Special report: Taking a Gamble - WAOW - Newsline 9, Wausau News, Weather, Sports

Special report: Taking a Gamble

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Wisconsin has a dirty little secret, and it's far from hidden.

You may see those video gambling machines in bars and restaurants where people test their luck and hope to beat the odds, but you may not know that they are illegal.

Tim Thomas is the head of the Marathon County Tavern League and a co-owner of Red Granite Bar and Grill in the Town of Maine, which is the home to five video gambling machines.

"We gamble every day," Thomas says. "Every time you do something, you take a chance."

People shell out cash to play, but if they hit the jackpot it's against Wisconsin law for a business owner to give a cash pay-out.

“They are for entertainment only, like everyone knows" says Captain Clayton Schulz, an Everest Metro police officer. "Whenever they pay out, they become illegal. It is kind of known that most people are paying out."

Captain Schulz adds that though the gambling machines are illegal, police officers can do little to stop them. Local police have little to no authority to enforce the rules, unless a Class B liquor license holder, like a bar or restaurant, has more than five machines. That is a felony under Wisconsin law.

At one time, having any of these machines was considered a felony and violators faced some serious repercussions: thousands of dollars in fines, the loss of their liquor license and even possible prison time. In 2003, state lawmakers reduced the penalties to misdemeanors and handed over enforcement of five or less machines to the Department of Revenue.

"For establishments that have less than five gaming machines, there are civil penalties. So fines for people who have machines, if they have less than five," says Secretary of the Department of Revenue Richard Chandler.

Department of Revenue officials say they have nine field agents who monitor the issue, and money from gambling machines is considered taxable income. Yes -- that means bars and restaurants are paying taxes on the illegal machines. The head of the Tavern League calls it a fair tradeoff to ensure the economic stability of bars and restaurants across the state.

"Helping us by doing that, looking the other way, because they are also at the same token watching every penny that goes through your business and you’re paying taxes on it," Thomas says. He adds that the taxes don't only go to the state, but also to the county and individual municipalities. 

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