Piggly Wiggly and Daisy Usher in a New Era

Make no mistake about it, Illinois is a gambling state.  In the Land of Lincoln, there are ten casinos, five horse race tracks, a $3 billion a year lottery and 26,000 VLTs located in 6,000 bars, restaurants, truck stops, fraternal and veterans establishments.  Illinois has more separate places to gamble than any other state.  And yet every year, the legislature debates adding more options for gamblers; this year poker, online gaming, fantasy sports and six more casinos were proposed.  However, the next wave of expansion may be beginning without any discussion on the floor of the House or Senate in Springfield.  In Chicago, a Piggly Wiggly became the first full service grocery in the state to receive a video gaming license.  However, the second license has already been issued to a grocery store in Park Forest.  To qualify for a gaming license, a grocery must have both liquor and food for consumption on the property.  Providing space and prepared food to eat in the store is a growing national trend.   In New York, Wegmans Food Markets offers entertainment and other special events to go with the dining.  Shoppers can make an evening of a trip to their favorite market.

Dining in grocery stores may be relatively new, but putting in slot machines is not a new idea. Nevada has allowed them for years and for the most part it has been a success for the state and the stores.  The machines did very until a law was passed prohibiting smoking in grocery stores and other public places.  When smoking was no longer permitted, revenues and taxes dropped dramatically.  Still, most stores in Nevada have slots that rely on impulsive play of shoppers on the way out the door; they rarely stay and play the way they might in a casino.  In Illinois, a different model is being contemplated.  Piggly Wiggly following a Wegmans-like model is seeking to provide a more complete experience.  In that model, buying groceries is only part of the experience and sometimes only a minor part.  Now in Chicago you can meet your friends for dinner, have a drink and if you feel like it, play the slots.  And on your way out the door, you can pick up milk and bread.  That was not what people imagined might happen eight years ago.

The Video Gaming Act was enacted on July 13, 2009, but the state was not flooded with VLTs immediately.  It took several years to pass the necessary regulations, approve the video games to be played and license the distributors.  Each city or county in the state had a veto right and local elected officials were uncertain they wanted video gaming in their backyard.  They sat on the fence and watched.  Over time attitudes changed, as more and more cities saw advantages in allowing gaming.  In October 2012, the second month of VLT gaming, there were only 169 establishments operating 712 devices in the state; a year later there were 11,000 units in 2100 establishments.  The growth in the next three years was as great as during that first year.  In 2017, it has started to slow and may be approaching its limits.  Now, that could change; I think Piggly Wiggly is going initiate a new trend.  The new trend might not have the growth potential that existed in 2013, but it will give a second wind to the expansion.

Piggly Wiggly also illustrates a shift in creative thinking on the subject.  For the last five years, video gaming has grown because conventional bars and restaurants realized VLTs offered an opportunity to drastically improve their profits.  In fact, Illinois is much like Nevada in one sense, the majority of the VLTs in the state are operated by slot route operators like Penn National, Golden Gaming, Delaware North and Dotty’s; their primary business is gaming.  Grocery stores will not be as reliant on the VLT revenue as other licensees.  Rather the video gaming will be an extension of the services offered.  It will be another new product and a relatively minor addition to the store’s cash flow and profitability.

Another example from Illinois suggests other businesses become creative in using VLTs.  In Joliet, Kathy Wilda applied for a gaming license to compliment the products and services she wants to offer in her Daisy’s.  The not yet open, Daisy’s, is planned to be a place for women to gather and socialize. Wilda hopes to offer food, drink, painting, pleasant companions, conversation and VLTs.  The city council rejected the VLTs; somehow a place for women with gambling was against their standards.  Ms Wilda protested and said the gaming was just an adjunct to the business; the VLTs would provide a little something for hubby to do.  Ironically, that was the conventional wisdom when I started working in casinos. “Real gamblers – the men – played craps and maybe blackjack.  The only reason to have slot machines in a casino was so the little lady had something to do while her husband threw the bones.”

Back to my point and for a minute ignoring the blatant sexism of the Joliet City Council.  Daisy’s and Piggly Wiggly could be the leading edge of the next generation of slot operators in Illinois.  Both are seeking ways to add services, products and create a more social and friendly environment.  Under those circumstances gambling is not the reason the business exists, it complements the core business.  For the bars, restaurants and truck stops that have VLTs, gambling is the most important part of the business.  Any social activity that develops is simply a byproduct of the gambling.  For Piggly Wiggly and others like it, the gambling will be the byproduct of the social activity.


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