O’Fallon tightens rules for how businesses are granted video gaming permits

Before local video gaming terminal permits can be issued, the O’Fallon City Council has now tightened pre-conditions to close what they perceived to be a loophole.

Before adopting an amended ordinance Tuesday, they modified wording to include a prorated allowance by an already existing business, as recommended by Alderman Todd Roach, and a provision for an established business that moves elsewhere in the city, as suggested by Alderman Eric Van Hook.

The council has established 50% minimum food and beverage sales, and alcohol sales for on-premises consumption, a minimum time for having a liquor license, and compliance with all local zoning ordinances as pre-conditions.

Before, a new business had a six-month grace period where revenue could be evaluated. But city staff wondered what if an establishment wasn’t meeting the 50% requirement, and then re-applied with a new name or new owner? Would they receive another six-month grace period?

The city attorney changed that wording to not allow that to happen.

The update states that a minimum 50% food and beverage gross revenue is required, which does not include fraternal or veterans’ establishments. The business must then maintain that and continue documenting that 50% of its total gross revenue is from food, beverage, and liquor sales.

If not, the video gaming terminal permit will be revoked immediately, and the establishment will not be eligible to reapply until next May 1. That will happen too if the quarterly submission is not turned in timely.

The original ordinance, which has been in place for about six years, is designed to prevent commercial businesses from having a stand-alone gaming parlor that sells “incidental” food and drink. At the time, that council did not want to see a proliferation of gaming places.

The city requires a business that applies for a video gaming license to have had a liquor license for two years.

The new change states that if a licensed establishment moves to another location in town and is in good standing with the state and the city, and has met all of the qualifications to have a business license, liquor license, and video gaming permit, then they can transfer their license, or apply for an additional gaming license.

But only if they meet the requirements of this current ordinance, have the same corporate ownership, and structure, and operate in a “substantially similar manner to its previous location.”

For instance, if it was previously a restaurant, it must continue to be a restaurant to have video gaming.

Regarding prorated license fees, a qualifying business may be eligible if they have never had a video gaming permit revoked, nor the building location or the current owners.

If a business is granted proration, the license and fees must be paid before the last day of the month prior to the month that gaming was permitted.

Annual nonrefundable video gaming licenses cost $1,000 per retail terminal in O’Fallon, and $250 for fraternal and veterans organizations.

The permit fee must be paid at the time of the initial or renewal application is filed with the city, and good until April 30.

The ordinance prohibits video gaming cafes from opening in the city and cannot obtain any existing classification of O’Fallon liquor license.

To determine if a business is a video gaming café, the city will consider its layout and design, the preparation and variety of food and beverages offered, the creation and operation of a commercial kitchen, and the number of employees.

They will also look at the number of video gaming machines relative to the customer seating capacity, square footage of space devoted to video gaming relative to the amount of space devoted to other activities, and the source of proposed or actual revenue derived from the establishment.

The ordinance also removed truck stops from being eligible for video gaming terminals. There are no truck stops currently in O’Fallon.

According to the FY24 budget, $240,000 was projected for video gaming terminals.

Honoring State Champions

Tuesday was proclaimed Carriel Gameday Cheerleading Day in honor of the junior high team winning the state championship for Gameday routine and fourth place for medium division routine.

During the presentation Tuesday evening, Coach Joni Bugger Fultz explained that the team won for their routine at the ICCA (Illinois Cheerleading Coaches Association) championships in January while the recent championship honors were from the IESA (Illinois Elementary School Association). They previously won in 2022.

Mayor Herb Roach complimented the players for their hard work and efforts. “There’s a lot more that goes into it. It’s not just showing up on game day,” he said.

He also praised parents for their dedication.

“I know it’s a lot of time and effort, working with the school, getting to practices, getting to games, being there, knowing what to expect,” he said.

Roach also noted that the all-female squad is part of an elite legacy -- the high school and grade school state champions in town have all been girl teams – until now. A boys’ team from Joseph A. Arthur Middle School will be recognized at the next meeting for their first ever basketball championship in Class M at the SIJHSAA (Southern Illinois Junior High School Athletic Association) tournament Feb. 9.

City Appointments

Deborah Arell-Martinez, Al Keeler, Ray Rohr, and Larry Sewell were reappointed to the Planning Commission for a 3-year term expiring March 20.

Susan Holden and Ed Martinez were reappointed to the Board of Fire and Police Commissioners for a 3-year term expiring in March 2027.

This story was originally published February 22, 2024 at 4:12 PM.