The Streator City Council agreed to draft an ordinance to ban non-licensed video gambling machines, referred to as sweepstakes machines.
City Manager Scot Wrighton said Tuesday an ordinance won't come before the City Council for vote until its January meeting at the earliest, because it will take some time to review the legal language in the ordinance.
Police Chief Kurt Pastirik said he believes three taverns in Streator have sweepstakes machines.
These machines operate similarly to the state-licensed slot or video poker machines, among other games of chance, with cash prizes, but the businesses don't pay a share of the profit to local or state governments. The profits stay with the businesses and the machine vendors.
Licensed video gambling businesses must pay 25 percent of profits to the state and 5 percent to the local government.
The Illinois Gaming Board has said sweepstakes machines are illegal but there are legal roadblocks in removing them. Local governments, however, can create an ordinance to prohibit them while keeping the legal ones around, and some Chicago suburbs have done so, Wrighton said. The City Council reviewed Flossmoor's ordinance as an example.
Mayor Jimmie Lansford said he was against sweepstakes machines, because they are unfair to the businesses that follow the state's regulations.
Lansford said the taverns in Streator that have the non-licensed machines have them because they don't qualify for the legal machines.
"Right now, the majority of the liquor license owners are playing by the rules the state has set up," said Lansford, who also is the city's liquor commissioner. "If they're going to be inundated with other locations of these sweepstakes machines then at what point and time do they say 'Why should I have the video gaming machines where I have to pay the fees and they are regulated?' "
"It's unfair competition," the mayor said.
The City Council also agreed it takes away from the city's share of the gambling revenue. From the beginning of 2018 to October, the city has received $228,230.98 from 157 licensed machines at 34 establishments.
Council members also brought up concerns the sweepstakes machines are unregulated. There's no age limit for players, no limits on the number of machines or requirements for the types of businesses that can have them. There's also no regulation on how fair the machines have to be.
"There's no background checks on the operators of the machines from the people that are putting them in their establishment," said Councilman Ed Brozak. "The businesses that own them or install them don't have any kind of license. There are problems that come out of that. I'd rather the establishments have background checks and the people that own the machines have background checks by the state."
A lawyer told the Chicago Sun-Times, which wrote a feature on sweepstakes machines this summer, the non-licensed machines are legally no different than any other corporate sweepstakes, because users have the option to play the machines without wagering.
Another difference between sweepstakes and video poker machines, the article noted, is sweepstakes machines issue winners coupons, which can be exchanged for prizes instead of cash.
The City Council hasn't talked about how it will enforce an ordinance, but it may fine businesses, or revoke city licenses, among other options. Wrighton said the city will look at what other communities have done before the council decides.