How to Open a Slot Machine Business in Illinois
Over $32 Billion was wagered on Video Gaming Terminals in 2023. Learn how to open your slot machine business with Universal Gaming Group.
The Basics of the Illinois Slot Machine Industry
Sometimes you win, sometimes you lose. In 2023, players wagered over $32 billion on Illinois Video Gaming Terminals (VGTs) and won more than $29 billion. The remaining $3 billion was divided amongst licensed locations, Terminal Operators, and the State of Illinois.
Thanks to the 2009 Video Gaming Act, many different kinds of businesses can profit from slot machines–from bars and restaurants to truck stops and dedicated video gaming cafes. Most businesses can have up to 6 machines. In April of 2024, the Illinois Gaming Board (IGB) data indicates an average of more than $9,300 in gross gaming revenue per establishment. That’s a big business opportunity.
Key to these figures for gaming businesses is the Net Terminal Income (NTI), defined as all monies wagered, minus all monies won. The Video Gaming Act sets the tax rate on NTI at 34%, and mandates that all after-tax profits on NTI be shared equally between licensed locations and terminal operators. An administrative fee of 0.8512% must also be split between licensed locations and terminal operators.
The Illinois slot machine industry continues to grow, offering a very lucrative opportunity for business owners across different industries. The IGB publishes Illinois gaming revenue reports on a monthly basis that are available to the public.
You can learn more about how we help video gaming businesses before, during and after launch by reading about our full suite of services.
The Slot Machine Business Terminology
Like any industry, the slot machine industry has its own special terminology, abbreviations, and other shorthand.
Video gaming, video gambling, and video slots. These all refer to exactly the same thing, namely, the video slot machine industry itself. The Video Gaming Act calls it video gaming while players often call the machines video slots.
Gaming Licenses are granted by the IGB and are required for every establishment before they can operate VGTs. To learn more, read a comprehensive guide to Illinois gaming license requirements.
The Terminal Operator (TO) is the licensed party that owns, services, and maintains VGTs and installs them in licensed video gaming locations. All video gaming locations must enter into a valid use agreement with a licensed Illinois Terminal Operator.
The Illinois Gaming Board (IGB) is the State regulatory agency that oversees all aspects of gambling. Appointed by the Governor and confirmed by the Senate, its five members oversee all aspects of gambling in the State including licensing. They have a large staff including investigators, attorneys, enforcement agents, and financial and licensing personnel.
The Central Communication System (CCS) is the network that provides for real-time communication among all the licensed slot games in the state.
A Video Slot Machine Business is any establishment that qualifies to operate video gaming terminals (VGTs). These businesses must meet specific requirements set by the Illinois Gaming Board (IGB), including obtaining a valid gaming license and liquor license, and must meet local location and zoning requirements. Types of video slot machine businesses can include:
- Licensed retail establishments
- Bars and restaurants
- Truck stops
- Gaming cafes
- Veteran and fraternal establishments
How to Get Your Illinois Gaming License
Universal Gaming Group will work with you through the entire process of securing your gaming license. In fact, our IL terminal operators provide help even after the Board approves the application. We are a full-service operator, who will provide your location with the best equipment, ensure your location remains in compliance with changing laws and regulations, and assist your location with marketing plans. Step by step, our licensing process looks like this:
obtain your state and local LIQUOR LICENSE
First, we research your municipality to see if it has opted in to legal gambling. Assuming that it has, we look at all the local requirements to make sure you meet them. (You can also check out your area yourself by going to the Illinois Gaming Board website.)
WORK WITH UNIVERSAL GAMING GROUP ON SUBMITTING YOUR IGB APPLICATION
Second, a member of our team will meet with you at your establishment to start the application process for your Illinois gaming license eligibility and help you determine the optimal set-up for your slot machines. Everyone whose name is on the application will then need to be fingerprinted by a state-approved fingerprinting vendor.
Prepare for Inspection
Third, we’ll help you prepare for the mandatory inspection by the Illinois Gaming Board and make sure you have all the documents the Board will need to see. (The Board will also need to see exactly where the slot machines will be installed.)
Getting Your Slot Machine Business Ready to Open
Now that you’ve submitted your application, it’s time to think about where you’ll put the slot games and associated materials. This is important partly because you need to meet legal requirements and partly because casino slots that aren’t well placed don’t generate as much revenue as ones that are. Spaces between machines, phone chargers, purse hooks, and bins for cash out vouchers aren’t absolutely required but paying attention to them will likely pay off in additional proceeds. Here are key things to consider that are required, however:
Signage
This is one of the matters covered by legal requirements. Signs displaying the age requirement for gambling must be visible.
Electricity
Dedicated electricity is required to run VGTs and is generally provided in part or full by the Terminal Operator.
Staff
Staff who are over 21 years of age need a clear line of sight from the front door to the entrance of the slot machine area.
Stanchions
Stanchions are used to set off the gambling area, and are required if people under 21 are allowed in other parts of your establishment.
Personnel Needed for Your Illinois Slot Machine Business
Hire personnel carefully as they’re critical to your success. One absolutely key position is that of the video gaming manager, whom you’ll need to name in the course of completing your license application. He or she will work with your TO, take care of license renewals and may also be in charge of promotions, customer engagement, social media, and marketing.
When choosing and training staff members, bear in mind that they will need to check IDs of potential customers since gambling is strictly for customers who are 21 or older. They should know what to do and who to call if a slot machine malfunctions or if there is a problem with a cash out voucher. They should have a general familiarity with the slot machine industry and the outside people you work with, and be absolutely discrete when dealing with patrons’ financial matters.
How long does it take to open your slot business?
Opening a slot machine (Video Gaming Terminal) business in Illinois typically takes 6 to 12 months. This timeline depends on various factors, including acquiring necessary gaming and liquor licenses, selecting a location, and securing approval from the Illinois Gaming Board (IGB). The licensing process itself can take several months due to background checks, inspections, and compliance requirements. Once approved, setting up the machines and establishing the business can take additional time depending on your location and infrastructure.
You can prevent delays by working with your chosen Terminal Operator to make sure that all steps are handled properly and in a timely manner. This includes completing all paperwork for the necessary licenses, getting all the necessary signage posted, and promptly paying the IGB licensing fees and any additional required Municipal fees.
As the first Terminal Operator to install licensed VGTs in Illinois, we have more gaming experience than anyone else in the industry. Universal Gaming Group helps you every step of the way–from obtaining licenses to designing an optimal gaming area layout. Learn more about how we help through the entire process of opening a slot machine business, and continued support from remote servicing to marketing your business.
