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'Bar Month' at OnMilwaukee.com is back for another round! The whole month of February, we're serving up intoxicatingly fun bars and club articles -- including guides, unique features, drink recipes and more. Grab a designated driver and dive in!

At bars all over the Milwaukee area, patrons sit down, order a drink and take their chances at a video gambling machine.

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In just about every bar, you can find one of these machines. And for every machine, there is at least one patron willing to dump in money for hours on end, despite labels proclaiming 'for entertainment use only.'

Many times, though, the label is as decorative as beer advertisements on the wall. The fact is a large percentage of bars offer payouts for gamblers, in direct violation of Wisconsin state statutes.

Under a 1999 agreement that reduced penalties for operating illegal machines, enforcement is now handled solely by the state Department of Revenue, which makes sure bar, restaurant and hotel owners are paying appropriate taxes on revenue generated by machines.

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Before then-Gov. Tommy Thompson revised the state law, violators faced felony charges, fines of up to $10,000, loss of liquor license and prison time. The current state law allows bars to have up to five video poker machines and paying out winnings is a civil offense, carrying a $500 fine and no loss of license.

Bars with more than five machines, however, could face criminal charges, according to Department of Revenue Communications Officer Jessica Iverson.

Regulating the machines is big business for the DOR, which has brought in nearly $23 million in taxes since the law went into effect in 2003. Proceeds generated through video gaming machines are taxable income, and the gross receipts are subject to the state's sales tax.

To keep things in check, the department relies heavily on tax audits and also enlists the help of Alcohol and Tobacco Enforcement agents.

'Our ATF agents come across the illegal machines through the course of normal inspection as well as in the course of investigating other tobacco or alcohol law violations,' Iverson says. 'We also, of course, conduct tax audits of businesses. If auditors identify gambling operations during the course of those audits, they will enlist the help of ATF agents to enforce that part of the statute, as well.'

In addition to the tax implications, the Wisconsin statute 945.01 (c) makes it illegal to operate any machine that affords a player to win something of value determined by a game of chance.

The threat of audits, fines and licensing issues aside, bar owners are willing to make the illegal payments because the machines bring in a big chunk of money.

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'People sit down when they're bored,' said one bar owner who spoke with OnMilwaukee.com under the condition of anonymity. 'They're more inclined to spend more time and buy more drinks when they're at the machines and have a chance to win some money.

'A lot of people, if there's nobody at the bar, will sit at a machine and make a couple bucks to pass the time.'

At this particular establishment, players receive a ticket when done that they can redeem at the bar for their winnings. The bar owner knows he's taking a chance, but there's big money to be made, especially important in the current economy.

'It's a little bit scary, yeah,' he said. 'But it's a risk you take.'

Earlier in the decade, the Tavern League supported a measure introduced by Rep. Terry Musser (R-River Falls) that would have legalized the machines, generating as much as $380 million in revenue. Other supporters of the bill wanted to prevent Wisconsin Native American tribes, legally operating casinos under a compact with the state, from having a monopoly on gaming.

Some states are reconsidering their stances on video gambling in an effort to patch up growing budget deficits.

In Pennsylvania, Gov. Ed Rendell proposed legalizing some forms of video gambling as a means to fund free college tuitions at the 28 campuses in his state. Officials there estimate that roughly 17,000 video poker machines are operating illegally. Those machines, if legalized, could generate as much as $550 million, according to Gov. Rendell's plan.

'This is not an expansion of gaming,' Pennsylvania Revenue Secretary Stephen Stelter told The Philadelphia Inquirer earlier this month. 'It is the recognition that video poker is already a thriving industry.'

Marked as skill-based machines

Police in Pennsylvania have confirmed that they seized a total of 71 β€˜illegal’ gambling machines in a litte over one month.

Officials confiscated the gambling machines, which were marked as skill-based machines, between January 22 and February 25. Seizures took place across the state, with businesses in major cities like Pittsburgh and Philadelphia subject to raids.

Raids carried out across the state

The majority of machines seized came from licensed liquor establishments. Venues in Allentown, Wilkes-Barre, Altoona, Williamsport, and Erie made the list of areas affected by the police action.

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illegal and unregulated gambling is a serious issue that is growing in the state

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According to Captain Jeffrey Rineer, acting director of the State Police Bureau of Liquor Control Enforcement, illegal and unregulated gambling is a serious issue that is growing in the state. Business owners are installing the gambling machines in malls, convenience stores, and restaurants.

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Captain Rineer said: β€œSo far in 2020, gambling machine seizures have been reported from every BLCE office, in counties from Erie to Philadelphia.”

Various companies manfacture the machines taken during the seizures. Investigations into these machines will continue, and Pennsylvania State Police will continue to confiscate those that they find.

Nonprofit organizations hit back

One issue regarding the skill-based machines began back January when several nonprofit organizations in Middletown attended a council meeting in the borough. The groups showed up to oppose an ordinance that would stop the games from being offered in the town.

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Nonprofit organizations want the games to continue because they raise a significant amount of revenue. They pointed out that this money allows them to support the community financially.

Mark Stewart, an attorney for Eckert Seamans, submitted the ban proposal to the council. The proposed ordinance was submitted on behalf of Parx Casino, a gambling venue based in Bethlehem. The council did not continue with the proposal due to the opposition from the nonprofit groups.

On a state level, the games are part of a case involving Pace-O-Matic, a leading manufacturer of the skill-based machines. The group is seeking a declaration statewide that the machines are legal based on state laws. The company wants Pennsylvania State Police and other enforcement agencies to stop seizing their machines.