Data from industry experts and the state of Illinois show video gambling has generated about $785 million in state and local tax revenue since the machines were legalized 4 years ago.
The Southern Illinoisan newspaper in Carbondale reports that the number of machines in Illinois establishments isn’t reaching its limit as 5,600 businesses have them.
Illinois Gaming Machine Operators Association officials said the state brings in more than $22 million a month in gambling tax revenues that are to be dedicated to capital infrastructure projects.
In the Sauk Valley, the cities’ share of video gambling income continues to provide a cushion for the general funds since the first distribution was booked in September 2012.
When looking at its three largest cities – Dixon, Sterling and Rock Falls – Dixon has seen the biggest windfall from gambling ever since its first inception. In all three cities, the growth in volume and revenues has risen at a rapid pace since the first payments arrived.
After the first full year of distributions, Dixon has 62 machines in 14 locations, and its share was $45,798.01. Dixon now has 121 machines in 128 places, and from September 2012 through August 2016, the city has received $631,881.63.
In Rock Falls, year one brought in $25,043.395 from 7 machines in 8 locations. The gambling revenue through August 2016 total $302,074.76, and there are now 71 machines and 15 establishments.
Sterling has tried to fight the trend, last year passing an ordinance targeting the expansion of gambling parlors. There also was talk of curtailing the gambling activity by limiting liquor licenses. The growth, however, has continued, and budget challenges have softened some officials’ attitudes about gambling.
“While I don’t want to see Sterling become the Vegas of the Midwest, that money can become salaries that we don’t have to burden the taxpayers for,” Alderman Joe Martin said.
Martin said last year’s 18.76 percent tax levy hike, driven by rising pension costs, came after a gut-wrenching process for the council.
“It was very difficult for the people on this council to approve that big of an increase, but we really didn’t have any other choices.” Martin said. ‘if we limit licenses, how can we tell people that we’ve done everything possible to keep taxes down?”
Sterling Mayor Skip Lee is concerned about the economic impact gambling can have in communities where a large percentage of families already are struggling. About 60 percent of Sterling’s schoolchildren receive free or reduced lunches.
“There is only about so much the cities can do to stop this,” Lee said. “The state created this by failing to close loopholes in the statute, and they are the ones that have to fix it.”
In Rock Falls, the gambling money has been earmarked for a specific purpose from the beginning of the payouts. Most has been used for police vehicles and related equipment. While some officials and residents aren’t huge fans for gambling’s growth, at least there is a tangible reward.
“Since we’ve received the video gambling money, we’ve bought four new squad cars, two police detective vehicles, and we’re getting ready to order two more,” City Administrator Robbin Blackert said.
Police vehicles are difficult for most small towns to budget for, and the gambling revenue is helping Rock Falls get on a set purchasing schedule.
Dixon officials have discussed earmarking video gambling money, but some wondered if dedicating it to a specific purpose would be wise when the amount is difficult to forecast. The city had even considered using the money in its efforts to fight drug addiction.
The Illinois Gaming Machine Operators Association says the numbers show that the association is meeting its objective of supporting businesses and bringing in revenue for state and local governments.
“Our goal from the beginning with video gaming has been to make an economic difference,” said Michael Gelatka, the association’s president. “We want to make a difference for our partners who draw players to their establishment, for their employees and patrons, and for our state and local governments who need tax revenue to support their services and programs.”
The study found that video gambling tax revenue could grow to about $500 million annually if the early 150 municipalities that don’t allow video gaming decide to participate. The study did not include the city of Chicago. The association estimates that if Chicago had been included, the tax revenue could reach $700 million a year.