A small village in Illinois has big ideas about how it should tax the video gambling terminals (VGT) within its borders. Sugar Grove may raise the annual fee paid by the shops where the machines are located. The Sugar Grove Village Board has already discussed the possibility of imposing an annual fee of $250 per machine, according to the Chicago Tribune. This would be a significant increase over what is currently paid. Next month, the board will vote on the matter.
Sugar Grove to Sweeten its Coffers With New Gaming Tax
According to Sugar Grove Village President Jennifer Konen, the village’s annual fee is currently $25 per machine. She said that $25 for the extra terminals in the village “wasn’t worth the paperwork” required to process the fee. She added, “But I look at gaming like I do a liquor license and we do charge for that. It’s my job to look at different revenue streams and bring it to the board for discussion.”
The village has four video gambling sites. Three of these have six VGTs each. The fourth has five. Sugar Grove Finance Director Matt Anastasia wrote a memo to his board. He noted that the village could generate up to $5,750 annually if the maximum fee of $250 per terminal were implemented.
Anastasia pointed out in his memo that although revenue from video gaming took a hit at the height of the pandemic, it has enjoyed a relatively strong rebound.
He added, “As expected, annual video gaming revenues for the 12-month period of November 2019 through October 2020 were down due to state-mandated COVID closures.” He explained that, with the exception of one of the locations, all “had a 25% drop in video gaming revenue for November 2019 through October 2020 versus the prior period.”
Anastasia stated that revenues have more than made up for the loss and rebounded at 40% above the base period of 2018-2019.
VGT Owners Clap Back
As would be expected, owners of the shops where the VGTs are located aren’t happy with the idea. Ray Awad, the owner of the Grove Stop gas station, stated that he believes the village is seeking money from any source now. One of those sources is video gaming.
Awad stated, “The video revenue is going up because we’ve been there for a while. If this is the case – the fees are going up – it may be because we’re starting to get more customers.” Although he doesn’t want to see the increase arrive, he confirmed he would pay it if necessary.
Konen stressed that the proposed fee increase is a way to generate revenue for the municipality without turning to an increase in local taxes across the board. “If you choose to play, if these establishments want these machines, then there’s the cost of doing business. Given the costs of all things that you’re charged to run your business, based on return, this would not be a huge cost to doing business in this case,” she asserts.
Konen acknowledges that the almost $6,000 Sugar Grove will receive per year as a result of the fee hike doesn’t seem like much, but it does make a difference to a village of its size. According to the US Census Bureau, the village has approximately 9,689 inhabitants.
It isn’t clear when the final decision on the rate increase will be made.