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Oak Lawn fines video gaming operators

By Dermot Connolly
Thirteen video gaming terminal operators — in charge of nearly all the video gaming terminals in Oak Lawn — have been fined by the village for failing to comply with the new “push tax” that went into effect on Jan. 1.
The push tax imposes a one-cent tax every time a button is pushed to gamble at any of the 200 video gaming terminals scattered among 41 businesses in the village. Oak Lawn was the first municipality in Illinois to approve such a tax, which was expected to generate $1 million in annual revenue for the village prior to the COVID-19 pandemic shutdown.
The ordinance requires terminal operators to collect and remit the push taxes to the village monthly. Those who do not file accurate or complete push tax reports are subject to fines and the suspension and/or revocation of their licenses.
Oak Lawn Mayor Sandra Bury held an initial hearing on the matter in March, and action was expected to be taken at a follow-up hearing later that month. But it was postponed until July 15 due to the pandemic. A week later, on July 22, she issued $500 fines to all 40 businesses found not to be in compliance.
Only Illinois Operators, which operates the terminals in Jedi’s Garden restaurant submitted revenue and therefore was not fined.
The Illinois Gaming Machine Operators Association filed an injunction in March against the village to stop the tax from being imposed. The association maintains that The violates the Video Gaming Act and would be costly and technologically complicated to implement.
“ I don’t think they proved their case very well,” said Bury earlier this week.
She pointed out that Rick Meitzler, president and CEO of Novomatic Americas Sales, an international manufacturer and operator of gaming equipment, testified at the hearing that gaming terminals have the capacity to track total pushes or plays. He said that type of tracking already occurs, but is not monitored.
“ And he was testifying for them,” Bury pointed out.
She and other village officials maintain that as a home-rule municipality, they have the right to impose the tax. They say it is necessary because the village is getting comparatively little revenue from what is generated by the gaming terminals in town.
At an Oak Lawn Village Board meeting in February, Bury pointed to the Illinois Gaming Board’s figures that showed $16,501,382 was wagered in Oak Lawn gaming terminals in January — more than the village’s entire tax levy of $14.2 million for 2019.
However, by state statute, the village only receives 5 percent of the net income. Business owners and terminal operators each get 35 percent, and the state gets 25 percent.
The lawsuit claiming the tax in unconstitutional is ongoing, so the village may not see the money from fines for a while.
“We feel very confident about our standing on this. But it a small thing and let’s just leave it at this and get on with life,” said Bury, asserting that further legal action will just benefit the attorneys involved.

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