IGB Meeting Update - January 2019

Every month, the Illinois Gaming Board (“IGB”) meets to discuss any changes in the Illinois gaming market and issue licensing and disciplinary decisions. What follows is a repost of the notes by our friends at Fox Rothschild in their “At Stake” Newsletter. You can also find official IGB meeting minutes on the IGB website.  The minutes of each IGB meeting are typically posted following the next scheduled meeting of the Board.  

The Illinois Gaming Board (IGB) held its monthly meeting on Wednesday, January 30, 2019, also known as the second coldest day in Chicago history. While the extremely cold weather kept most away, the Board conducted business as usual.

The Chairman, Member Dolins and Member Alejandre were all present, and Member Robinson participated by phone due to illness. Our own Donna More also braved the elements to be there! The meeting followed the familiar pattern of starting open session at 10 a.m., but combined the Riverboat and Video Gaming agendas. This approach appears to be the new norm, at least for the time being.

The Chairman opened the meeting by covering quite a few topics. First, he thanked all in attendance given the weather conditions and stated that the Board apologized for not canceling the meeting but it was too difficult to reschedule.

Next, the Chairman addressed the recent press coverage the IGB has received from ProPublica and the Chicago Tribune. The Chairman stated that the article by ProPublica was fair and balanced and factual. He also stated that he hopes some good comes from it, such as more funding for the IGB. Similarly, he appreciated the Chicago Tribune’s recent editorial because it reflects well on IGB staff, who have a reputation of being hardworking and honest.

The Chairman continued his comments by thanking two IGB staff members that have left the IGB. Mark Stevens has retired and Frank Spizziri has accepted a new position with the Illinois State Police. Both men were thanked for their service and will be missed.

The Chairman then proceeded to briefly address the new proposed inducement rule. He stated that the inducement rule has been one of the more challenging things he has ever worked on, but it will be approved for First Notice filing at this meeting. He stated that the rule will not be a detailed road map, but that the Board believes it is a good start. We will email a copy of the proposed rule for filing with the Joint Committee on Administrative Rules (JCAR) as soon as we get it. Once the proposed rule is filed with JCAR for First Notice filing, it does not become law but, rather, is subject to the public commentary process (see below).

Lastly, the Chairman addressed the self-exclusion rule for video gaming, stating that he was not happy with the current status and hopes that technology will help to resolve the issue. He reiterated that this will be a focus of his for this year.

There were no other Board Member comments nor public commentary. The Administrator stated that there are 6,843 licensed locations and 31,046 live video gaming terminals (VGTs). The meeting continued with the Board approving the December Riverboat and Video Gaming meeting minutes.

RIVERBOAT

To start the Riverboat session, the Board deferred presenting its new Riverboat rule and continued with owner licensee items. The Board moved to approve the final consideration of the $600 million senior credit facility refinancing of Midwest Gaming & Entertainment, LLC d/b/a Rivers Casino – Des Plaines. This issue is separate from the recent transfer of ownership request.

The Board also moved to approve a number of supplier licensee items. Data Financial, Inc. and Midwest Game Supply Company both had their supplier licenses renewed. The Board also approved a motion to amend its November motion to correct the name and key person of Ainsworth Game Technology, Inc. The Board also moved to approve Douglas Albregts as a key person for Bally Gaming, Inc. in his role as Executive Vice President and Group Chief Executive of Gaming for Scientific Games Corporation. 

The Board issued occupational licenses to 72 Level 2 and 133 Level 3 applicants, and granted one Level 1 license to Sherri Bruno, Director of Finance of Alton Casino, LLC d/b/a Argosy Casino Alton.

Lastly, the Board issued five disciplinary complaints seeking to revoke occupational licenses for reasons that included allegedly failing to disclose an arrest and alleged termination from their respective casinos due to unprofessional and offensive behavior.

The Riverboat session then concluded.

VIDEO GAMING

The Video Gaming session opened with the Board moving to approve the submission of the proposed Rule 340 (addressing inducements) to the Index Department of the Secretary of State on first notice with JCAR. We will send out the rule when published and there is a 45-day comment period to suggest any revisions or amendments. Thereafter, there will be a second comment period made available. 

The meeting continued with initial licenses issued to the following:

• terminal operator applicant, Admira, LLC;
• 67 terminal handlers;
• 1 terminal technician; and
• 139 video gaming locations including Donkey Inn Bar and Grill, Inc. d/b/a The Donkey Inn which was addressed separately in a 3-0 vote (Member Dolins recused himself). and Casale Pizza. Inc. d/b/a Casale Pizza. This establishment had a non-renewal issued in January of 2018, but the IGB rescinded the non-renewal and granted a license retroactive to January, 2017.

Wild Money Gaming, LLC was denied an initial Terminal Operator license. There were also a number of license renewals granted. Those terminal handler, technician and location licensees that were up for renewal this month were renewed, (given they provided updated information to the IGB, timely paid their renewal fees and complied with all other requirements).

The IGB tabled the renewal of AGS, LLC but renewed the supplier license of SUZOHAPP Gaming Solutions, LLC and the following terminal operator licensees:

• Andy’s Video Gaming Co.;
• Heck Gaming, LLC;
• Illinois Gaming Systems, LLC;
• Illinois Gold Rush, Inc.;
• Illinois Video Slot Management Corp.;
• J&J Ventures Gaming, LLC;
• JHey Enterprises, LLC;
• Midwest SRO, LLC;
• Quad Gaming, Inc.;
• Royal Entertainment LLC; and
• Sparrow Gaming Inc.

The Board denied the applications of five terminal handlers/technicians and the following six establishments:

• Michelle D. Miller d/b/a Riverview Lodge;
• Aunt Maggie’s Catering, Inc. d/b/a Aunt Maggie’s Catering, Inc.;
• The Happy Place Café Company d/b/a The Happy Place Café;
• Jameson Pub. INC d/b/a Skooter’s Roadhouse;
• Rough Road LLC d/b/a Freedom Bar; and
• TNT Securities Inc. d/b/a TNT.

The Board received nine Requests for Hearings. The Board denied the hearing requests of Anthony Jemison and Lavue Management Corp. d/b/a Lavue Bar & Grill. The following requests were granted:

• Tim Ebbets and Michael White;
• Rachel’s Café Inc. d/b/a Rachel’s Café;
• Sunshine USA Enterprises, Inc. d/b/a Morris Citgo;
• Onesti Entertainment Corp d/b/a Arcada Theatre;
• Pub 225 LLC d/b/a Pub 225;
• Scorchy Café Italiano, Inc. d/b/a Scorchy Café Italiano; and
• Calm & Chaos LLC d/b/a the Irish Legend.

The Board moved to rescind the denial of G-Town Deuce Investments LLC d/b/a Red Deuce and grant it a license, making its hearing request moot.

The following three requests to reapply were granted:

• SLR Ventures, LLC d/b/a SLR Bar & Grill;
• Travan Inc. d/b/a Angelo’s Restaurant and Pizza; and
• Lavue Management Corp. d/b/a Lavue Bar & Grill.

The Board voted to issue a number of disciplinary complaints against Video Gaming licensees:

• The Board is seeking a $5,000 fine from AGS, LLC for allegedly submitting an incomplete renewal application.
• The Board is seeking a $5,000 fine from SUZOHAPP Gaming Solutions, Inc. for allegedly providing incomplete structure information.
• The Board is seeking a $2,000 fine from Tap Room Gaming, LLC for allegedly having a use agreement from an undisclosed sales agent.
• The Board is seeking a $2,000 fine from Veterans VGT, LLC for allegedly having a signed use agreement from an undisclosed sales agent.
• The Board is seeking a $15,000 fine from Leisure Time Gaming & Amusements, Inc. for allegedly having a handler that worked with an expired license and another that worked while being listed as ineligible to work.
• The Board is seeking to revoke the licenses of two handlers and seeking fines from six handlers ranging from $500 - $1,200. Reasons for the complaints include:
  • Allegedly failing to properly record information related to the G2S upgrade ($500);
  • Allegedly failing to properly record information related to the G2S upgrade and paying for a location renewal with his personal credit card ($1,200);
  • Allegedly allowing his license to expire ($1,000);
  • Allegedly working while on the ineligible to work list ($1,000);
  • Allegedly taking money from employer and using those funds for personal use (revocation); and
  • Allegations listed in the disciplinary complaint revoking the terminal operator license since the handler is also the owner of the terminal operator (revocation).
• The Board is seeking a $2,000 from Michael’s Gaming Inc. d/b/a Bella’s Caffé for allegedly failing to monitor the VGTs.
• The Board is seeking a $2,000 fine from Team BJA LLC d/b/a Lacey’s Place for allegedly advertising free drinks.
• The Board is seeking a $1,500 fine from Lou’s Tap, Inc. d/b/a Louie’s Tap House for allegedly failing to monitor VGTs.
• The Board is seeking a $10,000 from Tina G’s Inc. d/b/a Tina G’s for allegedly permitting a minor to play VGTs ($5,000) and allegedly serving alcohol to the minor ($5,000 fine).
• The Board is revoking the licenses of the following five locations for allegedly failing to answer the previously issued complaint or pay their respective fines:
  • LSB One, Inc. d/b/a Lock Stock & Barrel;
  • The Grove Bar and Grill Inc. d/b/a The Grove Bar and Grill;
  • Tilted OBT, Inc. d/b/a Tilted Kilt;
  • Fuzzy’s, Inc. d/b/a Fuzzy’s Tavern; and
  • Puzzled Minds Management Group, LLC d/b/a JT’s Corner Tap and Eatery.

The Board next reviewed the decisions of the Administrative Law Judges (ALJ) in the cases against Dolly’s Café LLC d/b/a Lulu’s Place (Lulu’s Place) and Hoffman House of East Rockford, Inc. d/b/a Firehouse Pub (Firehouse Pub).

In re Lulu’s Place, the ALJ affirmed that the IGB was correct in issuing a notice of limitation related to Rule 810, which specifies that the IGB may limit the number of VGTs when two or more adjacent businesses are operated by the same or comingled ownership. In re Firehouse Pub, the ALJ recommended that the IGB failed to meet its burden of proof in regards to the establishment permitting underage individuals access to VGTs and that the disciplinary complaint be dismissed. In both cases, the Board adopted the ALJ’s recommendation and decision as final board orders.

Lastly, the Board granted authority to the Administrator and staff to enter into settlements and dismiss the complaints when appropriate to the following licensees: How-Dog, Inc. d/b/a Cactus Country; Jenny’s, LLC – Freeburg and Jenny’s, LLC – Sparta Café; and Damaschke International d/b/a Lacey’s Place.