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Decatur council rescinds video gaming licensing fees on business for a year


DECATUR — The City Council handed a big financial win to Decatur business owners with video gaming machines Monday night, scrapping their license fee and voting to refund owners who've already paid their $500 per machine fees for 2021.

The city currently has more than 440 licensed gambling machines, with the $500 annual license fee currently paid by the business establishments housing the machines. But council members voted Monday to change that, opting for  charging the $500 licensing fee instead to the operators of the terminals themselves, often out of town companies.

The idea is to lessen the financial strain on local businesses like bars and restaurants hammered by the state-mandated COVID-19 shutdowns on indoor service; currently, no video gaming is allowed under present lockdown rules.

The new licensing ordinance kicks in for 2021 and will stay in place for at least a year. 

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Council members had kicked around various options for charging for the machines but voted 4-3 to back switching the fee over to machine operators. "For the last five or six months we've been looking for ways in which we can help our business owners," said Councilwoman Lisa Gregory.

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"I would really like to see us move the burden of the fee from our restaurant/bar establishments to the owner of the games."

Objections had ranged from being fair to the machine owners to the complaint of Councilman David Horn, who said no one need feel sorry for the video gaming industry. He said it won more than $100 million in annual revenues from Decatur and needed no help or assistance.

But Mayor Julie Moore Wolfe argued local businesses were hurting in the wake of the economic snake eyes that rolled in from the wake of COVID-19. "I think we are trying, in the best case scenario, to give immediate relief to our small businesses," the mayor said. 

Speaking ahead of Monday’s meeting, Deputy City Manager Jon Kindseth said the city just wanted to help businesses survive until the effects of the newly-arrived vaccine against COVID-19 take hold and gets life in general, and the gambling business in particular, gets back on track.

“So hopefully by January or February 1 we can start to see the reopening of some indoor activities, including video gambling,” Kindseth added. “But, of course, that timeframe is open-ended.”

And in a briefing note from City Manager Scot Wrighton spelled out just how much the city wins when those video gambling terminals fire up again.

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Wrighton said that after a previous three month gambling shut down earlier this year, the gamers came roaring back and stuffed the machines with money: “City-only video gambling revenues in July 2020 (after gaming resumed) were $177,321, a record high amount for any single month since video gaming was first authorized in 2012,” added Wrighton. “The second highest month ever on record in Decatur was $163,553 received in October of 2020… So video gaming remains a lucrative business, despite the business shutdowns.”

The city, in addition to license fees, gets a one-sixth cut of the 30% the state claws in from video gaming net terminal proceeds.

Another big money issue occupying the council on Monday was the task of coming up with more cash to support hiring police officers and firefighters, and covering their expanding pension costs.

Council members had previously chewed over the idea of finding out whether their citizens would support paying more in property taxes for public safety expenses, and Wrighton circulated a memo outlining the pros and cons.

One the one hand, he said the city can just increase its share of property tax revenues to whatever level is needed to meet pension costs under the law, and can further raise property taxes, although not to unlimited levels, to meet the costs of running and staffing the police and fire departments.

If the council wants to gauge public opinion by asking citizens in a ballot question whether they would support such taxes, it would need to adopt such a resolution by Jan. 15 to be sure of getting it on the April 6 ballot, Wrighton said.

The city manager said if such a question goes down in flames with voters, however, the city can still impose property tax increases. But doing so after a “no” vote, however, might make political life very difficult if the council suddenly concluded they had to pull the tax trigger anyway.

The city is under pressure not only to come up with the costs of maintaining and improving police and fire staffing, but also to pay for the city’s share of the pension costs. Those expenses jumped by $1 million for 2021 obligations compared to 2020 pension costs, and Wrighton said a similar increase was anticipated in 2022.

Council members finally decided Monday they didn't like the idea of being put in a potential bind by a non-binding referendum. They decided instead to look at other ways of trying to gauge public opinion on the subject of paying more for public safety and its costs.

Moore Wolfe said the issue isn't going away, and said the best answer was trying to find a long-term solution to sustain pension costs. She said the city could afford its fire and police services if it wasn't weighed down "with this incredible burden that we cannot sustain."

A look back at Decatur police through the years 

Contact Tony Reid at (217) 421-7977. Follow him on Twitter: @TonyJReid

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