In an effort to balance the needs of businesses with what Morton Grove’s mayor said was a desire to not have businesses with gaming as the sole focus, the Village Board has increased the maximum amount of revenue businesses can generate from video gaming to 50 percent of their gross revenue.
Village staff recommended the increase, from the previous limit of 30 percent, after gaming license holders complained it is hard to cap their gaming revenue at that lower level.
“Reputable establishments holding liquor licenses which allow for video gaming have notified the village that they will have difficulty meeting the requirement for video gaming income to be no more than 30% of the establishment’s gross revenue,” Village Administrator Chuck Meyer wrote in a report to the Village Board.
Trustees voted 5-1 to approve the change, with Trustee Janine Witko casting the sole vote against the measure.
“I worked with staff to narrow the percentage,” Witko said before voting. “This change seems contradictory to me, so I’m going to vote no.”
Village President Dan DiMaria said Morton Grove chose to limit the portion of revenue a business can make from gaming to make sure the village does not allow establishments in which gaming is the primary focus of the business.
“First of all we want businesses that can stand on their own that don’t need gaming,” DiMaria said. “That’s kind of where that comes from. We’re not into gaming parlors. We don’t want that either. We’re looking for appropriate places to have gaming. By reviewing this, we feel we’re setting up ourselves for success in the places it should be.”
In his report, Meyer said the change will provide “greater flexibility” to existing and future businesses providing video gaming to their customers, “thereby ensuring their ongoing compliance and success, while maintaining control to ensure video gaming is not the businesses’ primary revenue source.”
“The significance is that it will help refine the structure to ensure the business’s primary use aligns with their primary revenue source,” he said later by email.
Meyer said the concerns raised by video game license holders suggested that other communities allow higher percentages of video gaming.
“Their questions were geared more towards other communities’ standards that speak to the 50 percent standard and (are) similar to other aspects of the village code that require restaurants to derive 50 percent of their revenue from food sales and bars to derive 50 percent of their sales from alcohol sales,” he said.
Witko said that when Morton Grove approved video gaming, she pushed for clarification on the maximum percentage of such revenue that businesses would be permitted to generate.
“We came up with 30 percent,” she said. “To turn around and approve 50 percent … I did not want to go back on it.”
Witko said she understands the use of video gaming as an economic development tool, but she doesn’t want gaming to negatively affect the village.
“We don’t know the impact,” she said. “I don’t want Morton Grove to become a place where we’re half gambling and half restaurants.”
Witko referred questions about the impact of gaming on the village to Morton Grove staff.
Meyer, who took over as village administrator on July 1, said, “I am not aware of any crime problems related to video gaming in Morton Grove since I started.”
Asked if he had received feedback regarding the increased percentage of gaming allowed, Meyer suggested the change will not increase gaming in the village.
“The modification of the maximum income received by the licensee should not directly impact the percentage of gaming within the community,” he said. “The number of businesses that have video gaming would not increase as a result of this legislation.”
Currently, 11 businesses have received video gaming licenses in Morton Grove, Meyer said.
Businesses report their gaming revenue on an annual basis and their food and beverage revenue on a monthly basis, Meyer said. They also receive regular reporting from the state on their gaming revenue, he said.
“As they get closer to that time of year, they will know in November or December if they are trending toward (exceeding gaming revenue limits),” Meyer said.
