Slot revenue in the Rockford region hit its second-highest year on record in 2023

By Kevin Haas
Rock River Current
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ROCKFORD — Revenue reaped in from video gaming machines in Rockford and its largest neighbors increased about 3% last year to its second-highest total on record.

Slot machines in Rockford, Loves Park, Machesney Park and unincorporated portions of Winnebago County brought in a combined $86.3 million in net revenue, according to data compiled from the Illinois Gaming Board. Video gaming has been allowed in Illinois for a dozen years.

Tax revenue from those four communities — the same ones that share in tax revenue generated from Hard Rock Casino Rockford — totaled $4.3 million in 2023. By comparison, the casino generated $4 million in gambling tax revenue split between the four with Rockford taking 70% of the funds.

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Revenue from slot machines is down about 8% from its peak in 2021, when local gaming operators say they saw a spike in activity as people reemerged from their homes after the pandemic lockdowns and had stimulus cash to spend. November 2021 is also when the Rockford Casino opened.

“Everybody was cooped up in the house and they wanted to get out. Slot places give something for people to do who don’t want to go to a bigger place,” said Frank Laudicina, who owns Top Dollar Slots and Napoli’s Pizza in Loves Park and Machesney Park. “They missed getting out of the house and going to their local joint, and they supported us.”

There were also changes made to state gambling laws in 2019 that allowed for higher bets and more machines that contributed to higher revenue.

In 2019, Illinois lawmakers approved increasing the maximum bet at video gaming terminals from $2 to $4 and the maximum win rose from $500 to $1,195. They also permitted businesses to have six slot machines instead of five and increased the tax from 30% to 33%.

Businesses in Rockford and its neighbors took in $65.7 million in net slot revenue in 2019, about $20.6 million less than last year.

Slots v. casino

Slot revenue here has fallen since the A Hard Rock Opening Act casino opened in November 2021 at 610 N. Bell School Road. There was a net $93.4 million in 2021, compared to $83.9 million and $86.3 million the two following years.

The sharpest revenue fall came in the city of Rockford, where net slot income went from $47.4 million in 2021 to $40 million last year.

Local operators interviewed for this story, however, credit that to a post-pandemic spike in 2021 rather than the entrance of the casino into the market.

“The big spike was the fact that people had more money in their pocket,” said Luke Meyer, who owns BJ’s Place on 11th Street in Rockford.

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He said the casino draws a different crowd than neighborhood bars or small gaming parlors.

“I knew it wasn’t going to really affect us because most people that play video gaming machines are local,” Meyer said. “They’re going to go in and put in their $20 or their $40 and see if they’re lucky.

“Will that change next year when they open the big casino? Maybe, and maybe not.”

There are 213 establishments across Rockford, Loves Park, Machesney Park and unincorporated Winnebago County that offer video gaming. Those businesses have a total 1,209 machines. Both of those numbers are up from 2019, when there were 192 establishments and 930 machines.

“I don’t think the casino has taken a toll on most of the locations in the area,” Laudicina said. “I don’t think it’s helped, but I don’t think it’s hurt us as much as people think.”

Statewide, video gaming revenue has continued to rise since it netted $2.4 billion in 2021 and generated $717.7 million in state taxes. Last year, the state saw $2.8 billion in net terminal revenue and $836.4 million in state taxes, according to the Gaming Board.

Revenue and taxes

Video gaming via slot machines at bars and restaurants went live in Illinois in September 2012.

Since then, slot machines have generated more than $340 million in net income in Rockford alone. That’s brought in more than $17 million in tax revenue for the city of Rockford, which dedicates the money toward purchasing and replacing vehicles such as police squad cars, public works trucks and fire engines.

In Loves Park, video gaming has generated more than $9.8 million since its inception. The money goes into the city’s general fund and helps keep city services operating without the need to levy a city property tax, Mayor Greg Jury said. Machesney Park similarly uses the money in its general operating fund.

Jury said the bars and restaurants that are part of the Illinois Licensed Beverage Association, a trade group that represents bar and liquor businesses on state issues, have also given back to the community by donating to various charitable causes such as Rock House Kids and Easterseals.

“I don’t think it has affected Hard Rock at all, and I think it’s a big plus for the restaurants,” Jury said.

State lawmakers approved video gaming in 2009 as a means to help restaurants and small businesses that were struggling amid The Great Recession. After three years of delays and negotiations it went live.

Meyer, who is also treasurer of the Illinois Licensed Beverage Association, said the extra revenue slots bring has helped bars and restaurants survive.

“Everyone has experienced higher food costs, higher liquor costs, higher beer costs, higher labor costs,” he said. “If they didn’t have that video gaming revenue, a lot of these guys wouldn’t make it.”

Meyer built Rascal’s Bar & Grill in 2006 and ran it until 2019, when he sold it to Mike Sterling. Meyer and Jay Gesner partnered to buy BJ’s Place, a neighborhood bar at 2842 11th Street, in May 2023.

“BJ’s wouldn’t be in business if we didn’t have video gaming,” Meyer said. “It’s a neighborhood bar that’s been there since 1946, and it’s limited to its customer base. It’s a neighborhood establishment.”

He said fellow bar owners he knows in the area similarly depend on gaming revenue to help them stay afloat.

“I truly believe that additional income allows them to stay in business,” he said.

This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on X at @KevinMHaas or Instagram @thekevinhaas and Threads @thekevinhaas