Video gambling parlors sue Illinois over profit-sharing
CHICAGO (AP) — Two companies that own video gambling parlors have sued the Illinois Gaming Board to challenge rules requiring them split profits with the businesses that operate the gambling machines.
The lawsuit argues that the nearly 6,000 parlors in the state could reinvest more money in their operations if they weren’t required to evenly divide their profits, the Chicago Tribune reported.
The lawsuit was filed in Cook County by the owners of the Dotty’s Cafe, Stella’s Place and Shelby’s gambling-parlor chains. The two companies argue that gambling parlors and the terminal operators should be free to negotiate their own profit-sharing deals and that establishments should be allowed to buy, install and maintain their own machines.
“The amount in profits the Video Gaming Act divvies out to each party is not rationally related to the contributions or investments each party may make toward the business or the amount each party has at risk,” the lawsuit argues.
The Illinois Gaming Board declined to comment on the lawsuit.
Combined, Illinois Cafe & Services Co. and Laredo Hospitality Ventures own and operate more than 100 Illinois video gambling parlors in more than 20 counties, employing nearly 500 workers.
Lawyers David Dahlquist and Dan Webb said that if the parlors didn’t have to share such a big percentage of their profits, the establishments could upgrade current operations, hire staff, expand or promote their businesses. Such endeavors would help generate additional revenues and more taxes to Illinois, the lawyers said.
“I can think of no other industry where, by law, a business is forced to give up 50 percent of their profits and is strictly prohibited from even trying to negotiate better terms,” Webb said.