The Basics of the Illinois Slot Machine Industry
Last year an average month of video gambling in Illinois produced $123,381,510 in total income.
As you would probably expect, the businesses providing the slot games didn’t get to keep all that. Several parties divvied up the NTI (the Net Terminal Income, which is the money that goes into the casino slots minus what’s paid out to players.) Illinois got 30% (and then paid out 5% to the local municipality.) An outfit known as Scientific Games got 0.8153% for maintaining the CCS (the Central Communication System that slot machines connect to.) The Terminal Operator (who owns or leases and places the slot games) and the Licensed Location split the rest of the money evenly.
That means there was still a lot of money for businessmen, and assuming your municipality allows it (not every town has opted in), you may well be interested in getting into the slot machine industry yourself. Here’s some basic information to get you started.
THE SLOT MACHINE INDUSTRY; TERMINOLOGY
Like any industry, the slot machine industry has its own special terminology, abbreviations, and other shorthand. Here are some of the other terms in common parlance:
- Video gaming, video gambling, and video slots. These all refer to exactly the same thing, namely, the slot machine industry itself. The Video Gaming Act calls it video gaming while players often call the machines video slots.
- The Terminal Operator (TO) is the licensed party that owns or leases, services, and maintains slot machines and put them in Licensed Video Game Locations, which are either licensed Retail Establishments, truck stops, or Veteran and Fraternal Establishments. A location can’t have slot machines unless it has a signed contract with a TO.
- The Illinois Gaming Board (IGB) is the State regulatory industry that oversees all aspects of gambling. Appointed by the Governor and confirmed by the Senate, its five members over see 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.
Getting a License to Operate a Slot Machine Business
Obtaining a license from the IGB is a multi-step process. Here are some of the crucial ones:
- First you’ll need to ensure your area actually allows video gaming. As mentioned above, not all municipalities in Illinois do. You can find information about your town at http://www.igb.illinois.gov
- Second, assuming your area does in fact allow casino slots, make sure your particular location is one of those allowed to apply for an Illinois gaming license. As noted above, authorized locations are either truck stops, fraternal establishments, veteran’s establishments, or retail establishments. Truck stops are exempt from the requirements to have or obtain an on-premises liquor license that applies to the other three categories. The retail category can include some non-traditional businesses, and it’ you’re unsure, it’s worth checking to see if yours qualifies.
- Third, you’ll need to fill out the ten-step application for an Illinois gaming license. The TO you’ve partnered up with should be able to help you navigate the complexities.
Getting Your Illinois 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. Here are key things to consider:
- Signage (this is one of the matters covered by legal requirements)
- Required, dedicated electrical (generally provided in part or in full by the TO)
- Stanchions to set off the gambling area (required if people under 21 are allowed in other parts of your establishment)
- Staff who are over 21 years if age need a clear line of sight from the front door to the entrance to the slot machine area
The following considerations aren’t absolutely required but paying attention to them will likely pay off in additional proceeds:
- Spaces between machines if you can manage it
- Phone chargers
- Purse hooks
- Bins for cash out vouchers near the slot games or ATM
Personnel for Your Slot Machine Business in IL
Hire personnel carefully as they’re critical to your success
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 filling out your license application. He or she will work with your TO, take care of license renewals and may well also be in charge of promotions, customer engagement, social media, and marketing.
When choosing and training staff members, bear in mind that they’ll need to card 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 there’s 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 Get Your Slot Machine Business Open?
After reading all the above, you may be wondering just how long it take to get a slot machine business open. Sadly, it’s not a process you can start today and finish tomorrow. After you submit your application, the licensing process takes 2-3 months on average but can take significantly longer.
You can prevent delays by working with your TO to make sure all paperwork is completed properly, making sure all necessary licenses (like the on-premises liquor license, for example) are current, getting all the necessary signage posted, and promptly paying the IGB licensing fees and any additional required Municipal charges.