Friday, June 21, 2024

Jim Brown: Video gambling is regressive, and a bad idea – Evanston RoundTable

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Editor’s note: Jim Brown is a feature writer who writes about local businesses for the RoundTable. This is his first column in what will be an occasional series. He is an avid conservationist, birder, nature photographer and is interested in all things Evanston.

The definition of a regressive tax, according to Investopedia: 

  • A regressive tax is a tax that is applied uniformly regardless of income. Regressive taxes take a larger percentage of income from low-income earners than from middle- and high-income earners. As such, the tax burden decreases with regressive taxes as income rises. Gambling is a classic regressive tax given that individuals with low incomes have a higher propensity to spend money on gambling and therefore pay a higher percentage of their income on gambling.

On May 6, the Evanston Human Services Committee voted 4-1 in favor of an ordinance to legalize video gambling machines at Evanston establishments. Eleanor Revelle (7th Ward) cast the only “no” vote. Devon Reid (8th), Juan Geracaris (9th), Krissie Harris (2nd), and Bobbie Burns (5th) voted in favor of the ordinance. The full City Council will discuss this proposal for the first time at its meeting Tuesday, May 28

Reid, who chaired the May 6 meeting, made the original referral for the city to consider a video gambling ordinance in May 2023, noting that legalizing the activity could create an additional source of revenue.

The gambling issue was brought to Reid’s attention by Robert “Rob’’ Bady, a fellow Eighth Ward resident and the business development manager for the Universal Gaming Group based in Addison, which has roughly 200 video gambling locations in Illinois.

Bady spoke at a March 5 Human Services Committee meeting in support of the video gaming ordinance, as reported in the in the RoundTable. In response to a question from Council Member Revelle about video gambling revenue distribution, Bady said that “proceeds are basically divided into three parts. One third of that goes to that location [the establishment], one third of that goes to the terminal operator [Universal Gaming Group, for example] and a third goes to the state as a tax.”

The state then remits a 5% share to the municipality, he said. Bady’s firm would have a much higher percentage of the “take” than the City of Evanston. 

Revelle then asked what percentage of their money that people playing the machines tend to get back on what they bet. She said she wasn’t convinced that’s the way the city should raise its revenues.

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