An Inside Look At Illinois’ Video Gambling Café Phenomenon
Since video gambling in Illinois became legal, the state’s neighborhoods, retail districts and shopping malls have been invaded by a new type of gambling establishment—the video gambling café. Unlike bars and restaurants that provide a few video slot machines for their customers’ convenience or to supplement the main business, video gambling cafés are a stripped down no-frills version of the casino that exist solely to make money off of people’s passion for electronic games of chance.
When politicians in Illinois got the idea to legalize video gambling machines, their primary purpose was to give a boost to neighborhood taverns and local restaurants struggling under the weight of the economic downturn. Of course they were also looking for new revenue streams, and they knew expanded gambling would swell the state’s tax coffers more prodigiously than spring melting floods the Mississippi River.
Illinois’ Video Gaming Act of 2009 authorized the placement of up to five video slot machines or gaming terminals in truck stops, veteran facilities, fraternal establishments and retail outlets licensed to serve alcoholic beverages for immediate consumption. It took a while for the new law to be put into application (three years, to be precise), but when video gambling finally came online, a new type of gambling operation barged onto the scene and threw its chips into the pot.
Originating from mysterious locations far outside the Illinois border, these gambling entrepreneurs applied for liquor licenses in Illinois municipalities eager for business expansion. After their requests were granted—as they almost always were—the video gambling café phenomenon truly took off.
Video Gambling Cafés Surging
The numbers are changing every day, but according to one recent report, there are more than 1,250 video gaming machines ensconced in 280 cafés across the Prairie State. And that estimate doesn’t include the applications for café licenses that are pending in the 40-plus Illinois counties that have granted café operators permission to set up shop.
To meet the requirements of the law, video cafés must serve food. But their offerings are sparse in comparison to bars (with strict drink limitations often enforced), and the vast majority of their income is gained from the operation of their video slot machines.
Video Gambling Cafés’ More “Wholesome” Impression
The cafés advertise themselves as a “wholesome” alternative to bars, featuring a pure, unadorned gambling experience appropriate for all men and women of legal age.
To present a benign image, most of the cafes have chosen names like “Dottie’s,” “Penny’s,” “Stella’s,” “Annie’s” or “Emma’s,” perhaps intending to give the impression that café owners are sentimental sweethearts who chose to name their businesses after their moms.
Not as glitzy and glamorous as the typical Las Vegas gambling venue (and not nearly as big), most video gambling cafés have been humbly plopped down in shopping malls or alongside other small locally owned neighborhood businesses.
Simple frontage and unassuming décor complement this modest comportment, helping portray the video gambling café as a quieter, more casual and more affordable option for those repelled by the money-grubbing flashiness of the traditional casino.
Video Gambling Cafés’ Huge State Profits
So far, the understated stylistic choices of the video gambling cafés have proven to be a fabulous success. These establishments are already grossing in excess of $100 million annually, and are responsible for about 7 percent of the state’s legal gambling profits.
Since these businesses are taxed, they are helping to fill depleted government treasuries. But they are stealing customers away from the bars, clubs and restaurants that were the intended target of the original legislation and helping spread gambling farther and faster than was ever anticipated.
Most of the cafés are owned by out-of-state interests that divert profits to far-off locations, infuriating community and political leaders and creating a sense of urgency among those who want to rein in these slick operators.
And while no studies have yet been performed to see what effects their presence might be having on pathological gamblers, having so much temptation so close at hand (most of these cafés are adjacent to or actually in residential neighborhoods) must be undermining the attempts of many to overcome their addictions.
Lake County Reaction
In Lake County, just north of Chicago, new rules have been passed requiring liquor license holders with video slot machines to gross at least 60 percent of their revenue from food and drink sales. Additionally, these businesses may not dedicate more than 10 percent of their floor space to video gambling.
These restrictions will inevitably mean the end for prospective video gambling entrepreneurs looking to set up shop in Lake County, since their cafés could not possibly hope to meet these exacting and clearly discriminatory standards.
It remains to be seen if other Illinois counties will follow the example set by Lake County. But it seems highly probable, especially in areas where public opinion isn’t so keen on endlessly-expanded gambling. But as long as these cafes have a significant customer base, they will likely remain a fixture on the Illinois gambling scene, even if their numbers are restricted in the future.