A City Council committee determined to maximize revenue from video gambling terminals and eliminate competition for them moved Tuesday to ban sweepstakes machines over Mayor Brandon Johnson’s objections.
Business Affairs and Consumer Protection Commissioner Ivan Capifali urged the Committee on License and Consumer Protection to give him more time to establish a regulatory structure and “ensure seamless and lawful implementation” of the Chicago ban.
Capifali said he also has concerns that the regulations proposed by Ald. Anthony Beale (9th), the driving force behind lifting the Chicago ban on video gambling terminals, may be “overly broad and burdensome” and have a “disparate impact on various communities.”
“At this time, BACP is opposing the ordinance as it stands, and we believe concerns need to be addressed before we can move forward,” Capifali said.
“There’s a lot of question marks… we want to resolve before we move full speed ahead. I don’t think it’s fully baked yet. That’s all I’m asking — for a little bit of time so we can continue the conversations.”
Unswayed, the License Committee approved the ban by a voice vote. It was another defeat for Johnson at the hands of an emboldened City Council that rejected the mayor’s corporate head tax in favor of revenue alternatives that included video gambling terminals. The ban still needs full City Council approval before becoming law.
Sweepstakes gambling machines look like video slot machines, but have managed to operate in a gray area of the law by offering “free play” options and coupons to winners instead of cash.
Politically connected businessman James T. Weiss was convicted and sentenced to nearly five years in prison for bribing two former state legislators — state Rep. Luis Arroyo and state Sen. Terry Link — while trying to get sweepstakes gambling machines legalized.
Weiss is the husband of former state Rep. Toni Berrios, whose father, Joe Berrios, served as Cook County assessor and Democratic Party chair.
“Now [that] we‘ve moved into the VGT category, it’s very important that we legalize the entire system… and not give one an advantage over the other,” Beale said.
Video gambling terminals can only be located in places such as bars, restaurants, theaters and bowling alleys that have a liquor license.
“I guarantee you, there’s not a sweepstakes machine in a liquor store or a restaurant — because they’re in your gas stations. They’re in your 7-11s and all of the other corner stores within our community — going unregulated,” Beale said.
“I’m sympathetic to the people who are potentially going to be harmed by this. But they’ve made a lot of money over the years. Think about how much money they’ve made over the years by not being regulated, not paying fines, fees, taxes — nothing. We haven’t made a dime here in the city of Chicago.”
Maze Jackson, a former radio talk show host now representing the National Association of Promotional Retailers, acknowledged that upwards of 5,000 illegal sweepstakes machines currently operating in Chicago are a “problem” that “needs to be cleaned up.”
But Jackson urged the License Committee not to “inadvertently sweep out” machines and operators that have “done everything right” by purchasing stickers from the city clerk’s office.
He asked the City Council to craft an ordinance that “achieves the goal of a clean, accountable market, but doesn’t leave us behind.”
Beale didn’t buy it.
“We’re turning a blind eye on an industry that has taken advantage of the South and West Sides under the [guise] that these are Black and Brown businesses,” the alderman said. “It’s easy to come into our community and operate illegally.”
Northwest Side Ald. Nick Sposato (38th) helped push through a $16.6 billion alternative budget that legalized video gambling, over Johnson’s strenuous objections. But Sposato did not support the ban on sweepstakes machines that “keep businesses running” by attracting customers.
“I don’t want to hurt people in the pocketbook — whatever little money they’re making,” Sposato said. “Once we have VGTs, I don’t see people keeping them. But until then, there’s no reason to shut them down… Let’s figure this out and license them for now.”
Beale’s revised ordinance has three levels of punishment. After the first offense, operators would be slapped with a $1,000 fine for each illegal sweepstakes machine on the premises, and would have 30 days to get rid of those machines.
If the machines are still around after 30 days, the fine would double to $2,000 per machine, and the operator’s business license would be suspended for six months. A third offense would result in seizure of the sweepstakes machines and revocation of the business license.