HomeMy WebLinkAboutOrdinances - 21-56 - 10/31/2021 - Video Gaming Push Tax
CITY OF MCHENRY
MCHENRY COUNTY
STATE OF ILLINOIS
Ordinance 21-56
AN ORDINANCE AMENDING TITLE 4, BUSINESS AND LICENSE
REGULATIONS, CHAPTER 6, VIDEO GAMING TERMINALS, OF THE CITY
OF MCHENRY MUNICIPAL CODE
Passed by the
Mayor and City Council
Of the
City of McHenry
McHenry County
State of Illinois
October 31, 2021
Published in pamphlet form by authority of the Mayor and City Council of the City
of McHenry, McHenry County, Illinois this 1st day of November, 2021.
ORDINANCE NO. 21‐56
An Ordinance Amending Title 4, Business and License
Regulations, Chapter 6, Video Gaming Terminals, of the City of McHenry Municipal Code
WHEREAS, the City of McHenry, McHenry County, Illinois, is a home rule municipality as
contemplated under Article VII, Section 6, of the Constitution of the State of Illinois, and the
passage of this Ordinance constitutes an exercise of the City’s home rule powers and functions
as granted in the Constitution of the State of Illinois.
WHEREAS, the Illinois Video Gaming Act (“VGA”), 230 ILCS 40/1 et seq., regulates the operation,
licensing, and administration of video gambling; and
WHEREAS, the City in accordance with the VGA regulates video gaming activity within the City;
and
WHEREAS, pursuant to Article VII, Section 6(a) and Section 6(i) of the Ill. Const. of 1970 in
conjunction with 65 ILCS 5/11‐42‐5 of the Illinois Municipal Code, the City is authorized to impose
a tax upon amusements; and
WHEREAS, the Illinois General Assembly’s HB3136 which passed through both houses on
Thursday, October 28, 2021 and was further amended on Thursday, October 28, 2021 to preempt
home rule powers if an ordinance imposing an amusement tax on persons who participate in the
playing of video gaming terminals was not in place before November 1, 2021; and
WHEREAS, the City now desires to impose a tax upon the amusement of playing a video gaming
terminal within the City (“Push Tax”); and
WHEREAS, the City’s Push Tax will provide much needed revenue to promote the general health,
safety, and welfare of the City and its residents, and provide adequate funds to offset the adverse
effects of gambling within the City; and
WHEREAS, the President and City Council of the City of McHenry, hereby believe that it is in the
best interest of the City and its residents to impose said Push Tax; and
NOW, THEREFORE, BE IT ORDAINED by the CITY COUNCIL of the CITY OF McHENRY, McHenry
County, Illinois, as follows:
SECTION 1: Title 4, Chapter 6, shall be amended by repealing and replacing Chapter 6 as follows:
CHAPTER 6: VIDEO GAMING TERMINALS
CHAPTER 6: VIDEO GAMING TERMINALS
Section
4-6-1: Applicability of Provisions
4-6-2: Definitions
4-6-3: License Required
4-6-4: Limitations Of Establishments And Terminals
4-6-5: Application For License
4-6-6: Fees For Establishments And Terminals
4-6-7: Push Tax Imposed
4-6-8: City Clerk To Administer Licenses
4-6-9: Development Agreement
4-6-10: Inspection Of Premises
4-6-11: Display Of Licenses
4-6-12: Existing Video Gaming Establishments
4-6-1: APPLICABILITY OF PROVISIONS:
The provisions of this chapter, except as otherwise provided, shall apply to all
amusements as hereinafter defined, whether specifically licensed or regulated under
other provisions of this City Code or other ordinances, or not.
4-6-2: DEFINITIONS:
As used in this chapter, the following terms shall have the meanings so indicated:
AMUSEMENT: (1) Any theatrical, dramatic, musical or spectacular performance, motion
picture show, flower, poultry or animal show, animal act, circus, rodeo, athletic contest,
sport, game or similar exhibition for public entertainment, including, without being
limited to, boxing, wrestling, skating, dancing, swimming, racing, or riding on animals or
vehicles, baseball, basketball,softball,football,tennis,golf, hockey,track and field games,
bowling, billiard and pool games. (2) Any entertainment offered for public participation,
including, without being limited to, dancing, carnival, amusement park rides and games,
bowling, billiard and pool games, or any Video Gaming Terminal.
PERSON: Any natural individual that participates in an amusement, including a firm,
organization, society, foundation, institution, partnership, association, joint stock
company,joint venture, limited liability company, public or private corporation, receiver,
executor, trustee or other representative appointed by order of any court, or any other
entity recognized by law.
PLAY: Shall mean each individual push of the Video Gaming Terminal which initiates the
simulation provided by the Video Gaming Terminal. Play shall not include the physical
pushing of individual wager amounts, selection of types of the games on the VGT, or the
entry of any information or printing of winning receipts.
TERMINAL OPERATOR: Any individual, partnership, corporation, or limited liability
company that is licensed under the Video Gaming Act, 230 ILCS 40/1 et seq., and that
owns, services, and maintains Video Gaming Terminals for placement in licensed
establishments, licensed truck stop establishments, licensed large truck stop
establishments, licensed fraternal establishments, or licensed veterans establishments.
VIDEO GAMING ESTABLISHMENT: Any establishment holding a valid and current video
gaming establishment license issued by the City. In order to qualify for an establishment
license,the establishment must:
A. Hold a current and valid video gaming location license issued by the Illinois Gaming
Board;
B. Hold a current and valid Class A (full bar) or Class B (table service) liquor license in
accordance with chapter 2 of this title, or hold a valid Class C license with a truck stop
endorsement as defined by Illinois Statute;
C. Meet all other criteria required by applicable laws of the State of Illinois and/or the
City of McHenry, as may be amended from time to time.
VIDEO GAMING TERMINAL: Any electronic video game machine that, upon insertion of
cash, electronic cards or vouchers, or any combination thereof, is available to play or
simulate the play of a video game, including, but not limited to, video poker, line up and
blackjack, as authorized by the board utilizing a video display and microprocessors in
which the player may receive free games or credits that can be redeemed for cash. The
term does not include a machine that directly dispenses coins, cash or tokens or is for
amusement purposes only. This definition shall be expanded by any amendments to the
Video Gaming Act, 230 Illinois Compiled Statutes chapter 40/5.
4-6-3: LICENSE REQUIRED:
No person or establishment shall have, keep or operate a video gaming terminal in any
place or public resort, unless it is a licensed video gaming establishment and every video
gaming terminal therein is annually licensed in accordance with these regulations.
4-6-4: LIMITATIONS OF ESTABLISHMENTS AND TERMINALS:
A. Establishment Licenses: Unless and until the City Council acts on an application for
an additional video gaming establishment license,the existing maximum number of video
gaming establishment licenses shall not be increased. When a video gaming
establishment license is revoked or relinquished, or is not renewed, the maximum
number of video gaming establishment licenses shall be reduced for each such
revocation, relinquishment or nonrenewal.
B. Terminals: Individual video gaming terminal licenses shall be issued by the City
Administrator or designee but only after a video gaming establishment license is
authorized by Council. No authorized video gaming establishment shall be issued more
than six (6) individual video gaming terminal licenses.
4-6-5: APPLICATION FOR LICENSE:
A. Required: All applications for video gaming establishment and video gaming
terminal licenses issued by the City shall be completed on forms provided by and filed
with the City Clerk. All applications shall conform to the general provisions set forth in
chapter 1, "Business Licenses Generally', of this title, as well as the State of Illinois,
through the Illinois Gaming Board, and pursuant to the Illinois Video Gaming Act and the
rules and regulations implemented thereto.
B. Action On Filed Applications: Filed applications for video gaming establishments
shall be submitted to the City Council for approval or denial. The City Council may issue
or deny the application, within its sole discretion, taking into consideration factors,
including, but not limited to,the following: location of the applicant's establishment, past
history of the applicant and its principals, the nature of any proposed business(es)
associated with the applicant, surrounding property uses, and any other factors deemed
relevant by the City Council members regarding aesthetics, the character of the
community and welfare of the public. Issuance of a liquor license shall not entitle the
holder to renewal of a video gaming license, and no protectible property interest or
vested right shall have been created.
4-6-6: FEES FOR ESTABLISHMENTS AND TERMINALS:
The annual license fee payable to the City shall be one thousand dollars ($1,000.00) for
each video gaming establishment to be paid by the video gaming terminal operator and
one thousand dollars ($1,000.00) for each video gaming terminal, five hundred dollars
($500.00) to be paid by the video gaming establishment and five hundred dollars
($500.00) to be paid by the terminal operator. Fees for licenses obtained, revoked, or
relinquished in the middle of the license year shall not be reduced or refunded. The fees
for any not-for-profit establishment shall be two hundred fifty dollars ($250.00) for the
annual video gaming establishment to be paid by the video gaming terminal operator and
two hundred fifty dollars ($250.00) for each annual video gaming terminal (one hundred
twenty five dollars ($125.00) to be paid by the video gaming establishment and one
hundred twenty five dollars ($125.00) to be paid by the terminal operator). All renewal
license fees shall be submitted simultaneously and paid prior to May 1 of each year as
licenses are effective from May 1 through the following April 30.
(Ord. 19-1197, 6-17-2019; amd. Ord. MC-19-1197-A, 7-20-2020)
4-6-7: PUSH TAX IMPOSED:
Except as otherwise provided by this Chapter, an amusement tax to be known as a "Push
Tax" is imposed upon any person who participates in the Play of Video Gaming Terminals
that takes place in the City. The rate of that tax shall be equal to one cent ($0.01) per Play
on a Video Gaming Terminal.
A. Tax Additional. The tax imposed by this Section is in addition to all the other taxes
imposed by the State of Illinois, the City, or any municipal corporations or subdivisions
thereof.
B. Collection; Payment; Accounting. It shall be the duty of any terminal operator to
secure, from each person participating in the Play of a Video Gaming Terminal, the Push
Tax imposed by this Section. For the purposes of this Section, it shall be presumed that
the amount of the Push Tax imposed on each person has been collected from the person
by the video gaming operator licensee, unless the taxpayer or tax collector demonstrates
otherwise with books, records, or other documentary evidence.
1. Push Tax payments shall be remitted to the City on or before the 20th day of
the month following the month in which the tax is collected or is required to be
collected and shall be accompanied by a tax return, which shall be in a form
prescribed by the City Finance Director.
2. Every terminal operator who is required to collect the Push Tax by this Section
shall be considered a tax collectorforthe City.All Push Tax amounts collected shall
be held by the terminal operator as trustee for, and on behalf of, the City. The
failure to collect the Push Tax shall not excuse or release the individual person
Playing the Video Gaming Terminal from the obligation to pay the tax. The
ultimate obligation of the Push Tax shall remain on the individual person Playing
the Video Gaming Terminal, and shall never be shifted to the terminal operator or
video gaming establishment.
3. Notwithstanding any other provision of this Section, in order to permit sound
fiscal planning and budgeting by the City, no person shall be entitled to a refund
of, or credit for, the Push Tax imposed by this Section unless the person files a
claim for the refund or credit within one (1) year after the date on which the Push
Tax was paid or remitted to the City.
4. The terminal operator of any Video Gaming Terminal(s) Played in the City shall
be subject to audit, inspection, and record keeping provisions of the City Code. It
shall be unlawful for any terminal operator, video gaming establishment, or
individual person Playing a Video Gaming Terminal,to prevent, hinder,or interfere
with the City, its officers, employees, or agents in any manner that is designed to
or has the effect of preventing, hindering, or interfering with such officials,
employees, or agents in the discharge of their respective duties related to the
performance, audit, or enforcement of the provisions of this Section. It is the duty
of every terminal operator to keep accurate and complete books and records for
each Video Gaming Terminal to which the City's officers, employees,or agents will
at all times have full and complete access.
C. Promulgation of Rules and Regulations.The City is authorized to adopt, promulgate,
and enforce any additional rules and regulations pertaining to the interpretation,
collection, administration, and enforcement of this Section.
D. Violations; Penalties
1. Violations.
(a) A terminal operator who falsely reports, or fails to report, the amount
of Push Tax required by this Section shall be in violation of this Section, and
shall be subject to a fine, as defined in this Section, as well as suspension
or revocation of their license.All payments not remitted when due shall be
paid together with a penalty assessment on the unpaid balance at a rate
of five percent (5%) per month, which penalty shall compound monthly.
(b) It shall be deemed a violation of this Section for any terminal operator,
video gaming establishment, or individual person Playing a Video Gaming
Terminal, or any agent of any of the foregoing, to knowingly furnish false
or inaccurate information to the City.
(c) Each day a violation continues shall constitute a separate violation.
2. Suspension or Revocation of License. The Mayor as local liquor commissioner
shall have the power to suspend for not more than thirty (30) days or revoke any
liquor or video gaming licenses if, after hearing, it is determined that a terminal
operator or video gaming establishment shall have violated any of the provisions
of this Section, any of the Statutes of the state, or any ordinances, resolutions, or
rules enacted by the City. Ten (10) days' written notice of the hearing shall be
given to the terminal operator or video gaming establishment. Alternatively, the
terminal operator or video gaming establishment may agree to negotiated terms
and penalties rather than proceeding to a hearing.
3. Fines Imposed. In addition to the foregoing, or any other penalties provided by
the City Code, any terminal operator or video gaming establishment violating the
provisions of this Section shall be subject to an additional fine of$500.00 for a first
offense and $750.00 for a second offense. For a third offense, a terminal operator
or video gaming establishment shall be subject to a$1,000.00 fine and a
mandatory revocation of any license relating to a Video Gaming Terminal or its
operation within the City jurisdictional limits.
4. Action to Enforce. Whenever any person obligated to remit any tax as provided
in this Section fails to do so, the City may bring an action to enforce the payment
of such tax in any court of competent jurisdiction.
5. Penalties Additional. Any citations issued under this Section may be in addition
to any other citations or enforcement mechanisms authorized by or issued
pursuant to the City Code.
4-6-8: CITY CLERK TO ADMINISTER LICENSES:
Upon approval of the issuance of a City video gaming establishment license the City Clerk
is hereby directed to increase the maximum number of authorized City issued gaming
licenses accordingly. Any time a City issued gaming license is revoked or voluntarily
surrendered, the City Clerk is hereby directed to reduce the maximum number of
authorized City issued gaming licenses accordingly.
4-6-9: DEVELOPMENT AGREEMENT:
All video gaming establishment licenses shall be subject to a written agreement between
the licensee and the City Administrator addressing issues deemed relevant by the City
Council, including, but not limited to, outdoor signage and partitions. With regard to
partitions, at a minimum, the agreement shall provide that all Class B liquor license
holders, and all Class A liquor license holders whose business includes table seating for
patrons under the age of twenty one (21), must erect a partition that effectively separates
the gaming area from visible view of the remaining customer area of the business. Plans
and specifications of the partition shall be included with the agreement.Video monitoring
of the gaming area by staff must be installed in all locations in which any full partition is
installed where the view of the gaming area by staff is screened out.
4-6-10: INSPECTION OF PREMISES:
The City reserves the right to inspect the premises of any licensed video gaming
establishment for compliance with these regulations and all other applicable ordinances.
Refusal of inspection is ground for revocation of all video gaming licensing.
4-6-11: DISPLAY OF LICENSES:
Upon approval of the video gaming establishment license, including receipt of the
payment of the license fee, the City shall issue a license certificate bearing the notation
"City of McHenry Video Gaming Establishment License". One license shall be issued for
each licensed video gaming establishment and list the number of video gaming terminals
licensed for said establishment, and it shall be affixed in a conspicuous place near any
video gaming terminals. Upon approval of the video gaming terminal license, including
receipt of payment for each video gaming terminal, a licensing sticker issued by the City
must be affixed to each video gaming terminal and visible for inspection.
(Ord. 19-1197, 6-17-2019)
4-6-12: EXISTING VIDEO GAMING ESTABLISHMENTS:
Upon renewal of each video gaming establishment, in existence at the time of adoption
of this chapter, each licensee shall enter into the Development Agreement referenced in
section 4-6-7 of this chapter.
SECTION 2: If any section, paragraph, subdivision, clause, sentence or provision of this Ordinance
shall be adjudged by any Court of competent jurisdiction to be invalid, such judgment shall not
affect, impair, invalidate or nullify the remainder thereof, which remainder shall remain and
continue in full force and effect.
SECTION 3: All ordinances or parts of ordinances in conflict herewith are hereby repealed to the
extent of such conflict.
SECTION 4: This Ordinance shall take effect immediately upon its passage, due to the urgency of
implementing a Push Tax in light of HB3136.
Passed this 31st day of October, 2021.
Ayes Nays Absent Abstain
Alderman Devine X
Alderman Glab X
Alderman Harding X
Alderman McClatchey X
Alderwoman Miller X
Alderman Santi X
Alderman Strach X
r a
Wayne Jett, Mayor Monte Johnson, Deputy City Clerk
CERTIFICATION
I, Monte Johnson, do hereby certify that I am the duly appointed, acting and qualified Deputy
Clerk of the City of McHenry, McHenry County, Illinois, and that as such Clerk, I am the keeper
of the records and minutes and proceedings of the Mayor and Aldermen of said City of
McHenry.
I do hereby further certify that at a regular meeting of the Mayor and Aldermen of the City of
McHenry, held on the 315Y day of October, 2021, the foregoing Ordinance entitled an Ordinance
Amending Title 4, Business and License Regulations, Chapter 6, Video Gaming Terminals, of the
City of McHenry Municipal Code, was duly passed by the City Council of the City of McHenry.
The pamphlet form of Ordinance No. 21-56, including the Ordinance and a cover sheet thereof,
was prepared, and a copy of such Ordinance was posted in the City Hall, commencing on the 1st
day of November 2021, and will continue for at least 10 days thereafter. Copies of such
Ordinance are also available for public inspection upon request in the office of the City Clerk.
I do further certify that the original, of which the attached is a true and correct copy, is
entrusted to me as the Clerk of said City for safekeeping, and that I am the lawful custodian and
keeper of the same.
GIVEN under my hand and seal this 15Y day of November 2021.
/7y4,x*-q. y
Monte Johnson, Deputy Clerk
City of McHenry,
McHenry County, Illinois
(SEAL)