Chicago City Council to vote on sweepstakes machine ban as bar owners warn of business closures

CHICAGO - Chicago alders are divided over a debate on whether to ban or keep sweepstakes machines legal in the city.

The backstory:

We're expecting alders to hold a vote on the issue, which Mayor Brandon Johnson has supported in the past. The machines, which are commonly found in bars and restaurants, look similar to state-regulated video gaming terminals. 

Players insert money and play games such as poker or slots, but instead of cash payouts, winnings are redeemed for prizes. 

For some business owners, like Sal Mehmeti, who owns Coach's Bar & Grill in Norwood Park, the machines have become an important source of revenue.

"Everything's getting expensive, food's getting expense, alcohol is getting expensive," said Mehmeti. "Being in this business is getting tougher and tougher."

Mehmeti said he began looking for additional revenue streams after the COVID-19 pandemic.

"Slow months, it helps in, people come in, they play, we love to have them," he said.

When players win, prizes are awarded through an online redemption system like a gift certificate or a voucher. Opponents of the machines argue they are operating without the oversight applied to video gaming terminals regulated by the state.

Alderman Anthony Beale, 8th Ward, said the city receives no revenue from the machines and argues they operate just like state-regulated gaming machines, but pay no tax revenue.

"We get no money off of them whatsoever because they say we're not plugged up to the internet and that's their reasoning for saying we don't need to be regulated because we're not hooked up to the internet, which we know that's just a legal loophole they're using to operate in the darkness," said Beale.

Maze Jackson, who represents the National Association of Promotional Retailers, said hundreds of bars and restaurants rely on the machines and feel they are being unfairly targeted.

"They've been operating for almost 10 years, uninterrupted, and now, all of a sudden, it seems like they're coming in and saying, ‘we want to turn you all into illegal operators,’" said Jackson.

Mehmeti warns that the impact could be severe.

"If they ban the machines, our business might be a jeopardy. We might have to close shop, you know. You know, we might even move to a different state. I mean, it might get that bad," said Mehmeti.

NAPR said business owners are worried about what a ban could mean for their bottom line. The organization tells Fox Chicago that hundreds of small businesses bring in around $70 million for their combined annual revenues.

"I'm hearing from them that they don't want their sweepstakes machines taken away as the city is still trying to figure out video gaming," said Jackson.

It comes days after Mayor Johnson called for a ban on video gaming at bars and restaurants, citing Bally's Casino's concerns for the ordinance to potentially be a job killer for its industry, as well as a hit to its revenue and development for its new casino that's under construction. That's why the mayor is calling for a 'robust debate' that doesn't harm workers.

"There are some significant concerns that exists with VGTs (video gaming terminals), particularly around the development of the casino, the revenue of the casino and then jobs," said Johnson. "We have to center our commitment to everyday people and at a time in which we know that affordability is a top concern for people, not just in Chicago, but across the country, policies that undermine the interests of working people is one that we will have to address."

What's next:

The Chicago City Council is expected to vote on the proposed ban Wednesday.

If city council approves it and Mayor Johnson signs the ordinance, businesses that currently host sweepstakes machines would have to remove them or face potential enforcement action.