The City of Chicago has chosen not to utilize Illinois’ legalization of video gaming terminals (VGTs) since July 2009, following the signing of the Video Gaming Act by Gov. Pat Quinn (D). Sixteen years later, with Chicago facing a financial crisis, Mayor Brandon Johnson (D) is softening his resistance. 

The Video Gaming Act permits retail stores, restaurants, bars, truck stops, and veterans' or fraternal groups to host slot-like machines in municipalities that haven’t opted to ban this type of gaming. Most small businesses can operate as many as six VGTs, whereas truck stops can operate as many as 10. 

Currently, Illinois has nearly 50K VGTs, with these games available in the majority of counties and cities. The largest exception has consistently been Chicago, the most populated city in Illinois. 

Confronted with a large debt load, a substantial pension obligation issue, ongoing budget deficits, and increasing expenses, along with escalating demands from legislators to explore VGTs, Johnson mentioned this week he is receptive to the proposal of permitting the gaming devices. Johnson enjoys considerable support within the 50-member Chicago City Council, which has no Republican members. 

 

Bally’s Influence 

Bally’s Corp. is set to be the financial rescuer of Chicago. The firm is in the initial stages of building its approximately $2 billion initiative to create an integrated resort casino at the old Chicago Tribune printing facility. 

Income generated by Bally’s casino and related resort activities is set to significantly enhance city funding, despite the company’s temporary casino at the Medinah Temple underperforming compared to initial market expectations. 

Bally's is the sole casino located in Chicago itself. Permitting VGTs throughout the city might deter certain slots players from visiting the River West area, where the permanent resort will function. 

Johnson is not wholly supporting VGTs, since the devices mainly advantage the state. However, he is "receptive."

"I’m open. I’ll just say it like that, right, because the work that we have to do to continue to build a safe and affordable city requires us to make critical investments,” Johnson said of VGTs during a press conference this week.

“As long as people are willing to participate in that form of entertainment, it’s an opportunity for us to secure the revenue that’s needed,” Johnson reasoned.

The state retains 30% of a VGT's total revenue, whereas the hosting municipality receives only 5%. The host facility and terminal operator share 64.08% of the funds equally, while the leftover 0.92% is allocated for administrative expenses faced by the Illinois Gaming Board. 

On the other hand, Chicago obtains approximately 12.3% of the casino gaming revenue from Bally’s. 

 

Chicago Is Already Reaping Advantages From VGTs 

Although Chicago prohibits VGTs, the city significantly benefits from the slot machines functioning in other parts of the Land of Lincoln. 

The state's VGT tax advantage aids the Capital Projects Fund and Local Government Video Gaming Distributive Fund. The latter is accessible solely to municipalities permitting VGTs, while the former is open to all towns. 

Managed by the Illinois Department of Commerce & Economic Opportunity, the Capital Projects Fund was established in 2020 as part of the state’s “$45 Billion Rebuild Illinois Plan,” which also approved Chicago’s downtown casino and five rural casinos in suburban areas.