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Crystal Lake reverses video gambling ban, approves more restrictive rules.

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The Crystal Lake City Council reversed its ban on video gambling, approving a more restrictive ordinance that would allow certain local business to have the machines.

Council members voted 5-2, on Tuesday evening, to pass the ordinance, which was presented to the City Council last month by a coalition of local business owners who wanted the ban overturned for a long time. They argue that the ban put them at a disadvantage against bars and eateries in neighboring jurisdictions.

Mayor Aaron Shepley opened the hourlong debate by saying that the ordinance proposed by the owner if The Cottage, Paul Leech, and Brian Coli, owner of Georgio’s Chicago Pizzeria and Pub, was stringent enough to reverse his long-standing opposition.

I believe, on balance, that this is about the best solution that we could come up with that would allow our businesses to thrive and not feel like they’re suffering at the hands of something that puts them at a competitive disadvantage, while at the same time addressing all of the concerns that I personally have had with video gaming in Crystal Lake,” Shepley said.

Restrictions under the ordinance include a limit of three machines – state law allows five – and no signage visible from the outside that advertises video gambling. The machines must be segregated at establishments that allow customers younger than 21 years old, and also cannot be visible from outside. The ordinance limited the machines to places where alcohol is consumed on premises.

The city will charge establishments two annual fees totaling $1,100, and a charge permit fee of $500a machine. Applicants for licenses must also sign a hold harmless clause promising that they will not go to court to get the city’s ordinance softened.

City ordinance also limits the machines to where alcohol is consumed on premises, and does not allow for the creation of video gambling parlors.

Tuesday’s vote leaves Lakewood as the sole remaining McHenry County government that bans video gambling. Illinois legalized it in 2009 to help generate revenue to pay off bonds for a $31 billion capital plan, although the machines didn’t start appearing in local establishments until late 2012.

The state gets 30% of the proceeds, 5% of which is given back to the local government on top of whatever annual fees it charges. The remain 70% of the proceeds are split between the machine owner and the establishment.

That money comes in handy, said Jim Rosato, director of operations for Ala Carte Entertainment, which owns Finn McCool’s. He told council members that video gambling has not created any issues in any of the other establishments the company owns.

“It did give us revenues in a lot of places to reinvest in the business,” Rosato said. “In Lake in the Hills, we remodeled and put in a lot of stuff. In the McHenry location, video gaming gave us enough money to buy all-new garden furniture, which we probably [otherwise] wouldn’t have done.”

Council members Cathy Ferguson and Brett Hopkins voted against the ordinance, and against amending existing city code to allow for video gambling. Ferguson said she has seen the “ugly downside” of gambling’s consequences.

“I think when you serve alcohol, and people’s inhibitions are down, this is the poor man’s tax to me, and the people who can least afford it are the ones filling your coffers,” Ferguson said.

But Leech said that the public doesn’t see it as a concern, and pointed out the lack of opponents in the audience as well as the fact that Tuesday’s vote was written about in the newspaper and on social media.

“I don’t see anybody here standing up and objecting to it,” Leech said. “I don’t see people knocking down the door with pickaxes, handles and pitchforks demanding we all resign.”

Crystal Lake was one of six local governments that took advantage of an opt-out under the law and banned video gambling, and is the fifth to change its mind. Woodstock reversed its ban in 2012; and Cary, Algonquin and the McHenry County Board reversed their bans the following year.