They look and operate like typical video gambling machines. But they’re unregulated and largely untaxed thanks to loopholes in Illinois’ gaming laws.
So-called sweepstakes machines are at the center of the latest corruption trial in Chicago.
Businessman James T. Weiss is accused of paying $32,500 in bribes to then-state Rep. Luis Arroyo between November 2018 and October 2019 to promote and vote for legislation related to sweepstakes machines in the Illinois General Assembly.
When the legislation didn’t pass, the men turned to then-state Sen. Terry Link and, according to federal prosecutors, offered him a bribe to support their bill. But Link, it turned out, was cooperating with the FBI.
Prosecutors charged Arroyo with bribery in October 2019, and a grand jury indicted Arroyo and Weiss one year later, in October 2020. Arroyo pleaded guilty and already is serving a 57-month prison sentence. Weiss’ trial began June 5.
“To an untrained eye,” sweepstakes machines look like slot machines, according to state Rep. Daniel Didech, D-Buffalo Grove, who chairs the Illinois House gaming committee. But because they also offer “free plays” and offer coupons and other prizes rather than money, Didech said, “They don’t fit into the definition of video gaming that we have in state law right now.”
State and local governments collected more than $900 million in tax revenue from traditional video gaming machines in 2022. But, because they aren’t covered by the video gaming law, no such revenue was collected from sweepstakes machines.
“No judge has ever said they’re illegal, so that’s the problem,” said Ivan Fernandez, president and executive director of the Illinois Gaming Machine Operators Association.
Weiss’ lawyers have made the point that the state can collect revenue from sweepstakes devices through an amusement tax sticker and an associated annual fee as well as through income tax.
But Didech said officials also don’t know whether sweepstakes machines “are fair to players, if it’s possible for players to win on these machines.”
State Sen. Bill Cunningham, D-Chicago, said the Illinois Senate has passed legislation three times meant to clarify the law. Cunningham said he sponsored the legislation on behalf of the Illinois Gaming Board but also as “an ethical matter.”
“Given that a public corruption scandal erupted in the General Assembly on the very topic of sweepstakes games, we in the Senate believe that a signal needed to be sent that there is no gray area on this topic,” Cunningham said.
The Senate passed one of the bills in March. Didech is its chief sponsor in the House. But he said he doesn’t expect it to be passed in its current form.
Didech said the proliferation of sweepstakes machines was the result of decisions by some local governments — notably Chicago — not to allow video gambling. Sweepstakes machines were brought in where the traditional machines couldn’t go.
Didech said that made sweepstakes machines an “unintended consequence” of Illinois’ video gaming law.
Mayor Brandon Johnson’s campaign staff made supportive comments about video gambling before his election this year, calling it “an important revenue source for critical investments in public safety, transportation, housing and other public accommodations.”
Didech said he’d prefer that sweepstakes machines become part of a “larger conversation about whether Chicago is going to opt in to our video gaming regime.”
Fernandez said traditional video gaming devices are “much more attractive” than sweepstakes machines, with technology that rivals what’s found in casinos.
“If there were a market where video gaming were allowed, [sweepstakes] would not survive,” he said.
Editor’s note: This story has been updated to reflect testimony on June 7 in the trial of James T. Weiss.