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Industry Monitors Growing Battle Over Illinois VLTs

Posted On: 11/13/2009

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Video lottery terminal, VLT, American Amusement Machine Association, AMOA, Illinois Coin Machine Operators Association, ICMOA, Chicago Crime Commission, Illinois General Assembly, Pat Quinn, Gary Brewer, operator-run VLT, gaming machines, videogames, coin-op news, coin-operated devices, vending, amusement games, coin machine operator

CHICAGO -- Industry insiders are quietly saying that getting the Video Gaming Act passed by Illinois General Assembly, and signed by Gov. Pat Quinn in July, may have been the easy part.

Plans for an operator-run VLT market are under fire on many fronts. The state's video lottery director said last week that it's "almost impossible" to keep organized crime out of the VLT business. Also this month, the Chicago Crime Commission charged that VLTs would bring higher crime to communities across the state. An ever-growing list of local jurisdictions, including at least two dozen cities, have opted out of the legal VLT market so far -- about two a week since the law passed. More are expected to follow.

Industry members across the U.S. are watching the situation closely. As one national association leader recently commented, if Illinois launches a successful operator-run VLT market, more states might follow. But the implication was that if the Illinois VLT market fails -- or runs into serious trouble -- operator-run video lottery would face tougher sledding nationwide.

The Video Gaming Act is intended to create a multibillion-dollar VLT market to begin rolling out in late 2010. The act provides for a local option whereby individual cities and counties can decide whether or not to participate in the newly legalized industry. The Illinois Coin Machine Operators Association, which lobbied for VLTs for more than 20 years, hopes the new market will support some 40,000 networked gaming devices or more.

But it appears more communities are leaning toward opting out. In early November, a West Chicago City Council committee voted unanimously to ban VLTs. ICMOA is hard-pressed to lobby in favor of VLTs in dozens of municipalities statewide. Often, in fact, the association cannot even get advance warning when the issue is placed on a city council's agenda or a county board's docket.

In the state legislature, one lawmaker recently proposed a bill that would allow operators to keep operating VLTs for two years in local jurisdictions that first approve then later reject the devices. The intent of the bill was to avoid a situation like that seen three years ago in Ohio, where operators spent millions to install 6,000 TouchPlay gambling devices, only to have the machines outlawed before their investments were repaid. But the Illinois bill's sponsor quickly pulled it earlier this month, saying it didn't have enough votes.

Despite these challenges, ICMOA members remain buoyant about their prospects, according to AMOA president Gary Brewer of Brewer Amusement (McMinnville, TN). Following his attendance at a state association meeting, Brewer said that "The operators in Illinois are confident that most jurisdictions will opt in and that they will have a healthy video lottery market next year."

There is some good news for VLT supporters. Last week the General Assembly finally authorized a $2.5 million budget for the Illinois Gaming Board to hire video lottery regulators and build the needed computer infrastructure. Lack of funds had been holding up some important preparatory work by the IGB.

Separately, International Game Technology announced that it had signed a memorandum of understanding with American Vending Sales, naming AVS as IGT's exclusive distributor for the Illinois VLT market.