McHenry sets new guidelines for gambling cafes, will allow existing venues with poker machines to stay

Council voted to deny in a gaming license before guideline vote

A customer plays a game on Tuesday, Nov. 28, 2023, at International House of Wine and Cheese in Richmond. Tom Jiaras, the owner of Hot Shots and the International House of Wine and Cheese, both which have electronic gaming, received a license for gaming in McHenry in October.

When he called two business owners Tuesday, McHenry Deputy City Clerk Monte Johnson was pretty sure they would pull their applications for liquor and video gambling licenses in town.

Both of the businesses were seeking electronic gaming licenses and, following a new ordinance approved by the McHenry City Council Monday night, both would be considered gaming cafes, Johnson said.

“Those other two businesses are out now,” Johnson confirmed Tuesday afternoon.

The ordinance defines gaming cafes as “an establishment whose primary or a major focus ... is video gaming and the service of alcohol; food is secondary to the operation of video gaming.”

“I don’t want to lose who we have.”

—  McHenry Alderwoman Sue Miller, 7th Ward, on defining gaming cafes in the city

Prior to the unanimous vote approving video gaming cafe guidelines, the council denied a gaming license to a business set to open in six months.

Johnson had asked the council at its Nov. 20 meeting for more definite guidelines when advising applicants seeking gaming licenses.

Following that discussion, City Attorney David McArdle reached out to Cary and Algonquin for those towns’ electronic gaming ordinances. He added some language of his own, and the council approved that ordinance this week.

According to the new ordinance, the Local Liquor Control Commissioner – McHenry Mayor Wayne Jett – is the arbiter of what constitutes a gaming cafe. Factors to determine if an establishment is a gaming cafe include design and layout, the preparation and variety of food offered, the commercial kitchen, the number of gaming machines relative to customer seating, space devoted to gaming versus all other space, and the number of employees, among other factors.

Following discussion, the council removed a proposed section of the law that would have shuttered the existing gaming cafes if they were closed for 30 days or longer.

Johnson noted the city’s budget receives nearly $1 million each year in taxes from video gaming machines.

He could think of one video gaming cafe, among the handful already operating in McHenry, that was closed for six months during a change of ownership.

“Losing revenue scares me,” Johnson said of closing down an existing business.

He was also concerned about the location size requirements. Bars like Ye Olde Corner Tap could have been considered a gaming cafe based on its size.

“They have been a bar here since McHenry has been around, and they fit the definition of a gaming cafe in here,” Johnson said.

Seventh Ward Alderwoman Sue Miller said. “I don’t want to lose who we have.”

The new language lays out consistent guidelines while allowing existing locations to continue to operate, she added.

If a businesses is considering McHenry as a location, the guidelines could cause them to “tweak” design plans to conform, McArdle said.

Earlier in the meeting, the council approved a liquor license, but not a gaming license, for John Barnes and The Kraken. Planned for a storefront at 4509 W. Elm St. that formerly housed a title loan business, Barnes told the council he envisioned a coffee shop, bar and lounge atmosphere that would be “comfortable and homey,” where patrons could work remotely if they desired.

“They plan to revitalize this blighted property with [a] Chicago urban coffee shop feel,” Johnson wrote in his report to the city.

Barnes told the council he lives in North Carolina and selected McHenry at the advice of friends. “I am in the amusement business,” he explained, operating pinball, jukeboxes and pool tables at bars in the Raleigh and Wake Forest areas. He’s wanted to open a bar but not where his business is now, Barnes said.

“I have clients that would be upset if I did so,” Barnes said.

Per the city, Barnes must find a manager-agent to operate the business as part of the liquor license requirement. He does not plan to move to the area.

Miller said her concern is that Barnes would be an absentee owner and unable to respond to issues quickly.

After a year in operation, Barnes could come back and ask for a gaming license again, Alderman Victor Santi, Ward 1, said.

Alderman Andrew Glab, 2nd Ward, voted against both the liquor and the gaming license.

“I know we have a lot of empty buildings we need to fill, but how many liquor establishments are we going to keep opening up in this town?” Glab asked, adding that McHenry was becoming a “party town.”

“Unless there is something interesting that comes in, I won’t be supporting any more liquor licenses,” Glab said.