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Illinois Operators Predict VLT Victory, Seek Expanded Market

Posted On: 11/22/2009

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SPRINGFIELD, IL -- Far from being discouraged over a growing number of "opt-out" jurisdictions and a stream of negative press, industry members here are confident that a regulated, operator-run video lottery market will be realized in Illinois next year, according to Tom Fiedler, president of the Illinois Coin Machine Operators Association.

Fresh from a visit to the Global Gaming Expo (G2E) in Las Vegas, Fiedler, who heads Melody Music (Champaign, IL), told VT that the industry is facing a serious challenge. VLT supporters are concerned that if too many local jurisdictions opt out of the video lottery market, it could eventually prompt the state Legislature to rescind the Video Gaming Act. "That's a possibility," Fiedler conceded.

But ICMOA not only expects to win this fight; the association is supporting a bill that would expand the planned VLT market to include 5¢ wagers on video poker. (That's in addition to the $2 wagers that are already permitted under the VGA, which passed last summer.) The expansion bill was requested by the Illinois Gaming Board, but it failed to garner enough votes to pass in the most recent session of the state legislature. Nevertheless, Fiedler predicted the 5¢ wager bill will be enacted when lawmakers reconvene in January.

In addition, Fiedler said, ICMOA is helping build a broad- based coalition to lobby local jurisdictions and state legislators alike to continue supporting VLTs, rather than opting out of the market. The coalition includes restaurant and bar associations, labor unions, bowling proprietors and others, he said.

Next, ICMOA is continuing to mount a vigorous education and lobbying campaign to tell members of city councils and county boards that video lottery will be positive for their communities, Fiedler said. Other states that legalized VLTs have experienced no problems with increased crime or political scandals, Fiedler insisted.

The industry will be subject to tough regulation and enforcement by the Illinois Gaming Board, he said. Applicants who wish to participate in the industry must pass a rigorous background check, Fiedler explained. Any operators who cater to underage gamblers or fail to pay taxes on VLT revenues will quickly find their machines shut down by the IGB, which will control all terminals through a central computer network.

ICMOA is also advising local officials that allowing legal VLTs in their towns or counties "won't result in mini-casinos everywhere," Fiedler said. Under the Act, installations of gaming equipment will be limited to liquor-licensed locations, he pointed out. That means video lottery is entertainment for adults only, he said.

Another important tactic for pro-VLT lobbying, said Feidler, is to portray the prospective market as "very controlled gaming." Accordingly, ICMOA is reassuring local officials that VLTs will not award "huge jackpots or create life-changing events like hitting a riverboat slot machine or winning the lottery," he said.

ICMOA is reminding officials at all levels that "it's not just about us." Industry members are reminding government leaders that the Video Gaming Act is an important part of a larger capital fundraising bill that is intended to raise $31 billion for the state and that is expected to create 439,000 jobs, he said. These revenues would be paid to local construction workers and recycled through local economies, Feidler asserted.

The alternative to video lottery, he argued, would be higher taxes, which the private sector can ill afford in these tough economic times. "Lawmakers in Springfield understand the importance of video lottery to the larger state economy, but local officials don't always make that connection," said Fiedler.

Since the VLT enabling act passed last July, some two dozen municipalities and several counties have voted to "opt out" of participation in any video lottery market. Earlier this month, the state lottery director and the Chicago Crime Commission made headlines by charging that video lottery would inevitably attract organized crime in its wake. Fiedler said most communities have remained supportive of video lottery but "it doesn't make headlines."