- Associated Press - Thursday, October 16, 2014

CHICAGO (AP) - An anti-crime group in Illinois launched a campaign Thursday to eradicate unregulated casino-like kiosks in bars and other venues that mimic legal video gambling, arguing the “sweepstakes” or “coupon” machines are sometimes fixed to cheat players and invite the involvement of organized crime.

Those installing the machines, which accept cash but typically pay out coupons or credits that can be used for online purchases, exploit a loophole in Illinois law that legislators have not closed, according to the Chicago Crime Commission, a 95-year-old nonpartisan group of civic leaders.

The machines are present in more than a dozen states, many of which are grappling with similar issues, a report by the American Gaming Association found. Revenues nationwide may run into the billions of dollars, with single terminals generating up to $5,000 a month, the 2012 report said.

Rough estimates are that there are more than 100 operational in Illinois - with 600 machines waiting to be installed, said Art Bilek, the commission’s executive vice president. The gaming association report said there are several thousand in some states.

Once they become established in a state, Bilek warned, “They are like parasites - they never go away.”

There are around 13,000 legal and strictly regulated video gambling machines in Illinois, which generate tens of millions of dollars in tax revenue, according to the Illinois Gaming Board. No money from the unregulated devices goes into government coffers.

Bilek says in some instances anecdotal evidence suggests reputed organized crime figures involved in extortion or illegal cigarette sales are the same figures who approach bars to gauge whether their owners will sign up for sweepstakes and coupon machines.

“The guy’s a runner - a goon for the Outfit,” he said referring to one name for the Chicago-area mob.

Bilek’s group is mailing a new guidebook called “The Nightmare of Sweepstakes Video Gaming” to every sheriff and state’s attorney in Illinois. In Cook County, where the devices are more prevalent, mayors and police chiefs will get one, too.

Defenders of the machines say they don’t directly distribute cash and, hence, shouldn’t be subject to gambling controls.

A notice on the Illinois Gaming Board’s website says that line of reasoning “has been universally rejected in jurisdictions across the country,” including by courts in eight states.

Bilek, who joined undercover police to play the machines, says they clearly meet criteria for gambling, including because they rely on chance, not skill. At some venues, he said bartenders paid him cash if he produced receipts indicating he won on a machine.

There have been no arrests in Illinois of anyone linked to the machines, Belik said, in part because of the absence of a definitive Illinois court decision finding they violate state law.

Some establishments, he said, justify the machines by pointing to a 2-year-old amendment exempting some games from gambling rules, including raffles. A bill to explicitly ban sweepstakes and coupon machines unanimously passed Illinois’ Senate this year, but it stalled in the House.

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Follow Michael Tarm at www.twitter.com/mtarm


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