United States: At Stake - September 2015

The Illinois Gaming Board (IGB) held its monthly meetings this week. Below is a summary of both the Riverboat and Video Gaming Meetings.

Riverboat Meeting

It was acknowledged that Member Dunn was participating via phone due to an injury.

After the approval of the open session meeting minutes, the Chairman congratulated Administrator Ostrowski on being awarded Regulator of the Year for North America by the International Masters of Gaming Law (IMGL). Our firm would also like to congratulate Administrator Ostrowski. We look forward to helping him celebrate at the ceremony at G2E as both Donna and Bill are members.

The Administrator stated that two Key Person approvals (Edward Hansberry and Robert Savaglio) will be tabled and considered at the November meeting. He continued his comments to acknowledge the departure of Mark Louis, Chief Financial Officer of the IGB. The Administrator thanked Mr. Louis for his service. We also wish Mr. Louis and his family best wishes for the future.

Des Plaines Development Limited Partnership d/b/a Harrah's Joliet Hotel and Casino had its owner's license renewal approved.

The following individuals or entities were approved as Key Persons: Midwest Gaming Mezzanine, GP, LLC for Midwest Gaming & Entertainment, LLC; Midwest Gaming Mezzanine, L.P. for Midwest Gaming & Entertainment, LLC; and Jeffrey Taips as Director, Vice President and Treasurer for The Rock Island Boatworks, Inc. d/b/a Jumer's Casino and Hotel. Eva Isabella Holten Boyd Trust U/A/8/8/2014 was also approved for estate planning purposes for The Rock Island Boatworks, Inc. d/b/a Jumer's Casino and Hotel.

A total of 171 Occupational Licenses were approved: 48 Level 2 licenses and 123 Level 3 licenses respectively. The IGB denied one Occupational Licensee.

The IGB denied the request to reapply by Kevin N. Johnson stating Mr. Johnson has allegedly failed to provide complete information to investigators.

The IGB delegated to the Administrator to enter into a settlement agreement with Occupational Licensee, Heather Barlow. The IGB had previously filed a complaint to revoke Ms. Barlow's license.

The IGB moved to revoke the occupational license of Alfredo Cousada due to his alleged violation of internal controls and his termination as a result of the alleged violations.

Video Gaming Meeting

The Chairman stated that he had no additional comments beyond those that were made in the Riverboat Meeting.

The Administrator reported that there are 5,106 locations that are operational with a total of 21,431 Video Gaming Terminals (VGTs).

IGB Legal Staff proposed the following Amendments to the Video Gaming Rules:

  • Rule 260 - Prohibit Licensed Terminal Handlers and Licensed Terminal Technicians from playing VGTs.
  • Rule 430 - Prohibit Persons with Significant Influence or Control (PSICs) of a Teminal Operator (TO) from playing VGTs at locations in which TO has entered into a Use Agreement.
  • Rule 270 - VGTs are to be played only during business hours when the location is opened for business, or in the cases of licensed fraternal establishments and licensed veteran establishments when the location is generally opened to membership.

There were no speakers during the public commentary portion of the meeting.

Bell Gaming LLC and GEM-SPV, LLC had their TO licenses renewed. DSG Amusement, Ltd. was denied due to allegedly failing to provide timely submission of materials and incomplete financial documents.

The Board approved 31 Terminal Handler licenses and denied four Handler Licensees.

The Board approved 101 location licenses and denied the following six locations: Quincy Post No. 37, The American Legion, Department of Illinois d/b/a Quincy Post No. 37, The American Legion, Department of Illinois; Meranda Ashby d/b/a Crazy 8's Billiards and Bar; Dynamite Management Company d/b/a The Locker Room; The Baron Bar & Grill, Inc. d/b/a The Remedy Pub; Graham Enterprises of Central Illinois, LLC d/b/a Springfield Racquet & Fitness Center; Centerville Station LLC d/b/a Centerville Station.

The Chairman asked IGB legal counsel if they characterized these locations as "nontraditional" locations, at which point IGB's counsel said some would be considered "nontraditional" and some have other reasons for denial adding that the reasons for these denials would be detailed in the letters to each location.

Three other locations were also denied: Bella's Hometown LLC d/b/a Bella's; GiGi's Hometown d/b/a GiGi's; and TC Pub 5, Inc. These three locations are located in the same shopping center in Hometown, IL. The Chairman followed the motion to deny with comments stating that he believed that these locations all in one mall complex were tantamount to a "gaming mall" or a back door casino. The Chairman said that a gaming mall concept or this "back door casino" idea would not have the traditional safe guards of licensed casinos, such as regulating security, onsite Board staff, limits and self-exclusion rules and internal controls. Additionally, he stated that having a group of locations in a mall is allegedly inconsistent with the overall statutory and regulatory scheme and a threat to Illinois gaming. The Chairman stated that he believes that if the legislation had intended to authorize video gaming malls, the concept would have been specifically addressed. For these reasons, the Chairman said he would vote no on these three applicants and any future locations that would be classified as alleged gaming malls. Member Dunn, Member Gould and Member Alejandre all stated that they joined in the Chairman's comments and stated they would vote no in future similar situations dealing with multiple locations in close proximity.

The IGB rescinded the denials of the location applicant Jones Plaza and the two Terminal Handler applicants for Nick Martinez and Brandon Eller. All of these applicants were approved for licensure and their hearing requests were denied as moot.

Chairman Tracy stated that he reviewed the request for a hearing made by Springfield Pub, Inc. and motioned to grant this request. Of note the Chairman did indicate, as our firm has argued before, that an individual with a felony conviction is not per se ineligible for a Video Gaming License. The Chairman acknowledged that under the Video Gaming Act, the Board "may or may not" grant a license to an individual who has been convicted of a felony or crime of dishonesty. Thus, the Chairman acknowledged that the IGB has discretion to grant a license to such an applicant. In this case, the applicant's owner was purportedly convicted of a felony approximately 30 years ago. Still, this motion failed by a vote of two to two.

The IGB denied TO applicant Fox Gaming's hearing request.

The IGB granted the requests to reapply for Scooter's Bar, LLC and La Isla Tropical Restaurant, LLC.

The IGB issued six disciplinary complaints.

The following two locations were each fined $25,000 for allegedly allowing underage individuals to use VGTs at the locations: PJ Pub Inc. and Greg's Old Inc. d/b/a Greg's Old Tap.

Venice Properties' license was revoked due to allegedly not timely renewing their state liquor license and not timely paying the fine previously issued by the IGB.

Juan Rodriquez and Edwin Sanchez had their Terminal Handler licenses revoked due to their alleged misappropriation of money from their employers.

Chicago Gaming Distributors, LLC had its TO license revoked due to its alleged use of an undisclosed sales agent.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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