ACTION REQUESTED:
Title
Communication from the City Manager and Corporation Counsel with a Request to ADOPT an ORDINANCE Amending Chapter 18, Article IV, of the CODE of the City of Peoria Regarding the OPERATION OF VIDEO GAMING TERMINALS.
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BACKGROUND: On August 26, 2014, the City Council, in response to citizens’ concerns relative to the proliferation of Video Gaming Cafes, held a policy discussion. During the policy discussion of this topic, there were concerns regarding the business model presented by proposed video gambling cafes. The business model for these video gambling cafes is to have the sale of alcohol only as an accessory to the business of operating a gambling establishment. This turns upside down the purpose of the Video Gaming Act which was to allow video gaming machines in qualified liquor licensed businesses, not to add a very minuscule sale of alcohol as an accessory to gambling establishments. The legislative intent of the Act, was to support existing businesses by supplementing their income with video gaming.
Thereafter, in furtherance of this legislative intent, the City Council adopted on April 28, 2015, the current requirements to obtain a video gaming license from the City. Currently, pursuant to Section 18-99, a new applicant must generate 80% of its revenue from the sale of food or beverages for two years prior to obtaining a video license. Secondly, in order to maintain a video gaming license, the license holder must make at least 60% from food and beverage sales.
On January 8, 2019, staff presented an ordinance on first reading that:
1. Established an annual $1,000 license per machine (up from the current $500) for bar and restaurant owners offering video gaming. The license would be prorated for two months, to February 28, 2019, and then be an annual license thereafter from March 1;
2. Established an annual $1,000 terminal operator license for the owners of the machines;
3. Established a prorated scale for food and beverage sales linked to the number of video gaming terminals that an establishment could maintain; and
4. Current establishments and video gaming license holders be allowed to open a new location in the City and have a video gaming license without the two year waiting period as long as the new establishment is similar to the establishment currently operated by owner; and
5. Bowling alleys would be exempt, similar to fraternal and veteran’s organizations.
At the last Council Meeting there was little support for an increase of the license fee charged to bar owners for individual gaming machines. Therefore, this license fee will remain at $500.00 per machine. The imposition of a $1,000 terminal operator license is proposed in the ordinance. Current existing establishments and video gaming license holders will be allowed to open a new location in the City and have a video gaming license without the two year waiting period as long as the new establishment is similar to the establishment currently operated by owner. Bowling alleys would be exempt, similar to fraternal and veteran’s organizations. Finally, the consensus from Council was to enforce the current 60% threshold, instead of prorating the number of machines based on the percentage of food and beverage sales.
FINANCIAL IMPACT: The City will recover approximately $269,000.00 per year.
NEIGHBORHOOD CONCERNS: None
IMPACT IF APPROVED: The City will be furthering the intent of the Act and will receive $269,000.00 per annum.
IMPACT IF DENIED: The City will not be furthering the intent of the Act and will not receive $269,000.00 per annum.
ALTERNATIVES: N/A
EEO CERTIFICATION NUMBER: N/A
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL’S 2017 - 2032 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Financially Sound City
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Support sustainability.
2. Have an efficient government.
DEPARTMENT: Legal