Video gaming

Video gambling machine operators and the City of Kankakee are at odds over a $1,000 per machine city tax. Some operators say paying the annual tax could put them out of business.

KANKAKEE — A battle between the Kankakee administration and video gambling machine operators is about to come to a head as the two sides battle over a $1,000 per machine city tax.

And what makes this fight a certainty is the fact that the tax revenue — about $180,000 — is included in this year's budget.

The issue came before the full Kankakee City Council on Monday as machine operators told the council and the administration the burden this tax will place on them. They said it ultimately could lead to businesses closing or fewer machines operating within the city limits.

The budget approved in June included this revenue stream, but gaming operators did not know this tax was even being considered until it was brought before the council's Ordinance Committee on Nov. 28.

The tax would be a per-machine tax. It means that a business which has five machines in operation would have to pay the city $5,000 before the budget year concludes April 30.

Thus far, in the 2017 calendar year, the 187 gaming stations in 40 Kankakee business locations have generated $377,000 in city taxes. About two weeks remain in the calendar year.

The Ordinance Committee's next meeting will be at 5:30 p.m. Dec. 20 in the Donald E. Green Public Safety Center.

Ald. Mike O'Brien, D-2, committee chairman, said the committee's goal is to have a law before the full city council for its consideration sometime in January.

Owners contend this additional tax will be crippling to some business owners, causing some businesses to close.

O'Brien said since time is running so short now, he thinks an option might be to approve the tax, but place a sunset clause on it for April 30. That clause would mean the tax would expire at the end of this budget year and the two sides could sit down an discuss how this tax could be modified or if they have other revenue-generating ideas.

"Right now, we are in a difficult spot," O'Brien said after the council meeting. "There is a hole in the budget and it needs to be filled."

Mayor Chasity Wells-Armstrong said after the meeting that some council members are being pressured by bar and gaming station owners.

Heatherann Low, who is the compliance officer for Revile Gaming in Kankakee, which operates about 25 machines in the city, said after the meeting machine operators were under the impression this tax still was open for discussion.

She left city hall feeling it might not be.

"This will shut down businesses in Kankakee. This will be the nail in the coffin for some business owners. This won't hurt large operators, but it will hurt these mom-and-pop places that count on this revenue. We are being hit with tax on top of tax. This revenue is what is used to keep many businesses afloat."

Paul Jeziorski, co-owner of Paul's Place in Kankakee, said sending $1,000 per machine to the Kankakee budget would hurt his business as well.

Illinois lawmakers approved legalized video gaming in May 2009. In October 2012, machines finally hit locations with liquor licenses. The revenue from these machines has only grown as time has past.

The law states the 25 percent of the money waged goes to the state. Seventy percent is equally divided between the business location and the machine owner. The remaining 5 percent goes to the municipality where the machines are played.

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