Accel Entertainment Gaming, LLC v. Village of Elmwood Park
46 N.E.3d 1151
Ill. App. Ct.2016Background
- The Village of Elmwood Park adopted a Video Gaming Ordinance requiring local licenses, registration tags, inspections, supervisory authority by the liquor commissioner, limits on terminal numbers, and a $1,000 annual license fee per video gaming terminal. Much of the ordinance tracked the state Video Gaming Act and regulations.
- Accel Entertainment operated three video gaming terminals in an Elmwood Park bar under state approval but was ordered to deactivate them for failing to obtain the Village license and pay the $1,000 per-terminal fee; Accel then sued for declaratory and injunctive relief.
- Accel’s amended complaint pleaded four facial constitutional claims: (1) the $1,000 fee is an impermissible occupation tax; (2) the fee is preempted by the Riverboat Gambling Act (as incorporated into the Video Gaming Act); (3) the Ordinance exceeds the Village’s home-rule authority (statewide concern); and (4) the fee is an unconstitutional license-for-revenue.
- The trial court denied a TRO and granted the Village’s section 2-615 motion, dismissing all counts with prejudice: it held the Ordinance pertains to local government and affairs (home rule permitted) and that Accel failed to plead facts showing the $1,000 charge lacked a reasonable regulatory relation (i.e., was necessarily a tax).
- On appeal the First District affirmed: the court applied Kalodimos factors to find local interests (public safety, morals, local regulation of establishments) sufficient to sustain home-rule authority, and it rejected preemption and occupation-tax/license-for-revenue challenges, adopting prior reasoning from Midwest Gaming.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Ordinance exceeds home-rule power (pertains to local gov/affairs) | Regulation of video gaming is a statewide concern; Village cannot regulate locally | Video gaming within municipal borders affects local health, safety, morals and welfare; Village may regulate absent express legislative preemption | Ordinance pertains to local affairs; home rule permits Village regulation; count III dismissed |
| Whether the $1,000 per-terminal charge is an unconstitutional occupation tax | The charge functions as a tax on the occupation of operating terminals and is barred | The charge is a regulatory license fee reasonably related to local regulation; even if a tax, authorized by statute permitting certain non-sales taxes | Charge not shown to be an unconstitutional occupation tax; counts I and IV dismissed |
| Whether section 21 of the Riverboat Gambling Act preempts local licensing/taxing | Section 21 expressly forbids license/occupation taxes on licensees and thus preempts home-rule taxation | Section 21 lacks the requisite specificity to negate home-rule powers; Statute on Statutes requires explicit language to limit home-rule units | Section 21 is not specific enough to deny home-rule taxing power; count II dismissed |
| Whether the fee is an unconstitutional license-for-revenue | The Village is using licensing power to raise revenue in lieu of lawful taxing authority | The fee is regulatory and, even if a tax, falls within exceptions (Municipal Code §8-11-6a(7)) and is not a forbidden license-for-revenue | Fee is not an unconstitutional license-for-revenue given home-rule authority and statutory authorizations; count IV dismissed |
Key Cases Cited
- Young v. Bryco Arms, 213 Ill. 2d 433 (discussing standard for a section 2-615 dismissal)
- Wakulich v. Mraz, 203 Ill. 2d 223 (same pleading-sufficiency principles for 2-615 motions)
- Kalodimos v. Village of Morton Grove, 103 Ill. 2d 483 (framework for whether a subject is of statewide or local concern)
- Crocker v. Finley, 99 Ill. 2d 444 (distinction between a fee as compensation for services and a tax for general revenue)
- Town of Cicero v. Fox Valley Trotting Club, Inc., 65 Ill. 2d 10 (discussion of purposes of occupation taxes)