Push Comes To Shove Over Oak Lawn’s VGT ‘Push Tax’

The video gaming terminal (VGT) push tax went into operation in Oak Lawn on January 1, sparking significant controversy.

In Illinois, gamblers must pay a coin drop tax when using gambling machines. Recently, the village of Oak Lawn fined 13 Video Gaming Terminal (VGT) operators for failing to submit necessary forms under the city’s ordinance.

The providers are responding in a similar manner.

Push duty problems

The Illinois Gaming Machine Operators Association, representing terminal operators, argues that the push tax violates the Video Gaming Act’s ban on player tracking. The association also claims that the ordinance would be costly and difficult to implement due to technological limitations.

During a hearing on July 15, lawyer Kim Walberg representing the terminal operators expressed that some operators may not have the capacity to complete the task being asked of them. It was stated that they do not have the ability to fulfill the request.

Rick Meitzler, the president and CEO of Novomatic Americas Sales, contradicted Walberg’s testimony, particularly on that specific point.

Every time the handle is pulled, measurements are taken. It is the responsibility of the system or state within each machine to retrieve that data.

Mayor Sandra Bury fined 13 operators $500 a week after the trials, claiming that a key aspect of Walberg’s event did not meet the required standard.

I doubt they will be successful as their own expert discredited their entire argument during the push tax hearing.

Push revenue is meant to balance the budget.

According to the Illinois Gaming Board (IGB), the 200 slot machines in Oak Lawn’s bars and lounges brought in almost $15 million in revenue last year. The state’s recent gaming legislation requires that a 33% tax on the gross revenue from Video Gaming Terminals (VGTs) be divided between state and local governments.

Despite this, the state of Illinois receives 83.3% of the total sum, which is almost $5 million, leaving Oak Lawn with less than $1 million. In order to increase community revenue, the drive tax was introduced.

According to the Chicago Tribune, projections for generating approximately $1 million this year were derailed by the COVID-19 pandemic.

Bury clarified that their goal is not to cripple the terminal operators, but rather to ensure they can continue to serve the community.

Push revenue is also approved by Waukegan City Council.

In response to the financial challenges posed by COVID-19, Waukegan has decided to introduce a push tax that was sanctioned in April, joining other local governments in their efforts to raise necessary funds.

Alderman Greg Moisio shared his worries with the Tribune, acknowledging his uncertainty and expressing some pessimism. He said, “We are unsure about how long this situation will last, how many businesses may not reopen, the impact on tax revenue, and the possibility of a significant decrease in our income tax share from the state of Illinois.” Moisio also mentioned, “The total revenue loss is still unknown to us.”

Businesses in Waukegan are declining, mirroring the situation in Oak Lawn.

Alderman Keith Turner reported that he had received a letter from 30 enterprise users expressing their objection to the income. The email detailed the significant negative impacts that their businesses have already experienced due to the COVID-19 pandemic.

It is crucial to remember that the tax is imposed on VGT providers, not the companies directly. There may be confusion among business owners or concerns that the tax could discourage bettors.

Springfield passed regulations outlawing such a duty.

State Representative Bob Rita proposed regulations to ban laws resembling the force tax, but Waukegan town attorney Bob Long is skeptical that it will be successful. Huge remarked:

The proposal is currently under consideration by the legislature, and I have not received any recent updates on its status. The General Assembly in Springfield will ultimately decide its fate when they reconvene, but the date of their next meeting is unknown to me.

If that were to happen, more areas may consider implementing a force tax. Interestingly, local authorities could be monitoring developments in Waukegan and Oak Lawn.