Schaumburg, Hanover Park pursuing new tax on gambling machines

Schaumburg officials Monday recommended following the lead of Hanover Park and Joliet in trying to stay ahead of pending state legislation that may limit their ability to impose an additional tax on video gambling machines and maybe triple the tax revenue from them.

The village's finance, legal and general government committee unanimously supported the idea of a "push tax" that would charge a penny for every push or spin of a video gambling machine.

Waukegan and Oak Lawn were among municipalities that came up with the idea earlier this year, an idea that was swiftly followed by lawsuits from video gambling operators and a bill still pending in the Illinois Senate that seeks to set a retroactive deadline for more municipalities to create such taxes.

Though the state House passed an omnibus gambling bill on June 1 that set that day as the deadline for any new municipal push taxes to be imposed by home rule communities, the legislation presumed the governor's signature - and that hasn't happened yet, Hanover Park Village President Rod Craig said.

That's why Craig believes his village's recent effort to impose a push tax to take effect on Jan. 1 wasn't too late.

More perplexing to him, he said, was why fellow government representatives wouldn't want the gambling machines that are generating money for others to further assist the communities in which they've been approved.

"The problem we have in municipal government is keeping taxes low," Craig said. "I need everything I can get to keep the cost of government off of our residents. ... When I talk to state legislators, they're looking for ways to reduce property taxes. Is this not a home run for them?"

Schaumburg's committee recommended a penny-per-push tax be approved by the full village board on Oct. 26 to take effect at the start of the village's next fiscal year on May 1, 2022.

Currently, municipalities receive 5% of the revenue generated by video gambling machines. The state collects 25%, the Video Gaming Terminal Central Communication System collects 1%, and the remaining 69% is evenly split between the machine operator and the establishment hosting the machine.

Craig said the estimate of the push tax being able to approximately triple current municipal gambling revenues is something of a guess because no one has told officials exactly how many pushes the machines would receive or what their overall income would be.

"It's inconsistent," Craig said. "If it were consistent, everyone would be gambling."