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Galesburg Businesses Oppose 1-Cent Push Tax on Video Gambling Machines Authorized by City Council

Galesburg City Council has burdened local video gaming terminals (VGTs) with an amusement push tax that could considerably boost the annual revenue portion received by the municipality from the operations. For the time being, the new tax has not been implemented yet.

Under the tax, whenever users play a video gaming machine operating under a license granted by the municipality, they will be charged 1 cent per spin or wager.

According to Todd Thompson, a City Manager, if officially implemented, the tax could account for extra revenue of between $300,000 and $400,000 for the city on an annual basis, on top of the 5% share of the overall video gambling terminal’s income. Mr. Thompson explained that the exact amount is difficult to foresee because analysts could not know the exact amount of the individual bets.

The move has come at a time when some cities and municipalities that have already implemented push taxes are dealing with some legal action started by the video gambling machine operators. According to experts, it is only a matter of time for state legislators to outlaw such taxes from making further progress. As Mr. Thompson shared, the State Legislature may pass a piece of legislation to prevent the city’s ability to pass such a tax.

Local Taxes and License Fees Already Too High, Video Gambling Operators Say

As mentioned above, Galesburg has not been the first city in Illinois to consider the implementation of a push tax. A number of suburban municipalities of Chicago were actually the first to adopt taxes of this nature over the last few years – a move that faced the opposition of the local gaming industry and some business owners.

For the time being, there has been no information regarding the implementation of the push tax on video gambling machines in Galesburg. Still, at the beginning of the week, the local city council approved the ordinance to establish the VGT push tax with a 4 to 3 vote. The three city council members who voted against the ordinance were alderman Kevin Wallace, Wayne Dennis and Brad Hix.

City Manager Thompson explained that the ordinance is very clear, as it imposes a tax on the machine’s user. He also compared it to a sales tax, saying that under the push tax the business collects the tax that is being paid by the customer. In this case, it would be the video gaming terminal’s operator who would collect the tax, rather than the licensed establishment that hosts the machine.

Some local bar owners, however, have remained cautious. According to some, the already existing taxes on local bars and restaurants, liquor licenses and gaming fees are already too high, so the implementation of just another tax would be another blow for the sector.

Currently, municipalities get 5% of video gaming’s revenue. The city of Galesburg has received around $435,000 of the net income of the video gambling machines totaling $8.7 million through the end of September. One-quarter of the overall video gambling revenue is received by the state of Illinois, which makes its share around $2.5 million through September 2021 from Galesburg alone.

City leaders have hoped that the implementation of the new push tax would give them a larger slice of the revenue. Currently, there are 167 video gambling machines and 32 establishments licensed to offer video gambling services in Galesburg.

 Author: Harrison Young

Harrison Young is an experienced writer, who started his career almost 8 years ago. Prior to joining our team at CasinoGamesPro, he worked as an editor for a small magazine.