Lincoln City Council
Motion to limit gaming machines in Lincoln passes by a vote of 7-1

 

[July 16, 2024] 

At the Monday, July 15th meeting of the Lincoln City Council a motion to codify the number of video gaming machines permitted in the city limits passed by a vote of 7-1 with all eight aldermen present.

In addition to setting the limit by ordinance, the limit itself was set at 175 total machines licensed to operate in Lincoln. Currently this limit is 25 below the total number of machines licensed in the city.

There are currently license in effect for a total of 200 machines. Two sets of licenses have gone unused for quite some time, but Lincoln Mayor Tracy Welch said that in the last week he had heard that one business that is holding a city license has now received its state license and will soon be operating video gaming as well.

This does not impact the 200 total, as those games had been counted as licensed though they were not in use.

Welch said that as he had said at the committee of the whole meeting last week, the ceiling of 175 machines will not force any current businesses to relinquish license. The number of machines will drop over time due to permanent closure of business or decisions by the business not to renew.

Welch reminded the council that he stopped signing licenses a few years ago when the number of machines licensed had reached 240. Since that time, 40 machines have been disconnected, and none had been permitted to replace them. Welch said considering the past, it could take multiple years for the number to drop to below 175.

It had been noted previously that the current ordinances on liquor license pertaining to gaming had no limit to the number of licenses that would be issued by the city. During the course of discussion on the motion Monday night, city attorney John Hoblit said that regardless of what the city chooses to do, he felt that legally it would be prudent to assign a number, whether it be 175, 200 or something else officially stating the limit would be in the best interest of the city.

Also at the beginning of the discussion after the motion was made, Alderman Craig Eimer noted that he was opposed to the limit. He said that in the week prior, city treasurer Chuck Conzo had spoken about the potential for loss of income as the number of machines declined. Conzo had expressed concern for losing revenue. Eimer said he had no interest in gaming, had never ventured to play on of the machines, but he did understand what Conzo was trying to impress upon the council.

Eimer went on to say that the city seems to continue to find new ways to spend money, but now they are taking away revenue that is vital to the city. He reminded the council that the city has a deficit in the fire and police pensions, and that at some point that money has to be paid. Currently the pension program is not fully funded, and the state has mandated full funding and set a date when that must be accomplished.

Alderwoman Robin McClallen said that there was more to consider than just possible loss of revenue. She said that the main thoroughfare through Lincoln is not attractive because of the gaming signs. She said it makes a bad impression for people who might want to come here to start a business. She said losing potential business meant losing potential tax revenues. Therefore she concluded that though the city might lose revenue by reducing the machines, it could also lose revenues by not being attractive to other businesses.

She said the gaming brought on other troubles as well. She spoke about the potential of theft and loss of homes and more as a result of gambling debts. Eimer said he would have to disagree with McClallen’s point. He said there was no increase in crime in the city due to gaming, and no indication that anyone has lost their homes.

He also surmised that the problem is not the actual machines, but all the signage that is being put out along the highway promoting the gaming businesses. And, he agreed, he doesn’t like the signs any more than anyone else does.

Alderman Sam Downs said that he had begun somewhat with the same view as Eimer, but he had reconsidered. He said that as the mayor had stated this would take years for the number of machines to actually drop to 175. He said it would be a gradual decline in games. He said he also understood and agreed with McClallen about the unsightliness of the city streets due to these signs. He said he would like to see something done to address those.

Welch said that he had taken a stand a few years ago to stop signing licenses. He said in that time, the number of machines had dropped, but he didn’t see where the revenues had dropped, in fact they have risen some. Welch added that regardless of the evening outcome, he would still not be signing any more liquor licenses that pertain to gaming. He said he had been asked to codify the number, but if that doesn’t happen, it will not change his stance on the matter.

Conzo spoke about the rule of diminishing returns that basically says you can increase a supply (aka machines) and make increased revenues, to a certain point. Then there will come a time when increasing the number of machines does not equal increased revenue because the market is saturated. He said he didn’t know if the city had reached that point, but he still believes that reducing the number of machines will reduce revenue in the long run. He said that just because revenue did not drop when the city went from 240 to 200 machines didn’t mean it wouldn’t drop in the future.

Conzo also said that as Eimer had stated, the city keeps coming up with new ways to spend money. He pointed out that the city is reluctant to increase property taxes, yet the same ones opposed to that are willing to “buy every new shiny object that you can find to spend money on.”

Alderwoman Wanda Lee Rohlfs said that she had done some per unit math comparing Lincoln to Rantoul that has only 80 operating machines as opposed to Lincoln’s 197 currently. She said Lincoln’s revenue was averaging $203.09 per machine while this other community was averaging $250.84. She wondered why Rantoul was making more with less.

Conzo said there are always varying factors, including highways. He said that is why Effingham has more machines because they have two major interstates as well as state and U.S. highways running through it with more visitors. Therefore they can support more machines as opposed to a community like Canton with no interstates or U.S. Highways. He said Lincoln was more comparable to Effingham because it has the interstate and two state highways. He said that how much revenue machines will make in a given city is unpredictable. He added that there is a possibility that 175 machines in Lincoln will generate as much revenue as 200, but it is also possible that it they won’t.

Alderman David Sanders said he felt that it would not cause a drop, because there are actually only 12 businesses in town where that gaming machines are being used on a regular basis. He said in the other businesses one can see the dust settling on the machines, a good indication that they are not being used by anyone. Sanders also said that he would be more worried about losing revenue to online gaming than to the reduction in machines. He added that a lot of people have online on their phones and play all the time that way.

With the discussion at its end, the vote was taken. Seven alderpersons voted in favor of capping the number of machines at 175. They were Aldermen Bateman, Sanders, McClallen, Parrott, Downs, Rohlfs, and O’Donohue. Alderman Eimer voted against the cap.

[Nila Smith]