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As if the massive business and personal tax hikes recently signed into law by Democratic Illinois Governor Pat Quinn were not bad enough, the 2009 Video Gaming Act (VGA) may also be in trouble. The Act was passed as a portion of 2009’s Capital Improvement Act public-works legislation.
The VGA legalised Illinois operators as potential partners in a statewide video-gaming programme. It passed with the expectation that small businesses would benefit and tax revenues would be generated for the state treasury.
The Illinois coin-op industry has made significant investments to prepare for the launch of the programme. However, two years later, there is no start date and the VGA has faced multiple problems. No operators have been certified, and neither has the central computer system been activated. Also, at least 80 jurisdictions have chosen to opt out.
Most serious are multiple new legislative proposals and a case before the Illinois Supreme Court following the lower Appellate Court’s recent ruling. It decided in favour of a beverage company owner who claimed new liquor taxes – included in the Capital Improvement Act – were illegal. The state constitution permits only one subject per bill, and the lawsuit claimed the taxes and the VGA void the law.
If the Illinois Supreme Court rules for the plaintiff, a new video-gaming law would have to be separately passed. Quinn said he is willing to repeal the VGA.
Other proposals include a $1 per pack increase in cigarette tax, affecting taverns and their vending/amusement equipment, and legislation to install 900 to 1200 slot machines at Illinois racetracks.
The Illinois casino association opposes the proposal. However, the proposal’s concession would allow riverboat casinos to move onto land and receive tax breaks. Casinos could also increase their permitted number of gaming positions to 2000. But with Illinois’s high taxes and a down economy, most casino operators do not plan to increase their numbers.
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