Bar owners, who own and operate video gaming machines are reeling after the City Council confirmed plans to raise video gaming and liquor license fees. On Monday night, the Belleville City Council voted in favor of a tax hike proposal that would boost city coffers by more than $180,000. The recent news triggered an avalanche of discontent among business owners, who explained that the recent tax hike may have a negative impact on their operations.
We have witnessed similar scenarios of lawmakers imposing too burdensome taxes on the proliferating gambling industry. Actions of this kind have produced all the same effect – a massive exodus of licensed operators, hamstringing the development of the gambling industry. That is the reason why black market thrives in jurisdictions that impose high tax rates on licensed operators.
The perspective of reaping big money from the proliferating gambling industry misled many jurisdictions to impose burdensome taxes on the gambling industry. Apparently, Belleville City makes no exception to the rule. For quite some time, Belleville has been looking for ways to boost its gambling tax take. Three years ago, Belleville business owners managed to block that plan, convincing Belleville Finance Committee to reject the proposal.
Tax Increase at the Center of the Overhaul Plan
On Monday, the majority of the City Council approved a proposed tax reform that would raise fees for video gaming terminals and liquor licenses. The reform passed on a vote of 12 to and it is scheduled to come into effect on 1st May this year. The sweeping tax reform raises video gaming terminal fee from $100 per machine per year to $300 annually. In addition to that, the liquor license fee goes up from $550 to $700. A video gaming terminal operator’s license would cost $500.
Mayor Mark Eckert explained that gambling taxes have not increased since the voters approved video gaming terminals six years ago and the liquor license fees have not been increased for at least 10 years. He added that he considers to meet the affected bar owners some time this week in an attempt to discuss the tax reform and reach a compromise.
Barry Gregory, owner of Crehan’s Irish Pub at 5500 North Belt West and the vice president of the Illinois Licensed Beverage Association commented that he will attend the meeting with city officials in order to present his stance on the matter. Gregory and seven other people involved in the bar industry urged the city officials and the mayor to step back from their plans to raise the video gaming and liquor license fees.
It is interesting to mention that the revenue is shared between the bars (that get 35% of the gaming revenue), the distributor (that gets 35% of the gaming revenue), the state (that gets 25% of the gaming revenue) and the city (that gets only 5% of the gaming revenue).