A bill filed by one-time Chicago mayoral candidate and Illinois Rep. Kam Buckner offers a potential avenue for Chicago establishments to apply for video gaming terminal licenses.

HB 5791, which Buckner filed March 22 and was referred to the House’s Rules Committee, would amend the state’s Video Gaming Act so that a licensee or applicant would not be in “violation of the Act or specified rules and shall not be subject to disciplinary action for operating a gaming device if operation of the gaming device is in compliance with and not considered gambling under the Criminal Code of 2012.”

This is in relation to sweepstakes machines, which are commonplace throughout Chicago since a city ordinance bans video gaming terminals (VGT). Despite their absence from the third-largest city in the United States and a few other places in Illinois, the state is home to the most extensive VGT network in the country. As of the Illinois Gaming Board’s monthly revenue report for February, there are 47,290 VGTs spanning 8,494 establishments.

Bars, taverns, and other non-truck stop establishments are allowed to have as many as six VGTs at their locations — up from five — after Gov. JB Pritzker signed a massive gaming expansion bill that also legalized sports betting in Illinois in 2019. While the state’s 15 casinos and eight mobile sportsbooks garner most of the limelight, VGTs are actually the biggest source of tax revenue for the state when it comes to gaming.

The terminals generated $2.88 billion in net terminal income in 2023, which resulted in $980.7 million in total tax revenue. The state received $836.5 million and local municipalities the remaining $144.2 million. The combined state tax revenues from casino gaming and sports betting totaled $438.5 million last year.

What is a “sweepstakes machine?”

A sweepstakes machine is one in which a bettor puts in money in exchange for coupons for things such as online merchandise, but the bettor can then play slot-like games and cash out winnings via the coupon. There is also an option that allows for free play, which has put the legal status of the machines in a gray area; sweepstakes machines are often referred to as “gray gaming” because of this.

The Illinois Gaming Board has long been opposed to sweepstakes machines, which would make getting a license for applicants who had such machines challenging should the city lift its ordinance banning VGTs. Buckner’s bill also calls for a “Gaming Disparity Task Force” that would “gather data necessary for the determination of the impact on minorities within the video gaming industry.” The Task Force would be allowed to impose fees for its work to be collected by the IGB on operators that generate more than $5 million, including “for specified payments to a minority business enterprise-owned terminal operator.”

Buckner — whose 26th district spans multiple Chicago neighborhoods including Bronzeville, Gold Coast, Grand Boulevard, Greater Grand Crossing, Hyde Park, Kenwood, Oakland, South Chicago, South Loop, South Shore, Streeterville, and Woodlawn — was one of nine mayoral candidates last year. He failed to advance to the run-off between eventual winner Brandon Johnson and Paul Vallas after finishing seventh.

The sweepstakes machines were front and center in a corruption trial last year when businessman James T. Weiss was accused of paying then-State Rep. Luis Arroyo $32,500 in bribes between 2018 and 2019 to help pass legislation favorable to the machines.

When the legislation did not pass, the two turned to then-State Sen. Terry Link and offered a $10,000 bribe. Link, however, was wearing a wire in cooperation with the FBI. Arroyo was charged with bribery by a grand jury in 2019 and indicted with Weiss the following year. Arroyo pled guilty in November 2021 was given a 57-month sentence in May 2022 while Weiss was given a 66-month sentence last October for participating in a bribery scheme with an Illinois lawmaker.

Chicago’s chase of revenue streams

Johnson came out in support of VGTs during his campaign, but the Mayor’s Office has yet to take any action on potentially lifting the ordinance banning them. Johnson saw his Bring Home Chicago referendum — which would have raised the real estate transfer tax on property sales over $1 million — rejected by voters last month as the city looks for ways to fund his $16.8 billion budget for 2024.

Johnson also inherited a downtown casino from predecessor Lori Lightfoot that Bally’s is scheduled to open in September 2026. Bally’s opened its temporary casino at Medinah Temple in the River North neighborhood of Chicago on Sept. 9, but the venue is currently not on pace to meet the $35 million in local tax revenue Johnson earmarked for his 2024 budget despite showing revenue growth each month since November. Bally’s has run into logistical problems ahead of construction in nearby River West and was forced into a re-think of its plans after studies revealed construction of its initial design could potentially damage city infrastructure underground.

State law requires Bally’s to open its permanent casino within two years of the temporary venue, and Bally’s has already received a 12-month extension from the IGB after showing “good faith” in making progress to that end. The gaming company is expected to break ground in River West this summer on the grounds of the Tribune Publishing plant.

The possibility of adding VGTs to bars and taverns across the city also raises the question of whether Bally’s will opt to devote any of its gaming positions for slots at O’Hare and Midway airports. Bally’s has remained mum on that possibility, but it is allowed to do so as the downtown licensee provided its total number of gaming positions does not exceed 4,000.

The city will also be collecting a 2% tax on revenue generated from in-person wagers made at the DraftKings Sportsbook at Wrigley Field, which began taking bets last month. The venue, located adjacent to the iconic ballpark on the North Side of the city, had been open since last June as a restaurant and bar.

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