Who gets biggest cut of video gambling pie?

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Hillary Gavan/Beloit Daily News (From left): Cathy McKinney of Rockton won $500 on gaming on Tuesday morning as South Beloit's Bordertown Gaming Manager Deanna Laing watched her. McKinney said she likes how calming gaming is and the friendly staff at Bordertown.

SOUTH BELOIT - With gaming revenue on the increase in South Beloit, Rockton and Roscoe, one city councilor is hoping to keep more of the revenue local.

In a Monday interview, South Beloit City Councilor Tom Fitzgerald proposed increasing the "Boutique" license fee for video gambling establishment from $1,500 to $15,000.

"The city is looking for all the revenue it can find, and it's one way to get revenue," Fitzgerald said.

Fitzgerald explained that South Beloit gets about 5 percent of gaming revenue while the state receives 25 percent. The vending machine companies and business operators get the rest. According to Fitzgerald, too much of the revenue is leaving South Beloit.

In South Beloit from June 2016 to June 2017 the state share of video gaming revenue was $1,198,437 and the municipality received $239,687, according to data from the Illinois Gaming Board website, www.igb.illinois.gov/VideoReports.aspx

There are 11 video gaming establishments in South Beloit, four of which are BG or Boutique gaming license holders. The others are bars, restaurants or packaged liquor dealers that have had pre-existing liquor licenses. Under state law, a business must have a liquor license to legally operate video gambling machines.

The South Beloit establishment with the most revenue in 2016-2017 was Pilot Travel Centers bringing $48,721 in revenue to the city.

In June 2016 to June 2017, there was $61,740,720 played and $56,949,959 won in the city. The net wagering activity was $4,793,761.

Revenue to South Beloit has continued to increase each year. In 2012-2013, the city received $18,004 in revenue; 2013-2014, $79,855; 2014-2015, $165,791; and 15-16, $196,216 in revenue.

A gaming boutique is an establishment with no cap on the amount of revenue it can realize from gaming. Unlike other liquor licenses, there is no requirement that the majority of the business's revenue come from liquor sales. Other licenses are for establishments with more than 51 percent of net sales coming from revenue other than gaming, such as food, alcohol and merchandise. Those establishments have to pay $25 per year per machine.

Fitzgerald first raised the issue of boutique license fee increases while chatting with Mayor Ted Rehl a month ago. He is considering bringing it up again for discussion at an upcoming board meeting.

Although he doesn't have a problem with the machines themselves, he said the majority of revenue is being spent in the city and then leaving South Beloit.

He said the business owners have very little or no overhead with only an employee to oversee the machines which can be located in a small room.

"I'm trying to get everybody together to discuss it. I'd like to have people who own the machines and establishments to come," Fitzgerald said.

Mayor Ted Rehl said he would support Fitzgerald's discussion on the issue at a council meeting.

"I think it's amazing how little we charge given the profits by those who take the money out of the city," Rehl said.

Deanna Laing, a manager at Bordertown Gaming, 356 Prairie Hill Road, and Vegas Magic, at the corner of Blackhawk and Gardner Streets, said the increased fee to $15,000 was a 100 percent increase. She called it "insanity."

Laing said such a high fee would likely cause many operators to move to either Rockton or Roscoe. She suggested Fitzgerald try to get the state to provide the municipalities with more funds as opposed to putting the burden on the backs of business owners.

Laing said there is more overhead to a gaming facility than Fitzgerald might realize. She said the establishment pays the city fees for all employees at each establishment, pays the employees, buys soda and liquor and stocks the bathrooms with cleaning supplies and toiletries. Although South Beloit needs more revenue, she said it's not right to derive it all from gaming operators. She said it would result in some good businesses and their happy customers leaving South Beloit to play somewhere else.

Laing said many people enjoy coming to the South Beloit facilities.

"I love our customers and have made good friends here. There are a lot of regulars. It's quiet and people can play and relax," Laing said.

Laing said most of her customers know their limits. They range in age from 21 years old up to a woman in her mid-90s.

Cathy McKinney of Rockton was one of the gaming fans playing on Tuesday late morning. She had just won $500 on Triple Golden Cherry. She said Bordertown is one of her favorite places to gamble.

"It's calming and relaxing and you don't have to think about anything when pushing the button," McKinney said.

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