On January 16, the city council in Champaign, Illinois approved new regulations for video gambling establishments which make more than half of their revenue from gaming machines. But many business owners have expressed confusion over the rules.
Currently, video gambling establishments pay $2,400 to $5,000 for a liquor license, depending on their size. Mayor Deb Feinen, who also serves as Champaign’s liquor commissioner, said the new Class VL license type will “bring it in line” with other liquor licenses offered by the city. But under the new rules, small internet cafes like Lacey’s Place will pay a higher fee of $250 per machine and pay a flat $4,200 for a Class VL liquor license.
With five locations in Champaign, Lacey’s is the largest gaming café chain. Owner Jeff Rehberger questioned how the city will spend the extra revenue from the higher licensing fees. His attorney Rochelle Funderburg said, “We couldn’t gather a lot of information on how video gambling is costing the city. If the fees are grossly in excess of what video gambling costs the city, that could serve as a possibility for a lawsuit.”
Feinen said the additional revenue will be added to the city’s general fund, which is used in numerous ways. She said the next budget will be drafted soon and talks regarding the new revenue will occur then.
Council member Alicia Beck said she’ll recommend the extra gambling revenue go to organizations that treat addicts or help people get steady jobs. She noted the social impacts of video gambling were factored into the Class VL rate. Those impacts were highlighted in a report to council members by city staff based on information from the National Opinion Research Center, Gamblers Anonymous and the National Research Council. The report stated, “Research has indicated that government sponsored gambling facilities spread pathological gaming. And studies have agreed that pathological gamblers ‘engage in destructive behaviors such as committing crimes, running up debts, damaging relationships and self harm.”
The new regulations limit Class VL licenses to 23 at any one time. Currently 19 gaming cafes operate in Champaign and four more are expected to open soon, Deputy City Manager Matt Roeschley said. Video gambling is offered in a total of 59 establishments; in December those took in $5,211,341 and paid out $3,975,438.
Councilman Tom Bruno voted against the arbitrary Class VL license limit, noting the free market would have established the proper number. But Lucky Diamond internet café employee Jay Patel said the higher fees also may eliminate some of the competition. “There’s a lot of these cafes and lounges around town,” he said.
Every internet café owner, however, approved of the provision that unlike current liquor license requirements, they no longer must serve food and drinks. Don Franklin, manager at Joobie’s, said the city “shouldn’t have made us like restaurants in the first place.”
Joshua Stephens, owner of Libby’s Lounge, said his license fee will jump from $2,400 to $4,200.”It seems like the city thinks these establishments are open-ended ATM machines but we’re just a business, like anyone else.” He added, “Almost all of the people that come in here, this is their hobby. They like to come in and enjoy quiet time.”
