Normal Implements Annual License Fee for Video Gambling Machines

NORMAL — The Normal City Council approved an annual license fee of $200 per video gambling machine last week to help finance the administrative costs associated with registering the machines with the Illinois Gaming Board.

“There is quite a bit of staff time involved in the process to get these machines placed,” said Normal City Manager Mark Peterson. “We have had numerous visits from the Illinois Gaming Commission doing research on liquor license holders that have applied for the machines. We have had many inquiries and visits from people who are interested in establishing video gaming in our community. So it has consumed a lot of staff time.”

Currently, the Illinois Gaming Board has issued licenses for the machines at three establishments in Normal. Only one of those three establishments, Brewe Ha’s, reported revenue from the machines for January.  

Normal administrators estimate that around 25 video gambling machines will eventually operate in the city. With the $200 annual license fee, those 25 machines would generate around $5,000 annually.

“Right now I think there is just a few (video gambling machines) — maybe three or four,” said Peterson. “There are a number of establishments that have already applied for the machines and are going through the approval process, so we think 25 probably is likely number. There may be more in the future, but we think 25 at least in the short term is what we’ll see.”

According to state law, each establishment can have up to five machines. The state gets 25 percent of the net proceeds from each video gambling machine; local entities, 5 percent; the gaming industry, 35 percent; and the business with the machines, 35 percent. 

The state law doesn’t require local entities to establish an annual license fee for video gambling machines. Several Central Illinois cities, including Champaign-Urbana, Peoria and East Peoria have. Bloomington has not.

Money generated through the annual license fee will be deposited into the Normal’s general revenue fund.

“At this point the money will just go into the general fund to be used for general governmental operations, including the police department, but the council could at some point in the future choose to earmark those revenues for some specific expense,” said Peterson.

Normal Councilman Jeff Fritzen thinks the city should earmark the money generated through the annual license fee to finance gambling education services. 

“Gambling certainly has some negative aspects, impacts on the community, and so in addition to the cost of administrating the registration, there are social costs as well,” said Fritzen. “In my opinion, social costs are even greater than the administrative costs. Even though it’s not a significant amount of money, I felt we should earmark that money for some kind of programming that could be made available to people who have families or individuals who have issues with gambling addiction, rather than just funneling the money through the general revenue of the town because there is not only the registration money, there’s the percentage that we’ll collect as well off net proceeds from the gambling activity itself.”

Fritzen thinks the city council should wait a year, before it decides to earmark the money generated through the annual license fee.

“Next fall when the staff starts putting together our budget for the following year, we’ll have a better idea of how many of these machines are in town, what kind of total revenue we have from those machines,” said Fritzen. “So I think a year from now we might even have perhaps a more significant amount of money that we could put towards something.

“I’m not talking about reinventing some program from the ground up. There are already programs out there that are available to people with issues. My sense is that we direct people towards those things that are already in existence, but I think we have a responsibility on a local level to participate in that.”