Mundelein’s fees for video gambling are among the lowest in the northwest suburbs, but they could soon be among the highest.
Currently, Mundelein charges a $250 application fee and if accepted a $50 video gambling business license fee along with a $150 fee to register each individual machine. All restaurants with video gaming have at least five machines.
Trustees on Oct. 1 decided to increase the $150 per machine fee to $1,000 per machine. A revision to the ordinance is being prepared for a future vote some time before the annual May 1 application deadline, according to Village Administrator John Lobaito.
The idea to hike the fee was proposed during Mundelein’s annual strategic planning committee meeting, which normally occurs in October and outlines upcoming issues employees should prioritize.
“We surveyed 25 communities and based on that survey it shows that our fees are a bit low,” Lobaito said.
The survey showed the different assortment of fees, including application fees, per terminal fees, operator fees and business license fees. Some communities charge only one of them, while others charge multiple.
Lobaito said the median total cost for having video gambling in a restaurant was $3,000. Assuming a restaurant has the minimum five machines, an owner in Mundelein currently pays $1,050.
If approved, the collective cost for video gambling in Mundelein will become $5,300.
Niles charged the highest fees in 2018, at $1,000 per machine and a $250 application fee, according to the Mundelein study.
North Chicago, Waukegan and Wheeling all charge only a $1,000 per terminal fee. Crystal Lake charged a $1,000 annual license fee, a $1,000 annual operator fee and a $500 per machine fee — totaling $4,500.
Several communities charge an assortment of application fees and $500 per terminal fees, while Round Lake Beach only charges a $50 per terminal fee.
Mundelein’s proposal included an option for raising the per terminal fee from $150 to $500 or raising it to $1,000. Lobaito voiced his support for the $500 fee.
Village Trustee Dawn Abernathy was using her tablet to research how much money the restaurants and machine operators earn per year when Trustee Scott Black interrupted her findings and proposed the $1,000 fee.
“They’re not doing too bad,” Abernathy said. “I agree, go to $1,000 per machine.”
The 14 licensed restaurants in Mundelein collectively generated more than $2.3 million in revenue between Jan. 1 and Aug. 1, according to data from the Illinois Gaming Board. That money, which is split with machine operators at different negotiated ratios, was then taxed at 30 percent. Those taxes go to both the state and local government.
The tax on business earnings from player wagering is different than the up-front registration fee Mundelein is looking to increase. State law controls the percentage of local tax on earnings.
As of Aug. 1, Mundelein received $116,816.90 in tax revenue from player wagering in 2018, according to state records.
If approved, Mundelein’s revised licensing ordinance would generate $58,650 in new revenue, taking its income from video gambling fees up to an estimated $72,500, assuming the same number of businesses apply.
“Just for the record, I’m good with going up to $1,000,” Village Trustee Kerston Russell said. “I’m sorry but it’s not hurting any constituents that I know of.”
Village Trustee Bill Rekus, who has voted against other video gambling topics in the past, also expressed support for the change.
“Didn’t we find out that the gaming machine companies typically pay that fee for each machine, that that’s not actually coming out of the restaurant owner’s pocket?” Trustee Ray Semple said.
When contacted, several businesses were shocked by the news and asked to defer comment while they verified the information with Village Hall.
Bob Carlsen, part of the family that owns The Original Sundance Saloon, said he and his contracted machine operator split all fees.
“That’s a little bit gouging, to be honest,” Carlsen said. “They already get a cut of the proceeds.”
In response to the hike, Carlsen said Mundelein should consider waiving its prohibition on ATMs being present at restaurants with video gambling.
“In the four years that we’ve been the owners, there’s definitely been a transformation for the better as it relates to how the village works with (businesses), but this particular decision is troublesome,” Carlsen said.
Carlsen also suggested Mundelein consider incrementally raising the fee throughout the next few years to eventually reach the new total.
“As a business in this city, we understand there’s a need for new revenue, especially if we want to see this administration continue to improve things there’s a need for us to support that, but going $150 to $1,000 is just too much,” Carlsen said.
William Bowes, owner of Jake Moran’s Bar & Grill, said he’s extremely grateful for the police and fire department services Mundelein provides.
“I love this town. This town has been good to me, and they were kind enough to let us have these machines,” Bowes said. “Whatever they want to do, I’m OK with it.”
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October 9, 2018 at 04:34PM