in their municipal Code since they include language regarding that VGTs must be immediately removed, upon order of the Illinois Gaming Board or its agent, or if the VGT has been out of service or otherwise inoperable for more than 72 hours. Additional Oversight on Local Level Beyond State Regulations: A few communities implemented additional regulations beyond the Act and Administrative Rules. Elk Grove, Morton Grove and Niles require VGT establishments to install and maintain a video recording and monitoring system. Elk Grove also requires the establishment operating VGTs to have their burglar alarm system directly connected to Northwest Central Dispatch. Additional Examples of Video Gaming Regulations.- Local egulations:Local video gaming may also be regulated through liquor license criteria such as how a community defines a type of establishment, setting requirements that X amount of sales must be from alcoholic beverages or specifically prohibiting video gaming cafes. • Sycamore's Class B; Bar: license includes the following language, "Bars with State video gaming licenses must generate at least fifty one percent (51%) of gross annual receipts from beverage and food sales and dedicate no more than twenty five percent (25%) of floor space to video gaming in order to maintain eligibility for a Class B license. • Buffalo Grove specifically prohibits Video Gaming Cafes. o 5.20.155.13- Video Gaming Cafes prohibited. A Video Gaming Cafe shall not be qualified to obtain any existing classification of Buffalo Grove Liquor Licenses and is prohibited from becoming a Licensed Video Gaming Location within the Village. Further, no such license allowing Video Gaming Cafes shall be created, maintained or authorized by this chapter. • Hanover Park allows video gaming through a supplemental liquor license (Class X) and the license has criteria regarding seating capacity. -Chapter 10 — Alcoholic Beverages; Sec. 10-42.5 Gambling and video gaming; -(b)(3) The licensed premises shall have a minimum square footage of 2,000 square feet and the establishment shall have a minimum seating capacity in the main dining room or dining rooms of 50 person and a seat shall be provided for each person" -(b)(4) The area of the main dining room or dining rooms shall provide a minimum of ten square feet per customer. Video Gaming — Municipal Code Comparison March 08, 2018 Page 4 Fee Amounts: Table 1 provides the annual VGT licensing fees. Municipalities may also charge a one-time application fee. Table 1: Municipal Video Gaming Licensing Fees Municipality Annual License Fee Bartlett $250 per terminal 5-2018: $500 per terminal Bensenville $25 per terminal Buffalo Grove $1,000 per terminal Carol Stream $650 per terminal Elk Grove $1,000 per establishment, Elmwood Park $1,000 per establishment, $1,000 per terminal Hanover Park $1,000 per terminal, $500 license fee Hoffman Estates $400 per terminal Itasca $25 per terminal Morton Grove $250 per terminal Niles $1,000 per terminal, $250 application fee Prospect Heights $25 per terminal Schiller Park $1,000 per terminal, $500 application fee Sycamore $100 per terminal Streamwood $150 per terminal Wheeling $500 per terminal & license fee depends on li uor license class. Wood Dale $25 per terminal CONCLUSION Staff offers no specific recommendation at this time. Alexander Bertolucci Administrative Analyst H:\VILM\VIDEO GAMING\March 2018\Video_Gaming_Municipal_Code_Comparison_03-08-2018_final.doc Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM TO: MICHAEL CASSADY, VILLAGE MANAGER FROM: ALEXANDER BERTOLUCCI, ADMINISTRATIVE ANALYST Mount �M? DATE: MARCH 8, 2018 (UPDATE TO DECEMBER 7, 2017 AND JUNE 5, 2015 VERSIONS) 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 (the `Act') was signed into law in 2009. At the September 8, 2009 Committee of the Whole meeting the Village Board (the `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 requires the owner of the licensed VGT establishment, or his agent, to enter into a written use agreement with the Terminal Operator (owner of the VGTs) 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 Video Gaming Terminal Discussion March 8, 2018 Page 2 $2.00 and the maximum cash award for a single hand is $500. Additionally, the value of 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 of VGT 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 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 receive up to a $25,000 fine and up to 3 years in jail. For additional information regarding the Act, VGTs and municipal licensing authority please review Attachment A - Video Gaming FAQ. The SGB 2017 annual report states that there were 226 disciplinary complaints against video gaming licenses in 2017. While the report does not list all the disciplinary complaint reasons or complaints, it does include 43 complaints for failure to prevent underage access to VGTs. The SGB completed about 5,000 investigations of persons and entities and about 9,000 follow-up compliance inspections and complaints from the public. The SGB 2016 annual report states that there were 139 disciplinary complaints against video gaming licenses in 2016. The two most frequent categories for disciplinary complaints listed were: operating VGTs without valid liquor license (33 complaints) and outstanding tax liabilities (26 complaints). Complaints drop to 13 -12 for the two more categories followed by 5 complaints or less for the remaining 20 complaint categories listed. It also states that during calendaryear 2016, the SGB completed 4,990 investigations of persons and entities and 7,618 follow-up compliance inspections and complaints from the public. Video gaming expanded to 6,359 locations throughout Illinois with a total of 28,271 active VGTs by the close of 2017. According to the Committee on Governmental Forecasting and Accountability (COGFA) 62.6.2% of the State's population now lives within communities that allow video gaming, up from 55.2% in 2016 and 26.7% in 2013. The report notes that Chicago still prohibits video gaming which contains 21% of the State's population. Video Gaming Terminal Discussion March 8, 2018 Page 3 As of January 2018, there are 6,379 licensed establishments and 28,403 VGT in the state. Municipalities and Video Gaming The Village's neighboring communities that prohibit video gaming are 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 (Updated March 6, 2018) Arlington Heights (Ord.) Status Quo Northbrook (Opt-Out/Ord.) Status Quo Rolling Meadows - (Ord.) Status Quo Des Plaines (Ord.) Status Quo Palatine — (Ord.) Status Quo Schaumburg (Ord.) Status Quo Glenview (Opt-Out/Ord.) Status Quo Park Ridge (Opt -Out) Status Quo Skokie (Ord.) Status Quo Note: Listed municipalities are Village comparable communities from April 2015. Buffalo Grove permitted video gaming in April 2016. Their change to permit was prompted by inquiries from establishments stating that video gaming revenue would help them reinvest and stay in business, to remain competitive with restaurants in nearby Long Grove that recently completed a test pilot program and certain restaurant groups not opening new restaurants in communities that do not have video gaming for the reasons stated above. There have been four elections since April 2015 and four communities have had video gaming related referendums. • March 15, 2016 Presidential Primary Election - "Shall video gaming be authorized in Village of Willow Springs?" 61.67% voted Yes (1,226 votes of 2,094 Ballots Cast). • November 08, 2016 Presidential General Election — "Shall the Village of Maywood adopt an ordinance prohibiting the issuance of any new Class M (video gaming cafe/bistro) liquor licenses in the Village of Maywood?" 55.63% voted Yes (4,850 votes of 9,553 Ballots Cast). • April 04, 2017 Consolidated General Election — "Shall the Village of Franklin Park allocate video gaming taxes received from the state of Illinois to the police and fire pensions." 69.07% voted Yes (1,474 votes of 11,034 Ballots Cast). • April 04, 2017 Consolidated General Election — "Should the Village of Forest Park use the estimated $200,000 in future annual video gaming license revenue to lower property taxes on residents?" 65.06% voted Yes (1,002 votes of 1,730 Ballots Cast). Video Gaming Terminal Discussion March 8, 2018 Page 4 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, Schiller Park had a referendum in March 2014 which 66% or 401 voted "Yes" and ultimately resulted in the approval video gaming within the community. Table 2 lists the surrounding communities that permit video gaming. It also references the number of licensed establishments and VGTs in each municipality. Table 2: Surrounding Communities that Permit Video Gaming* (Updated March 6, 2018, January 2018 SGB Data ) Bartlett (12-53) Hoffman Estates* (22-105) Schiller Park (9-39) Buffalo Grove* (8-36) Morton Grove (8-40) Streamwood (11-51) Elk Grove* (22-101) Prospect Heights (13-64) Wheeling* (15-64) Hanover Park (7-35) *(#Est. - #VGTs) = Total number of licensed establishments - Total number of VGTs in municipality Note: Listed municipalities are Village comparable communities from April 2015. Note: These ten 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. The Police Department surveyed surrounding 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 March 8, 2018 Page 5 Figure 1 - Video Ganging Revenue Distribution Municipal Share 1/6th or 16.67% Establishment 35°la Taxes 30% State Sha VGT Operator 5/6th crr 83. 35' Today, the SGB has VGT wagering and income data available from September 2012 to January 2018. A revenue tabulation from the ten communities in Table 2 is provided as Attachment B. Several highlights from the revenue tabulation are: • Estimates for annual municipal revenue range from around $100,000 to $400,000 annually. Buffalo Grove received $44,000 in 2017; however, it was the first full year after permitting VGTs and revenue totals are similar to other communities' first year revenues. • Since 2012, Elk Grove collected a total of $998,086, Hoffman Estates collected a total of $1,186,470, Prospect Heights collected a total of $599,408 and Wheeling has collected a total of $775,157. • In 2017, the total average municipal revenue was $216,252, state revenue was $1,081,261 and total average revenue received by VGT operators and licensed establishments was $3,027,510 or about $1.5 million for VGT operators and for licensed establishments. These revenues were collected by an average of 13 licensed establishments or 60 VGTs per community. • For every one VGT placed in a municipality, the annual average municipal revenue received is $3,641, the state revenue is $18,203.07, and $50,968 would be split between a VGT operator and a licensed establishment A more detailed review on how VGT revenue may affect local businesses is provided as Attachment D: VGT Revenue by Establishment per Municipality. It shows combined licensed establishment and VGT operator revenues for establishments in Buffalo Grove, Elk Grove, Hoffman Estates, Prospect Heights and Wheeling between January 2017 and December 2017. Video Gaming Terminal Discussion March 8, 2018 Page 6 Local Licensing Fees: 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 local communities that permit video gaming. Home rule municipalities license fees are unrestricted per the Act, but amounts 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 2017 Fee Establish- lis VGT Totals Municipality Annual License Fee mems Count (minus Notes: (2017#) (2017#) Initial Fee) $500 effective Bartlett $250 per terminal 13 54 1 $13,500 5/1/2018 Buffalo Grove* $1,000/terminal fee 8 36 $36,000 $250 Initial Fee $1,000 per Elk Grove* establishment 21 100 $21,000 $500 Initial Fee $500 Annual Hanover Park $1,000 per terminal 7 35 $35,000 License Fee Hoffman Estates* $400 per terminal 21 100 $40,000 Video Gaming Cafe Morton Grove $250 per terminal 8 40 $10,000 separate fees. Non -Home Rule Prospect Heights $25 per terminal 14 68 1 $1,700 Fee limited to $25 $500 application Schiller Park $1,000 per terminal 10 43 $43,000 fee Streamwood $150 per terminal 12 56 $8,400 Varies based on License Class Initial Fee Annual ($2,500, $1,750 or $15,000 License Fee plus Wheeling* $1,000) 15 64 minimum $500 per terminal * = 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 Video Gaming Terminal Discussion March 8, 2018 Page 7 or place of worship. Mount Prospect has a combined total of 54 F -Class and S -Class liquor license holders eligible to be a VGT licensed establishment and the complete list is provide as Attachment C. Package Liquor stores are not eligible for a video gaming license. Village of Mount Prospect Community Survey 2016 ETC Institute administered a community survey for the Village of Mount Prospect during 2016. The seven -page survey included a question regarding community priorities asking respondents to rank 18 issues based on priority level. This was followed by a question asking to rank the top five priorities that should receive the most emphasis over the next two years. Allowing video gaming was one of the issues to rank and it scored the lowest priority ranking for both questions out of the other 17 issues. The 2016 Community Survey Findings Report page regarding community priorities is attached for reference as Attachment E. Note: The Community Survey results (random sample of 490 households) have a 95% level of confidence with a precision of at least +/- 4.4%. Prior Public Surveys Online surveys were conducted during the 2009, 2012 and 2015 video gaming discussions. The purpose was to gauge public opinion on allowing video gaming in the Village. The 2015 survey had a response total of 546. This response count is significant and Table 4 places it in context of the 2009 and 2012 video gaming surveys. The 2015 Video Gaming Survey provided respondents with a new answer option to provide non-resident stakeholders with an opportunity to identify their responses. Survey design limited responses to one per computer. However, the 2015 survey results were reviewed in further detail and many responses that submitted Mount Prospect addresses did not correspond with actual street addresses in town. Also, responses' IP addresses frequently repeated possibly a result individuals working 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) around surveymonkey.com survey design limit of one response per computer. The adjusted results had a response count of 98 with 62 (63%) in favor of video gaming and 36 (37%) against. In the 2009 and 2012 surveys majority (over 60%) of respondents voted they would not be in favor of allowing video gaming in the Village. Public opinion did not change when Video Gaming Terminal Discussion March 8, 2018 Page 8 presented with the scenario that if surrounding communities allowed video gaming, it would potentially put eligible Mount Prospect businesses at a competitive disadvantage. 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. Alexander Bertolucci Administrative Analyst Attachment A — Video Gaming FAQ Attachment B — Video Gaming Revenues Tabulation Attachment C — Video Gaming Establishment Possibilities Attachment D — VGT Revenue by Establishment per Municipality_12-8-2017 Attachment E — 2016 Community Survey Findings Report — Community Priorities Attachment F — 230 ILCS 40/ Video Gaming Act Attachment A - Video Gaming FAQ Q. What qualifies as a video gaming terminal ("VGT")? A. A "Video Gaming Terminal" ("VGT") is an electronic video gaming machine that plays or simulates the play of a video game authorized by the State Gaming Board, upon the insertion of cash. Authorized video games include, but are not limited to, video poker, line up, and blackjack. The VGT must utilize a video display and microprocessor in which the player may receive free games or credits that can be redeemed for cash. VGT does not include a machine that directly dispenses coins, cash, or tokens or is for amusement purposes only. Q. Are the VGTs subject to any requirements? A. Yes. The Act sets forth minimum requirements for each VGT. They all must be tested, approved and conform to a standard model that must conform to all federal laws and regulations, abide by pay out and computation requirements, and meet certain data and electronic requirements. Q. Do the machines pay out coins or cash when you win? A. No. The VGTs authorized under the Act only dispense "receipt tickets" that can be later redeemed for cash payable by the establishment. The ticket is available after a turn is complete and will indicate the total amount of credits and the cash award, the date and time, the terminal serial number, the sequential ticket number and an encrypted validation number. Q. Is there a limit on how much you can win or bet on a VGT? A. Yes. The Act provides both maximum wagers and maximum earnings. The maximum wager per hand is capped at $2.00 and the maximum cash award for a single hand is $500.00. Additionally the value of each credit is limited to 5C, 10C or 25C. Q. What are the hours of operation for VGTs? A. VGTs may only be played during the legal hours of operation allowed for the consumption of alcoholic beverages at the licensed premise. Q. How many VGTs will be allowed at each site? A. Illinois law allows up to five machines to be placed at each license establishment. Q. What types of establishments are eligible for VGTs? A. A "licensed establishment", licensed truck stops, or a licensed veterans and fraternal establishments. "Licensed establishment" is defined as any licensed retail establishment where alcoholic liquor is drawn, poured, mixed, or otherwise served for consumption on premises, whether the establishment operates on a nonprofit or for profit basis. 1of7 Attachment A - Video Gaming FAQ Q. Are there any location restrictions for VGT licensed establishments? A. A VGT establishment cannot be located within 1,000 feet of a facility operated by an organization licensee licensed under the Illinois Horse Racing Act or home dock of a river boat or 100 feet of a school or place of worship under the Religious Corporation Act The Act defines a "school" as a public or private elementary or secondary school registered or recognized by the State Board of Education. Q. What if a school or place of worship was to move within 100 feet of a VGT qualified liquor license establishment? A. VGT applications will not be accepted if a school or place of worship moves to or is established within the restricted area after a licensed establishment becomes licensed under this act. Also applications will not be accepted if a school or place of worship moves to or is established within the restricted area after a licensed establishment obtains its original liquor license. Q. Do VGTs need to be placed in a specific area inside a licensed establishment? If so, how is the area restricted? Is it supervised? A. Yes. All VGTs must be located in an area restricted to persons over 21 years of age. For all licensed video gaming locations that restrict admittance to patrons 21 years of age or older, a separate restricted area is not required. In licensed video gaming locations where separation from minors under 21 is required, a physical barrier to the gaming area is also required. The physical barrier may consist of a short partition, gate or rope or other means of separation and shall not visually obscure the entrance to the gaming area from an employee of the licensed video gaming location who is over the age of 21. The owner, manager or employee of the licensed video gaming location who is over 21 years of age shall be present during all hours of operation, and the VGTs or the entrance to the VGT area must be within the view of at least one owner, manager or employee. While a location may utilize closed circuit television to monitor the entrance to the area in addition to an employee, it may not utilize closed circuit television in lieu of an employee. Another duty of the licensed video gaming location is to prevent access to or play of VGTs by persons who are visibly intoxicated. Q. Are VGTs monitored by the State and can they be remotely deactivated? A. VGTs are linked by a central communications system to provide auditing information as approved by the State Gaming Board. The central communications system shall use a standard industry protocol, as defined by the Gaming Standards Association, 2of7 Attachment A - Video Gaming FAQ and shall have the functionality to enable the State Gaming Board or its designee to activate or deactivate individual gaming devices from the central communications system. Q. How does an establishment get a license? A. In order to offer video gaming, the Act requires an establishment to obtain a license issued by the State Gaming Board. In order to obtain a license, the establishment must possess a valid liquor license at the time of application and at all times the VGT is available to the public. Upon applying for a license, the establishment is subject to a background investigation and must disclose all persons, associations, trusts or corporations who will have more than 1% pecuniary interest in the video gaming operation. The State Gaming Board will deny licenses to establishments that have a background that poses a threat to the public interests of the State or the security and integrity of video gaming. This includes establishments with a criminal record or a bad reputation, habits, social stigma or business associations. Q. Is a liquor license required? If yes, what happens to VGTs if they lose their liquor license? A. Yes, unless the video gaming location is a truck stop or a veterans or fraternal establishment. All other video gaming locations must be a licensed retail establishment where alcoholic liquor is drawn, poured, mixed, or otherwise served for consumption on premises, whether the establishment operates on a nonprofit or for profit basis. The State Gaming Board rules state a licensed video gaming location is to commit no violations regarding alcoholic beverages that results in suspension or revocation of any liquor license held by or associated with a licensed video gaming location. Additionally, a licensed video gaming location is to promptly report to the State Administrator any action taken on or related to any liquor license held by the licensed video gaming location. Q. Is a license the only requirement to have a VGT? A. No. The Act also requires that the owner of the establishment, or his agent, must enter into a written use agreement with the terminal operator regarding the placement and maintenance of the terminals. This agreement must be kept on file by the owner and available for the State Gaming Board's inspection. Q. Who is a terminal operator? A. An individual, partnership, corporation, or limited liability company that is licensed under the Act and that owns, services, and maintains VGTs for placement in licensed establishments, licensed truck stop establishments, licensed fraternal establishments, or licensed veterans establishments. 3of7 Attachment A - Video Gaming FAQ Q. Is the Village responsible for conducting background checks and/or licensing any of the licensees? A. The Village is NOT responsible for conducting background checks and/or licensing any of the licensees. The responsibility is placed on the State Gaming Board. Though the Board may delegate some of this responsibility, either to the municipality or an appointed investigator, the Village will first be provided with due notice of this delegation. Furthermore, the burden on compliance is placed on the licensees, to ensure they are abiding by their respective duties and obligations. Q. Who has jurisdiction over the gaming operations? A. The Act provides that the State Gaming Board has jurisdiction over and shall supervise all gaming operations under the Act. Q. Does the municipality have to communicate with the state regarding licensing? A. Per Section 1800.1110 State -Local Relations: a) Whenever the State Gaming Board takes any action authorizing or prohibiting the licensing, operation, or use of VGTs, it shall notify the police department or sheriff's office whose jurisdiction includes the premises on which the VGTs are authorized or prohibited. b) Any municipality, county or law enforcement agency that takes action relating to the operation or use of a VGT, whether licensed or unlicensed, shall notify the State Gaming Board and specify the extent of the action taken and the reasons for the action. The Board shall thereupon take whatever action is necessary under the Act. Any law enforcement agency that confiscates VGTs or terminal income shall, as soon as practicable under the circumstances, turn over the VGTs and terminal income to the Board unless otherwise ordered by a court of competent jurisdiction. Q. What if an establishment violates the Act? A. According to the Act, any gambling device in violation of this Act will be seized, confiscated and destroyed. In addition, the state liquor license for the establishment shall be immediately revoked and the owner of the establishment is subject to a Class 4 Felony, meaning he/she could get up to a $25,000.00 fine and be jailed for up to 3 years. Q. How are VGT revenues distributed? A. The net terminal income "Gamblers Losses" is subject to a 30% state tax. Of that tax, five -sixths is deposited into the State Capital Projects Fund and one-sixth is deposited into the Local Government Video Gaming Distributive Fund. The Department of Revenue will allocate on a monthly basis the funds available to pay each eligible municipality and county and then will distribute these amounts from the Local Government Video Gaming Distributive Fund. The money can be used for any general corporate purpose. The allocation of funds shall be in proportion to the 4of7 Attachment A - Video Gaming FAQ tax revenue generated by video gaming from the eligible municipalities and counties as compared to the tax revenue generated from video gaming statewide. Q. When does the State deposit Local Government Video Gaming Distributive Fund amounts to municipalities? Are the deposits on time? A. The video gaming money is transferred monthly to the local municipalities around the 20th of each month. To date deposits have been on time. Q. Is there any news if the Local Government Video Gaming Distributive Fund will be reduced like the Local Government Distributive Fund? A. Currently, there is no news and staff will monitor this further. Q. Do local municipalities have additional options to regulate VGTs locations? A. Home rule municipalities can likely imposed additional restrictions on the location of video gaming machines that are reasonable and designed to meet a rational objective. Q. Can a municipality have a local license fee? If yes, is there a maximum the fee can be? Is the fee per establishment or video gaming terminal? A. Yes. Non -home rule municipalities can only charge a license fee of $25.00 per year per video gaming terminal. Home rule municipalities do not have a fee amount limit; however, the fee must have a rational relationship to the cost incurred by the Village. Q. How can a municipality regulate establishments with VGTs? A. The licensed video gaming establishments would have a liquor license; the Village could exercise effective control over any such establishment through its liquor licensing authority. (i.e. if one of these establishments became a problem because of video gaming, the Local Liquor Commissioner could treat it like any other problem the Commissioner addresses with a liquor license holder. Q. Can municipalities limit the number of video gaming licensed establishments? A. The Video Gaming Act is silent on home rule preemption; thus the Village has the ability to regulate the number of video gaming establishments. • A trial court opinion issued by Judge Kennedy in a case involving Elmwood Park video gaming license fees in 2014 specifically held that the Video Gaming Act does not preempt home rule authority. The case is up on appeal. The Village Attorneys will monitor its progress to determine if the appellate court takes the same view. The number of video gaming licenses can be limited through the issuance of dedicated liquor licenses. The Village could limit the types of liquor licenses that are eligible for a video gaming license. The Village could also require applicants for liquor licenses to provide information about video gaming in their establishments. 5 of 7 Attachment A - Video Gaming FAQ Finally, the Village could create a special class of liquor license for video gaming or video gaming cafes. A few municipalities have chosen to limit video gaming to only certain liquor license classifications. • The best example is the City of Sycamore which only allows video gaming in liquor establishments which hold a Class B, C or E liquor license. This allows bars, clubs, bowling alleys and golf courses to have video gaming. Excluded from video gaming are restaurants, which are a Class A liquor license in Sycamore. Under the City of Sycamore's regulations, a video gaming cafe could not likely open because the definition of a "bar" requires that 80% of the gross sales must be from alcoholic liquor. • Similar, Granite City, Illinois has limited video gaming to Class A liquor licenses, which is limited to bars where half the sales are alcohol. • In contrast, the current liquor regulations in Hoffman Estates do not allow bars or taverns to obtain video gaming licenses. Therefore, an establishment wishing to have video gaming would have to meet the definition of restaurant, which means "any public place kept, used, maintained, advertised and held out to the public as a place where meals are served primarily for sit down dining which offers patrons meals, including dinner and/or luncheon menu at which the service of alcoholic beverages is incidental and complementary to the service of such meals. Food service, such as provided by luncheonettes, diners, coffee shops, drive-ins, fast food operations, and similar uses, do not satisfy the requirements of this definition." A cafe location may not meet the definition of a restaurant, depending on how it is interpreted. • The Village of Elgin uses its liquor license application procedure to gather information about businesses seeking to provide video gaming. All floor plans attached to liquor license applications have to identify proposed video gaming areas and applicants for new licenses have to state whether they will also apply for a video gaming license. Given that video gaming is now associated with a liquor license, it is an additional consideration for a municipality to consider when determining whether to increase the number of liquor licenses. These types of liquor code regulations would help limit the types of establishments that can obtain video game licenses. Further, it ensures current liquor license holders have the ability to obtain a video gaming license. Another option is to create a specific liquor license for video gaming or video gaming cafes. This would allow the Village to craft specific rules and regulations for video gaming within the Village and limit the number of liquor licenses for video gaming. • The Village of Lake Zurich has created a Class V liquor license for liquor establishments with both a current liquor license and a video gaming license. A business operating a video gaming terminal is required to have a Class V license in 6of7 Attachment A - Video Gaming FAQ conjunction with and in addition to the liquor license already required to be held and there is an additional $250 fee for a Class V liquor license. However, the number of Class V liquor licenses is in tandem with the underlying liquor license. • The Village of Sherman created a special class of liquor license for video gaming and only permitted four licenses. The Village of Sherman charges a $500 annual fee for the video gaming liquor license and charges $250 per terminal. • Village of Lake in the Hills amended its Liquor Code to specifically address video gaming cafes by making cafes their own specific class of liquor license (A-2) and only authorized one A-2 liquor license. • The Village of Wheeling has enacted changes to its Liquor License Code requiring a specific type of liquor license to allow for video gaming in any type of video gaming eligible establishment. Q. Can municipalities further limit the number of video gaming terminals? A. Using its home rule authority, it appears that at this time a municipality can limit the maximum number of units per establishment below the statutory maximum of S. This number should be determined using a rational basis and it should be the same for any licensed establishment. Q. Is video gaming an all or nothing proposition? If we allow video gaming, can we decide not to do it at a future date? A. Once video gaming is allowed, a municipality will be able to ban video gaming in the future; however such a community will likely face significant litigation. Contractual rights between vendors of video gaming machines and video gaming establishments will arise out of the passage of video gaming in a community. Banning video gaming in the future will impact those rights and thus likely cause litigation to ensue. While video gaming can likely be banned in the future it will have to be for good reason and will possibly come at great expense. The decision to allow gaming should be made with the eye that it is permanent. The better option is to create control over video gaming establishments through your liquor licensing process. As stated above, the municipality can suspend or revoke a problem video gaming establishment's liquor license. Q. What is the process for the Village to institute video gaming? A. The Village would pass an ordinance modifying the Village code to allow for gaming. The new ordinance once adopted would then be sent by fax (312) 814-4602 or mail it to: Illinois Gaming Board Legal Counsel James Pellum 160 North LaSalle - Suite 300 Chicago Illinois 60601 7 of 7 E m o � O F y > z w ri ri v. v ro16 v. of 1 v. v. v. m m 4 v v. ni v. v. r� g c5 g N 6 6 ri 16 v. v. a N v. li 16 m of 4 vi v. a mw o v 1 o v. v. m- li 16 viOIn of o v ni v. v. v. mi N ry v M m 11 w vmi M IN lw 11 mm o ro m vt N �D N h N O vt O rV �1 N b V N N vt O c Q vtI N m 0 0 Om Oc:� Ili Ili Ili m~Ics n O W ci O tO V Q obit m Obi Ot O^i c -I Q m V W Q N Ot Lt Lt Lt Lt Lt Lt ------ -------------------- Lt Lt Lt Lt O O511.11 N O Q V N ti^ oN N F b NN w Q n 0w N w M Owl w I O - M O N h N Nwl N O vt W N N N Ol �1 p Ool M c -i Obi Q N c -i h ri Q F a+ F j L� L� L� L� L� t/�'VT L� t/�'VT L� L� L� L� t/�'VT L� L� L� L� t/�'VT Lt L� L� L� L� t/�'VT Lt L� L� L� L� t/�'VT - - - - W n Ool n t�+l h m ml M Q F ` v1 I mI mh Q m h Oi �f1 c -I Oi E ov'^i w rya m, m m ro m ro 'm N v c ro vO1i n w M m o N ti n b h N N n ri h F F Z Lt Lt Lt Lt Lt t/�'VT Lt t/�'VT Lt Lt Lt Lt t/�'VT Lt Lt Lt Lt t/�'VT Lt Lt Lt Lt Lt t/�'VT Lt Lt Lt Lt Lt t/�'VT Lt Lt Lt Lt Ol N b I m I m Q w m N m c -I b V m N h I V b N N r1 n O cm�f W iDwl °li O W h V O N b O N V V clam - v16 cl� o6 o6 M O N w Obi N h Obi N m m N N Vm ^ mw w�c-i M h Oi r1 n I OOi o6 F Oi 16 Oi N vt 16 E zm o o > LL E 0 0 0 0 0 0 0 o O O O O O O O O O O 0 0 0 0 0 0 0 0 0 0 0 0 O O O O o w ¢ E o m 1w a z 0 E ml F v I m ¢ ry w n w F .n .n .n .n .n .n .n .n .n .n .n .n .n .n .n .n 9 .n .n .n .n 4411—m F � � o N N m m m N m m m O rvv v v v > u o � ° u r > — — ° o 'o G U w U 2 S U \ ------------------------- /§§ §§//]) §§/§/2§§ \ \ \( 6\\\\ 'i\}\\\ \\\\\\\� \ \\\ \cs \\\\\\\ \\\\\ mw \\\ \ \\\\ �\\\\ A cr� mw 16 \\\ (�}� j �\\\ ��/\\ �\\\j --- - - )\ J / < > 416 c5 4 cr� um 1w § 2 )\ §} Attachment C — Video Gaming Establishment Possibilities Class F-1 F-1 F-1 F-1 F-1 F-1 F-1 F-1 F-1 F-2 F-2 F-2 F-2 F-2 F-2 F-2 F-2 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-3 F-4 F-5 F-5 F-5 F-6 F-6 F-7 3 Establishment Bricks Wood Fired Cafe Chipolte Mexican Grill Chung Kiwa Restaurant Izakaya Sankyu LePeep Cafe Los Arcos (Fadadias 4) Mi Restaurant Mr. Kimchi Korean BBQ New Pusan Restaurant Salerno's Pizzeria Avanti Cafe & Sandwich Bar Frankie's Fast Foods Misoya Chicago Mr. Beef & Pizza Qulinarnia Tortas Locas Yupin Thai Balkan Taste Bar Louie Black Finn Brick City Buffalo Wild Wings Canta Napoli Pizzeria Draft Picks E&O Hacienda EI Sombrero Emerson's Ale House Fellini Restaurant Jameson's Charhouse Kampai Japanese Steak House La Presa Langostino's Nayarit Mia's Cantina Mina Restaurant Mrs. P & Me Restaurant Nina Restaurant Outback Steakhouse Pap's Ultimate Grill & Bar Retro Bistro Sam's Place Smokey Bones Summertime Trezeros Truco Prospect Moose Lodge #660 Bristol Palace Emerald Banquets Victoria in the Park Mount Prospect Park District Prospect Heights Park District Dave's Specialty Foods Brunswick Zone -Mount Prospect Moretti's AMC Theatre Randhurst Address 1501 Feehanville Dr. 102 E. Kensington Road 1658 W. Algonquin Rd. 1176 South Elmhurst Road 10 E. Northwest Highway 1707 W. Algonquin 1742 E. Kensington 1747 Golf Road 1144 South Elmhurst Road 1716 East Kensington Road 1900 South Elmhurst Road 720 East Rand Road 1584 S. Busse 1796 South Elmhurst Road 1730 W. Golf Road 1827 W. Algonquin Road 1652 W. Algonquin 2354 S. Elmhurst Road 200 East Rand Road 157 Randhurst Village Drive 34 S. Main 301 East Euclid Avenue 90 East Busse 912 S. Busse Road 125 Randhurst Village Drive 1100 South Elmhurst Road 113 S. Emerson Street 1729 West Golf Road 1702 West Algonquin Road 2330 South Elmhurst Road 401 E. Euclid 1590 South Busse Road 143 Prospect Avenue 1724 W. Golf Road 100 East Prospect Avenue 1774 W. Golf Road 909 N. Elmhurst 1904 South Elmhurst Road 1746 West Golf Road 15 West Prospect Avenue 164 Randhurst Village Dr. 1132 S. Elmhurst 302 W. Northwest Hwy. 211 Randhurst Vilage Drive 601 North Main Street 828 E. Rand Road 1070 S. Elmhurst 1700 S. Elmhurst 1000 W. 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Overall Satisfaction with Community Priorities by percentage of respondents who rated the item as a 1 to 5 on a 5 -point scale (excluding don't knows) Overall quality of life Crime prevention A balanced Village budget Quality & drivability of Village streets Flood prevention/storm water management Quality of services provided by the Village Village sidewalks Walkability of downtown & other areas A vibrant downtown Availability of parking downtown Environmentally sustainable practices Availability of green space Historic preservation Arts & cultural amenities Availability/integration of biking lanes & trails Diversity of housing choices Greater residential density downtown Allowing video gaming Other r 41% 34% 9% 1 8% 36% 13% - 60% 14% - 36% 14% >� 49% 15% 49% 1 19% 6% 45% 1 21% 5% 41% 1 20% 6% 41% 31% 9% 39% 31% 12% 11% 37% 37% 13% 35% 37% 141/6 30% 37% 20% 27% 39% 24% 21% 1 44% 25% 10% 26% 58% 24% 8% 1 8% 0% 20% 40% 60% 80% 100% Very High Priority (5) OHigh Priority (4) [::]Neutral (3) [::]Low Priority (2/1) Source: ETC Institute (2016) Q22. Community Priorities That Should Receive the Most Emphasis Over the Next Two Years by percentage of respondents who selected the item as one of their top five choices Crime prevention 56% A balanced Village budget 46% Flood prevention & storm water management 40% Overall quality of life 359% Quality of services provided by the Village 34% A vibrant downtown 31% Quality & drivability of Village streets 29% Village sidewalks 15% Environmentally sustainable practices 13% 1 1 Availability/integration of biking lanes & trails 11% Walkability of downtown & other areas 11% Arts & cultural amenities 11% Availability of green space 9% Availability of parking downtown 9% Diversity of housing choices 6% Historic preservation 5% Greater residential density in downtown 5% Allowing video gaming 4% Other 3% 0% 20% 40% 60% 1st Choice 02nd Choice 03rd Choice 11111114th Choice 05th Choice Source: ETC Institute (2016) I` ETC Page 14 230 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 CJJ 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://ilga.gov/legislation/ilcs/ilcs4. asp?DocName=023000400HArt%2E+5 &ActID=3095&... 3/5/2018 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://ilga.gov/legislation/ilcs/ilcs4. asp?DocName=023000400HArt%2E+5 &ActlD=3095&... 3/5/2018 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 ILCS 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 Page 3 of 16 http://ilga.gov/legislation/ilcs/ilcs4. asp?DocName=023000400HArt%2E+5 &ActID=3095&... 3/5/2018 230 ILCS 40/ Video Gaming Act. play history (outcome, intermediate play steps, credits 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 Page 4of16 http://ilga.gov/legislation/ilcs/ilcs4. asp?DocName=023000400HArt%2E+5 &ActlD=3095&... 3/5/2018 230 ILCS 40/ Video Gaming Act. gaming terminal distributor, or both, but in no event shall 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 ILCS 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 ILCS 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://ilga.gov/legislation/ilcs/ilcs4. asp?DocName=023000400HArt%2E+5 &ActID=3095&... 3/5/2018 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 Page 6of16 http://ilga.gov/legislation/ilcs/ilcs4. asp?DocName=023000400HArt%2E+5 &ActlD=3095&... 3/5/2018 230 ILCS 40/ Video Gaming Act. otherwise controls 100 or more of the assets of the 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 Page 7 of 16 http://ilga.gov/legislation/ilcs/ilcs4. asp?DocName=023000400HArt%2E+5 &ActID=3095&... 3/5/2018 230 ILCS 40/ Video Gaming Act. determines such operation will result in undue economic 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 ILCS 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 ILCS 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 ILCS 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://ilga.gov/legislation/ilcs/ilcs4. asp?DocName=023000400HArt%2E+5 &ActID=3095&... 3/5/2018 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 ILCS 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://ilga.gov/legislation/ilcs/ilcs4. asp?DocName=023000400HArt%2E+5 &ActID=3095&... 3/5/2018 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 ILCS 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 ILCS 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 the corporate structure of the applicant allows, the http://ilga.gov/legislation/ilcs/ilcs4. asp?DocName=023000400HArt%2E+5 &ActlD=3095&... 3/5/2018 230 ILCS 40/ Video Gaming Act. Page 11 of 16 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 (2) Distributor................................$10,000 http://ilga.gov/legislation/ilcs/ilcs4. asp?DocName=023000400HArt%2E+5 &ActID=3095&... 3/5/2018 230 ILCS 40/ Video Gaming Act. Page 12 of 16 (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 ILCS 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 ILCS 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 establishment is located in a municipality within a county with a population between 8,500 and 9,000 based on the 2000 http://ilga.gov/legislation/ilcs/ilcs4. asp?DocName=023000400HArt%2E+5 &ActID=3095&... 3/5/2018 230 ILCS 40/ Video Gaming Act. Page 13 of 16 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 ILCS 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 ILCS 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.) (230 ILCS 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 http://ilga.gov/legislation/ilcs/ilcs4. asp?DocName=023000400HArt%2E+5 &ActID=3095&... 3/5/2018 230 ILCS 40/ Video Gaming Act. Page 14 of 16 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 ILCS 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. (Source: P.A. 96-34, eff. 7-13-09.) (230 ILCS 40/78) Sec. 78. Authority of the Illinois Gaming Board. http://ilga.gov/legislation/ilcs/ilcs4. asp?DocName=023000400HArt%2E+5 &ActlD=3095&... 3/5/2018 230 ILCS 40/ Video Gaming Act. Page 15 of 16 (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 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.) http://ilga.gov/legislation/ilcs/ilcs4. asp?DocName=023000400HArt%2E+5 &ActID=3095&... 3/5/2018 230 ILCS 40/ Video Gaming Act. Page 16of16 (230 ILCS 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 ILCS 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.) http://ilga.gov/legislation/ilcs/ilcs4. asp?DocName=023000400HArt%2E+5 &ActlD=3095&... 3/5/2018 qp K a u `S Z 0� 00 U W F- aZ D �0 DU z a cl) O z D Y Z Fa = O cn ooy 0 Z 5 W Z a Wo .*k z U o aZ w FL J J ~ ya 0 m oLu - Y ZZ d Oyz \U wwz LU r WLJ F- # a¢ J o W a w o o Z Q a moo VILLAGE MANAGER MAYOR Michael J. Cassady Arlene A. Juracek VILLAGE CLERK TRUSTEES Karen Agoranos William A. Grossi Eleni Hatzis Phone: 847/392-6000 Paul Wm. Hoefert Fax: 847/392-6022 Richard F. Rogers ½½½Ȍ³µ»´º¶¸µ¹¶«©ºȌµ¸ Colleen E. Saccotelli Michael A. Zadel Village of Mount Prospect 50 South Emerson Street, Mount Prospect, Illinois 60056 MINUTES ECONOMIC DEVELOPMENT COMMISSION Community Room, Village Hall Wednesday, May 9, 2018 8:00 a.m. The meeting of the Economic Development Commission (EDC) of the Village of Mount Prospect was held on Wednesday, May 9 in the Community Room in the Village Hall, 50 South Emerson Street, Mount Prospect, Illinois. CALL TO ORDER Skip Robertson called the meeting to order at 8:00 a.m. Commissioners Jim Drew, Dan Novak, David Roe and Tom Zander were present. Also present were Arlene Juracek, Mayor, Bill Cooney, Director of Community Development, Consuelo Arguilles, Deputy Director of Community Development, Jason Shallcross, Planner, Connor Harmon, Planner, Alex Bertolucci, Administrative Analyst, Doreen Jarosz, Administrative Assistant and Dawn Fletcher-Collins, Executive Director of the Chamber of Commerce. APPROVAL OF MINUTES The minutes of the January 25, 2018 meeting were reviewed and approved unanimously. CITIZENS TO BE HEARD No comments. OLD BUSINESS Development Update Mr. Cooney provided a brief update on various developments throughout the Village. The group discussed several of the downtown projects and provided insight on market conditions related to those projects. NEW BUSINESS Video Gaming Mr. Cooney provided a history of the video gaming issue in Mount Prospect and advised the EDC that several local restaurateurs had recently approached the Village to request that we reconsider the current prohibition of these terminals in town. He stated that the Village Board held a Committee of the Whole meeting on March 13 to discuss this topic. After hearing testimony from several restaurateurs they requested that they bring this issue up before the EDC for their consideration and recommendation. Mr. Bertolucci also provided an update on the number of surrounding communities that have passed ordinances allowing video gaming and provided an overview of the financial and regulatory impacts that gaming has had on these communities. Mr. Cooney indicated that Ms. Fletcher-Collins would provide an overview of the restaurateurs request. Ms. Fletcher-Collins stated that why she was personally neutral on whether video gaming should be allowed in Mount Prospect, she has had many discussions with restaurateurs that have stated that they are at a competitive disadvantage because most of the surrounding communities allow video gaming and they lose business to restaurants in those communities. She stated that she has spoken to most restaurateurs in the community and while the majority of them are not interested in having the video gaming terminals in their establishments, they all support allowing them in town. and Brick City all reiterated the importance of the gaming terminals to their bottom lines and to keep their customers in the Village. In addition, representatives of two terminal operating companies (Gold Rush Gaming and Veterans Gaming) who supply the terminals described orks with revenue sharing between the restaurateurs, the terminal operating companies and government agencies. The EDC thanked the group for their input and then discussed the issue at length. After final deliberations, the EDC voted 5-0 to recommend to the Village Board approval of video gaming in the community. They stated that the evidence provided showed that video gaming would benefit the local restaurateurs without creating any negative impacts to the Village. Mr. Cooney then requested that the EDC provide their input on the various restrictions that were proposed as possible local options by legal staff. After further discussion they voted as follows on each option: Expand the definition of education facility to include tutoring, day care, etc. voted 5-0 to not expand the definition. Prohibit outdoor signage advertising the gaming terminals voted 5-0 to prohibit outdoor signage. Limit the number of terminals to 3 voted 5-0 to not create a local limit, thereby allowing up to 5 terminals per establishment. Restrict the total revenue from video gaming to no more than 30% of total revenue from the establishment voted 5-0 to implement a cap on the percentage of revenue from the video gaming. Prohibit video gaming cafes voted 5-0 to prohibit the video gaming cafes. The EDC thanked the group for attending the meeting and requested that staff forward their recommendation to the Village Board for their consideration at an upcoming meeting. Police Headquarters and Fire Station #13 Proposed Relocation Mr. Cooney provided the EDC with an overview of the proposed relocation of the Police/Fire operations out of the downtown district. In addition the group discussed the potential options for redevelopment of the current police/fire property and possibly the Chase Bank site to the north. The EDC voiced their support for the relocation projects and looked forward to the redevelopment opportunity in the downtown district. Business Attraction Strategy Due to time constraints the EDC did not discuss the business attraction strategy. Mr. Cooney did indicate that efforts to attract a distillery were going well and believed that the group he was working with would sign a lease to locate in town in the coming weeks. OTHER BUSINESS There was no other business to discuss. ADJOURNMENT The meeting was adjourned at 9:20 a.m. Respectfully submitted, William J. Cooney Director of Community Development MEMORANDUM TO: Village Board, Village of Mount Prospect FROM: Lance C. Malina and Jason A. Guisinger DATE: May 2, 2018 RE: Draft Ordinance Allowing for Video Gaming Per the VillageÓs request, we have prepared a draft ordinance that creates liquor license classifications for establishments that have video gaming. For example, a restaurant, which usually requires a Class F-3 License (Restaurant with lounge license), would need to apply for and receive a Class F-3-V license to run a restaurant with video gaming. However, under the draft ordinance, not all liquor license classifications in the Village have the ability to apply for a video gaming liquor license, such as Class S-1 (Hotel License) and Class F-5 (banquet facility license), which are establishments whose business structures do not appear to support video gaming. Please note that the proposed ordinance creates six (6) classifications which allow video gaming. We can increase, decrease or change the classifications that allow for video ga ming at the VillageÓs direction. This approach only requires liquor establishments with video gaming to have one (1) liquor license. It will also allow the Village to control and regulate video gaming within the Village. The proposed ordinance creates additional restrictions on video gaming establishments outside of those required by the Illinois Video Gaming Act, 230 ILCS 40/1 et seq. For example, the ordinance requires that video gaming establishments be located at least 100 feet from any educational facility as defined by the Village Code. We include a definition of educational facility in the proposed ordinance which encompasses tutoring facilities as well as schools, daycares, etc. The ordinance also creates caps on the number of machines allowed at each establishment, creates requirements for security and video surveillance and imposes sign regulations. Further the ordinance insures that the percentage of income received from video gaming at each establishment will not exceed a set percentage of the es tablishmentÓs net income and requires that any establishment operating pursuant to a Special Use Permit issued by the Village go through a trial period before it receives a license. The ordinance also expressly prohibits video gaming cafes. The ordinance can be amended to create additional restrictions on video gaming establishments if the Village Board so desires. The ordinance also creates fees for the issuance of a liquor license that allows for video gaming. The amount of the fee indicated in the proposed ordinance is the same as the fee for the equivalent liquor license classification without video gaming. We anticipate that the Board will want to increase the amount imposed for the issuance of a liquor license which allows for video gaming and the corresponding fee amount can be changed once an appropriate amount is determined by the Board. Additionally, if the Board ultimately passes an ordinance which creates new liquor license classifications allowing for video gaming, we will need to amend the Village Code at that time to set the number of available licenses at zero. 394260_1 Village Board Page 2 of 2 April 5, 2018 Further, the ordinance removes Class S-3 (Tavern license) entirely. The Village was concerned that these licenses would essentially allow for the equivalent of video gaming cafes. The Village predominantly used Class S-3 licenses to allow restaurants with Class F-3 licenses to have an additional upstairs lounge area. To accommodate this, we have amended the Class F-3 regulations to allow a secondary, additional lounge area within a licensed establishment under a F-3-V license if the secondary lounge area is located on a different floor than the primary lounge area and restaurant dining area. Allowing video gaming in the Village through the creation of liquor license classifications for establishments that have video gaming allows the Village to retain maximum control over video gaming. Any establishment that wants video gaming at its location will need to apply for and obtain a liquor license from the Village. The proposed ordinance specifically prohibits video gaming within the Village except as allowed in the limited circumstances created by these liquor license classifications. Therefore, the Village is able to regulate who gets these licenses and where video gaming is permitted within the Village. Please contact us with any questions. 394260_1 ORDINANCE NO. _________________ AN ORDINANCE AMENDING CHAPTER 13 OF THE VILLAGE OF MOUNT PROSPECT’S MUNICIPAL CODE, “ALCOHOLIC LIQUORS,” SPECIFICALLY SECTIONS 13.101, 13.204 AND 13.204.1; CHAPTER 23 OF THE VILLAGE OF MOUNT PROSPECT’S MUNICIPAL CODE, “OFFENSES AND MISCELLANEOUS REGULATIONS,” SPECIFICALLY SECTION 23.503.1; AND APPENDIX A, DIVISION II OF THE VILLAGE OF MOUNT PROSPECT’S MUNICIPAL CODE TO CREATE LIQUOR LICENSES FOR ESTABLISHMENTS WITH VIDEO GAMING WHEREAS, the Village of Mount Prospect (“Village”) and its officials are authorized pursuant to the provisions of Section 4-4 of the Illinois Liquor Control Act of 1934, (235 ILCS 5/4-1, et seq.), to provide for the control, management and licensing of the sale of alcoholic beverages within the corporate boundaries of the Village of Mount Prospect; and WHEREAS, the Village has determined it is necessary and desirable to provide additional classes of liquor licenses, which would allow its recipients to operate video gaming in the Village; and WHEREAS, the President and Board of Trustees find it is in the best interests of the community of the Village of Mount Prospect to approve the Ordinance as herein amended. NOW, THEREFORE, BE IT ORDAINED by the President and the Board of Trustees of the Village of Mount Prospect, County of Cook, State of Illinois: SECTION A: Section 13.101 of the Mount Prospect Municipal Code, “WORDS AND PHRASES,” is hereby amended to include a new definition of “Educational Facility” and “Video Gaming Café” to read as follows: EDUCATIONAL FACILITY: Any building used for instruction of enrolled students, including but not limited to any day-care center, nursery school, public or private school, tutoring center, college, university, medical school, law school, or career and technical education school. VIDEO GAMING CAFÉ: An establishment whose primary or major focus is video gaming and the service of alcohol and food is incidental to the operation of video gaming. Video Gaming Cafés are expressly prohibited in the Village of Mount Prospect. SECTION B: Section 13.204 of the Village of Mount Prospect’s Municipal Code, “CLASSIFICATIONS,” is hereby amended to read in its entirety as follows: A. Licenses: Liquor licenses in the Village shall be divided into the following classifications: 394112_1 1 1. Package Licenses (P): Class P-1 General package license. Class P-2 Secondary package license. Class P-3 Wine and beer only package license. Class P-4 Wine only package license. Class P-5 Home delivery license. 2. Food Service Licenses (F): Class F-1 Restaurant without lounge license. Class F-1-V Restaurant without lounge license, video gaming. Class F-2 Restaurant, wine and beer only license. Class F-2-V Restaurant, wine and beer only license, video gaming. Class F-3 Restaurant with lounge license. Class F-3-V Restaurant with lounge license, video gaming Class F-4 Private club license. Class F-4-V Private club license, video gaming. Class F-5 Banquet facility license. Class F-6 Golf course license. Class F-7 Restaurant corkage license. Class F-8 Brewpub license. Class F-8-V Brewpub license, video gaming. 3. Specialty Licenses (S): Class S-1 Hotel license. Class S-2 Bowling alley license. Class S-2-V Bowling alley license, video gaming. Class S-3 Tavern license. Class S-4 Gourmet beverage shop license. Class S-5 Movie theater license. Class S-6 Complimentary service license. Class S-7 Caterer's license. Class S-8 Craft brewery or distillery license. Class S-9 License with special conditions. B. Temporary Permits: 1. Non-Mount Prospect caterer's permit. 2. Ad hoc. C. License Endorsements: 1. Sampling. 2. Mount Prospect caterer. 3. Outdoor entertainment. 394112_1 2 4. Corkage endorsement (Class F only). Any Class F-1, F-2 or F-3 licensee may, in the discretion of the licensee, allow a patron to bring his or her own unopened wine into the establishment subject to the same restrictions as a Class F-7 license. D. Certifications: 1. Management entity certification. 2. Outdoor certification. SECTION C: Section 13.204.1 of the Mount Prospect Municipal Code, “DESCRIPTIONS AND RESTRICTIONS,” is hereby amended to read in its entirety as follows: The restrictions on a particular license, permit or certification classification shall be binding on the licensee and no premises or activity may be operated in violation of the classification restrictions and regulations. No license, permit or certification may be issued unless the applicant's business is specific to one of the following classifications: A. Class P Licenses (Package): 1. Restrictions Applicable To All Class P Licenses: a. Consumption and/or allowing consumption on the premises where sold is prohibited. (See subsection E1 of this section for special daily sampling events.) b. The licensee is prohibited from selling or offering for sale single containers of refrigerated or chilled alcoholic beverages where the single container has a capacity of less than twenty two ounces (22 oz). c. A Class P licensee may sell gasoline for motor vehicles only if the sale of gasoline takes place at a building or structure that is physically separated from the licensed premises. d. Except for a duly permitted daily sampling, it shall be unlawful for the holder of any Class P license to deliver alcoholic beverages in any container other than its original sealed and unopened package. e. Video Gaming as defined under the Illinois Video Gaming Act 230 ILCS 40/1 et seq. shall not be allowed in a Class P licensed premises. 2. Specific Class P Licenses: a. General Package License: Class P-1, for delivery of all alcoholic beverages in an original sealed package. Regulations specific to a Class P-1 license: (1) Under no circumstances shall there be more than five (5) Class P-1 general package licenses outstanding at any time. (2) The license may not be issued for a premises whose primary business is the sale of groceries or other products. b. Secondary Package License: Class P-2, for delivery of alcoholic beverages in an original package only, at a premises where the primary business is the sale of goods and products other than alcoholic beverages. Regulations specific to a Class P-2 license: 394112_1 3 (1) The licensed premises shall contain not less than ten thousand (10,000) square feet of floor area. (2) The sale of prepackaged food items must be a significant (not merely incidental) aspect of the business model. c. Wine And Beer Only Package License: Class P-3, for the delivery only of wine and beer in its original package. Regulations specific to the Class P-3 license: (1) No Class P-3 license shall be issued for a premises whose primary business is the sale of groceries or other products not related to the sale of alcohol unless the premises occupies at least ten thousand (10,000) square feet of floor area. d. Wine Only Package License: Class P-4, for delivery only of wine in its original package. Regulations specific to a Class P-4 license: (1) No Class P-4 license shall be issued for a premises whose primary business is the sale of groceries or other products unless the premises occupies at least ten thousand (10,000) square feet of floor area. e. Home Delivery License: Class P-5, for the storage or loading within the Village of alcoholic beverages that are to be delivered to residences. Regulations specific to a Class P-5 license: (1) Only beer and wine may be delivered within the Village pursuant to a Class P- 5 license. (2) Delivery within the Village must be made directly into the hands of an actual individual and may not be "dropped off" at an address. B. Class F Licenses (Food Service): 1. Restrictions Applicable To All Class F Licenses: a. The premises shall be primarily devoted to the preparation, cooking and serving of meals. b. The premises must have a kitchen, dining room, staff and equipment as deemed adequate by the Village health authority. c. Full food service including dinner and/or luncheon menus shall be offered at all times while alcoholic beverages are served. d. See subsection E2 of this section for off site catering privileges. e. See subsection F1a of this section for outdoor service of alcoholic beverages at establishments that are within three hundred feet (300') of a residential zoning district and subsection 14.311B of this Code for regulation of outdoor dining areas in other parts of the Village. See section 13.408 of this chapter for the holding of events for civic organizations. f. Spirits may not be sold, delivered or served by the bottle. (See banquet facility exception at subsection B2e(2) of this section.) g. Infused beverages may be delivered only in accordance with State regulations. 2. Specific Class F Licenses: a. Restaurant Without Lounge License: Class F-1, for service of alcoholic beverages at a restaurant. Regulations specific to a Class F-1 license: (1) Consumption or allowing of consumption of alcoholic beverages at any place other than dining tables is specifically prohibited. 394112_1 4 (2) Service of alcoholic beverages shall be limited to those patrons dining in the restaurant. (3) Video Gaming as defined under the Illinois Video Gaming Act 230 ILCS 40/1 et seq. shall not be allowed in a Class F-1 licensed premises. a-1. Restaurant Without Lounge License: Class F-1-V, for service of alcoholic beverages at a restaurant and authorize the operation of video gaming devises upon the licensed premises. Regulations specific to a Class F-1-V license: (1) Consumption or allowing of consumption of alcoholic beverages at any place other than dining tables is specifically prohibited. (2) Service of alcoholic beverages shall be limited to those patrons dining in the restaurant. (3) The restaurant must have a video gaming license issued by the Illinois Gaming Board in accordance with the provisions of the Video Gaming Act, 230 ILCS 40/1 et seq, and shall comply with all provisions of the Illinois Video Gaming Act and all rules, regulations and restrictions imposed by the Illinois Gaming Board. (4) The operation of video gaming terminals shall not be permitted during the hours alcoholic liquor sales are prohibited as provided in Section 13.403. (5) A Class F-1-V License shall not be issued to any restaurant located within 100 feet of any educational facility as defined in this chapter or within 100 feet of a place of worship. (6) Video gaming shall be located in an area that is restricted to persons 21 years of age or older. (7) The total number of video gaming terminals located in the restaurant shall not Commented \[CRC1\]: This cap on total number of machines can exceed five (5). be adjusted at the VillageÔs discretion. The Video Gaming Act allows (8) The restaurant shall comply with all Village sign regulations and it shall be up to five machines to be placed at each licensed establishment unlawful to advertise for video gaming via any street, alley or public right-of-way within the Village. (9) The restaurant shall be required to install, operate and maintain a video camera surveillance system capable of recording clear and unobstructed photographic representations of the segregated area of the establishment where the terminals are located and shall retain the video recordings produced therefrom for a minimum of thirty (30) days. Said video recordings shall be subject to inspections by the police department upon request therefor. (10) The restaurant shall be equipped with a direct connect burglar alarm system to Northwest Central Dispatch in instances of unpermitted entry into the establishment, which system shall be approved by the chief of police. (11) The percentage of income received from video gaming shall not exceed thirty percent (30%) of the restaurant’s net income. At the Village’s discretion, each licensed establishment shall be subject to an annual audit to verify compliance with Commented \[CRC2\]: This percentage can be modified at the this section. VillageÔs discretion (12) If the restaurant operates pursuant to a Conditional Use Permit issued by the Village, a F-1-V license shall only be issued after the restaurant completes a six (6) Commented \[CRC3\]: This can be changed to 1 year month trial period. The decision to issue a F-1-V license following the trial period is at the Village’s full discretion. 394112_1 5 Formatted: Font: Times New Roman, 12 pt (13) In those licensed video gaming locations where separation from minors under 21 is required, a physical barrier to the gaming area is required and the means of separation will be approved by the Village Manager or designee. No barrier shall visually obscure the entrance to the gaming area from an employee of the licensed video gaming location who is over the age of 21. (14) The restaurant must be in good standing with the Village. b. Restaurant, Wine And Beer Only License: Class F-2, for the providing of beer and wine only at a restaurant. Regulations specific to a Class F-2 license: (1) Consumption or allowing of consumption of alcoholic beverages at any place other than dining tables is specifically prohibited. (2) Service of alcoholic beverages shall be limited to those patrons dining in the restaurant. (3) Video Gaming as defined under the Illinois Video Gaming Act 230 ILCS 40/1 et seq. shall not be allowed in a Class F-2 licensed premises. b-1. Restaurant, Wine And Beer Only License: Class F-2-V, for the providing of beer and wine only at a restaurant and authorize the operation of video gaming devises upon the licensed premises. Regulations specific to a Class F-2-V license: (1) Consumption or allowing of consumption of alcoholic beverages at any place other than dining tables is specifically prohibited. (2) Service of alcoholic beverages shall be limited to those patrons dining in the restaurant. (3) The restaurant must have a video gaming license issued by the Illinois Gaming Board in accordance with the provisions of the Video Gaming Act, 230 ILCS 40/1 et seq, and shall comply with all provisions of the Illinois Video Gaming Act and all rules, regulations and restrictions imposed by the Illinois Gaming Board. (4) The operation of video gaming terminals shall not be permitted during the hours alcoholic liquor sales are prohibited as provided in Section 13.403. (5) A Class F-2-V License shall not be issued to any restaurant located within 100 feet of any educational facility as defined in this chapter or within 100 feet of a place of worship. (6) Video gaming shall be located in an area that is restricted to persons 21 years of age or older. (7) The total number of video gaming terminals located in the restaurant shall not Commented \[CRC4\]: This cap on total number of machines can exceed five (5). be adjusted at the VillageÔs discretion. The Video Gaming Act allows (8) The restaurant shall comply with all Village sign regulations and it shall be up to five machines to be placed at each licensed establishment unlawful to advertise for video gaming via any street, alley or public right-of-way within the Village. (9) The restaurant shall be required to install, operate and maintain a video camera surveillance system capable of recording clear and unobstructed photographic representations of the segregated area of the establishment where the terminals are located and shall retain the video recordings produced therefrom for a minimum of thirty (30) days. Said video recordings shall be subject to inspections by the police department upon request therefor. 394112_1 6 (10) The restaurant shall be equipped with a direct connect burglar alarm system to Northwest Central Dispatch in instances of unpermitted entry into the establishment, which system shall be approved by the chief of police. (11) The percentage of income received from video gaming shall not exceed thirty percent (30%) of the restaurant’s net income. At the Village’s discretion, each licensed establishment shall be subject to an annual audit to verify compliance with Commented \[CRC5\]: This percentage can be modified at the this section. VillageÔs discretion (12) If the restaurant operates pursuant to a Conditional Use Permit issued by the Village, a F-2-V license shall only be issued after the restaurant completes a six (6) Commented \[CRC6\]: This can be changed to 1 year month trial period. The decision to issue a F-2-V license following the trial period is at the Village’s full discretion. (13) In those licensed video gaming locations where separation from minors under 21 is required, a physical barrier to the gaming area is required and the means of separation will be approved by the Village Manager or designee. No barrier shall visually obscure the entrance to the gaming area from an employee of the licensed video gaming location who is over the age of 21. (14) The restaurant must be in good standing with the Village c. Restaurant With Lounge License: Class F-3, for providing of alcoholic beverages by restaurants maintaining a separate lounge area. Regulations specific to the class F-3 license: (1) Alcoholic beverages delivered in the restaurant portion of the premises shall be limited to those patrons dining in the restaurant. (2) Alcoholic beverages may be served in the lounge portion of the premises with or without the service of food. (3) The total lounge area shall be no more than fifty percent (50%) of the floor area of the premises. (4) A secondary, additional lounge area shall be permitted within a licensed establishment under a F-3 license if the secondary lounge area is located on a different floor than the primary lounge area and restaurant dining area. This secondary lounge area need not comply with the floor area requirement of 13.204.1(B)(2)(c)(3). (4) Video Gaming as defined under the Illinois Video Gaming Act 230 ILCS 40/1 et seq. shall not be allowed in a Class F-3 licensed premises. c-1. Restaurant With Lounge License: Class F-3-V, for providing of alcoholic beverages by restaurants maintaining a separate lounge area and authorize the operation of video gaming devises upon the licensed premises. Regulations specific to the class F-3-V license: (1) Alcoholic beverages delivered in the restaurant portion of the premises shall be limited to those patrons dining in the restaurant. (2) Alcoholic beverages may be served in the lounge portion of the premises with or without the service of food. (3) The total lounge area shall be no more than fifty percent (50%) of the floor area of the premises. (4) A secondary, additional lounge area shall be permitted within a licensed establishment under a F-3-V license if the secondary lounge area is located on a different floor than the primary lounge area and restaurant dining area. This 394112_1 7 secondary lounge area need not comply with the floor area requirement of 13.204.1(B)(2)(c-1)(3). (5) The restaurant must have a video gaming license issued by the Illinois Gaming Board in accordance with the provisions of the Video Gaming Act, 230 ILCS 40/1 et seq, and shall comply with all provisions of the Illinois Video Gaming Act and all rules, regulations and restrictions imposed by the Illinois Gaming Board. (6) The operation of video gaming terminals shall not be permitted during the hours alcoholic liquor sales are prohibited as provided in Section 13.403. (7) A Class F-3-V License shall not be issued to any restaurant located within 100 feet of any educational facility as defined in this chapter or within 100 feet of a place of worship. (8) Video gaming shall be located in an area that is restricted to persons 21 years of age or older. (9) The total number of video gaming terminals located in the restaurant shall not Commented \[CRC7\]: This cap on total number of machines can exceed five (5). be adjusted at the VillageÔs discretion. The Video Gaming Act allows (10) The restaurant shall comply with all Village sign regulations and it shall be up to five machines to be placed at each licensed establishment unlawful to advertise for video gaming via any street, alley or public right-of-way within the Village. (11) The restaurant shall be required to install, operate and maintain a video camera surveillance system capable of recording clear and unobstructed photographic representations of the segregated area of the establishment where the terminals are located and shall retain the video recordings produced therefrom for a minimum of thirty (30) days. Said video recordings shall be subject to inspections by the police department upon request therefor. (12) The restaurant shall be equipped with a direct connect burglar alarm system to Northwest Central Dispatch in instances of unpermitted entry into the establishment, which system shall be approved by the chief of police. (13) The percentage of income received from video gaming shall not exceed thirty percent (30%) of the restaurant’s net income. At the Village’s discretion, each licensed establishment shall be subject to an annual audit to verify compliance with Commented \[CRC8\]: This percentage can be modified at the this section. VillageÔs discretion (14) If the restaurant operates pursuant to a Conditional Use Permit issued by the Village, a F-3-V license shall only be issued after the restaurant completes a six (6) Commented \[CRC9\]: This can be changed to 1 year month trial period. The decision to issue a F-3-V license following the trial period is at the Village’s full discretion. (15) In those licensed video gaming locations where separation from minors under 21 is required, a physical barrier to the gaming area is required and the means of separation will be approved by the Village Manager or designee. No barrier shall visually obscure the entrance to the gaming area from an employee of the licensed video gaming location who is over the age of 21. (16) The restaurant must be in good standing with the Village. d. Private Club License: Class F-4, for providing of alcoholic beverages at a private club. Regulations specific to a class F-4 license: 394112_1 8 (1) Service of alcoholic beverages may be only to: a) members; and b) guests of a specific member if that member is also on the premises. (2) The organization must own or lease a premises of sufficient size and character for the reasonable and comfortable use and accommodation of its members and their guests. (3) The licensee's affairs and management must be conducted by a board of directors, executive committee or similar body chosen by the members at an annual meeting. (4) No member or any officer, agent or employee of the club may be paid or directly receive as compensation, any profits from the distribution or sale of alcoholic beverages at the club, beyond the amount of such salary as may be fixed and voted at any annual meeting by the members or by its board of directors or other governing body out of the general revenue of the private club. (5) Video Gaming as defined under the Illinois Video Gaming Act 230 ILCS 40/1 et seq. shall not be allowed in a Class F-4 licensed premises. d-1. Private Club License: Class F-4-V, for providing of alcoholic beverages at a private club and authorize the operation of video gaming devises upon the licensed premises. Regulations specific to a class F-4-V license: (1) Only licensed fraternal establishments and licensed veterans establishments as defined by the Video Gaming Act, 230 ILCS 40/1 et seq, shall be eligible to receive a Class F-4-V License. (1) Service of alcoholic beverages may be only to: a) members; and b) guests of a specific member if that member is also on the premises. (2) The organization must own or lease a premises of sufficient size and character for the reasonable and comfortable use and accommodation of its members and their guests. (3) The licensee's affairs and management must be conducted by a board of directors, executive committee or similar body chosen by the members at an annual meeting. (4) No member or any officer, agent or employee of the club may be paid or directly receive as compensation, any profits from the distribution or sale of alcoholic beverages at the club, beyond the amount of such salary as may be fixed and voted at any annual meeting by the members or by its board of directors or other governing body out of the general revenue of the private club. (5) The Private Club must have a video gaming license issued by the Illinois Gaming Board in accordance with the provisions of the Video Gaming Act, 230 ILCS 40/1 et seq, and shall comply with all provisions of the Illinois Video Gaming Act and all rules, regulations and restrictions imposed by the Illinois Gaming Board. (6) The operation of video gaming terminals shall not be permitted during the hours alcoholic liquor sales are prohibited as provided in Section 13.403. (7) A Class F-4-V License shall not be issued to any Private Club located within 100 feet of any educational facility as defined in this chapter or within 100 feet of a place of worship. 394112_1 9 (8) Video gaming shall be located in an area that is restricted to persons 21 years of age or older. (9) The total number of video gaming terminals located in the Private Club shall Commented \[CRC10\]: This cap on total number of machines can not exceed five (5). be adjusted at the VillageÔs discretion. The Video Gaming Act allows (10) The Private Club shall comply with all Village sign regulations and it shall be up to five machines to be placed at each licensed establishment unlawful to advertise for video gaming via any street, alley or public right-of-way within the Village. (11) The Private Club shall be required to install, operate and maintain a video camera surveillance system capable of recording clear and unobstructed photographic representations of the segregated area of the establishment where the terminals are located and shall retain the video recordings produced therefrom for a minimum of thirty (30) days. Said video recordings shall be subject to inspections by the police department upon request therefor. (12) The Private Club shall be equipped with a direct connect burglar alarm system to Northwest Central Dispatch in instances of unpermitted entry into the establishment, which system shall be approved by the chief of police. (13) The percentage of income received from video gaming shall not exceed thirty percent (30%) of the Private Club’s net income. At the Village’s discretion, each licensed establishment shall be subject to an annual audit to verify compliance with Commented \[CRC11\]: This percentage can be modified at the this section. VillageÔs discretion (14) If the Private Club operates pursuant to a Conditional Use Permit issued by the Village, a F-4-V license shall only be issued after the Private Club completes a six Commented \[CRC12\]: This can be changed to 1 year (6) month trial period. The decision to issue a F-4-V license following the trial period is at the Village’s full discretion. Formatted: Indent: Left: 1" (15) In those licensed video gaming locations where separation from minors under 21 is required, a physical barrier to the gaming area is required and the means of separation will be approved by the Village Manager or designee. No barrier shall visually obscure the entrance to the gaming area from an employee of the licensed video gaming location who is over the age of 21. (16) The Private Club must be in good standing with the Village. e. Banquet Facility License: Class F-5, for the service of alcoholic beverages at private events at the banquet facility. Regulations specific to a class F-5 license: (1) Consumption of alcoholic beverages at or over a bar shall be permitted, but all consumption shall be limited to those patrons who are guests invited specifically to the private event. (2) Spirits may be delivered and served at individual tables in the same manner as beer or wine. (3) Video Gaming as defined under the Illinois Video Gaming Act 230 ILCS 40/1 et seq. shall not be allowed in a Class F-5 licensed premises. f. Golf Course License: Class F-6, for the service of alcoholic beverages at golf courses. This license shall include service in a clubhouse restaurant, a clubhouse lounge, service from licensee owned carts on the golf course, service at any other snack or food facility on the course and at events on the golf course grounds. Regulations specific to a class F-6 license: 394112_1 10 (1) If the golf course also offers regular meal service in a restaurant type of facility, then the regulations applicable to the appropriate class F license shall apply to that restaurant facility. (2) If the golf course does not operate a restaurant facility, but operates a lounge, the regulations applicable to an S-3 license shall apply to the lounge. (3) Video Gaming as defined under the Illinois Video Gaming Act 230 ILCS 40/1 et seq. shall not be allowed in a Class F-6 licensed premises. g. F-7 Restaurant Corkage License: Class F-7 shall allow patrons to bring unopened wine into a restaurant establishment for the sole purpose of consumption in that establishment. Regulations specific to the class F-7 license: (1) A corkage fee may be assessed to the participating patrons. (2) Corkage service shall be limited to those patrons dining in the restaurant and seated at a table. Corkage service shall not be available in a lounge. (3) Corkage wine may only be consumed on the premises during the hours set forth in section 13.403 of this chapter. (4) A manager who has successfully completed a certified alcohol awareness training course shall be on the premises any time that corkage service is available. The individual servers are not required to have such training. (5) Video Gaming as defined under the Illinois Video Gaming Act 230 ILCS 40/1 et seq. shall not be allowed in a Class F-7 licensed premises. h. Brewpub License: Class F-8 for service of alcoholic beverages at a restaurant which brews beer on its premises. Regulations specific to an F-8 license: (1) All regulations applicable to a class F-3 license shall apply to an F-8 license. (2) The licensee must be in compliance with state regulations applicable to a state brewpub license. (3) Growlers and howlers. (A) May be filled only with beer manufactured on the premises; and (B) Shall be filled and sanitized according to all applicable laws and regulations; and (C) Shall be sealed with a tamperproof seal; and (D) May be sold for off premises consumption only. (4) Video Gaming as defined under the Illinois Video Gaming Act 230 ILCS 40/1 et seq. shall not be allowed in a Class F-8 licensed premises. h-1. Brewpub License: Class F-8-V for service of alcoholic beverages at a restaurant which brews beer on its premises and authorize the operation of video gaming devises upon the licensed premises. Regulations specific to an F-8-V license: (1) All regulations applicable to a class F-3-V license shall apply to an F-8-V license. (2) The licensee must be in compliance with state regulations applicable to a state brewpub license. (3) Growlers and howlers. (A) May be filled only with beer manufactured on the premises; and 394112_1 11 (B) Shall be filled and sanitized according to all applicable laws and regulations; and (C) Shall be sealed with a tamperproof seal; and (D) May be sold for off premises consumption only. (4) The Brewpub must have a video gaming license issued by the Illinois Gaming Board in accordance with the provisions of the Video Gaming Act, 230 ILCS 40/1 et seq, and shall comply with all provisions of the Illinois Video Gaming Act and all rules, regulations and restrictions imposed by the Illinois Gaming Board. (5) The operation of video gaming terminals shall be not be permitted during the hours alcoholic liquor sales are prohibited as provided in Section 13.403. (6) A Class F-8-V License shall not be issued to any Brewpub located within 100 feet of any educational facility as defined in this chapter or within 100 feet of a place of worship. (7) Video gaming shall be located in an area that is restricted to persons 21 years of age and older. (8) The total number of video gaming terminals located in the Brewpub shall not Commented \[CRC13\]: This cap on total number of machines can exceed five (5). be adjusted at the VillageÔs discretion. The Video Gaming Act allows (9) The Brewpub shall comply with all Village sign regulations and it shall be up to five machines to be placed at each licensed establishment unlawful to advertise for video gaming via any street, alley or public right-of-way within the Village. (10) The Brewpub shall be required to install, operate and maintain a video camera surveillance system capable of recording clear and unobstructed photographic representations of the segregated area of the establishment where the terminals are located and shall retain the video recordings produced therefrom for a minimum of thirty (30) days. Said video recordings shall be subject to inspections by the police department upon request therefor. (11) The Brewpub shall be equipped with a direct connect burglar alarm system to Northwest Central Dispatch in instances of unpermitted entry into the establishment, which system shall be approved by the chief of police. (12) The percentage of income received from video gaming shall not exceed thirty percent (30%) of the Brewpub’s net income. At the Village’s discretion, each licensed establishment shall be subject to an annual audit to verify compliance with Commented \[CRC14\]: This percentage can be modified at the this section. VillageÔs discretion (13) If the Brewpub operates pursuant to a Conditional Use Permit issued by the Village, a F-8-V license shall only be issued after the Brewpub completes a six (6) Commented \[CRC15\]: This can be changed to 1 year month trial period. The decision to issue a F-8-V license following the trial period is at the Village’s full discretion. (14) In those licensed video gaming locations where separation from minors under 21 is required, a physical barrier to the gaming area is required and the means of separation will be approved by the Village Manager or designee. No barrier shall visually obscure the entrance to the gaming area from an employee of the licensed video gaming location who is over the age of 21. (15) The Brewpub must be in good standing with the Village. C. Specialty Licenses: See section 13.408 of this chapter for the holding of events for civic organizations. 394112_1 12 1. Hotel License: Class S-1, for the service of alcoholic beverages to guests of the hotel. Regulations specific to the class S-1 license: a. Alcoholic beverages may be served, consumed or allowed to be consumed only in guestrooms, hospitality suites and other areas of the hotel that are designed, designated and used as lounges or food service areas. b. If the hotel premises is used for private events, then the regulations applicable to class F-5 (banquet facility) shall apply. c. If the hotel also offers regular meal service in a restaurant or restaurant type of facility, then the regulations applicable to the appropriate class F license shall apply to that restaurant facility. d. If the restaurant is operated by a person other than the licensee, the commissioner shall have the sole authority to determine whether a management entity certification or a class F license is required. e. Absolute liability and responsibility shall attach to the S-1 licensee if any alcohol is consumed by a minor at any location within or on the hotel premises, including any in room bar or refrigeration units. f. Except for the stocking and use of in room bar or refrigeration units, spirits may not be sold, delivered or served by the bottle. g. Infused beverages may be delivered only in accordance with state regulations. h. Video Gaming as defined under the Illinois Video Gaming Act 230 ILCS 40/1 et seq. shall not be allowed in a Class S-1 licensed premises. 2. Bowling Alley License: Class S-2, for service of alcoholic beverages at a bowling alley. Regulations specific to a class S-2 license: a. The premises must operate as a bowling alley with full bowling facilities. b. Alcoholic beverage service must be incidental to bowling. c. The lounge area may comprise no more than twenty five percent (25%) of the floor area. d. Food service must be available to patrons at all times when alcoholic beverages are served. e. Spirits may not be sold, delivered or served by the bottle. f. Video Gaming as defined under the Illinois Video Gaming Act 230 ILCS 40/1 et seq. shall not be allowed in a Class S-2 licensed premises. 2-1. Bowling Alley License: Class S-2-V, for service of alcoholic beverages at a bowling alley and authorize the operation of video gaming devises upon the licensed premises. Regulations specific to a class S-2-V license: a. The premises must operate as a bowling alley with full bowling facilities. b. Alcoholic beverage service must be incidental to bowling. c. The lounge area may comprise no more than twenty five percent (25%) of the floor area. d. Food service must be available to patrons at all times when alcoholic beverages are served. e. Spirits may not be sold, delivered or served by the bottle. f. The Bowling Alley must have a video gaming license issued by the Illinois Gaming Board in accordance with the provisions of the Video Gaming Act, 230 ILCS 40/1 et seq, 394112_1 13 and shall comply with all provisions of the Illinois Video Gaming Act and all rules, regulations and restrictions imposed by the Illinois Gaming Board. g. The operation of video gaming terminals shall be not be permitted during the hours alcoholic liquor sales are prohibited as provided in Section 13.403. h. A Class S-2-V License shall not be issued to any Bowling Alley located within 100 feet of any educational facility as defined in this chapter or within 100 feet of a place of worship. i. Video gaming shall be located in an area that is restricted to persons 21 years of age or older. j. The total number of video gaming terminals located in the Bowling Alley shall not exceed Commented \[CRC16\]: This cap on total number of machines can five (5). be adjusted at the VillageÔs discretion. The Video Gaming Act allows k. The Bowling Alley shall comply with all Village sign regulations and it shall be unlawful up to five machines to be placed at each licensed establishment to advertise for video gaming via any street, alley or public right-of-way within the Village. l. The Bowling Alley shall be required to install, operate and maintain a video camera surveillance system capable of recording clear and unobstructed photographic representations of the segregated area of the establishment where the terminals are located and shall retain the video recordings produced therefrom for a minimum of thirty (30) days. Said video recordings shall be subject to inspections by the police department upon request therefor. m. The Bowling Alley shall be equipped with a direct connect burglar alarm system to Northwest Central Dispatch in instances of unpermitted entry into the establishment, which system shall be approved by the chief of police. n. The percentage of income received from video gaming shall not exceed thirty percent (30%) of the Bowling Alley’s net income. At the Village’s discretion, each licensed Commented \[CRC17\]: This percentage can be modified at the establishment shall be subject to an annual audit to verify compliance with this section. VillageÔs discretion o. If the Bowling Alley operates pursuant to a Conditional Use Permit issued by the Village, a S-2-V license shall only be issued after the Bowling Alley completes a six (6) month trial Commented \[CRC18\]: This can be changed to 1 year period. The decision to issue a S-2-V license following the trial period is at the Village’s full discretion. p. In those licensed video gaming locations where separation from minors under 21 is required, a physical barrier to the gaming area is required and the means of separation will be approved by the Village Manager or designee. No barrier shall visually obscure the entrance to the gaming area from an employee of the licensed video gaming location who is over the age of 21. q. The Bowling Alley must be in good standing with the Village. 3. Tavern License: Class S-3, restrictions specific to class S-3 licenses: a. Food service such as snacks, hors d'oeuvres and/or similar food items shall be available at all times in quantities sufficient to serve all patrons of the premises. b. See subsection E2 of this section for off site catering privileges. c. Spirits may not be sold, delivered or served by the bottle. 4. Gourmet Beverage Shop License: Class S-4, the regulations governing class P (package license) shall apply, except as follows: a. A gourmet beverage shop license shall be available only in a B-5 zoning district. b. No "spirits", as defined by this chapter, may be served. 394112_1 14 c. Glasses or flights of wine or beer may be served on the licensed premises under the following conditions: (1) Hors d'oeuvres must be available for consumption with the wine or beer. (2) No more than ten (10) ounces of wine or twenty (20) ounces of beer may be served to any individual during any day. (3) Each glass or flight of wine may contain no more than five (5) ounces and each glass or flight of beer may contain no more than ten (10) ounces. d. A class S-4 licensee may conduct off premises winetasting upon securing a daily or annual sampling license endorsement and in accord with the regulations for such endorsement. On premises samplings do not require a sampling endorsement, but nonetheless must be conducted in accord with the regulations of subsection E1 of this section. e. A class S-4 licensee may serve wine and beer at an event where the sponsor has obtained a permit even if the event is not on the S-4 licensed premises. f. A class S-4 licensee may serve wine or beer at a Mount Prospect licensed business which does not otherwise possess a Mount Prospect liquor license under the following conditions: (1) Such service may take place at a promotional event inside the business premises only. (2) The business must have obtained an ad hoc permit. (3) Such service at any single business may be made at not more than two (2) such events in any license term. (4) The S-4 licensee may not conduct such service for a total of more than twenty (20) times in any license term. The licensee shall notify the commissioner, in writing, not less than fourteen (14) days in advance of any such service event. g. Video Gaming as defined under the Illinois Video Gaming Act 230 ILCS 40/1 et seq. shall not be allowed in a Class S-4 licensed premises. 5. Movie Theater License: Class S-5, for delivery of alcoholic beverages at a movie theater. Restrictions specific to a class S-5 license: a. Service of alcoholic beverages shall be limited to a designated customer bar. b. Service of alcoholic beverages may be made only to persons wearing a wristband approved by the village of Mount Prospect police department ("alcohol wristband"). The person dispensing alcohol wristbands shall have completed a certified alcohol awareness training course as set forth in subsection 13.407F of this chapter. The alcohol wristband shall be valid only for the date on which it is obtained from the movie theater. This subsection C5b may be waived, in writing, by the commissioner if the commissioner is of the opinion that other procedures instituted by the licensee provide acceptable substitute measures to assure that underage persons are not served. This waiver may be made only after a review of the written statement of practices that the applicant intends to institute. If there is such a waiver, the waiver may be withdrawn by the Commissioner at such time as the Commissioner makes a finding of service of alcohol to an underage person pursuant to this chapter. c. Alcoholic beverages may be consumed in the movie theater auditorium, but may not be delivered or served in any movie theater auditorium. d. The containers in which alcoholic beverages are served must be of a different color, size and design than those in which nonalcoholic beverages are served. 394112_1 15 e. Beer may be sold only in individual containers holding twenty (20) ounces or less. All other alcoholic beverages may be sold only in individual containers holding twelve (12) ounces or less. This limitation shall be absolute and shall apply irrespective of the actual alcohol content of the beverage. f. No more than one alcoholic beverage may be delivered to a customer in any one trip to the bar. g. There may be no service of alcoholic beverages unless the movie theater is actually open for the showing of movies. Under no circumstances may alcoholic beverages be served more than one hour prior to the advertised showing time of the first movie to be shown on any day. h. The lobby bar and the lounge area associated with the bar may comprise no more than twenty percent (20%) of the floor area outside of the auditoriums. i. The lobby bar shall be subject to the requirements of subsection 13.405D of this chapter. If the licensee creates a separate and discreet lounge area as part of its bar and liquor service, such lounge area shall also be subject to subsection 13.405D of this chapter. j. An employee of the licensee who has completed a certified alcohol awareness training course shall be designated to monitor compliance with alcohol laws and be on duty on the premises whenever there is service of alcoholic beverages. k. The S-5 licensee shall be responsible if any alcohol is consumed by any minor at any location within or on the movie theater premises whether the alcohol was purchased at the movie theater or not. l. Video Gaming as defined under the Illinois Video Gaming Act 230 ILCS 40/1 et seq. shall not be allowed in a Class S-5 licensed premises. 6. Complimentary Service License: Class S-6 shall authorize cosmetic facilities, arts and/or crafts studios, jewelry stores and art galleries to allow the complimentary service and consumption of beer and wine by its patrons that: a) is brought to the premises of the business by the patron (BYOB) and/or b) is served by the business; as a complement to the patron's purchase of goods or services offered by the business (complementary service). A Class S-6 license shall be subject to the following regulations: a. Service may be only to customers of the shop or facility and only for consumption of the drink on the premises while the customer is waiting for or receiving customary barber, cosmetic, beauty shop, arts/crafts studio, jewelry store or art gallery services from the facility. b. The consumption of alcoholic liquor shall only take place during the operating hours of the business, but in no event earlier than nine o'clock (9:00) A.M. or after ten o'clock (10:00) P.M. c. Advertising the availability of alcohol may not be visible from the exterior of the licensed premises. d. The complimentary service or consumption of beer or wine at the licensed premises is limited to not more than three (3) 12-ounce servings of beer or three (3) 5-ounce servings of wine by a patron during any single calendar day, regardless of whether the beverage is provided by the licensee or brought to the licensed premises by the patron. No alcoholic liquor beverages other than wine, sparkling wine, champagne or beer are permitted. e. It shall be unlawful for the licensee, its agents, and employees to permit any patron to leave the licensed premises with an open container of wine or beer regardless of whether 394112_1 16 the container is provided by the licensee or brought to the licensed premises by the patron, except as otherwise allowed by section 13.410 of this chapter related to an unsealed and partially consumed bottle of wine brought to the licensed premises by a patron. f. All employees of the licensee serving alcohol must have successfully completed online BASSET certification. g. The licensee must maintain host liability insurance as required by subsection 13.401A of this chapter. h. Complimentary service licenses issued prior to May 1, 2018 shall be valid until April 30, 2019. i. Video Gaming as defined under the Illinois Video Gaming Act 230 ILCS 40/1 et seq. shall not be allowed in a Class S-6 licensed premises. 7. Caterer's License: Class S-7, for the delivery of alcoholic beverages by a caterer. Restrictions specific to a Class S-7 license: a. Notice must be given in writing to the Village Manager of the time, location and approximate number of guests at least seventy two (72) hours in advance of the event, at which alcoholic beverages will be served. b. A full menu of food must be available for consumption by patrons the entire time that alcoholic beverages are available. c. All servers or pourers of alcoholic beverages must have completed a certified alcohol awareness training course. d. The caterer may serve alcoholic beverages only at events to which specific persons (not the general public) have been previously invited or at a Village sponsored event. e. Video Gaming as defined under the Illinois Video Gaming Act 230 ILCS 40/1 et seq. shall not be allowed in a Class S-7 licensed premises. 8. Craft Brewery Or Distillery License: Class S-8, for the manufacture and delivery of beer or distilled spirits for on premises and off premises consumption by a craft brewery or distillery and for guided tours of its facility. Restrictions specific to a Class S-8 license: a. Must comply with all laws and regulations of the State of Illinois as may apply to craft brewers or distillers. b. Samplings may be conducted only pursuant to a Village sampling endorsement (subsection E1 of this section). c. Hours of sale shall be the same as a P-package license. d. Retail sales are allowed as follows: (1) On Premises Consumption: (A) Not more than fifty two (52) ounces of beer or six (6) ounces of distilled spirits may be served to any customer in one day and each serving shall be limited to sixteen (16) ounces of beer or two (2) ounces of distilled spirits. (B) At a minimum, must provide limited food service such as cheese, crackers, snack food or other similar deli style items to customers who are consuming craft beer or distilled spirits. (2) Growlers And Howlers: (A) May be filled only with beer manufactured on the premises; and (B) Shall be filled and sanitized according to all applicable laws and regulations; and 394112_1 17 (C) Shall be sealed with a tamperproof seal; and (D) May be sold for off premises consumption only. (3) Package Goods: Beer or distilled spirits manufactured on the premises and packaged according to Illinois law may be sold at retail from the licensed premises. e. Tours of the brewing or distilling facility may be offered during hours that the premises is open for retail sales. f. A Class S-8 craft brewery or distillery license shall authorize either craft brewery or craft distillery operations at a licensed facility, but not both. g. Video Gaming as defined under the Illinois Video Gaming Act 230 ILCS 40/1 et seq. shall not be allowed in a Class S-8 licensed premises. 9. License With Special Conditions: Class S-9, the Corporate Authorities may, from time to time, create conditional licenses which are based on the license classifications set forth above, but which contain additional conditions and restrictions. These licenses with special conditions, while created by the Corporate Authorities, shall remain subject to issuance by the Commissioner. D. Permits; Temporary: 1. Regulations Applicable To All Temporary Permits: a. The Commissioner may attach such conditions as are appropriate for a temporary permit. b. For temporary permits, the Local Liquor Control Commissioner, in his or her sole discretion, may accept host liability coverage as a substitute for dramshop insurance. c. Temporary permits may be issued on a daily basis only. The number of days shall be within the sole discretion of the Commissioner, but in no event may permits be issued for more than five (5) consecutive days. d. No more than twelve (12) such permit days shall be available to any one such organization during a license term. e. The permittee is responsible for securing any applicable State permit. If the State Liquor Commission requires a permit and it is not obtained, then the Village temporary permit shall be deemed void ab initio. It is the responsibility of the permittee to determine whether or not a State permit is needed and issuance of a Village permit has no bearing on the issue of whether a State permit is required. f. Unless otherwise stated, there shall be a daily permit fee as set forth in appendix A, division II of this Code. g. All other regulations of this chapter shall apply to the permit. 2. Specific Temporary Permits: Temporary permits are divided into the classifications set forth below: a. Non-Mount Prospect Caterer's Permit: A permit for the service of alcoholic beverages, at an otherwise unlicensed premises, by a caterer not possessing a Mount Prospect liquor license. Regulations specific to a non-Mount Prospect caterer's permit: (1) The caterer must possess a valid liquor license from another Illinois jurisdiction. (2) The caterer may serve alcoholic beverages only at events to which specific persons (not the general public) have been previously invited or at a Village sponsored event. 394112_1 18 (3) The permit shall be subject to such other conditions as may be established by the Commissioner. b. Ad Hoc Temporary Permit: The Commissioner shall have the authority to issue an ad hoc temporary permit, where the Commissioner determines that such permit is in the best interests of the public. E. Endorsements: 1. Sampling Endorsement: An endorsement allowing the holder of any Class P or Class S-8 license to serve wine, beer or distilled spirits without charge, in small and limited amounts, for sampling purposes only and in conjunction with sales promotional efforts occurring on the licensed premises. (See subsection C4d of this section with respect to an S-4 license.) Regulations specific to a sampling endorsement: a. The sampling shall be attended and supervised by a full time adult employee and may occur only in a designated area on the licensed premises; b. The actual amount of beer or wine in an individual sampling container may not exceed two (2) ounces, or one-fourth (1/4) ounce for distilled spirits; c. Signs or other materials advertising the availability of "sampling" may not be visible from the exterior of the licensed premises. However, an establishment with an annual sampling endorsement may post one (1) such sign, not to exceed three (3) square feet in area, so long as it does not violate the Village sign ordinance; and d. Quantities may not exceed a total of ten (10) ounces of beer or wine, or one (1) ounce of distilled spirits, per customer per day. 2. Mount Prospect Caterer's Endorsement: A license endorsement for the service of alcoholic beverages, at an otherwise unlicensed premises, by a Mount Prospect Class F or Class S-3 licensee. Regulations specific to a Mount Prospect caterer's endorsement: a. The caterer may serve alcoholic beverages only at events to which specific persons (not the general public) have been previously invited or at a Village sponsored event. b. A Mount Prospect caterer's endorsement may be purchased on an annual or daily basis. c. The endorsement shall be subject to such other conditions as may be established by the Commissioner. 3. Outdoor Entertainment Endorsement: An endorsement allowing outdoor live music for a Class F licensee. Regulations specific to a temporary outdoor entertainment endorsement: a. No such live music may be played between the hours of eleven o'clock (11:00) P.M. and eleven o'clock (11:00) A.M. b. The Commissioner may attach such other conditions to the endorsement as may be advisable to protect the peace and quiet of the surrounding area. c. The Commissioner, the Village Manager or a designee of either, shall have the absolute right for cause, and without the necessity of a hearing, to order the immediate cessation of such live music. 4. Corkage Endorsement: An endorsement allowing patrons of F-1, F-2, F-3 or S-3 establishments to bring the patron's own unopened bottle of wine for on premises consumption consistent with the regulations for an F-7 license. F. Certifications: 394112_1 19 1. Specific Certifications: a. Outdoor certification for allowing outdoor service of alcoholic beverages (for other outdoor dining regulations, see subsection 14.311B of this Code). Regulations specific to outdoor certificates: (1) For establishments within three hundred feet (300') of a residential zoning district: (A) Any licensee that commenced the conduct of the business of serving alcoholic beverages in an outdoor area within three hundred feet (300') of a residential zoning district prior to January 1, 1989, may be granted an outdoor certification and continue to operate the outside service area in that same location. However, that service area may not be enlarged in any manner. (B) The Commissioner may grant an outdoor certification for the service of alcoholic beverages in an outdoor service area that is within three hundred feet (300') of a residential zoning district but does not meet the criteria of subsection F1a(1)(A) of this section, subject to the following: (i) The outdoor service area is on property owned or leased by the licensee and is on or immediately adjacent to the building on the licensed premises; (ii) Prior to issuance of such outdoor certification, the applicant shall show proof that written notice has been sent by regular mail to all residential property addresses within three hundred feet (300') of the licensed premises. The notice shall inform such addressee of the licensee's intent to secure a special certificate for the outdoor service of alcoholic beverages. The form of notice shall be supplied by the Village Manager and shall invite comment on the proposed use from the affected property owners or occupiers; (iii) The Commissioner has made a determination that the outdoor service area will not have a detrimental effect on the neighborhood in which the premises is located; (iv) The Commissioner may place such conditions on the outdoor service area as she or he may deem appropriate; (v) Such an outdoor certification may be revoked at any time if the Commissioner reasonably believes that the operation of the outdoor area has become detrimental to the neighborhood in which it is located. Upon such revocation, the licensee may not reapply for an outdoor certification for a period of twelve (12) months following the date of revocation; (vi) An outdoor certification shall be available only to the holder of a Class F-1, F-2 or F-3 liquor license; (vii) An outdoor certification may be granted only upon receipt by the Commissioner and approval by the Village Attorney of a statement signed by the licensee, acknowledging and accepting the terms of the certification; and 394112_1 20 (viii) An outdoor certification is not transferable and if there is any change in five percent (5%) or more of ownership of the business, a new outdoor certification must be obtained by the licensee. (2) For establishments that are more than three hundred feet (300') from a residential zoning district: The regulations of subsection 14.311B of this Code shall apply. (3) The application shall be accompanied by a nonrefundable application fee as set forth in appendix A, division II of this Code, and no management entity may be qualified unless a certification fee as set forth in appendix A, division II of this Code has been paid. b. Management entity certification allowing for the certification of an entity to be retained to manage a licensed premises. It is recognized that a licensee may, from time to time, desire to hire or retain, as an independent contractor, a management entity to manage, generally operate and be responsible for the licensed premises. Regulations specific to a management entity certification: (1) No licensee shall permit a management entity to perform such a function unless the management entity has been certified to do so by the Commissioner. In order to be certified by the Commissioner, a management entity must execute a liquor license application. A management entity must qualify for a management entity certification in the same manner and meet the same standards as a licensee. (2) The application shall be accompanied by a nonrefundable application fee as set forth in appendix A, division II of this Code, and no management entity may be qualified unless a certification fee as set forth in appendix A, division II of this Code has been paid. (3) A management entity shall be subject to the jurisdiction of the Commissioner in the same manner as a licensee. If there is a violation on the premises, the management entity and the licensee shall be jointly and severally responsible for all consequences of such a violation. (4) An underlying Village liquor license must previously have been obtained for the premises. SECTION D: Chapter 23.503.1 of the Village of Mount Prospect’s Municipal Code, “VIDEO GAMING PROHIBITED,” is hereby repealed and replaced with the following: 23.503.1: VIDEO GAMING PROHIBITED; EXCEPTIONS Video gaming, as that term is defined in the Illinois Video Gaming Act, 230 ILCS 40/1 et seq., is prohibited in the Village of Mount Prospect, except as expressly authorized pursuant to Sections 13.204 and 13.204.1. Video gaming in prohibited in truck stop establishments as defined by the Illinois Video Gaming Act. Further, Video Gaming Cafés as defined in Section 13.101 shall not be qualified to obtain any existing classification of Mount Prospect Liquor Licenses and are prohibited from becoming a Licensed Video Gaming Location within the Village. Further, no such license allowing Video Gaming Cafés shall be created, maintained or authorized by Sections 13.204 and 13.204.1. 394112_1 21 SECTION E: Appendix A, Division II, Section 13.201 of the Mount Prospect Municipal Code, “LICENSE REQUIRED,” is hereby amended to read in its entirety as follows: A. Fees for classifications: 1. Package licenses (P): Class P-1 $2,200.00 Class P-2 $2,200.00 Class P-3 $1,925.00 Class P-4 $1,650.00 Class P-5 $2,200.00 2. Food Service Licenses (F): Class F-1 $2,200.00 Class F-1-V $2,200.00 Class F-2 $1,650.00 Class F-2-V $1,650.00 Class F-3 $2,750.00 Class F-3-V $2,750.00 Class F-4 $750.00 Class F-4-V $750.00 Class F-5 $2,200.00 Class F-6 $2,500.00 Class F-7 $750.00 Class F-8 $3,000.00 Class F-8-V $3,000.00 3. Specialty Licenses (S): Class S-1 $2,750.00 Class S-2 $2,750.00 Class S-2-V $2,750.00 Class S-3 $2,200.00 Class S-4 $1,650.00 Class S-5 $3,000.00 Class S-6 $250.00 Class S-7 $1,100.00 Class S-8 $1,500.00 Class S-9 $2,750.00 SECTION F: 394112_1 22 Those sections, paragraphs and provisions of Chapter 13, “ALCOHOLIC LIQUORS,” and Chapter 23, “OFFENSES AND MISCELLANEOUS REGULATIONS” of the Mount Prospect Municipal Code which are not expressly amended or repealed by this Ordinance are hereby re- enacted; and it is expressly declared to be the intention of this Ordinance not to repeal or amend any portion of the Mount Prospect Municipal Code other than those provisions expressly amended or repealed in Sections A, B, C, D, and E of this Ordinance. SECTION G: This Ordinance shall be in full force and effect from and after its passage and approval in the manner provided by law. ADOPTED this __ day of _______________, 2018, pursuant to a roll call vote as follows: AYES:_______________________________________________ NAYS:_______________________________________________ ABSENT:_____________________________________________ APPROVED by me this __ day of _______________, 2018, and attested to by the Village Clerk this same day. _______________________________ Village President ATTEST: _________________________________ Village Clerk 394112_1 23 STATE OF ILLINOIS ) ) SS COUNTY OF COOK ) CLERK'S CERTIFICATE I, Karen Agoranos, Clerk of the Village of Mount Prospect, in the County of Cook and State of Illinois, certify that the annexed and foregoing is a true and correct copy of that certain Ordinance now on file in my Office, entitled: ORDINANCE NO. _____ AN ORDINANCE AMENDING CHAPTER 13 OF THE VILLAGE OF MOUNT PROSPECT’S MUNICIPAL CODE, “ALCOHOLIC LIQUORS,” SPECIFICALLY SECTIONS 13.101, 13.204 AND 13.204.1; CHAPTER 23 OF THE VILLAGE OF MOUNT PROSPECT’S MUNICIPAL CODE, “OFFENSES AND MISCELLANEOUS REGULATIONS,” SPECIFICALLY SECTION 23.503.1; AND APPENDIX A, DIVISION II OF THE VILLAGE OF MOUNT PROSPECT’S MUNICIPAL CODE TO CREATE LIQUOR LICENSES FOR ESTABLISHMENTS WITH VIDEO GAMING which Ordinance was passed by the Board of Trustees of the Village of Mount Prospect at a Regular Village Board Meeting on the __ day of ____________, 2018 at which meeting a quorum was present, and approved by the President of the Village of Mount Prospect on the __ day of ___________, 2018. I further certify that the vote on the question of the passage of said Ordinance by the Board of Trustees of the Village of Mount Prospect was taken by Ayes and Nays and recorded in the minutes of the Board of Trustees of the Village of Mount Prospect, and that the result of said vote was as follows, to-wit: AYES:_________________________________________________________ NAYS:_________________________________________________________ ABSENT:_______________________________________________________ I do further certify that the original Ordinance, of which the foregoing is a true copy, is entrusted to my care for safekeeping, and that I am the lawful keeper of the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the Village of Mount Prospect, this __ day of ______________, 2018. ________________________________ Karen Agoranos, Village Clerk \[SEAL\] 394112_1 24 MOUNT PROSPECT POLICE DEPARTMENT FORMAL MEMORANDUM CHF 18-66 CONTROL NUMBER TO: MICHAEL CASSADY, VILLAGE MANAGER FROM: CHIEF JOHN KOZIOL SUBJECT: VIDEO GAMING DATE: JUNE 7, 2018 I recently conferred with area law enforcement agencies who have authorized video gaming establishments in their communities. Police Chiefs from the following communities were surveyed Buffalo Grove, Prospect Heights, Hoffman Estates, Elk Grove Village and Wheeling. None have experienced any Law enforcement issues nor has there been any uptick in calls for service. Buffalo Grove reports not having a call for service yet since their 2016 inception. Wheeling had recently done an extensive analysis 2/18 which showed no increase. They have had some establishments up and running since 2013. As far as there being a nexus with these types of establishments and an increase in crime, at least locally there appears to be none. C: Deputy Chief Eterno Deputy Chief Griffin Page 1 of 1 With COURAGE we protect, with COMPASSION we serve.