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Bar owners oppose Preckwinkle's proposed tax on gaming machines

County prez estimates charge would yield $1.2M a year

By Laura Bollin

The Cook County board president’s proposed tax on video gambling has some area bar and restaurant owners worried they will not make any money from gaming machines.

Cook County Board President Toni Preckwinkle has proposed each owner of an establishment that offers video gambling pay an annual tax of $1,000 tax per slot machine and $200 per video poker, blackjack or line-up machine. The tax would be just greater than the average single-day revenue produced per machine in Illinois, Preckwinkle stated in a press release. The proposed tax would generate an estimated $1.2 million in 2013 and “would help Cook County invest in public safety and criminal justice programs to combat the impacts of gambling addiction,” the release states.

Area business owners, however, are not so sure the proposed tax is a good idea. Ken Mandernach, owner of Murphy’s Bar and Grill, 9247 S. Cicero Ave., in Oak Lawn, said the tax would take more money from him than his business can afford. Murphy’s has five video machines and would under the terms of the tax pay $1,000 per year.

“It would affect us tremendously,” Mandernach said. “It would be terrible. For revenue from the machines so far, we’re getting maybe $100 a day. Now, they just want more money. If you give them more, they’ll just spend more and they’ll want more next week.”

Mandernach had hoped his machines would together generate about $1,000 a week. According to the state law governing video gambling, income generated by a gaming machine is divided between the state, the municipality in which the machine is located, the business, the distributor of the machine, and Scientific Games. The state collects 30 percent, of which the municipality gets 5 percent, and 69.3 percent is divided equally between the business and distributor, for example the Chicago Gaming Company. The remaining .7 percent goes to Scientific Games, builder and maintainer of the Central Communications System that will regulate and track how the money is wagered and won.

“We made the deals with the vending company and the state already, and everyone was told how much they were going to get,” Mandernach said. “Now, after the machines are in, the county wants a piece of it. I don’t think that’s right.”

Kathy McKinney, owner of Jesse’s Tavern, 10501 Ridgeland Ave. in Chicago Ridge, said she’s disappointed in Preckwinkle’s proposal. Jessie’s has five machines that have not been turned on yet.

“I’m a tavern owner, and we are a small business,” McKinney said. “They are not giving us a chance to even make any money. They don’t even know what is going to happen, and they’re already raising the taxes. It’s incredible. We don’t even have any idea how it is going to go, and they’re adding to the taxes.”

Video gaming went live Oct. 9 after the Illinois Gaming Board approved the installation of video gaming machines at 324 establishments across the state. The machines can be installed at places where liquor is served as well as fraternal organizations, VFWs and American Legions, and truck stops. Each establishment is allowed to have as many as five machines.

In addition to Murphy’s and Jessie’s, area establishments with video gaming machine licenses are Palos Lanes, 11025 Southwest Highway in Palos Hills; Great Wall Chinese Restaurant, 8110 W. 95th St., and Janosik Banquets, 9126 Roberts Road, both in Hickory Hills; Nickobee’s Banquets, 10555 Southwest Highway in Worth; and Lucky’s Lounge, 6605 W. 95th St. in Chicago Ridge.

More than 35 establishments in Oak Lawn, Palos Hills, Hickory Hills, Evergreen Park and Worth have applied for video gaming licenses, but have not yet been approved, according to the Illinois Gaming Board’s website.