Illinois Gaming Is Big Business
According to data from the Illinois Gaming Board (IGB), Illinois bars, restaurants, gaming cafes and other establishments that offer video gaming terminals (VGTs) averaged more than $104,000 in gross gaming revenue in 2023. In the month of April of 2024, the IGB data indicates an average of more than $9,300 in gross gaming revenue per establishment.
That’s not chump change. Video gaming offers a significant and reliable revenue stream for businesses with little overhead.
The Basics of Running an Illinois Gaming Establishment
It became possible to run a business that incorporated gambling machines when Illinois passed the Illinois Video Gaming Act in 2009. The law specified four types of establishments that could seek licenses to offer video slot machines if local ordinances allowed. (Some municipalities did and still do see fit to prohibit gambling machines.) The four types of establishment are as follows:
- Pouring establishments. As the name applies these are businesses with a liquor license to serve alcohol on premises. Bars, restaurants, coffee shops, hotels and dual license retailers are all considered pouring establishments;
- Truck stops. These are gas stations or convenience stores that occupy at least three acres, have separate diesel stands for commercial vehicles, designated commercial vehicle parking, and sell a minimum of 10,000 gallons of diesel fuel or biodiesel fuel per month;
- Veterans’ and fraternal organizations with national charters. These are member-based establishments that provide meeting and gathering spaces and often include bars, restaurants and other forms of entertainment.
Understanding Net Terminal Income (NTI)
What is Net Terminal Income (NTI) and how does it affect your gaming revenue? NTI is the total income generated by a Video Gaming Terminal (VGT). That is, the amount of money deposited into a VGT minus the money paid out to the players.
The NTI revenue is then split roughly three ways–one third to the gaming establishment (your business); one third to the government and municipality, and one third to the Terminal Operator (the business that supplies and services the VGTs).
When examining data from the Illinois Gaming Board, businesses can look at the NTI for any given month, then multiply that number by roughly 32% to help determine how much revenue is going to the gaming establishments.
Estimating Your Establishment’s Revenue From Video Gaming
How much revenue can your business generate from Video Gaming Terminals? In April of 2024, VGTs generated $81.75 of income per square foot of an establishment’s gaming area with 6 VGTs.
With an average of 107.25 square feet of video gaming space (including the cabinets, chairs and required spacing), that’s an average of $8,767 per month for a gaming area with 6 VGTs, or $1,461 per VGT, per month.
Establishments can use this benchmark to estimate how much average revenue can be generated from their gaming area, depending on available square footage and the number of VGTs they decide to install.
Your Illinois Gaming Establishment: Recent Developments
Illinois continuously passes legislation that makes the situation somewhat complicated. Here are some of the more recent changes (depending on when you’re reading this) that can help clarify the situation for Illinois gaming businesses.
- More machines. Formerly, most gaming establishments could have no more than five VGTs per license. In 2019 the limit was increased to 6 VGT’s, though they remain subject to local ordinances. Also, see the note on large truck stops below, as those establishments have different limits.
- Increased max bet and max win. The max bet was increased from $2 to $4 in early 2020. The max win on a single bet also went up,from $500 to $1199.
- Bonus jackpots and progressives. Authorized in early 2020, intra-location progressive jackpots, or wagers placed on select VGT’s in a single establishment which contribute toward a cumulative progressive jackpot of up to $10,000, will soon hit the market.
- More convenient servicing of VGTs. Formerly, an agent of the Illinois Gaming Board (IGB) was required to be present on site when a Licensed Terminal Operator performed maintenance, upgrades, and repairs on equipment. Effective early 2020, this is no longer required, allowing for faster service resolution times.
- Large Truck Stop category. Illinois now makes a distinction between large and regular truck stops. Large truck stops must meet all regular truck stop criteria while additionally selling a minimum of 50,000 gallons of diesel fuel and biodiesel fuel per month. Large truck stops must be situated within three road miles of a freeway interchange. The advantage of having your establishment classified as a large truck stop is the ability to have up to 10 video slot machines on the premises, as opposed to a maximum of six. Like regular truck stops, Large Truck Stops may also operate 24 hours a day.
- The tax on gaming establishment revenue was increased to 33% in 2020. Beginning July 1, 2024, the tax will increase once more to 35%.
Maximizing Your Illinois Gaming Establishment Revenue
As you can see, the tax increase notwithstanding, most of these changes are to the business owner’s benefit. Make sure to follow these tips to maximize your VGT income:
- Market and promote your video slots both outside and inside your business (as permitted by local ordinance). Put signs, posters, etc. where they can’t be missed.
- Promote your video gambling on social media platforms. Offer incentives like free coffee, soft drinks, snacks, and/or food specials.
- Provide friendly, engaged, knowledgeable staff to assist video slot players in their gaming experience.
- Make sure your restrooms are clean. Optimally, they should also be close to the gaming area.
- Make sure your video gaming area is appropriately lit for a pleasant and exciting atmosphere (not too bright, not too dark).
- Create a private gaming environment by putting up half walls (6’ tall or more), building out a separate gaming rooms, or otherwise dividing the space from your main dining area segregated rooms.
- Open early to bring in matinee players. Open on Sundays if you can.
Universal Gaming Group is a premier Terminal Operator in Illinois, widely regarded as having the best service in the industry. If you’d like to make your business an Illinois gaming establishment, or if you want to upgrade your Terminal Operator experience, choose Universal Gaming Group. Our dedicated, expert staff will be by your side from the very beginning, and help you grow your business along the way.
