Gold rush
Video gambling parlors cash in
GAMBLING | Bruce Rushton
Henry Baird figured that he would do well when he decided to open up Pennies Place, a gambling parlor on Wabash Avenue.
But not this well. The five video gambling machines in Pennies netted more than $20,000 in December, Baird’s first full month in business. After paying 30 percent in taxes to the state and village of Jerome, Baird’s take totaled more than $14,000.
“It’s actually more than we thought it would be,” Baird says. “That’s the first month we opened, and we had no advertising.”
Pennies is one of hundreds of veritable miniature casinos that have sprung up throughout Illinois, much to the chagrin of anti-gambling organizations such as Stop Predatory Gambling, which last fall did the math and found that statewide more than 200 so-called casino cafes had raked in nearly $27 million since legalized video gambling outside bona fide casinos became legal in 2012.
Each establishment can have five gambling machines. They are distinct from restaurants and bars in that gambling is the main draw. In other parts of the state, they have cropped up in swimming pool supply stores, flower shops and other businesses that have convinced local authorities to grant liquor licenses, a prerequisite for obtaining a gambling license from the state, which keeps 25 percent of the haul in taxes while municipalities keep an additional 5 percent.
In the case of Pennies, Baird carved out 1,200 square feet from a television repair shop his family has owned for more than 30 years – the official licensee is Great Western TV, Inc. He also has a mailing center in the same building that’s been on Wabash since 1985.
Soft drinks and snacks are free at Pennies. A can of Budweiser costs $2, but virtually no one buys alcohol, although Baird says that he will stock any brand a regular requests. So far, there have been no requests, but there have been plenty of customers, judging from the fishbowl at the attendant’s counter overflowing with entries from folks eager to win this month’s drawing for a free television.
“It appears that this month is (up) over last month,” Baird says. “We’re on a roll.”
Pennies piggybacks on a formula established by chains with names such as Dotty’s Place, Lucy’s Place and Betty’s Place. Baird is shooting for female customers, with plenty of couch space and television screens as well as free WiFi.
“If you want to play the machines and your husband doesn’t and he wants to watch football or wants to watch ESPN or the news, he can sit here and do that, or he can sit on his computer and surf the Internet,” says Baird, who plans to offer free pizza during peak hours and also set up a theaterstyle popcorn machine.
Baird isn’t alone in offering freebies to gamblers. Coupons for $5 in free slot play have become ubiquitous in newspapers and the backs of supermarket receipts. Once the state gaming board gives the nod, Chris Stone, founder of Lucy’s Place, says that he plans to set up customer loyalty programs patterned after programs in bona fide casinos that give meals, concert tickets and other freebies to gamblers. He expects that Lucy’s Place, which has 20 locations statewide that have collectively taken in more than $2.4 million since 2012 once taxes were paid, will be the first to offer rewards such as free meals and gift certificates based on how much a customer plays.
“It’s psychology,” explains Stone, whose location in Jerome took in nearly $29,000 from gamblers in December, its first full month of operation, outperforming Baird’s parlor three blocks away. “The gamer loves the idea that when they’re playing, whether they win or lose, they’re getting points that they can redeem for more play or actual items.”
The boom is obvious in Jerome, where the number of liquor licenses went from six in 2012 to eleven in 2014, with three going to businesses set up to make money from video gambling. Not everyone thinks it is a good idea.
“I don’t think gambling is good for the area,” said Jerome village trustee Sharon McConnell, who voted against liquor licenses for the three mini-casinos. “I would rather see wholesome stuff here than all this stuff. I know we don’t need this to survive.”
The village gets 5 percent of the take, a meager amount compared to the state’s 25-percent share. It’s not a major shot in the arm, says village board president Mike Lopez, but it helps pay for services such as the village’s annual cleanup, which gives residents a chance to get rid of unwanted appliances, furniture and other items too large to fit into garbage cans.
Lopez says he doesn’t envision more gambling parlors in Jerome, but he isn’t ruling it out.
“I’m going to let it go by market demand,” Lopez says. “At this point, we’re at our limit.”
Stone says he’s not sure what the saturation point might be in the Springfield area.
“I don’t know how much more we can get into this, but there will be more,” he predicted.
Contact Bruce Rushton at [email protected].
