Video Poker in Illinois – a New Era and a New Opportunity

A tiny article in the news on Monday, October 14th caught my eye .  A Nevada-familiar name, Dotty’s, received a license to open a café with slot machines in the village of Homer Glenn in Illinois.  According to the story, Dotty’s intends to develop a chain of Dotty’s Cafes across Illinois. “The chain is designed to cater to women 35-years and older in a home, Grandma’s-kitchen style atmosphere,” the article said. The following day, another community, Mundelein rejected Dotty’s application. Wow, Nevada comes to Illinois.  Actually for me and my family Nevada moved to Illinois 25 years ago when my sister, her daughter and husband moved to Decatur.

When the article appeared, I was in Decatur visiting as I do every year for my great niece’s birthday.  It was a beautiful fall week filled with family and fun events.  We ran, walked, talked, ate lots of good meals, had a birthday party, waited for school buses, told stories and sang songs.  When my sister and her family moved to Decatur 25 years ago, it was still the dark ages of casino gaming. Only Nevada and New Jersey had casinos and slot machines. In those days communities with casinos and communities like Decatur seemed to be in different countries, if not on separate planets. That has changed, dramatically.

Illinois authorized riverboat casinos in 1990 and since October last year has been in the process of licensing taverns, fraternal and veterans’ organizations and truck stops to operate video poker machines.  Even more gaming is on the horizon; a bill being introduced now would authorize 5 more (there are 9 currently) casinos in the state and allow slot machines at Chicago airports.

The roll out of slot machines has been slow, slower than the governor had predicted or wanted; it was also much slower than gaming observers expected.  Still after 11 months, there are over 9000 in 1800 locations.  Those machines generated $106 million in revenue in the first 6 months of 2013.  Two thousand more locations are awaiting approval, additional licenses being approved and more communities are opting to approve gaming.  The initial legislation gives each community in the state the right to opt in or to opt out of video gaming.  Both the processes of community authorization and the state’s licensing procedure have acted to slow the process; but the process is grinding on.

Decatur opted in last year and is currently in the process of granting licenses.  As of March, Decatur had 9 business operating a total of 44 machines.  The 44 games produced a million dollars of revenue in February, double what 40 machines in 8 locations produced in January.  In March there were 37 additional establishments awaiting licensing.  The Decatur visit was my first time to hear about the slot machines from locals.  My niece has a friend who works in one of the taverns; he sees video poker as the savior of a potentially failing business.  My niece told me her friend’s tavern employer had gone from a near death experience to being busy all of the time.  The parking lot is always full and employees related a really robust business.  While listening to my niece I was wondering why Nevada slot operators were not jumping on the opportunity.

Later after I returned to Reno, I saw the article about Dotty’s.  It makes sense that Dotty’s would be in search of a new home. Nevada has become a hostile business climate for the chain.  The chain grew out of the smoking ban; except for casinos smoking was banned in most places with slot machines.  Slot route operators, sports bars and small bars serving food were hit hard by the ban.  In the wake of the ban, Dotty’s created a different model.  It was as the article from Illinois said designed for women.  Dotty’s are intended to be quieter; they have free standing slot machines as opposed to bar-top machines and they are seemingly safer and friendlier of a woman alone.  Dotty’s avoided the smoking ban by eliminating a kitchen, serving only packaged food.

The plan worked and worked well, there are nearly 70 Dotty’s across Nevada.  However, both Clark County and the State of Nevada have passed regulations that will make it impossible to continue with the current configuration and business model.  So, like all good adapter Dotty’s is moving to friendlier operating environments, like Illinois, Montana and Oregon.  Dotty’s is a model for evolutionary development in gaming; as one environment ceases to be safe and profitable companies of all sizes are going to have to look in new places and develop new business models to survive.  Dotty’s may well serve as model for many when the full implications of online gaming begin to hit home in traditional casinos.


2 Responses to “Video Poker in Illinois – a New Era and a New Opportunity”

  1. 1 David minter October 18, 2013 at 7:45 pm

    I looked at this but you had to be an Illinois business Not sure how Dotys got round this

    • 2 Ken Adams October 18, 2013 at 9:19 pm

      they got around it in oregon, montana and illinois – i think they must have local partners


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