Video gaming is allowed in Illinois but subject to various state licensing regulations, state taxation, and local control. To obtain a video gaming license, an establishment must have a liquor license, meet certain state licensing regulations, and pay state gaming taxes, among other requirements. One business attempted to get around the video gaming statute by installing what was referred to as a “sweepstakes” machine. These machines allow cash play but also include a “free play” mode.
Recently, an Illinois Appellate Court found that these sweepstakes machines fall under the state video gaming law and, therefore, must comply with the licensing and tax requirements. In Clair v. Hanover Park, a municipality had cited a business for operating video gaming machines without the proper licensing and payment of taxes. The business argued that because the machines included a “free play” option, they did not fall within the video gaming statute. The Village countered that the statute and Village ordinance applied to any game of luck or chance that involved the insertion of cash or coupon. In this case, the Village had inspected the machines and determined that they accepted cash to play a game of chance, which could result in the receipt of credits that were redeemable for cash at the register.
The court reviewed state law and the Village’s gaming ordinance and agreed with the Village that the machines were video gaming machines subject to compliance with the licensing and taxation requirements for these machines. The fact that the sweepstakes machines contained a “free play” mode did not exempt them from the gaming statute since players can insert money into the machine, play a game of chance, and receive credits that are immediately redeemable for cash, making them video gaming terminals under state statute.