Industry Reports

Orland Park Officials Greenlight Video Gambling with 4-3 Vote

Orland Park officials have managed to revoke the video gambling ban in the village, after months of debates and negotiations plus a couple of questions placed at an advisory referendum a few months ago.

The deciding vote which overturned the ban was the one of Mayor Keith Pekau, who described the regime as the “most restrictive” video gambling one across the state of Illinois. After the ban is lifted, Orland Park will initially distribute an overall of 20 licenses, which will also be limited to Class A liquor license.

For years, the village of Orland Park had been among the south and southwest communities which outlawed the gambling terminals. Now, the regime was finally overturned by a 4 to 3 vote of the board that approved a measure which favored video gambling.

The vote took place at the beginning of the week at a special Village Board meeting. Previously, the March primary ballot saw two advisory referendum questions placed. At that time, 49% of the voters backed gambling on a restricted basis to be permitted, while 53% of the voters favored the existing ban on video gambling.

Under the decision, video gambling licenses would be restricted to bars and restaurants which own a Class A liquor license and have been in business for at least 18 straight months. This requirement has been put in order to block the way of video gambling cafés which normally generate most of their revenue from gambling services rather than from their food and beverage offerings.

Video Gambling Licensees to Pay 30% Net Terminal Income Tax Rate

The first gambling machines were brought to the state of Illinois in September 2012. However, it was in December 2009 when Orland Park officials opted out of the state law and banned the games on the territory of the village.

Last year, local lawmakers decided to reconsider the issue after a number of business owners had insisted that not having the video gaming machines put them at disadvantage to their competition in the region. As mentioned above, a series of public discussions on the matter were held, with the community remaining almost evenly divided both against and in favor of the issue.

Since 2017, an evaluation process of video gambling has been given a start, with the village of Orland Park having surveyed local Class A license holders in order to see which one of them would like to get a video gambling license. According to the results, 37 Class A liquor license holders did not want video gambling licenses, 23 wanted one, and the remainder have not made a decision.

As mentioned above, the Orland Park official’s vote backing video gambling would make the machines available in the village. Under the new regime, businesses which would hold video gambling license would owe an annual fee of US$1,000 per a machine, with a maximum of 5 terminals per establishment currently permitted under state gambling law. Such businesses would also be required to pay an application fee of US$2,500. According to the ordinance, businesses would owe a license renewal fee of US$1,000 annually.

When it comes to taxation, so-called net terminal income would be taxed at a 30% rate, of which 25% would be distributed to the state of Illinois and the remaining 5% would be redirected to the local municipality. The remaining 70% of the net terminal income would be divided between the video gambling license holder and the companies which install and maintain the gaming terminals.