Gaming Machines: Do Profits Outweigh Harm?

Vague Gaming Machine Laws Can Attract Unregulated Activity

Despite their financial benefits, gaming machines have also introduced regulatory challenges.

In some areas of Illinois, local governments have pushed back against their expansion. On November 19th, the Oak Park Village Board of Trustees approved a city-wide ordinance banning gaming machines altogether.

A key concern was the emergence of sweepstakes-style gambling machines, which operate in a legal gray area of the law. These machines function similarly to regulated video gaming devices but differ in how payouts are handled. Instead of dispensing cash directly, they issue tickets that can later be redeemed—allowing operators to bypass certain licensing and regulatory requirements.

As a result, sweepstakes machines began appearing throughout parts of Chicago and surrounding municipalities. Many of these devices operated without proper oversight, meaning:

• No tax contributions to the state or city
• Limited consumer protections
• Increased difficulty in enforcement

This lack of regulation led to frustration among local officials and communities, particularly in areas where these machines became highly concentrated.

Critics have also pointed out that gaming machines—especially unregulated ones—tend to cluster in lower-income neighborhoods. This concentration raises concerns about increased rates of problem gambling, financial strain, and related social issues.

Oak Park’s decision to ban these machines reflects a broader concern: while legalized gaming can generate revenue, poorly defined regulations can create unintended consequences that are difficult to control.

When Prohibition Doesn’t Work: North Carolina’s Experience

While some states struggle with overexpansion, others have taken the opposite approach by banning gaming machines entirely.

North Carolina is one such state, where gaming machines are illegal and penalties apply to operators, owners, and even users. The goal of this prohibition is to reduce gambling-related harm, including financial crime and addiction.

However, enforcement has proven difficult.

Despite the ban, illegal gaming machines continue to appear across the state. In one case, North Carolina’s Alcohol Law Enforcement (ALE) agency arrested multiple individuals after discovering illegal machines in retail locations in Anson County. In another instance, authorities seized more than two dozen machines from a business in Asheboro.

A major complication comes from so-called “skill-based” games, such as fish table games. These are often argued to fall outside traditional gambling definitions due to the element of skill involved. This creates a legal gray area similar to the sweepstakes issue seen in Illinois.

Even with active enforcement, smaller jurisdictions often lack the resources to fully eliminate illegal operations. As a result, underground gaming markets persist, demonstrating that prohibition alone does not necessarily solve the problem.

Why Gaming Machines Can Be Highly Addictive

One of the most consistent concerns surrounding gaming machines is their potential for addiction.

Unlike many other forms of gambling, these machines are designed to deliver rapid, repetitive play combined with strong sensory feedback—sounds, lights, and visual effects that reinforce winning moments.

Research supports the impact of these features. A study published in the Journal of Neuroscience found that “win-concurrent sensory cues”—such as celebratory sounds and visuals—can reduce a player’s sensitivity to risk. In other words, players become less focused on probabilities and more influenced by the immediate reward signals.

This can lead to:

• Riskier decision-making
• Longer play sessions
• Increased likelihood of developing problematic behavior

The speed and accessibility of gaming machines amplify this effect. When machines are widely available in everyday locations, the barrier to entry is extremely low, making it easier for habitual behavior to develop.

Do Gaming Machines Create More Harm Than Benefit?

The debate ultimately comes down to a difficult trade-off.

On one hand, gaming machines provide:

• Significant tax revenue
• Funding for state programs and infrastructure
• Economic activity for local businesses

On the other hand, they can contribute to:

• Problem gambling
• Financial hardship
• Increased regulatory challenges
• Illegal or gray-market activity

States like Illinois demonstrate the financial upside, while states like North Carolina highlight the challenges of outright prohibition.

In reality, neither extreme appears to be a perfect solution.

What States Can Do Moving Forward

Rather than focusing solely on expansion or prohibition, many experts suggest a more balanced approach.

Effective strategies may include:

• Clear, well-defined regulations to eliminate legal gray areas
• Strict licensing and enforcement for all machine operators
• Minimum age requirements (typically 18 or 21, depending on the state)
• Investment in problem gambling support services
• Limits on machine density, particularly in vulnerable communities

Illinois, for example, enforces a strict minimum age of 21 for gaming machine use. Operators who allow underage gambling can face fines of up to $5,000, reinforcing the importance of compliance.

Ultimately, the goal should be to maintain the economic benefits of gaming machines while minimizing their social impact. That requires not just regulation, but ongoing evaluation and adjustment as new challenges emerge.