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Hoping for a jackpot

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Waterman bar owner Tom Houlahan took a gamble on video gaming and saw an immediate payout this month.

“The first weekend it was a 20 percent increase in sales across the board,” Houlahan said. “That was my whole hope for it. They would come in and play, have a couple of cocktails and have something to eat.”

Houlahan’s Tavern at 208 W. Lincoln Highway is one of three businesses in DeKalb County with video gambling terminals up and running for patrons 21 and older.

Houlahan has three machines set up, and depending on how popular they prove to be, he might add a fourth.

Houlahan estimated his sales have increased by 10 percent to 15 percent since the gambling machines came online Nov. 1. Five terminals came online Oct. 31 at the Olde Tyme Inn at 109 S. Main St. in Sandwich. Kristy Soden, the owner of Olde Tyme Inn, said they pursued video gambling machines because of the revenue and entertainment possibilities.

“We thought it would be something fun for our clients to do while they’re there,” Soden said.

Three terminals at Karlsbad Tavern, 413 W. Main St. in Genoa, came online Thursday, said owner Karl Gallagher. At least 20 other businesses are waiting to be approved by the Illinois Gaming Board, the state’s gambling overseer.

The state legalized video gambling in 2009 to allow bars, truck stops and fraternal and veterans organizations with liquor licenses to have the terminals.

But individual municipalities can set further restrictions on who can apply.

The city of DeKalb, for instance, decided in August to allow establishments with a certain liquor license to have the terminals.

State law divides up who gets the net revenue after the payouts are made. Thirty-five percent of the revenue goes to the host establishment, 35 percent goes to the terminal operator, 25 percent to the state and the remaining 5 percent to the city.

Houlahan said he liked the revenue-sharing arrangement.

“If you look at the Illinois Lottery, nothing goes to the individual community,” Houlahan said.

Gene O’Shea, a spokesman for the Illinois Gaming Board, said there’s no real timeline for an establishment to be approved for a video gaming license.

“It really depends on the complexity of ownership [of the establishment], and how they fill out the applications,” O’Shea said. “Sometimes people can’t follow directions.”

Jeff Reisman, owner of J&K’s Half Moon Tavern in Hinckley, said he is still waiting for his license to be approved. He has sent in the application, and the Illinois State Police already have done a site inspection.

Reisman said he heard last week that his license was supposed to be approved, but it hasn’t yet.

“We’re just waiting for them to come in,” Reisman said. “A lot of people are waiting.”

O’Shea said the gaming board has a backlog of applicants. The board publishes a list of approved, pending, revoked and denied video gaming applicants on its website. The list of pending applicants is 227 pages long and filled with potentially thousands of would-be sites.

“If someone sends in an application within the past couple of weeks, it’s going to be a while,” O’Shea said, adding that each application – and the subsequent background checks – are handled on a first-come, first-served basis.

Once the board approves a license, when the machine is actually installed is between the business and the terminal operator. The terminal operator is a company licensed by the gaming board that sets up the terminal in the business.

O’Shea said 600 licenses have been approved, but only 234 have operating gambling terminals. That could be because video gaming terminals have a significant startup cost for the terminal operator, with costs reaching the tens of thousands. About 965 terminals are online in Illinois.

Cub & Spank’s at 113 N. Maple St. in Sycamore applied for a video gaming license a month ago, said Adam Swedberg, one of the owners of Cub & Spank’s.

Swedberg said he was expecting some money to come in from having up to five video gaming terminals, but not much. This year has been tough economically for his establishment, he said.

“I think it will help bring people in,” Swedberg said. “[Cub & Spank’s] is not going to become a Las Vegas casino, so I’m not expecting that much money. ... There’s no guarantee people are going to come in and play.”

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