City Council Passes Gaming Push Tax Amid Concerns

Introduction

The City Council convened on November 1, 2021, to address a critical and time-sensitive issue: the approval of a municipal push tax ordinance on video gaming operations. The meeting highlighted the urgency of action, detailed community and business concerns, and laid out plans for future evaluation and possible revisions.

Urgent Adoption of the Push Tax

Reason for Immediate Action

The push tax ordinance was introduced under tight deadlines due to Senate Bill 3136, passed on October 27, 2021. Cities were required to pass such ordinances by midnight on October 31, 2021, to retain the right to implement the tax in the future.

Although the tax will not take effect until May 1, 2022, the Council’s quick action ensures the city retains flexibility to generate future revenue from video gaming terminals.

Impact and Concerns Raised

Focus on End-Users, Not Businesses

City officials stressed that the push tax is designed as an end-user tax, meaning the burden should fall on players rather than local business owners.

Business Owners’ Opposition

Public comments included a statement from James Tom of Swamy Gaming and Western Automatic Music Inc., who strongly opposed the measure. He argued that even a “penny per push” tax would significantly impact the gaming industry, potentially driving players to other municipalities without similar taxes.

Pending Legal and Logistical Challenges

Council discussions revealed uncertainty about how the tax would be collected, with no formal collection mechanism currently in place. There is also a lawsuit pending against another municipality over a similar tax, raising additional concerns about its long-term viability.

Decisions and Actions

Ordinance Approval

After thorough discussion, the City Council voted to approve the push tax ordinance. The decision gives the city the right to levy this tax starting in May 2022.

Action Plan

• Monitor Impact: The Mayor committed to reviewing the tax’s effects on local businesses and repealing it if necessary.

• Business Communication: Affected businesses will receive detailed communication about the ordinance and its implementation timeline.

• Software Development: The State Gaming Commission is expected to develop systems to streamline tax collection.

Broader Context

Several other municipalities reportedly rushed to pass similar ordinances before the deadline, reflecting a broader trend of cities seeking new revenue sources while grappling with regulatory uncertainties.

Final Thoughts

The City Council’s decision to approve the push tax ordinance underscores a delicate balance between securing revenue opportunities and maintaining a business-friendly environment. While the ordinance ensures future revenue flexibility, its success depends on effective implementation and collaboration with stakeholders.

The coming months will be crucial as the city engages with businesses, develops collection mechanisms, and evaluates the tax’s impact on both the gaming industry and the local economy.

FAQs

What is the push tax approved by St. Charles City Council?

It’s a tax on video gaming terminals, designed as an end-user tax to generate future municipal revenue starting May 1, 2022.

Why was the push tax ordinance adopted urgently?

Senate Bill 3136 required cities to pass the ordinance by October 31, 2021, to retain the right to implement the tax.

Who opposed the push tax and why?

Local business owners, including James Tom of Swamy Gaming, opposed it, fearing it would drive players to municipalities without the tax.

How will the push tax be implemented and monitored?

The city will communicate with affected businesses, monitor the tax’s impact, and rely on the State Gaming Commission for collection systems.

What is the expected impact of the push tax on the local gaming industry?

The tax may affect player behavior and business revenue, but officials hope it balances municipal revenue needs with maintaining a business-friendly environment.