Council staff study urges tighter rules for video gaming: limit primary‑use parlors, curb signage and adjust siting

City staff delivered a detailed video‑gaming study to the Committee of the Whole on Monday and recommended new local rules to limit the proliferation and visual impact of terminals while protecting municipal revenue.

The staff presentation (delivered by a city staff member) showed the number of terminals in North Chicago rose from single digits in 2015 to roughly 170 terminals in recent counts, with licensee revenue and municipal shares rising substantially. Staff estimated city gaming receipts and license income total roughly in the mid six‑hundreds of thousands of dollars annually and said a separate “push” tax collection tied to a recent court decision could add materially if collections begin; staff estimated combined gaming revenue could approach $2.5 million a year when push‑tax receipts are included.

Despite the revenue, staff said the terminals concentrate in small areas and are frequently located in businesses whose primary activity is fuel or convenience sales or standalone gaming parlors rather than full‑service restaurants or hotels. The staff memo and maps showed higher terminal density in North Chicago than a set of comparable municipalities and recommended the council pursue ordinance changes to:

• Discourage gaming as a principal/primary use and favor locations where gaming is truly secondary to a restaurant or lodging business that provides a larger, on‑site customer service offering.

• Limit or prohibit new gaming licenses in businesses whose primary revenue is fuel, convenience retail or liquor sales.

• Restrict common, high‑visibility gaming advertising (feather flags, neon window displays and similar temporary signage) and consider appearance‑code standards that reduce visual clutter.

• Consider siting limits to reduce clustering (for example minimum distances between primary gaming parlors), and require traffic studies if an individual operator’s activity generates congestion.

Staff also reported they found no clear statistical correlation between the presence of terminals and increases in adjacent sales tax; the report noted terminals often do not generate spillover sales to surrounding businesses unless the host business provides other regular retail or food services. The presentation recommended staff and the city attorney draft ordinance language and return to committee with proposed rules for council consideration.

Alderman Evans and others praised the analysis and asked staff to work with the attorney on workable ordinance language. Staff said any rules would be applied to new licenses and that existing businesses would be treated differently because the law limits retroactive changes to vested business rights. The committee directed staff to draft proposed ordinance language and bring it back to a future committee meeting.