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Thursday, June 27, 2013 03:44 pm

Video gambling takes off



When it comes to pouring money into video gambling machines, Sangamon County is a leader.

“Sangamon County is the best video gaming county in the state,” says Christopher Stone, a would-be proprietor of a half-dozen proposed Springfield gambling parlors that are awaiting licenses from the Illinois Gaming Board.

Gaming board records for May support Stone’s claim.

More than $10.7 million was wagered in May at 141 video gambling machines in Springfield set up in 31 establishments, ranging from bars to gas stations to restaurants. Fourteen businesses in Jerome, Grandview and unincorporated areas immediately adjacent to the city collected another $4.5 million in wagers. Include Chatham and such outlying burgs as Pleasant Plains and Divernon and the total rises to nearly $16.5 million. It works out to $83.25 wagered for every man, woman and child residing within county borders.

Sangamon County isn’t tops in the state. That distinction, based on May wagers, belongs to Winnebago County (county seat Rockford), where nearly $28.6 million – or $96.78 per resident – was wagered. Statewide, $301.3 million was bet in the machines that went live last fall. It averages out to $43,315 going into each of the nearly 7,000 machines in Illinois that were online in May.

With Sangamon County trailing only Winnebago in terms of amount wagered, it isn’t surprising that more than 90 applications from county applicants, most from Springfield businesses, are pending at the state gaming board, which is taking months to act on applications. Stone, a co-owner of a string of franchises known as Lucy’s Place and Mokka Kaffeehaus, has been in line since last fall. All told, he and his partners have 24 locations in central Illinois. Eleven have been licensed, with the latest approval coming just last week. Of the 10 with track records, four are doing well and six not so well, Stone said.

Stone is expecting big things from the half-dozen locations proposed in Springfield.

“People, in general, in Sangamon County and Springfield are more apt than in most other counties in the state to do video gaming,” Stone said. “I don’t think that Springfield or Sangamon County have reached the saturation point yet, but I think that other parts of the state have.”

Businesses raking in the most aren’t bars.

Of the nine Springfield establishments that took in at least $500,000 in May, just two, the Butternut Hut and Franny’s, are for-profit bars and one, Starship Billiards Parlor on Stevenson Drive, is a pool hall where alcohol is served. Veterans of Foreign Wars LaFore on Old Jacksonville Road collected nearly $660,000. The top moneymakers – or takers, depending on one’s point of view – aren’t known for serving drinks.

The top performer, a Road Ranger truck stop on Camp Butler Road, has taken in at least $1 million a month four times since November, when the business got a license. The second-place business is a Road Ranger truck stop on Toronto Road that consistently grosses more than $600,000 a month. Both businesses, unlike bars and restaurants, are open 24/7 and so the machines never go dark. Pizza and gambling apparently go together, as Godfather’s Pizza on Dirksen Parkway grossed nearly $800,000 in May. The Hibachi Gill and Supreme Buffet on MacArthur Boulevard took in more than $535,000 in May.

Mike Walton, finance officer for American Legion Post 32 on Sangamon Avenue where machines went live in April and collected nearly $400,000 last month, said that he believes that state-approved machines are more popular than illegal machines that were ubiquitous before legalization. Players have more trust, he says, given that the payout percentage is guaranteed and overseen by regulators.

“I think more people are playing them,” Walton said. “I think with the state licensing them, it legitimized them. What they have not done is let you have enough of them. … This is going to help us a lot.”

It is, by all appearances, wealth redistribution on a massive scale. Gamblers get 93 percent back in the form of winnings, with state and local governments splitting 30 percent of the remaining 7 percent and establishments and businesses that provide and maintain the machines keeping what’s left.

William McCarty, director of the Springfield Office of Budget and Management, said that the city had collected $183,000 from video gambling as of May 31 and was owed an additional $42,000. He expects the city’s take to rise, but doesn’t know by how much.

“Maybe we’re looking at $1 million a year, but we don’t know,” McCarty said. “It could be more, it could be less.”

It is axiomatic that there must be winners and losers in any form of gambling, and in the case of video gambling, the losers are not limited to the unlucky who don’t walk away from machines gone cold. State records show that revenue at casinos has dipped since video gaming began at thousands of businesses across the state. Tom Swoik, executive director of the Illinois Casino Gaming Association, wasn’t surprised.

“I think it will continue to have somewhat of a negative effect,” Swoik said. “It’s really hard to put a number on it.”

Swoik blames a state smoking ban and a lackluster economy for a 38 percent reduction in casino revenue since 2008. At the same time, he notes, state legislators have been talking about putting slot machines at horse racing tracks and allowing more casinos.

“When you look at how much it’s down and the proposals for huge expansion, it doesn’t make a hell of a lot of sense,” Swoik said.

Contact Bruce Rushton at brushton@illinoistimes.com.

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