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Video gaming boosting profits for local businesses

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Nearly three months after video gaming went live in Illinois, some local business owners are finding the gambling machines live up to the hype as drivers of income.

However, the controversial machines have been slower to catch on at other establishments.

It’s early to draw widespread conclusions about the effect of the machines, which are banned in unincorporated McHenry County and Crystal Lake. But a peek at Illinois Gaming Board reports from October and November gives an indication as to the amount of money video gaming is capable of bringing in.

In Urbana, patrons at American Legion Post 71 played more than $1 million in November, generating about $71,000 in income.

In McHenry County, as of November, the machines have brought in as much as $28,000 in a given month at a single establishment.

Of all profits, 25 percent goes to the state, 5 percent goes to the local municipality and less than 1 percent goes to Scientific Games, which maintains the central communication system. The rest is split in half between the terminal operator and the establishment.

Of the $28,000 brought in at The Gambler Bar & Grill in McHenry in November, about $10,000 went to the bar’s ownership, through twice-monthly payments. About $1,400 of video gaming profits at The Gambler went to the city of McHenry.

The Gambler’s five video gaming terminals – the maximum allowed by the state – were turned on in late October.

Through November – which is covered in the most recent Video Gaming Report by the Illinois Gaming Board – about a dozen McHenry County establishments were generating revenue from their video gaming machines. Meanwhile, across the state more than 2,000 applicants awaited approval from the board.

“We have over 60 applicants that have applied for their licenses, and yet we only have 11 that are up and running,” said Chris McSwain, an owner of Rolling Meadows-based Awesome Hand Gaming, a terminal operator with machines placed at several McHenry County locations.

“We waited three years to get to this point, so I’m excited that we’re finally here and we’re seeing things move forward,” he added.

About 9 percent of money going into a machine becomes income, The Gambler owner Doug Strain said.

In November, Strain’s customers put nearly $100,000 into The Gambler’s video gaming terminals, playing $335,000 in all.

He said the machines have brought in a new clientele, some of whom he believes would otherwise be going to a casino. He’s happy with the result from the machines, but he’s careful not to rely too heavily on video gaming profits.

“My main concern was never to [put] the video gaming first and foremost,” he said. “The Gambler is The Gambler, and we also have video gaming.”

Hub Lounge in Harvard also is experiencing success in the early going since the bar’s machines became the first to turn on in the county Oct. 9. Patrons fed nearly $70,000 into Hub Lounge machines in November, playing a total of $282,000.

The bar received about $6,000 of the $17,000 in video gaming profits it generated in November.

“I think most of them are our customers that come all the time, because there are two other places in Harvard that have them,” said Cindy Waldo, Hub Lounge’s owner.

Still, the customer bases of some restaurants and bars still were warming up to the machines.

At Corkscrew Pointe in McHenry, profits from the machines were modest in November, at about $2,200. But the owner thinks activity at the machines tripled in December.

The restaurant put up a sign in November and has alerted people through Facebook that it has the machines.

“I’m happy with it so far,” owner John Macrito said. “I actually think it’s going to help me survive.”

Strain, of The Gambler, thinks the market share will continue to evolve as more bars and restaurants get the machines.

“I would say obviously as more places open, it will even out,” Strain said. “I’d like to think they’d rather come here than anywhere else, and I’d like to treat them that way.”

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