Time is running out to pass Illinois virtual casino legislation this session.
VGT operators are strongly opposed to bills in the House and Senate that seek to expand online casinos, citing concerns about cannibalization.
At a House Executive Committee meeting held in late April, advocates and opponents of online casinos debated their positions.
Ultimately, it became clear that the biggest barrier to the legalization of online casino gaming in Illinois is the VGT industry.
Let’s explore the reasons why operators of Illinois VGTs are opposed to the expansion of online gaming.
In Illinois, what are VGTs?
VGTs are like the slot machines found in video games. They can be located at:
- Child pleasure stores
- Bars
- Fraternal organizations, meeting venues, lodges, and the like.
- petrol facilities
- wine shops
- Nightclubs
- Restaurants
- Taverns
- Vehicle halts
- Some examples are soldiers, businesses, and meeting venues such as VFW halls.
There are close to 40,000 VGTs located in Illinois.
These companies have the potential to generate extra income by utilizing VGTs.
In the month of April, VGTs in Illinois brought in close to $70 million in tax revenue for the state.
Even though there are a large number of Video Gaming Terminals (VGTs) in Illinois, many companies that own them are not making a profit. Nevertheless, VGTs are providing an extra source of income for bars and restaurants that are still struggling due to the COVID-19 pandemic.
There is a conflict between online casino supporters and VGT users.
VGT providers are afraid of cannibalism and rsquo.
In the House meeting discussing online casinos and VGTs, witnesses frequently brought up the concepts of “cannibalization” and “ldquo”.
VGT users are concerned that players may choose not to play at them because of similar game options available in legalized online casinos.
In August, State Sen. Dave Syverson provided insight to Play Illinois on the reasons behind potential significant resistance to the expansion of internet gaming.
The limited number of video games available in bars and restaurants may be crucial in helping them survive, particularly in light of the harsh COVID restrictions in Illinois. Without revenue from Video Gaming Terminals (VGT), many of these establishments could be at risk of closure as they face competition from online platforms.
During the conference, State Representative Tim Butler was the most outspoken opponent of online casinos being legalized. He argued that small businesses that do not involve gaming rely on the income generated by Video Gaming Terminals (VGTs).
Butler also raised concerns about the argument put forth by proponents, which mainly focused on the idea that online casinos would not harm traditional casinos, rather than addressing the impact of Video Gaming Terminals (VGTs).
During the hearing, Jeff Kaplan, the Vice Chairman of Proper Financial Planning at Penn National Gaming, mentioned cannibalization within brick-and-mortar casinos.
Prior to the pandemic, we conducted an analysis of our customers to assess any changes in income from our physical stores. We discovered that revenue from iGaming was almost on par with revenue from in-person play.
Therefore, it is positive that brick-and-mortar businesses are backing the legalization of online casinos in Illinois. Nevertheless, Video Gaming Terminals (VGTs) continue to present a significant challenge.
Advocates for online casinos pointed out that VGT clients tend to be older than customers of online gaming in response to concerns.
Will playing at an online casino definitely cannibalize VGTs?
The million-dollar problem at hand is our inability to speak definitively, stemming from a dearth of substantial information on the matter.
This does not contain a case study that offers a direct comparison. The majority of states do not permit both online casinos and video gaming terminals (VGTs).
VGT sees the logic behind it. With the abundance of similar game choices and the widespread availability of online casino games, the connection is easy to understand.
During the hearing, opponents noted that online casino providers are focusing on a different demographic than VGT customers. Their goal is to draw more people to video games rather than to drive out the VGT market. Supporters argue that both industries can thrive together.
The State Senate has recently proposed a bill requiring a report on the possible revenue from online casinos in Illinois had internet gaming been legalized prior to the pandemic. The report must be submitted by October 1, 2021.
Although online casinos in the Land of Lincoln may be facing some challenges this session, the future appears to be more promising.
