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IL House Okays VLT Expansion Bill, Awaiting Gov's Signature

Posted On: 5/28/2010

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Illinois Video Gaming Act, video gaming, video lottery terminal, VLT, video poker, Illinois Coin Machine Operators Association, ICMOA, amusement machine operator, Illinois Gaming Board, The Funding Stop

SPRINGFIELD, IL -- A bill that makes various changes to Illinois's Video Gaming Act passed the state's House of Representatives on May 26 by 81 to 26. If signed by the governor, the bill will amend the gaming act to permit "penny video poker" machines, video lottery terminals to operate 24 hours a day in truckstops and VLT placements in VFW posts.

The Illinois Coin Machine Operators Association strongly supported HB 4927, which is on its way to Gov. Pat Quinn. Rep. Lou Lang (D-Skokie) sponsored the House bill; a Senate measure passed in early May. Quinn was the leading proponent of the original Video Gaming Act that passed last year.

Lawmakers approved the measure over the strong objections of Aaron Jaffe, chairman of the Illinois Gaming Board. Jaffe called HB 4927 "a disaster," saying it would mean operators who ran illegal video pokers in past years would be allowed to participate in the new, legal video lottery game industry -- unless an operator had been convicted of a felony. Jaffe said felony convictions are rare.

Jaffe favored giving the gaming board power to approve or deny VLT operating licenses on a case-by-case administrative basis. This approach would have been consistent with IGB's statutory obligation to exclude "organized crime" from the planned video gaming market, he said.

Additionally, Jaffe said the IGB is making inquiries to determine the ownership of The Funding Stop LLC, which specializes in financing video gaming equipment purchases by operators. The Video Gaming Act did not establish licenses or regulatory procedures for financing firms.

Separately, the Chicago Daily Herald reported that two ICMOA members were indicted recently on charges that included money laundering and illegal gambling. Attorneys for both operators denied the charges, the paper said, and ICMOA declined to comment.

The VLT market is expected to launch late this year or early 2011. It would allow up to five gaming machines in licensed establishments that serve alcohol. Bars, restaurants, clubs and truckstops are expected to be among the principal VLT locations.

Supporters hope the Video Gaming Act will eventually create a statewide market of up to 50,000 operator-run video lottery games that generate up to $1.5 billion in annual revenues. Some $250 million to $500 million a year would be paid in taxes.

The IGB just released its operator licensing application, which is available online. The application fee is $5,000.