State’s share of video-gaming pot shrinks for first time in April

SHARE State’s share of video-gaming pot shrinks for first time in April

There’s no such thing as a sure bet. 

Not even when it comes to Illinois’ burgeoning video gaming industry. 

For the first time since slot machines began to appear in bars and taverns across the state in summer 2012, video gaming recorded its first month-to-month drop in tax revenue last month. Illinois’ cut of the industry’s profits fell about 2 percent in April from March, records show. 

That decrease in revenue amounted to about $300,000 less in taxes paid. And that’s despite the continued rise in the number of video gaming licenses in Illinois, which grew 4.5 percent from 15,667 in March to 16,380 in April. 

But individual machines still took in about $106.45 in net income on a per-day basis — above the monthly average of $96.16. And the tax revenue collected last month outpaced February’s numbers by about 19 percent. 

The bottom line: Video gaming experienced only its second-best month in April. 

In 2013, tax revenue from video gaming grew 8 percent from March to April, but that was eight months after the first video gaming licenses were issued, at a time when the industry was still growing rapidly. 

Mark Ostrowski, the Illinois Gaming Board’s administrator, said revenue from Illinois’ casinos was also down compared to April 2013. Casino owners have complained the market has been saturated by video gaming, though. 

Alfonso “Izzy” Izquierdo also thinks the machines are beginning to flood the market — one reason he thinks his Izzy’s bar in Joliet saw its video gaming business slow down last month. 

State records show video gaming revenue at the bar — one of the first in the state to feature the machines — fell about 46 percent in April from March. Izquierdo disputes that and said business dropped 30 percent, tops. But he said that’s not simply because people went elsewhere to try new machines. 

April means warmer weather, Izquierdo said. And taxes.

“A lot of people need to pay their taxes,” he said.

Zack Stamp, lobbyist for the Illinois Coin Machine Operators Association, said the warmer weather could be the real culprit. He said he wouldn’t be surprised if the trend continues this summer. 

“Our guys are not surprised, discouraged or anything else,” Stamp said. “They think the players were taking the time with the weather getting better to get out and do stuff.”

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