City warns Racine businesses to pull video gambling machines

Racine convenience stores and gas stations are pulling out their video gambling machines after a city letter warned the machines may be seized.

City Attorney Rob Weber sent a letter dated Dec. 17 to all Class A liquor license holders - mostly convenience stores and gas stations - in Racine warning that possession of video gambling machine was a felony under Wisconsin law. The letter urged removal of any illegal machines by Dec. 31, 2009.

Weber's letter came two days after the Racine City Council voted to enact local fines against businesses that violated the law. Businesses can be fined $500 per machine, and the machines can be confiscated with money in them, under the ordinance, which mirrors state law.

Local convenience stores are taking the letter seriously. Odd Fellows, a convenience store at 817 Main St., has already removed its machines and a handful of other gas stations and stores have reportedly pulled the plug on their small-time gambling operations, as well.

City enforcement of the state law on video gambling does not affect bars, which hold Class B liquor licenses. They are allowed under state law to have up to five video gambling machines. The exemption for Class B liquor licenses has convenience store owners crying unfair. But Bar owners are reaping the rewards of an aggressive lobbying effort to open up gambling in places other than Native American casinos. No doubt locally bars will benefit if video gambling machines are pulled out of convenience stores - ie. the competition.

Alderman Aron Wisneski, who chairs the city's Public Safety and Licensing Committee, is playing a key role in enforcing the video gambling law. He said Monday the city is reacting to complaints its received from residents about gambling in neighborhood stores. He added the machines in businesses without a Class B liquor license is clearly a felony under state law.

Locally, police are concerned that a proliferation of video gambling creates additional targets for crime, Wisneski said. Stores that carry machines presumably have cash on hand to pay out winners. While none of the machines payout big money - the max is around $500 - it could attract criminal activity, he said.

"The police came to us and said, 'We want to do something,'" Wisneski said.

The city has done its homework on the issue. Police officers are trained to identify and confiscate gambling machines (a seemingly simple process, but important for testimony to hold up in court). They also have legal precedent. The City of Milwaukee confiscated video gambling machines about 10 years ago and fined the owners. The owners fought the fines, but lost in circuit court. The decision was upheld by the Court of Appeals in 2002.

Wisneski said the city does not want to fine anyone over video gambling machines. It just wants fewer machines in the city.

That said, it's likely the city will move forward against businesses that illegally hold on to video gambling machines.

"When we roll this out, we're going to bust places and we're going to win in court," Wisneski said.