In Illinois, Cook County Judge Neil H. Cohen ruled that video gambling parlors must continue to split profits equally with terminal operators. The ruling was the result of a lawsuit by the owners of Dotty’s Cafe, Stella’s Place and Shelby’s gambling parlor chains against the Illinois Gaming Board and the Illinois Machine Gaming Operators Association, claiming gambling parlors and terminal operators should be able to negotiate their own deals and retail establishments should be able to buy, install and maintain their own machines.
Cohen agreed with the defendants that repealing the profit-sharing mandate could lead to control of gambling terminal distribution by a few, large companies, limiting competition for small retail locations. “Plaintiffs argue that they should be allowed to negotiate the profit split, comparing themselves to grocery stores negotiating with suppliers. Gambling, however, is not an ordinary business,” Cohen wrote. He stated splitting profits equally prevents terminal operators from offering incentives to gambling establishments. Also, he wrote, allowing gambling parlors to both host and service the terminals could reduce customers’ confidence in the establishments. “This total control and regular, observed access to the inner workings of the terminals could lead the public to believe that the parlors were rigging the terminals,” Cohen noted.
Plaintiffs Laredo Hospitality Ventures and Illinois Cafe & Services Company argued that not being able to maintain their own machines could result in lost customers and revenue. In their amended complaint, they said if a dollar bill is jammed in a machine at one of the gambling parlors, an employee cannot clear it but must call its terminal operator and wait for a technician, which could put the machine out of service for days.
Illinois Machine Gaming Operators Association Executive Director Ivan Fernandez said, “This is a regulated industry that, but for this law, would still be illegal. Given the 5-year history, I think state regulators have done a fantastic job.”
An attorney representing Laredo and Illinois Cafe said the companies will appeal Cohen’s ruling. The two companies own and operate a total of more than 100 video gambling parlors in 21 Illinois counties, and employ 500 workers.
Meanwhile, after five years, the number of video gambling terminals in the capital city of Springfield has leveled off—but the amount gambled continues to rise. The Illinois Gaming Board reported in November, $9.9 million as bet at 570 terminals, compared to $9.8 million at 575 terminals in November 2016. Statewide, about 28,000 terminals are in operation.
Chris Stone, owner of 30 Lucy’s Place gambling parlors, including 10 in Springfield, said, “I think there are going to be some competitive drivers, now that it’s leveled out, where some gaming parlors and cafes are doing better than others.” Stone said he is considering new locations, either through construction or acquisition.
He added he had no issues with 50-50 profit-sharing. “Whether you’re a terminal operator, a video gaming parlor or a retail location, all you expect is a fair playing field,” said Stone.
