Thursday, March 26th, 2015

Home Rule Municipalities and Video Gaming Terminal Fees

In Accel Entertainment Gaming, LLC. v. Village of Elmwood Park, the Cook County Circuit Court recently decided a case involving home rule municipalities and annual fees charged for Video Gaming Terminals (VGTs). Specifically, the plaintiff argued that the Village’s ordinance requiring a $1,000 annual fee per VGT was unconstitutional on its face and that the ordinance exceeded the Village’s home rule authority.

In granting the Village’s motion to dismiss, the court found that the $1,000 per VGT per year was constitutional. Under the Act, the VGA only regulates non-home rule units of local government and states that they may not impose any annual fee for a VGT above $25. However, home rule units of local government have more discretion as the power vested in home rule authority is “based on the assumption that municipalities should be allowed to address problems with solutions to tailor to their local needs.”

In determining that the $1,000 per VGT annual fee was constitutional, the court analogized the issue to another case involving vending machines and licensing fees where the court stated that “a license fee for regulatory purposes can be sustained as long as the license fee bears some reasonable relation to the cost of regulation.” A & H Vending Service, Inc. v. Village of Schaumburg. The court found that the plaintiff did not allege any facts showing that the Village’s charge of $1,000 per terminal per year was not reasonably related to the ordinance’s regulation. In turn, the court therefore upheld the Village’s $1,000 annual fee for VGTs.

William C. Westfall

Authors: William C. Westfall, Jacob Caudill