City Council is moving to ban prize and gift kiosks that are free to play and legal under Illinois law, while the establishments that depend on them have no alternative and no time to wait.
The Chicago City Council is on the verge of banning thousands of prize and gift kiosks operating legally in bars and taverns across the city, a move that would devastate small business owners who followed the law and have no comparable alternative to replace the revenue.
The ordinance, led by 9th Ward Alderman Anthony Beal and passed out of the City Council’s Licensing and Consumer Protection Committee, would fine establishments $1,000 for a first offense, $2,000 for a second, and on a third strike, seize the machines and place their liquor license in jeopardy. For a neighborhood bar operating on thin margins, that is not a fine schedule. That is a timeline to closure.
Approximately 5,000 of these machines are currently operating across Chicago. Behind each one is a small business owner who looked at a shrinking revenue picture, consulted the law, and found an option that appeared to be on solid legal footing. Many of them are now writing letters to Alderman Beal and City Council members asking a simple question: Why are you treating us like criminals?
These Machines Are Legal Under Illinois Law
Prize and gift kiosks are not slot machines. Under 720 ILCS 5/28-1(b)(13) of the Illinois Criminal Code, games of skill or chance are explicitly exempt from gambling classifications when no payment or purchase is required to participate. Compliant kiosks are free to play, do not dispense cash, and issue gift certificates that are redeemed separately at the counter.
They are also exempt from the Illinois Video Gaming Act under 230 ILCS 40/35, and fall outside the city’s definition of coin-operated amusement devices because their stated purpose is the promotion and sale of gift certificates, not gaming.
Attorneys representing operators like Pomi have documented this legal framework in detail. This is not a loophole argument. It is a straightforward reading of statutes that the Illinois legislature wrote, confirmed by the courts, and that small business owners relied on in good faith.
The Ban Does Not Distinguish Between Legal and Illegal Operators
Alderman Beal’s concerns about bad actors in the sweepstakes industry are not unfounded. There are operators running machines that do not meet the legal standard, and those machines should be removed. The coalition of small business owners opposing this ban has said so directly and repeatedly.
What they are opposing is a policy that makes no distinction between a compliant operator and an illegal one. The ordinance bans the category, not the conduct. Every establishment gets the same treatment regardless of whether they consulted an attorney, restructured their operation around the legal standard, and have documentation to prove it.
What Small Business Owners Are Asking For
Dozens of Chicago small business owners have submitted letters to Alderman Beal and City Council members. The ask is not complicated. They want the city to pause the ordinance, engage with legal operators and their counsel, and develop a targeted enforcement strategy that removes illegal machines without closing the businesses that earned the right to operate.
Let’s work together to save small businesses, rid the City of bad actors, and generate revenue for the City.
These are neighborhood establishments that have survived recessions, pandemics, and years of declining foot traffic. For many of them, the revenue from these kiosks is the difference between staying open and shutting down.
