Local “Push Tax” On Video Gambling Pushed The Wrong Button

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An approval of a local tax in Oak Lawn village, Illinois, that was made last fall and went into force in January created a scramble between state and local governments for the proceeds from the video gambling machines that are wide spread across the town.

Bigger Piece Of The Pie

Last year, the 200 slot machines placed around the 40 bars, restaurants and lounges in Oak Lawn, Illinois, generated nearly $15 million, according to the records of the state regulator, the Illinois Gaming Board, and as the new gaming law in the state placed tax on the gross revenue from the video machines at 33%, almost $5 million was the amount split between the local and state governments.

In Illinois, however, five-sixths of the tax revenue goes to the state government coffers, resulting into $4 million last year, with the remaining $747,000 for the local government of the town where the video machine are placed, and the rest of the revenue split between the terminal operator and the establishments that house the machines.

Pay Per Bet Tax Clash Of Interests

To amend this unequal share of the spoils, the town of Oak Lawn approves a per-play local tax on slot machines that charges with a cent every push of a button to place a bet, the so-called “push tax”, with the expectation to generate extra $500,000 for the local government, but this new tax lights the fire of opposing interests.

On one side, Accel Entertainment, the state’s largest terminal operator, threatens to withdraw its machines from the town, while a handful of other towns send requests for details regarding the newly implemented local tax, obviously looking to implement it, too.

Consequently, lobbies from both sides of the conflict are being spurred into action, as last week State Rep. Bob Rita, being famous for shepherding gambling interests for years, filed a bill in Spingfield that would pour water on the threatening to spread fast fire of local governments implementing taxes, as the bill would give the state “exclusivity” regarding taxing slot video games.

“We need to have a full debate in Springfield over our tax and fee structure at the state and local level on video gaming machines, not a patchwork of local fees and taxes around the state that drives businesses and economic activity away”, State Rep. Bob Rita.

Being frustrated by the “scraps” they have been fed from the video games revenue for years, the Oak Lawn board of trustees that passed the local tax in November, led by Tom Phelan, claim it taxes the player, not the business and is aimed at relieving the cash-strapped town people from another hike in property tax.

Both Sides Mobilizing Forces

Unfazed by the empty threats from the largest operator, as it has contracts with the establishments from one side, and plenty of competitors to fill the void from its withdrawal from the 10th most video games revenue-generating municipality, the board of trustees is looking for a wide debate on the matter and are already drumming up opposition to the bill.

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