You’ve probably seen them around Chicago, especially in less affluent neighborhoods, in formerly vacant storefronts, convenience shops and gas stations.
They’re known to law enforcement and regulators as “sweepstakes” machines. But their looks, like their name, are deceiving.
These machines are a sham and a losing bet that have cost Chicago tens of millions of dollars — in addition to crippling morale in neighborhoods throughout the city.
As chair of the Chicago City Council’s Subcommittee on Revenue, I convened a hearing on gaming a few months ago, and my fellow alderpersons have expressed the desire to end the presence of these deceptive doomsday sweepstakes machines.
Unregulated and untaxed sweepstakes machines are a swindle, meant to mimic the legal and regulated video gaming terminals that you see everywhere else in Illinois and around our city’s borders — but not in Chicago.
Chicago must protect our seniors and others from these gaming predators that are in poorly secure gas stations, stores and other venues.
Allowing video gaming terminals is part of a broader effort to plug the revenue holes that have gotten wider over the years. I see banning these illegal sweepstakes terminals as a vital and natural first step in this process, and that’s why, in the coming days, I will be introducing legislation to do so.
Let me explain why.
Filling the void that prohibition has created, these impostor sweepstakes machines have spread in the city as Bally’s, our partner in the downtown casino and possibly in gaming machines at our airports, has opposed video gaming terminals activity here in Chicago.
The unregulated sweepstakes machines might pay out — but only a fraction as much as legal video gaming terminals. By law, the legal machines everywhere else but Chicago must pay out 80%, while the sweepstakes machines pay as little as 50%.
The players are getting ripped off.
The impostor machines offer some minor income to the business owner, but this amounts to only crumbs compared to the formula established by law, where the establishment owner is guaranteed a 50/50 split with the terminal operator.
With no real oversight by state or local authorities, sweepstakes machines have long been associated with corruption, including some high-profile cases recently in the news.
“They have become a haven for crime,” as Ald. Stephanie Coleman (16th) put it over the summer.
Good government is also under threat with the presence of these sweepstakes machines.
By conservative estimates, Chicago could be capturing tax revenue currently going to the illegal machines to the tune of at least $50 million per year. To date, Chicago has already lost at least $400 million in potential revenue since gaming terminals were legalized in 2009 and introduced in 2012.
The state, which uses these revenues to fund infrastructure projects vital to Chicago, has lost several times more than that.
Let’s not continue to play blame-game politics. Instead, let’s work together to build a Chicago that has enough revenue to ensure our city will be stronger in the future.
To clear the way for this commonsense proposal that is backed by vast majorities of Chicagoans and a growing number of my colleagues, we must start by banning impostor sweepstakes machines.
Ald. William Hall represents the 6th Ward and is chair of the Chicago City Council’s Subcommittee on Revenue.