Illinois Collecting Significant Revenue from Video Gaming Machines

SPRINGFIELD — Based on results from the Illinois Gaming Board and Illinois Comptroller’s Office, the state collected $7.3 million in gambling revenue, during the first six months of legalized video gaming.

In the first six months of legalized video gaming in Illinois, gamblers wagered an estimated $458.3 million and won $422.6 million, according to preliminary figures from the Illinois Gaming Board. 

Under state law, video gaming revenue after payouts are taxed at 30 percent, with five-sixths of the proceeds going to a state capital improvement fund and one-sixth to local governments. The law also requires at least 80 percent of wages to be paid out.

Video gaming machine owners and operators statewide shared $36.4 million of net income from video gaming revenues collected during the last six months.

According to a 2012 estimate from the Illinois Commission on Government Forecasting and Accountability, video gaming could raise $345 million to $640.6 million a year for the state. The estimate was based on the projection that 45,000 to 65,000 video gaming machine terminals would eventually be operating throughout the state, each earning an average of $70 to $90 a day.

“We’re far from knowing what the outcome is going to be for video gaming,” said Illinois Commission on Government Forecasting and Accountability Revenue Manager Jim Muschinske. 

Video gaming machine revenue flowing into the state capital improvement fund has doubled and tripled by the month, said Muschinske.

Currently, around 4,800 video gaming machines are operating in about 1,200 locations throughout state, said Illinois Gaming Board Spokesman Gene O’Shea. 

“We’re getting as many up and running as we can,” said O’Shea. “We do have a waiting list. We’re getting to those people as quickly as possible.”

Last week, the Illinois Gaming Board approved around 275 additional video gaming machine locations.

Muschinske said the newness of video gaming machines could wear off.

“People are always excited when they see something new,” said Muschinske. “The per-machine values might not hold up.”

Gene O’Shea doesn’t think that video gaming machines are a fad.

“They have these machines up and running in several states and I don’t think it’s proven to be a fad in those states,” said O’Shea.

Although the video gaming machines create significant revenue for the state and local governments, they also have the potential to create gambling addiction and related social ills.

“The problem is they focus on revenue, and they don’t consider the cost to the community,” said Illinois Church on Alcohol & Addiction Problems Executive Director Anita Bell. “The owners and the establishments are the big winners. The residents and communities are losers.”

The State of Illinois would create programs for people who have an addiction to video gaming machine gambling, if needed, said O’Shea. 

“We already have something for gambling addiction in the casinos,” said O’Shea. “How that will work with video gambling has yet to be determined. There’s a possibility that we could. It will depend on, to some extent, the need. I’m not saying that there won’t be a need, but we have to be aware of it. And the only way to be aware of it is if people come forward and let us know.”