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player ready...At Tailgaters’ expansive sports bar in Bolingbrook,patrons can bet $2 every few seconds on touch-screen, bingolike games while sipping their beers and watching TV.
That would be illegal in other towns. But not in Channahon or Bolingbrook.
Officials in those towns have given their blessings — deeming the video gambling machines to be “charity raffles” under local control — by using a state law created decades ago to allow Boy Scouts and church groups to raffle off prizes.
These modern versions of the raffle — with names such as “QuickShot McDraw” and “Bing O’Lucky” — represent a new step in Illinois’ legal dance with video gambling in bars.
It has always been illegal to pay winnings on video gambling machines in bars, though the shady practice flourished for years with the help of organized crime. The state is now working on ways to tax and strictly regulate the games.
The southwest suburban ventures sidestep that state regulation even as private companies collect most of the cash. The local laws don’t specify how much charities should get. In one case, the charity money is actually going to a public works project. In another, proceeds go to a social service agency led by the village clerk.
The concept bothers state Rep. Lou Lang, who has spearheaded gambling legislation. When told of the games, he said, “this is not what the law contemplated.”
“At first blush, it sounds like they are skirting the law even if it is legally skirting the law,” said the Skokie Democrat.
If the machines spread, they could be a boon to charities and local governments across the state. Joliet recently was asked to allow the games in as many as 30 bars.
Town officials and the private companies marketing the games say they are not akin to slots at a casino or video poker in a bar, but constitute something different: a “raffle machine.”
“It’s the same as if you would go to your church and buy a raffle ticket,” Channahon attorney Dave Silverman said of the video gambling at Mugz’s Hideout.
In 2009 state lawmakers decided to legalize and heavily regulate video gambling and tap the profits for public works projects. But that system has yet to get off the ground as regulators work to vet scores of companies and create the computer system to track every wagered dollar.
Under the Bolingbrook and Channahon raffle rules, only the charities are licensed. There are few standards set for how the games should function.
Told of the games, law enforcement agencies had little to say. The Will County state’s attorney’s office hasn’t looked at the issue, saying it hadn’t gotten any complaints.
The state revenue department oversees charity gambling. But spokeswoman Susan Hofer said the law is “very complicated” and noted raffle licensing is up to the towns.
Key parts of the state raffle law, approved in 1980, have changed little through the decades. The law loosely defines a raffle as “a form of lottery” and provides guidelines apparently aimed at ensuring the raffles are run by the not-for-profits they chiefly benefit.
Lawmakers made clear what they had in mind at the time: churches, PTAs and other nonprofits selling raffle tickets to raise money.
“All it allows is raffles and chances as we know them, a slip of paper in a hat or in a box and somebody draws a number and somebody wins,” state Rep. E.J. “Zeke” Giorgi told colleagues at the time. The Rockford lawmaker died in 1993.
In 2009 Bolingbrook officials approved local rules that combined the state law with new definitions for “raffle device” and “raffle machine” while imposing a local tax of up to 10 percent. Channahon followed suit in 2010.
“We’re certainly supportive of anything that can bring in revenue,” said Channahon Mayor Joseph Cook. “If we thought that we were skating on the edge of legal and not abiding by the law, we would have never done it.”
Cook has been in the news lately, both for his role in reportedly helping businesses skirt Chicago and regional taxes, and for pleading guilty last fall to not filing income taxes.
Bolingbrook Mayor Roger Claar, a Republican power broker in the region, didn’t return phone calls or emails seeking comment. Bolingbrook’s veteran village clerk, who helps run a not-for-profit benefiting from the games, said the town just wants to help charities.
“It’s not like they are in a ton of places,” said Carol Penning. “It’s just a revenue stream for a not-for-profit.”
In both towns, it is Joliet-based Bar Stool Gaming and Nebraska-based Video King at the center of the effort. Video King makes the games, and Bar Stool Gaming distributes them.
Bar Stool Gaming CEO John Martin said his company acts as an “agent” of the charities, which he said collects the money and writes the checks to all those involved.
A proposal Martin submitted to Joliet calls for 50 percent of proceeds to be split between Video King and Bar Stool Gaming, while the charities would get 25 percent and the bars 10 percent. Joliet’s tax would be 15 percent. Martin said the breakdown is similar in Channahon and Bolingbrook.
Channahon made about $1,200 in roughly 18 months, said Village Administrator Joe Pena. Bolingbrook has collected $6,400 in about three years, said town finance director Rosa Cojulun. “It’s not a big revenue generator,” she said.
Martin said it was his idea to use the raffle law to allow the machines in bars so charities and towns could raise needed revenue.
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“We want everything to be aboveboard,” Martin said.
A representative from Video King bristled at comparing the games to video poker or slot machines. Sales manager Will Stewart said it is an electronic version of pulling a raffle ticket out of a box and seeing if it matches a pre-determined set of numbers.
“We followed the rules and regulations as we understand them,” Stewart said. “Our focus is to help the charities.”
Games in Bolingbrook and Channahon allow bets ranging from a nickel to $2.25 on games that can pay out as much as $1,000. Bettors pay the bartenders to load credits on the machines and can cash out winnings.
The towns decide which charities can participate. In Channahon, the money isn’t going to a traditional charity.
Will County officials said $6,700 has gone to the Forest Preserve District — via a nonprofit — to help build a boat launch for rescue workers on the Des Plaines River. Mayor Cook called that a “win-win” because it still “improves the quality of life for people,” like a food pantry.
One of the chief benefactors in Bolingbrook is the Community Service Council of Northern Will County, a social service agency whose board president is Penning. The agency collects about $1,000 per month, which Penning said allows it to cut back on other fundraisers.
“I hope that (other communities) do adopt it because, like I said, for those of us who are trying to manage not-for-profits, it helps because fundraising is hard,” Penning said.
That money comes from machines at Tailgaters, a large sports bar that boasts more than two dozen flat-screen TVs, food and a professionally lighted stage.
Tailgaters owner Bob Zalewski said he was initially apprehensive about the legality of the machines, but charity and city officials reassured him.
“People ask me if it’s legal,” Zalewski said. “I say, ‘Yeah, it’s legal because I don’t run that kind of business.'”
After successes operating in Bolingbrook and Channahon, Martin has set his sights on their bigger neighbor: Joliet.
Projections that Martin gave the city show it could make an extra $216,000 a year in taxes on machines in 30 bars. The charities could nab $360,000. Bar Stool Gaming and Video King would get a combined $720,000. Joliet officials have yet to decide.
Martin said that eventually, he would “love to have the conversation” with Mayor Rahm Emanuel about bringing charity raffle machines to Chicago.