TO: Mayor Richard C. Irvin
FROM: Wendy McCambridge, City Clerk
DATE: February 23, 2018
SUBJECT:title
A status report and recommendations for regulating video gaming terminals within the City of Aurora.
body
PURPOSE:
To provide an update to City Council regarding the research conducted during the temporary moratorium on the issuance of video gaming terminal licenses and develop next steps for changes to the related Resolution(s) and Ordinance(s).
BACKGROUND:
The Illinois Video Gaming Act (230 ILCS 40/1) enacted in 2010 enabled video gaming terminals to be allowed in bars and restaurants on their premises as an accessory use. In 2012 the City of Aurora adopted an ordinance establishing that a license is required for video gaming terminals and adopted the Illinois Video Gaming Act in its entirety. An annual fee and application process was established and mirrored the requirements in the Illinois Video Gaming Act. The Act establishes that a business is allowed to operate up to five machines per licensed establishment. The statute defines a licensed establishment as “…any licensed retail establishment where alcoholic liquor is drawn, poured, mixed or otherwise served for consumption on the premises, whether the establishment operates on a nonprofit or for-profit bases (230 ILCS40/5).” The City of Aurora has not adopted or imposed any further regulations or restrictions and the City currently does not regulate video gaming separately from its regulation of alcohol through issuing of liquor licenses. A six (6) month moratorium was adopted on September 12, 2017 to allow staff adequate time to research options and an approach for the City of Aurora to regulate the issuance of video gaming terminal licenses..
DISCUSSION:
During the moratorium the following activities were conducted:
• Review of municipalities statewide who allow for video gaming terminals
• Review of other states who allow for video gaming terminals
• Review of the State of Illinois Video Gaming Act
• A compilation of all regulating activities were compiled and reviewed internally by staff
• Recommendations and options were provided to the Mayor’s Office for review
• Economic impact study was performed
Based upon the activities completed the following topics were deemed appropriate to review and investigate further and determine best practice recommendations:
• Capping the maximum number of video gaming terminals (VGT)
• Implementing geographic limitations and/or bans
• Place time frames for businesses before a business can apply for terminal licenses
• Setting eligibility criteria for licenses
• Develop application requirements for initial and license renewal
• Add definitions to clarify terms in the Code
• Add reporting requirements regarding financials for the licensed establishments.
IMPACT STATEMENT:
The impact of these ordinance and resolution changes will allow for the City of Aurora to attract and retain businesses that will enhance the area and promote
RECOMMENDATIONS:
It is hereby recommend that the Government Operations approve the recommendations as follows:
• Capping the maximum number of video gaming terminals (VGT)
o City wide
§ Place a cap at two hundred (200)
• Based upon our population this would be mean that there would be one VGT for every on thousand people (1:1,000)
• Estimated revenue would be $340,000/year
• Once the cap is reached applications will be taken on a first come first available basis. All requirements must be reached and a full application received to receive full consideration and placement on the wait list.
o Capping the maximum number VGT per site
§ Establish a maximum number of five (5) per site
§ The State of Illinois currently has a maximum of five per site and this would be adopting the same for the City of Aurora.
• Implementing geographic limitations and/or bans
o The Downtown and Downtown Fringe area would not allow for any new location or license to be issued. State law is that there is not to be any VGT within 1,000 feet from a casino.
o Each location with VGT must be at least 2,450 feet. This is the same measurement utilized by check cashing sites
o No more than one licensed site per strip mall, shopping center or plaza
• Place time frames for businesses before a business can apply for terminal licenses
o Businesses must be in operation as the primary use for a minimum of one hundred twenty days prior to application with the City
• Setting eligibility criteria for licenses
o Must be either a Class A, B, E or E-1
o Must be approved by the Illinois Gaming Board prior to application
o Proof of insurance to cover loss add City as additional policy holder
o Include the aspects to be considered by City Council when approving liquor licenses
o Provide update to the Local Liquor control Commissioner when any change in seating occurs. Under no circumstance is a license holder to go below the minimum seating requirement for the license class
o All restaurant license holders must maintain at least sixty (60%) of sales is from food and beverage annually to maintain video gaming terminal license
• Develop application requirements for initial and license renewal
o For initial application must have the following
§ A detailed floor plan
§ Review by the Liquor Control Commissioner
§ Approval by the Illinois Gaming Board
§ Proof of liability insurance in State approved amount
• Add reporting requirements regarding financials for the licensed establishment
o Audit forms for reporting income on renewals for specific classes requiring the audit
• Increase fees
o Increase individual device fee for establishment to $50/terminal per month (now at $100/terminal per year)
o Increase distributor license to $100/terminal per month (currently at $1,000/year for any device)
It is recommended that Government Operations review and provide a recommendation for additions and changes for the March 6, 2018 Committee of the Whole Meeting. Additional items may be drafted to correspond with the changes to be presented at the Committee of the Whole to enact the changes in corresponding Ordinances and Resolutions.
cc: Alderman Hart-Burns, Chairman
Alderman Mervine
Alderman Lofchie
Alderman Franco, Alternate