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TO: Mayor Richard C. Irvin
FROM: Wendy McCambridge, City Clerk
DATE: February 27, 2018
SUBJECT:
An Ordinance Amending Chapter 5 of the City of Aurora Code of Ordinances Entitled "Amusements".
PURPOSE:
To make changes to Article IV. - Miscellaneous Amusement Devices regarding the licensing of distributors and establishments with video gaming terminals onsite. The changes will allow the City of Aurora to develop a method for the monitoring and issuance of video gaming terminals.
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 the issuing of liquor licenses.
DISCUSSION:
A six month moratorium on the issuance of video gaming terminal license was adopted on September 12, 2017 to investigate methods for regulating the licensing of video gaming terminals. 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 changes to the Ordinance regulating the licensure for video gaming terminals is being recommended:
Sec. 8-103:
- Add a phrase that a distributor license will require a per terminal charge
Sec. 8-130 through 8-134:
- Capping the maximum number of video gaming terminals (VGT) at two hundred (200)
- Capping the maximum number of VGT per site at five (5)
- Implementing geographic limitations and/or bans
- Adding an ability to request a special use permit regarding distance between new locations. Edits are in purple in the ordinance language
- Place time frames for businesses before a business can apply for terminal licenses
- Setting eligibility criteria for licenses
- Development of application requirements for initial and renewal of licenses
- Add reporting requirements regarding the operations and funding streams
These recommended changes will provide expectations for the business community
IMPACT STATEMENT:
The changes as recommended will provide greater oversight over video gaming terminals.
RECOMMENDATIONS:
I propose the ordinance changes as proposed be enacted.
CITY OF AURORA, ILLINOIS
ORDINANCE NO. _________
DATE OF PASSAGE ________________
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An Ordinance Amending Chapter 5 of the City of Aurora Code of Ordinances Entitled "Amusements".
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, a moratorium regarding the issuance of video gaming terminal licenses was enacted on September 12, 2017 for six months to study possible methods for regulation of video gaming terminal licenses citywide, and
WHEREAS, staff has completed the study and proposed recommendations to the Government Operations Committee on February 27, 2018, and
WHEREAS, the City of Aurora has developed a comprehensive approach to regulate and monitor video gaming terminal licensing; and)
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Aurora, Illinois, as follows: Amendments to Chapter 5 of the City of Aurora Code of Ordinances Entitled "Amusements" be adopted as follows:
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Sec. 8-103. - Application and issuance of distributor's license.
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Any person desiring to distribute, sell, lease out or supply amusement devices or video gaming terminals in the city shall make an initial written application for a distributor's license to the city treasurer on forms provided by the city and paid a yearly fee to the city in the amount established by resolution of the city council from time to time, for each video gaming terminal on its premises. The form shall require the applicant's name, business name and address and complete listing of intended activities in relation thereto. If the applicant is eligible for a license under this division and having met all state requirements, the city treasurer shall issue the required license.
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DIVISION 5. - VIDEO GAMING
Sec. 8-130. - Video gaming license required.
Video game terminals, as authorized by the State of Illinois pursuant to the Video Gaming Act (230 ILCS 40/1, et seq.) are permitted within licensed establishments, provided however that:
(1) No licensed establishment shall be permitted to operate any video gaming terminal in the city unless said establishment also has obtained a license, and paid a yearly fee to the city in the amount established by resolution of the city council from time to time, for each video gaming terminal on its premises.
(2) Every licensee shall strictly comply with all of the conditions, rules and regulations imposed by the state, and by the city, and specifically shall comply with the following:
a. Each and every video gaming terminal shall be licensed by the state before placement or operation, and the license for each and every terminal shall be maintained within the licensed premises where the video gaming terminal is operated.
b. No video gaming terminal may be played except during the legal hours of operation allowed for the consumption of alcoholic beverages at the licensed establishment.
c. No licensee shall cause or permit any person under the age of twenty-one (21) years to use or play a video gaming terminal.
d. Video gaming terminals located within any licensed establishment must be within an area of the establishment that is restricted to persons twenty-one (21) years of age and over, the entrance to which restricted area is within the view at all times of at least one (1) employee of said establishment, which employee must likewise be twenty-one (21) years of age or over.
No establishment licensed by the Illinois Gaming Board shall be permitted to operate any video gaming terminal in the city pursuant to the Illinois Video Gaming Act (230 ILCS 40/1 et seq.) without first obtaining a video gaming terminal license under this division. The distributor of the video gaming terminal must also be in compliance with Division 2 of this Article.
Sec. 8-131 - Licensee Requirements.
(a) Effective March 31, 2018, video gaming terminal licenses will only be issued to licensed establishments holding a Class A, B, E, or E-1 liquor license. Any video gaming terminal license in effect at the time of adoption of this section shall be renewed yearly so long as the license is issued to the current owners. Any sale, transfer, or assignment of more than fifty (50) percent of the ownership of a business or partnership shall terminate said license. In the event that such license is held in the name of a corporation, the sale, transfer or assignment of fifty percent (5) of the stock shall terminate the license.
(b) Liquor license must be in good standing with the City of Aurora and the State of Illinois.
(c) An establishment must be in operation as a licensed liquor premise for no less than one hundred twenty (120) days prior to issuance of a video gaming terminal license.
(d) Limitations on the issuance of video gaming terminal licenses:
1. The number of video gaming terminal licenses shall be limited to two hundred (200) video gaming terminals.
2. Effective March 31, 2018, no new video gaming terminal license location may be issued to any establishment that is less than two thousand six hundred forty (2,640) feet from another licensed establishment, measured from the property line and where there is an existing licensed video gaming terminal licensed in the same no more than one (1) permit shall be issued for any single shopping center, plaza or strip mall without the applicant obtaining a special use permit allowing the issuance of said license. Current establishments located within two thousand six hundred forty (2,640) feet or within the same single shopping center, plaza or strip mall Any with a video gaming terminal license in effect at the time of adoption of this section shall be renewed yearly so long as the license is issued to the current owners. Any sale, transfer, or assignment of more than fifty (50) percent of the ownership of a business or partnership shall terminate said license. In the event that such license is held in the name of a corporation, the sale, transfer or assignment of fifty percent (50) of the stock shall terminate the license.
3. Prohibited in new establishments located within the downtown and downtown fringe as defined in the zoning ordinance.
5. Must not be permitted at establishments located within 1,000 feet of a casino.
6. A licensed video gaming location in the City may operate up to five (5) gaming terminals on its premise as any time.
(e) Every licensee shall strictly comply with all of the conditions, rules and regulations imposed by the state, and by the city, and specifically shall comply with the following:
1. Each and every video gaming terminal shall be licensed by the state before placement or operation, and the license for each and every terminal shall be maintained within the licensed premises where the video gaming terminal is operated.
2. No video gaming terminal may be played except during the legal hours of operation allowed for the consumption of alcoholic beverages at the licensed establishment.
3. No licensee shall cause or permit any person under the age of twenty-one (21) years to use or play a video gaming terminal.
4. Video gaming terminals located within any licensed establishment must be within an area of the establishment that is restricted to persons twenty-one (21) years of age and over, the entrance to which restricted area is within the view at all times of at least one (1) employee of said establishment, which employee must likewise be twenty-one (21) years of age or over.
Sec. 8-132 - Application and Issuance.
(a) Each video gaming terminal license application for an initial license at a premises shall at a minimum contain the following information:
1. A set of floor and site plans prepared under the seal of an architect or engineer licensed to practice in the State printed on 11 x 14 paper. The plans shall show the dimensions of its site; and the design and layout for determination of occupancy, including, but not limited to, exiting, seating, dining rooms, bars, game and waiting areas, proposed video gaming areas, and position of equipment and fixtures therein. The layout of any video gaming terminal licensed premises may not be substantially changed without submission of a new set of plans and approval by the Local Liquor Commissioner.
2. Proof of liability insurance on each video gaming terminal placed in a licensed video gaming location in an amount set by the state gaming board.
(2) The local liquor control commissioner shall have jurisdiction, subject to the jurisdiction of the state gaming board, to adopt rules for the purpose of administering the provisions of this article and to prescribe rules, regulations, and conditions under which all video gaming in the City shall be conducted. Such rules and regulation are to provide for the prevention of practices detrimental to the public interest and for the best interests of video gaming, including rules and regulations regarding the inspection of such establishments and the review of any permits or licenses necessary to operate an establishment under any laws or regulation applicable to establishments and to impose penalties for violations of this article.
Sec. 8-133 - Fees
(a) No licensed establishment shall be permitted to operate any video gaming terminal in the city unless said establishment and distributor also has obtained a license, and paid a yearly fee to the city in the amount established by resolution of the city council from time to time, for each video gaming terminal on its premises.
(b) An initial application fee of $100 shall be charged in addition to the operation fees for establishment and distributor.
Sec. 8-134 - Renewal
(a) All licenses issued by the city under this article shall expire on December 31 and are renewable annually unless sooner cancelled or terminated. No license issued under this article is transferable or assignable.
(b) The license may only be renewed upon receipt of a copy of the current state license, the applicable renewal fee and any renewal forms provided by the city.
(c) The license may only be renewed if the licensee continues to meet all qualifications for licensure set forth in the Video Gaming Act, the regulations promulgated pursuant to the Video Gaming Act, Aurora Liquor Control Ordinance and this article.
(Ord. No. O12-068, § 4, 8-28-12)
Secs. 8-131-8-135. - Reserved.