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5 Chicago Southland Towns Okay Taxation on Video Gambling
By Jeff Osienya Nov 05, 2021 LegalityFive towns and villages in the Southland Chicago region have given the green light to a penny-per-play taxation legislation on video gambling terminals. Oak Lawn village first enacted the regulation in 2020, but the law is currently facing a lawsuit.In special proceedings on Sunday, five Southland towns in Chicago, Illinois, rubberstamped new taxation on video gambling. The village boards and city councils conducted the weekend approval activity in meetings to okay penny-per-pay taxes on video gambling machines. This exercise was carried out on a weekend so that the five times would abide by a Monday deadline set by the General Assembly of the Prairie State.
According to reports published by the Chicago Tribune, the five Southland towns whose boards and city councils approved the video gambling machines tax are University Park village, South Chicago Heights, Markham, Dolton, and Calumet City. But then, even though South Chicago Heights passed the new tax, the village has moved to take a rain check on enacting the said regulation. Meanwhile, the trustees of Homer Glen village rejected the penny-per-play taxation measure.
The Video Gambling Tax Regulation Still Faces Legal Hurdles in Some Towns
It’s important to point out that the tax measure for the video gambling machines was first enacted by the Oak Lawn village nearly two years ago, on January 1st, 2020. About two months after the enactment, operators of video gambling terminals moved to contest the regulation, and legal actions are still unresolved to this day. Nonetheless, a week ago, the Illinois House and Senate also okayed legislation that gave municipalities the mandate to ratify the new taxation, as the regulation awaits Governor J. B. Pritzker’s signature.
Based on the arguments presented by the Illinois Gaming Machine Operators Association (IGMOA), the penny-per-play tax violates the Video Gaming Act in the Illinois constitution. IGMOA is the Prairie State’s industry trade body formed to represent and protect the interests of operators of video gaming terminals.
The trade group further claims that the new taxation plan would cost them too much money to implement on top of being technologically complicated. Besides, a smaller outfit of village businesses across Illinois came forward in the Sunday meetings to protest that the new tax would negatively affect their business operations. Additionally, video gambling machines venues such as bars are still suffering the damage caused by the COVID-19 pandemic. Many of these venues will be forced to lay off workers or cut down on operating hours just to meet the demands of the penny-per-play taxation.
Some industry experts in Illinois’ commercial gambling space have also argued that should the gambling tax be imposed, gamblers could potentially be driven to villages and municipalities that offer the video gambling terminals but haven’t approved the tax regulation. As for other towns in the Prairie State, the pending litigation has delayed action on introducing the tax.
No Way of Knowing How Gov Pritzker’s Approval Will the Pending Suit
The lawsuit against the penny-per-play regulation, dragged to court in March 2020, was an injunction to bar the Oak Lawn village from enacting and enforcing the law. This legal challenge also sought to block the village from collecting push tax revenue from the video gaming terminals.
For clarification’s sake, what this measure does is that it designates the owners of the machines as tax collectors, even though the actual burden of the tax falls on the gamblers. Therefore, owners of the devices are held liable for counting the number of pushes or individual games that gamblers play. Subsequently, the owners must also file appropriate documents and submit the tax payments to the municipality.
Mike Pappas, an executive of Accel Entertainment, a video gaming terminals operator, described the taxation as “a bad idea now and will be a bad idea in the future,” according to a report by the Chicago Tribune. Accel Entertainment is one of the plaintiffs of the IGMOA legal challenge that’s currently pending in court.
In the correspondence with the local media house, Pappas also indicated how painstaking it would be to introduce software that deducts a penny for every time a gambler pushes the play button – even though the process has a feasibility potential. For now, however, it still isn’t clear how the pending lawsuit will be affected should the governor sign the penny-per-play tax measure into law. Nevertheless, the Accel Entertainment executive expressed confidence that his team would win the litigation
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