Lincoln Mayor proposes lowering the ceiling on video gaming
Motion to be on the July 15th voting agenda

 

[July 14, 2024] 

At the Tuesday night meeting of the whole committee, a lengthy discussion revolved around making permanent changes to the ordinances involving video gaming in Lincoln.

Lincoln Mayor Tracy Welch prefaced the discussion saying that quite some time ago, he had advised the council that he would not be signing any more video gaming licenses until the number had dropped considerably.

Tuesday evening, Welch said that since that time, the number of licenses in Lincoln has dropped from 240 machines to 200, but he still wants the number to go lower.

He said the city has too many machines, and to support that, he had done research on surrounding areas. He said that towns within the region with similar populations had far fewer than Lincoln. He noted Canton has 72, Chatham has 57, Rantoul has 80. He noted that Kewanee has 183 and he said that Effingham has more than Lincoln.

Welch said that his thoughts are that he doesn’t want to deter business, but at the same time, the council should consider what the city looks like to visitors, and the number of video gaming establishments makes the city look like, to quote a friend of his from out of town, a Little Vegas.

Welch said it had taken about three years for the number of machines in Lincoln to drop from 240 to 200. He is proposing that the number be permanently established at 175 and would even prefer 150. He said this would not impact any existing licenses. So even though the ceiling would be set, it could still be several years before the number of machines dropped down to or below that ceiling.

At the moment, there are no written numbers in the books for gaming machines. Welch said that there had been a consensus when the city agreed to allow gaming that the licenses could be issued and the “strong would survive,” in other words the number of machines in the town would be self-regulating according to demand.

Welch said he had met with the liquor commission about his desire to set a ceiling lower than the current number of licenses. He said while he would have like the limit set lower, the 175 was a “compromise” number that he had reached with the commission. He added that the number could be amended later.

If passed, the 175 limit would become part of the gaming ordinance. However, city attorney John Hoblit explained that this would have no impact on the licenses that are already in place. The entire 200 would be grandfathered in. he said however, if a business closed, those licenses would be lost, and no new license would be issued to replace them until the number reaches below 175.

Welch said he wanted to elaborate, that the city is not out to hurt existing businesses. He said there would be instances where license would not be lost. For example if a business moves, the license will move to the new location with the business. If the business sells, with the only real change being the change in ownership, those licenses would be transferred. He added that the transfer would be conditional with the new owners passing all other requirements such as background checks. Welch said the liquor commission had required these concessions and he agreed with them.

Welch said he wanted to be clear. He is not anti-video gaming in the city. His desire is to get the number down to something more reasonable. The concessions mentioned would not increase the number of licenses or machines in the city, and his main goal is to let the number come down to a more desirable level before considering future approvals.

Alderwoman Wanda Lee Rohlfs had asked about the profitability of the gaming machines within the businesses. Had there been any research to show how that increasing the overall number of machines in the city had impacted the overall income to individual businesses. Welch said the city has not done any research in that area. Welch said what has been seen that can be supported by city treasurer Chuck Conzo is that the city share of revenue from the machines has leveled off and is neither decreasing nor increasing at the moment. He said that there have been a few cases where businesses have discontinued gaming, but it is very few.

Rohlfs said that she did feel the number of machines in Lincoln was very high, but she wondered why. Was the demand higher here or are there machines that are just not being used. Welch said that in the beginning that strong will survive philosophy had negated placing a limit on the number of licenses issued, so everyone who qualified for the class B liquor license with gaming attached was given their license. He said he had figured at one time that there was one gaming machine for every 55 people in the city, and that is too much.

Rohlfs said she thought that when the revenues started coming from the gaming the council had talked about gambling addiction and perhaps setting aside a portion of the income for addressing addiction. Welch said he didn’t believe that was ever done. He added that when the city moved the cost of license from $25 to $250, the money had been earmarked to go to streets and alleys for road repair and maintenance.

Conzo offered a few observations for the council. He said that in many cases, he believes the patronage to these gaming machines is not just local residents. He said many times the revenues from the machines in higher in travel locations. He said for example Effingham that was mentioned earlier, has two major interstates plus state highways going through it, so they probably get a lot of patronage from travelers. He said that Lincoln also has travelers from the interstate as well as Illinois Route 10, and that may be creating a larger market for gaming in town.

Conzo also noted that though it has leveled off, gaming is a revenue stream for the city. He said that as the number of games dropped so would the revenue. He added that the city should bear in mind the elimination of a sales tax on groceries would impact revenues as well.

Noting it was a bit off topic as he spoke, Hoblit did remind the council that the state has added a provision to its grocery tax rule that would allow the city to impose a local tax to compensate for the state tax loss. He said if the city wants to pursue that, it should start considering it.

Alderwoman Robin McClallen said she wanted to thank the mayor for making this move. She said it would be a positive for the community, and it would make the town more attractive.

There was further discussion about the signage and the “feather flags” that are outside nearly every gaming business. It was mentioned that perhaps the answer could be to control the flags and establish some signage ordinances to address them. Welch said signage has been a topic of discussion many times in the council and the problem is that no one can agree. In addition, there becomes a question of how much the city can influence what is placed on private property.

Alderman Kevin Bateman agreed that the signage was part of the issue. He said that if the businesses had gone about their business quietly, the council might not even be having this discussion. He also said that during the establishment of the gaming rules, he had been in the gallery, and he had agreed with the strong will survive theory, but he was wrong.

Welch said there were also a few entities that had licenses they were not using. He said that the businesses had gotten the licenses, were paying their renewals, but were not using them yet. He said that perhaps the next step would be to reach out to those holders and let them know that they needed to relinquish the licenses and reapply if and when they needed them. However, he added that there were questions about the legalities in taking this kind of action and so that could come at a later date.

There was discussion about when gaming was first approached, the idea was that machines would be the secondary income of a business, and not the primary. However, changes in the rules had made it to the point where that gaming seemed to be the primary source of income in many cases.

Alderman Steve Parrott recalled that when the gaming license went up, there were businesses that came to the council and said clearly that they could not survive without gaming. He said he would like to see it go back to gaming being the secondary income with other sales being most of a business’s revenue.

At the end of the discussion, aldermen agreed to place a motion on the Monday, July 15th voting agenda to establish a ceiling of 175 video games within the city limits. Again, the number is currently at 200, and no games will be shut down as a result of the ordinance. The number will only fall when licenses are not renewed by existing businesses, and that could take a number of years.

As always the council has the right to table any agenda item if they feel they are not prepared to make an informed decision.

It should also be noted that the city council’s Monday July 15th meeting will be delayed by 30 minutes to 6:30 p.m.

[Nila Smith]