At a time when riverboat and casino gambling is under extreme regulation, video poker is virtually free of governmental eyes–thriving in Chicago’s taverns, restaurants, barber shops, fraternal halls and just about anywhere entrepreneurs can plop down a video machine and a stool.
But that carte blanche era of excess for video poker purveyors soon may be coming to an end.
Chicago city lawmakers are cracking down on the highly addictive pastime that lures its victims with visions of endless free games and big-money payoffs. That action has set up a courtroom showdown next month between city authorities and the video game industry, which is fighting the new restrictions.
And federal investigators have a probe under way of one area organized crime figure trying to control the video poker industry in Chicago, law-enforcement sources said.
“I know a guy, a retired widower, who was losing $400 to $500 a week playing video poker,” Cook County Sheriff Michael Sheahan said. “It’s no longer fun if you are losing your paycheck. And where is the money going? Not for education. Not for tax relief.”
Video poker games have become cash cows for some bars, turning benign neighborhood gathering places into makeshift gambling houses, law-enforcement authorities say. A single, busy machine can gobble up as much as $100,000 per year.
The machines themselves are not illegal and can still be used for amusement purposes. But some taverns, authorities said, are using the devices for gambling, secretly paying their players for credit points accumulated or for tickets spit out by machines equipped with so-called double-counters.
In April, with little fanfare, the City Council approved an anti-gambling ordinance that gives law-enforcement authorities far more power to regulate establishments that use video machines for illegal gambling. The new law, on hold because of the court challenge, more broadly defines an illegal gambling machine, levies heftier fines on managers and players of the games and effectively puts a tavern out of business after a third gambling violation.
Ald. Eugene Schulter (47th), who sponsored the ordinance, describes the machines’ proliferation in recent years as “an epidemic.”
Specifically, the ordinance allows police to seize and impound video poker machines that tally credits and allow for more than 10 replays or free games–machines authorities believe are used for gambling. It also raises fines from $500 to $5,000 on owners and strips the establishment of its city business license after the third violation within five years. Fines on players of the machines also double from $500 to $1,000 under the new law.
But some tavern owners and game distributors are fighting back. They said city aldermen have crafted an ordinance that is vague and, in effect, outlaws all video games in the city, including video golf and video trivia, games which also tally credits for players.
They have obtained an order temporarily barring enforcement of the Chicago ordinance, pending a test in Cook County Circuit Court on Sept. 15.
“We think they are trying to destroy all the small taverns in the city,” said Leonard Des Jardins, an attorney for one distributor, Video Magic Operators Inc. “This (ordinance) is one arrow in the quiver.”
No one really knows just how much cash is generated by video poker devices, even though they’ve been dealing electronic cards to players for nearly 25 years in Illinois.
That’s because, unlike charity bingo games or riverboat casinos, the games aren’t taxed or otherwise regulated, something their critics charge invites organized crime and tax fraud through under-reporting of income.
Video poker machines, said Steven A. Hirsch, chief of the state revenue department’s bureau of criminal investigation, are a ready convenience for gamblers.
“Instead of going to the riverboats or elsewhere, some people simply walk to their neighborhood tavern,” said Hirsch, whose agents have mounted a continuing two-year crackdown on video poker games in 17 Illinois counties, including Cook County.
“They’re low-maintenance money makers,” explained one Chicago tavern owner, who pays his rent and utility bills from a 50-50 split of earnings he shares with a game distributor. “And you don’t have to pay them a salary or listen to their complaints.”
Nearly 100,000 game machines are licensed by the state, but it’s uncertain how many are video poker machines used for gambling.
The state requires just a $15 amusement fee per machine. The games also are licensed by communities that allow them as amusement devices. But such community fees, which run up to $100 per device, are pennies when contrasted with the massive profits the machines can generate.
The video poker industry has also attracted the attention of federal investigators. Sources said a probe is under way of one Chicago-area organized-crime figure who controls the industry in Cook County.
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Federal investigators learned just how lucrative the industry could be when they investigated former Northlake Police Chief Seymour Sapoznik.
Sapoznik pleaded guilty in 1997 to accepting bribes from organized crime figures to help protect the video poker machines in Northlake and Stone Park, where Sapoznik was also a policeman.
According to court documents, a dozen bars in the two suburbs generated more than $6 million in profits during a 14-year period that Sapoznik was on the take.
Joseph “Doves” Aiuppa, the late Chicago crime syndicate boss , introduced video poker gambling to northern Illinois in the mid 1970s, authorities said.
Veteran mob watcher Don Herion, head of the Cook County sheriff’s covert gambling squad, said Aiuppa’s forces controlled distributors and dictated how player losses would be divided among them and the owners of taverns, sandwich shops and all-night grills.
Mental health professionals who treat gambling addictions also criticize the machines. An 18-month study of video poker in Peoria, for example, showed a range of social and legal problems associated with the games, which the study found are dangerously addictive.
“Most of the players who spend hours at the machines do so to escape problems at home or in the workplace,” observed Henry Lesieur, president of the Rhode Island-based Institute for Problem Gambling.
“There is the illusion you control the game, (but) in reality it is (played) on an unpredictable basis,” he added. “You become delusional. As the speed with which the game is played increases, excitement builds. People talk to them (the machines) and actually give them names.”