How many is too many? Quincy’s mayor wants to investigate future of video gaming

QUINCY — Quincy Mayor Mike Troup isn’t sure if a problem exists, but he wants to examine the number of video gaming terminals in Quincy.

Troup announced at Monday’s City Council meeting he is temporarily freezing the number of liquor licenses in his role as the city’s liquor commissioner. He noted that the city had 162 video gaming terminals in June 2018. The city now has 243 terminals, according to the Illinois Gaming Board’s report for June 2021.

“It’s a significant increase,” said Troup, who began his first term as mayor in May.

It’s one of the largest increases in the state.

Illinois has 90 cities with more than a population of more than 20,000 people. Nine of those cities have added more than 80 video gaming terminals since June 2018. One of them is Quincy, which has added 81 terminals in three years.  Twenty cities with 20,000 people, including Chicago, do not allow video gaming terminals.

Top 10 Illinois cities with largest increase in video gaming terminals

Quincy also has one of the highest ratios of video gaming terminals per person in the state. With 243 terminals for a population of 39,751, Quincy has one terminal for every 163 people. That ranks 15th out of cities with a population of more than 20,000.

“We’ve outnumbered our churches with gaming licenses, and I think we’ve out numbered our bars with gaming licenses,” Troup said. “Gaming parlors are really everywhere. I’ve asked the police chief (Rob Copley) if he has seen any increase in crime or any change in the crime statistics, and he cannot attribute anything like that to gaming.

“I’m surprised at the number of gaming operations throughout the community. It’s very high.”

Top 15 Illinois cities with most video gaming terminals per person

Who profits from video gaming?

The Video Gaming Act was enacted in Illinois in July 2009. It authorized the placement of as many as five video gaming terminals in licensed retail establishments, truck stops, and veteran and fraternal establishments. The VGTs are connected to and monitored by a central communications system.

The Quincy City Council voted in December 2014 to apply revenue from video gaming to the public safety pensions for police and fire department employees. Aldermen voted in December 2017 to allow video gaming machines in establishments with a valid liquor license.

Quincy’s gaming machines have a net terminal income of $9,142,656 from January through June 2021.

How is that money divided?

First, the state levies a 29 percent tax ($2,651,372), and the local municipality where the video gaming terminals reside levies a 5 percent tax ($457,132). The city of Quincy’s share of net terminal income since 2012 (when state figures were first recorded) is $2,897,013.

Scientific Games, a Las Vegas-based company which provides gambling products and services to lottery and gambling organizations, receives 0.8513 percent ($51,368) as compensation for maintaining the Central Communications System, which all VGTs connect to.

The terminal operator (who owns, leases and places the terminals in locations) gets 32.57435 percent ($1,965,586).

Three terminal operators service most of the establishments in Quincy:

• Heck Gaming, 620 Kentucky in Quincy. Its website lists video gaming terminals at 56 locations in Quincy. It is owned by Robert Heck.
• J&J Gaming of Effingham, Ill. Its website lists video gaming terminals at six locations in Quincy. It is owned by Robert Willenborg, a 1989 graduate of Quincy University.
• Accel Entertainment of Burr Ridge, Ill. Its website lists video gaming terminals at 10 locations in Quincy. Andy Rubenstein is the president and CEO of Accel, which owns a third of the state’s video gaming terminals.

The Illinois Gaming Board does not list which terminal operators service each establishment.

Finally, the licensed establishment where the terminals are located gets 32.57435 percent ($1,965,586). Quincy has 77 establishments with 243 video gaming terminals, according to the June 2021 report of the Illinois Gaming Board. 

(EDITOR’S NOTE: The January-to-June numbers for video gaming terminals show 80 establishments with 250 video gaming terminals. Some establishments were open earlier this year but not open in June.)

Some companies, such as Max-A-Millions, Winner’s Lounge and Niemann Foods, own multiple establishments in the city and have received more than $100,000 this year as part of its cut from the state. Others, like Cassano’s Pizza, the Red Light Bar & Grill and North Side Boat Club, have received only a few thousand dollars from the state this year.

Top 15 Quincy establishments with video gaming terminals

Jackpot Maggie’s, 1515 S. 12th, has the largest net terminal income in 2021 for a Quincy establishment at $524,492. Barney’s Group LLC has received $170,849 from its 32.5 percent cut of the video gaming proceeds for being the establishment owner. Four other Quincy establishments have received more than $100,000 this year.

Max-A-Millions in Quincy already has received $371,880 in video gaming proceeds from its video gaming establishments at 606 Broadway, 1828 Broadway and 3034 Broadway. Six gaming companies with multiple establishments in Quincy have received more than $100,000 this year.

Quincy’s net terminal income in 2020 was $8,894,429, even though video gaming operations were suspended from March 16 to June 30 and from Nov. 20 to Dec. 31 (the suspension was lifted on Jan. 16, 2021). Quincy’s gaming machines had a net income of $12,034,132 in 2019, the last year that video gaming was available for the entire year.

Is Quincy ready for even more video games?

Establishments with a liquor license and existing video gaming machines before Jan. 1, 2018, were eligible for a Class I Liquor License to create a video parlor with up to five video gaming machines. Ten establishments in Quincy have five video gaming machines. 

All other establishments now are limited to three video gaming terminals. However, the city doesn’t have a limit for the overall number of video gaming terminals.

“There are a lot more (liquor licenses) that have been applied for,” Troup said. “Quincy has not put any limits on that, but other communities have. That’s something I’m looking into. Jacksonville doesn’t want any more (video gaming terminals). Different communities have different regulations they put in place.”

Quincy has granted 91 liquor licenses to businesses that don’t offer video gaming terminals. However, new businesses announced in recent weeks seem to be planning to get a liquor license to add gaming machines.

Adam Booth owns the Liquor Booth at 1500 N. 12th, which already has gaming machines. He announced plans in June to locate a second Liquor Booth at 3530 Broadway. A mid-August opening is planned.

Plans were announced earlier in July for the former Elder’s Restaurant on the southeast corner of 18th and State to be renamed Lucky Dogs, serving hot dogs and beer. Video gaming terminals also are part of the plan. 

“You really have to have the video gaming these days if you’re going to do something like this,” said Scott Frese, who will operate the restaurant along with David Wellman.

City of Quincy’s share of video gaming terminal dollars

City Treasurer Linda Moore says the city received an average of $227.60 per month for every video gaming terminal during Fiscal Year 2019 (July 2018 to June 2019). That figure rose to $228.17 per month in Fiscal Year 2020 (July 2019 to June 2020) and rose again to $279.34 for fiscal year 2021 (July 2020 to June 2021).

An owner of an average video gaming terminal in Quincy already has made $8,088 — an average of $1,348 per month — from its state gaming proceeds in the first six months of 2021.

The argument against more video games

The city makes money, helping pay growing police and fire pensions. Local operators like Heck Gaming make money. Establishments that host video gaming terminals make money. State laws allow establishments to host as many as six video gaming terminals.

So are more terminals merrier? Troup isn’t sure.

“If we opened up (video gaming) so that everybody could get six (video gaming terminals), I think that would create some significant issues for the community,” the mayor said. 

The Rev. Tom Rains of First Southern Baptist of Quincy repeatedly has gone before aldermen to oppose the establishment of video gambling since it was first discussed in 2012. He has said studies show every $1 that video gaming takes in takes $3 out of a community.

Gamblers have put $37.7 billion into video gaming terminals in Illinois since January 2013. Terminals have paid $27.9 billion to winners. Proponents of video gaming say most of the remaining $9.7 billion has paid for thousands of jobs throughout the state.

However, a four-part series by ProPublica published in 2019 called “The Bad Bet: How Illinois Bet on Video Gambling and Lost,” described the algorithm-driven gaming machines as “electronic morphine” and “the crack cocaine of gambling.”

As the amount of money wagered on gambling continues to rise in Quincy, Troup wonders where the money is coming from. When he was a member of the Quincy School Board, he said he learned 60 percent of the city’s students are eligible for free and reduced lunches. 

“And then you’ve had the federal government tell renters who have been affected by COVID  they don’t have to pay their rent,” Troup said. “Well, have those renters changed their spending patterns? Or are they part of the group that’s going to the put the dollars into gaming machines? I’m suspicious … that they’ve been saving the money. I have nothing to confirm that comment, but I have a suspicion.

“We have to be prudent. You don’t want to wait for things to grow and get out of control, and then you have to deal with the problem. Let’s try to anticipate what’s going on. Are we fine with what we’re doing? Do we have to put a limit in place? We need to evaluate it. 

“How many more gaming parlors do we need?”