The Rock Falls City Council will vote March 3 on an ordinance that would increase annual liquor license fees for bars in which primary revenue comes from gaming machines.

The ordinance was presented at Tuesday’s meeting and the council voted unanimously to place it on the agenda for a final vote at its next meeting. The most significant proposed changes are to create a separate license for bars that generate over half of their revenue from gaming machines at a higher annual fee than bars that don’t and to require another license for an additional annual fee to permit selling alcohol to be consumed off the premises at all bars, restaurants, hotels and other event spaces.

The ordinance, if approved, would also remove the additional license that’s currently required for all establishments, except campgrounds, to sell alcohol on Sundays and change the maximum number of licenses that can be issued to bars.

“Numerous times the council had discussions on gaming parlors and their license and how to restrict the number of gaming parlors,” Rock Falls Mayor Rod Kleckler said.

Gaming parlors are defined by the proposed ordinance as bars that make over 50% of their revenue from the use of those machines. Those bars would be required to have a Class F-1 license to permit the sale of alcohol for consumption on the premises seven days a week at an annual fee of $2,700. Only six of those licenses could be issued by the city at any one time.

Currently, city ordinance considers those establishments the same as any other bar and requires them both to have a “tavern” license and imposes a limit of 20. The proposed ordinance would change that Class A-1 license to be only for bars that generate under 50% of their revenue from gaming machines at an annual $2,200 fee and limit the number issued to 16.

“We looked at the fact that really none of the gaming parlors are producing any sales tax revenue so that [$500] was added in on that to try to bring them into a contributing factor of our business area,” Kleckler said.

At Tuesday’s meeting, the council approved an ordinance that also targeted gaming machines. It raised the annual fee imposed on each machine in an establishment from $125 to $175. The fee in Dixon and Sterling is higher, at $250 per machine.

[ Rock Falls City Council hikes annual fees on gaming machines on 5-3 vote ]

Alderperson Violet Sobottka, also chairperson of the council’s ordinance committee, told Shaw Local that gaming machines can be very profitable for the places that have them and said the city is “just trying to recoup some of the revenues.”

However, a machine’s revenue doesn’t solely go to the establishment it’s located in. As required by state law, a very small percent of a machine’s total revenue goes to the company that maintains the software that all machines connect to, and 9% goes to the state, which gives 5% of that to the municipality. The remaining revenues are split between the machine owner and the establishment that’s leasing it.

In 2025, Rock Falls made $416,040 from the machine tax and with 162 machines would have also made an additional $20,250 off its annual fee, according to IGB data.

If the proposed ordinance pertaining to liquor licenses is approved, Rock Falls bar owners would be required to provide the city with documentation of its revenues showing how much of it comes from liquor sales compared to gaming machines to determine the type of license required.

Its current ordinance outlines a similar requirement for liquor licenses issued to restaurants, hotels and other event spaces, which is carried over in the proposed ordinance. It requires the owner to provide the city with documentation proving that gaming machines make up less than 40% of total revenue.

All bar owners, under the proposed ordinance for Class A and F licenses, would be required to purchase an additional license for $200 annually if they want to sell alcohol to be consumed off the premises, which differs from the current ordinance permitting the consumption of alcohol on or off the premises at no extra cost.

For most licenses, the annual cost won’t go up as long as business owners already pay the annual $450 Sunday sale fee. The proposed annual costs for seven-day licenses simply add that fee to the cost of each current six-day license fee. There would be no changes to licenses for campgrounds.

At council meetings, members of the public are allotted time to voice their opinions before voting takes place. All meetings start at 5:30 p.m. and are held at 603 W. 10th St. in Rock Falls.