Cary, Algonquin eye penny-per-play tax on video gambling machines

Cary and Algonquin’s village boards are set to decide at an emergency meeting Sunday whether they will enact a penny-per-play fee, or a “push tax,” on video gambling machines.

The urgency of the meeting is because of proposed legislation that would prohibit home-rule municipalities such as Algonquin from imposing such a tax once the bill becomes law.

The bill was passed by the General Assembly on Thursday but has not yet been signed by Gov. JB Pritzker.

That means that if the board decides to approve the necessary ordinance Sunday, it can preserve its right to implement a push tax in the future, Algonquin Assistant Village Manager Mike Kumbera said.

“If the village desires to adopt a push tax, it must be done so at this time,” Algonquin village staff said in a memo to the board.

A conservative estimate for the amount of funding Algonquin could receive from a push tax would be $150,000 to $400,000, according to the memo. In Cary, officials estimate garnering $55,000 to $225,000 in revenue from a local push tax.

“As we review our long-term capital and infrastructure plans, we have been looking at several revenue sources to fund that, including the the push tax,” Kumbera said.

These plans include the projects that are part of Algonquin’s 10-year parks master plan, which was approved earlier this year. Many projects are included in the plan, such as the redevelopment and renovation of park equipment, amenities and even the parks themselves.

“When we looked at the revenues, we’re looking at how to accelerate and implement that plan,” Kumbera said. “The details and the final say will be once we go through our budget process early next year, but that’s the concept that we’re thinking about.”

The way a push tax works is by charging video gambling machine players 1 cent for each play they make. For instance, if a player makes 100 wagers, the push tax would be $1 regardless of how much money the player bets.

Algonquin village staff compared the push tax with a sales tax, as the burden of the fee would be passed through to the player. The video gaming licensee and operator would be responsible for collecting the tax from the player and sending it to the village.

Over fiscal 2021, Algonquin brought in $90,497 in video gambling revenue from the 16 establishments in town, which collectively have 81 video gambling terminals. Cary brought in $87,729 with nine establishments that have a total of 49 video gaming terminals.

Other suburban communities also have passed push takes, including Oak Lawn, which passed its in 2019. Tinley Park and Waukegan also have adopted similar taxes.

The Crystal Lake City Council recently approved a push tax ordinance that would authorize the city to implement the fee at a later date. However, city officials said they have no plans to enact this tax right away, and they still need to look at the mechanics behind it.

Instead, the Crystal Lake ordinance is acting as a “placeholder” in light of legislation similar to the one driving the special meetings Sunday.

The Algonquin Village Board meeting is set for 12:30 p.m. Sunday at the Ganek Municipal Building, 2200 Harnish Drive. Cary’s will be at 7 p.m. Sunday at 655 Village Hall Drive.