IGB Meeting Update: January 2020

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) rang in 2020 with a bang! Its most recent monthly meeting took place on Thursday, Jan. 30 in Chicago with a packed house, including media.

All members, besides Member Garcia, were present and the meeting began with the approval of last month’s meeting minutes and the amendment of meeting minutes from November 2019 to correct the language of a motion therein.

The meeting continued with the Chairman’s opening comments. He spoke briefly about the new ground the IGB would be breaking in 2020 and thanked the staff for their continued diligence, wisdom and dedication.

The meeting continued with the Administrator’s comments, which covered an array of topics. Administrator Fruchter began by thanking the meeting attendees for their participation in the regulatory process and stated that while 2019 was a productive year, given the gaming expansion bill, 2020 is starting with the same level of productivity.

Regarding sports wagering, Administrator Fruchter stated that the Phase II sport wagering emergency rules were posted on the IGB’s website. The Administrator asked the Board to approve first notice filing of the regular prosed rules. Administrator Fruchter said he believes that proposed rules will promote integrity, accountability and efficiency in the industry. The Administrator stated that they have already received some applications for sports wagering and made special mention that there is not, and will not be, a specific launch date for sports wagering. Rather, it will commence as soon as applicants are able. The three applications received were from Alton Casino, LLC d/b/a Argosy Casino Alton, Elgin Riverboat Resort d/b/a Grand Victoria Casino and Midwest Gaming & Entertainment, LLC d/b/a Rivers Casino. For those interested in sports wagering, the Administrator mentioned that there is a wealth of knowledge available on the IGB’s website including Frequently Asked Questions and rules. He also stated that there is a designated email address for questions, comments, or concerns related to sports wagering: IGB.RuleComments@igb.illinois.gov.

Regarding casinos, the Administrator said they are continuing to investigate and vet the 10 applicants for casino and racetrack licensure. He also mentioned a proposed IGB code of conduct, Rule 3000.106, to assure that persons subject to the code avoid situations, relationships or associations that may lead to or represent an actual or potential conflict of interests. View the proposed rule here.

The Administrator discussed a number of long awaited advances to the video gaming industry. First, he mentioned that with JCAR’s December 19, 2019 approval of proposed rules, the sixth video gaming terminal (VGT) is now eligible for installation and operation and is, in fact, operational in 896 locations. Second, he stated that after the meeting there would be five locations approved as large truck stops, qualifying for 10 VGTs per location. Third, the Administrator said that manufacturers have received approvals for software update requests permitting an increase in the maximum bet. The Administrator wrapped up these updates with details that the G2S conversation has been completed and that there are currently 34,076 VGTs operating in 7,212 locations within Illinois.

In other reports, the Administrator briefly discussed an ongoing investigation into the alleged unauthorized disclosure of confidential personal information by an IGB employee to three other government entities. There is currently an open investigation into the matter and, while the IGB is acting in a transparent manner to inform the public of the situation, it is an ongoing investigation and therefore information is limited. The individual allegedly involved in the information breach has been placed on paid administrative leave.

Next the Administrator acknowledged that Jeff Gaida of the Illinois State Police (who has been with the IGB for 15 years) will be retiring. Administrator Fruchter thanked Agent Gaida for his service and dedication and wished him well. We also would like to wish Agent Gaida well in his well-deserved retirement.

Lastly, in sad news, the Administrator sent condolences to the family and loved ones of Gregory Rieves. The retired state trooper was killed in a recent shooting at a cigar shop in Lisle. During his 25-years with the Illinois State Police, Agent Rieves was stationed at the Grand Victoria Casino in Elgin. Our thoughts and prayers are with his family during this difficult time. 

PUBLIC COMMENT

The first speaker to address the Board was Eric Poders, speaking on behalf of The Horseman’s Voice. It was a bit difficult to follow his remarks, but he seemed to suggest that the IGB and the Racing Board should be combined in order to better and more efficiently utilize resources. Mr. Poders also mentioned personal concerns regarding the investigations and practices of the Illinois State Police.

Anita Bedell, Executive Director of the Illinois Church Action on Alcohol and Additional Problems, also addressed the Board with a number of concerns including: the undue economic concentration of VGTs; investigations into current license holders; the request of South Suburban Development to amend its application currently on file with the IGB; and a number of concerns regarding sports wagering including betting on credits, betting on Illinois college games, temporary certified equipment being tested in other states, and provisional licenses. 

Finally, Charles Sheridan addressed the Board in regards to being permitted to approach the casino applicants of Waukegan and request they set up a community, development fund. The Chairman advised Mr. Sheridan that the Board could not provide him with legal advice but stated that they would encourage any applicant to work with their home community.

RULES

The Board then discussed new rule making. First, the Administrator discussed Phase II of the sports wagering rules that are being submitted as both emergency rules (effective immediately for 150 days) and regular proposed rules (which allow for public comment and JCAR review). Although there was no discussion at today’s meeting on the content of the rules, we know from last month’s meeting that the Phase II rules will govern the conduct of the wagering operations.  These rules are currently available on the IGB’s website.

Next, the Administrator briefly discussed the Proposed Video Gaming Rule concerning inducements. Unfortunately, however, the IGB staff did not present a summary or an explanation of this new proposed inducement rule except to mention that the rule should clarify inducements for licensees. We know you are all anxiously awaiting this new proposed rule so we will keep you informed with any updates we receive.

CASINO

The Casino meeting began with the Board hearing initial consideration of Haven Gaming, LLC, the Danville Casino Applicant, and its request to amend its application (including corrections and updates to forms, identification and background of ownership and investors, and identification of key persons). After the Board asked quite a few questions of the Applicant’s legal representative, it was determined that they would also hear the initial consideration of South Suburban Development, LLC, the Matteson Applicant, to amend its application to change the proposed location of its casino and would then enter into to closed session to discuss the matter further.

After an hour’s long deliberation, the Board returned and granted Haven Gaming, LLC’s request to waive the two-meeting rule but denied its request to amend its application. Separately, the Board granted South Suburban Development, LLC’s request to waive the two-meeting rule and granted its request to amend its application.

The Board next reviewed and granted the Initial Consideration and Request for Waiver of Two-Meeting Rule from Elgin Riverboat Resort d/b/a Grand Victoria Casino regarding its Financing Transaction (see below for more information). Lastly, the Board heard initial consideration from Casino Queen, Inc. regarding a request to transfer ownership.

Per the aforementioned waiver of the two-meeting rule, the Board next reviewed and approved the final consideration of Elgin Riverboat Resort d/b/a Grand Victoria Casino (Grand Victoria), Des Plaines Development Limited Partnership d/b/a Harrah’s Joliet Casino & Hotel (Harrah’s Joliet), and Southern Illinois Riverboat/Casino Cruises LLC d/b/a Harrah’s Metropolis Casino (Harrah’s Metropolis) for the following items related to the merger of Eldorado Resorts, Inc. and Caesars Entertainment Corporation: transfer of ownership; financing transactions; and lease amendments.

In addition, the Board approved the following key persons:

• Anthony L. Carano for his role as Executive Vice President and Chief Operating Officer of Harrah’s Joliet and Harrah’s Metropolis;
• Cindy L. Carano for her role with Harrah’s Joliet and Harrah’s Metropolis;
• Gary L. Carano for his role as Executive Chairman of the Board and Chief Executive Officer of Harrah’s Joliet Casino and Harrah’s Metropolis;
• Gene R. Carano for his role with Harrah’s Joliet and Harrah’s Metropolis;
• Glenn T. Carano for his role with Harrah’s Joliet and Harrah’s Metropolis;
• Gregg R. Carano for his role with Harrah’s Joliet and Harrah’s Metropolis;
• Rhonda K. Carano for her role with Harrah’s Joliet and Harrah’s Metropolis;
• John J. Frankovich for his role with Harrah’s Joliet and Harrah’s Metropolis;
• Edmund L. Quatmann Jr. for his role as Executive Vice President, Chief Legal Officer and Secretary of Harrah’s Joliet and Harrah’s Metropolis;
• Thomas R. Reeg for his role as Chief Executive Officer of  Harrah’s Joliet and Harrah’s Metropolis
• Eldorado Resorts, Inc. for its role with Harrah’s Joliet and Harrah’s Metropolis;
• Recreational Enterprises, Inc. for its role with Harrah’s Joliet and Harrah’s Metropolis;
• The Donald L. Carano Family Trust for its role with Harrah’s Joliet and Harrah’s Metropolis;
• Caesars Growth Partners, LLC for its role with Harrah’s Joliet and Harrah’s Metropolis;
• Caesars Resort Collections, LLC for its role with Harrah’s Joliet and Harrah’s Metropolis;
• Carl Icahn as owner of Harrah’s Joliet and Harrah’s Metropolis;
• Icahn Capital LP for its role with Harrah’s Joliet and Harrah’s Metropolis;
• Icahn Offshore LP for its role with Harrah’s Joliet and Harrah’s Metropolis;
• Icahn Onshore LP for its role with Harrah’s Joliet and Harrah’s Metropolis;
• Icahn Partners LP for its role with Harrah’s Joliet and Harrah’s Metropolis;
• Icahn Partners Master Fund LP for its role with Harrah’s Joliet and Harrah’s Metropolis;
• John Michael Maier for his role as Trustee of Casino Queen Employee Stock Ownership Plan and Trust of Casino Queen, Inc.;
• Michelle Bushore for her role as Executive Vice President, General Counsel, Chief Legal & Risk Officer, and Corporate Secretary of Harrah’s Joliet and Harrah’s Metropolis Casino; and
• Professional Fiduciary Services LLC for its role with Casino Queen, Inc.

The Board next reviewed and granted Hawthorne Race Course, Inc.’s request for waiver of two-meeting rule and approved the change pertaining to financing for its gaming development.

The meeting continued with supplier licensee items and the approval of the following key persons:

• ACON Suzo-Happ Investments, L.P. for its role with Suzohapp Gaming Solutions, LLC;
• ACON Suzo-Happ Management, LLC for its role with Suzohapp Gaming Solutions, LLC;
• ACON Suzo-Happ, LLC for its role with Suzohapp Gaming Solutions, LLC;
• Suzohapp, Inc. for its role with Suzohapp Gaming Solutions, LLC;
• Suzohapp Americas, LLC for its role with Suzohapp Gaming Solutions, LLC;
• Gary Kappral for his role as Chief Operating Officer with House Advantage, LLC;
• Jonathan Jacob Ginns for his role as Managing Member of ACON Suzo-Happ Management, LLC, Managing Director of ACON Suzo-Happ, LLC, and Limited Partner of ACON Suzo-Happ Investments, L.P. in relation to Suzohapp Gaming Solutions, LLC; and
• Kenneth Brotman for his role as Managing Member of ACON Suzo-Happ Management, LLC, Managing Director of ACON Suzo-Happ, LLC, Limited Partner of ACON Suzo-Happ Investments, L.P., Director of SuzoHapp, Inc., and Director of SuzoHapp Americas LLC in relation to Suzohapp Gaming Solutions, LLC.

The Board approved the occupational licensees of 56 Level 2 applicants and 87 Level 3 applicants and renewed the occupational licensees that that were up for renewal this month for those who provided updated information to the IGB, timely paid their renewal fees and complied with all other requirements. Notably, there were no Level 1 applicants or any denials of occupational licensees.

The Board then reviewed three requests for hearing from occupational licensees. They denied two requests and granted one. They also issued disciplinary complaints to two Level 3 occupational licensees and one Level 2 occupational license seeking revocation resulting from each individual’s alleged termination from their respective casino employers.

Lastly, the Board issued a disciplinary complaint against AGS, LLC for an alleged late submission of annual update information. As this was AGS, LLC’s second complaint on this same issue in the past two years, the Board is seeking a $10,000 fine rather than the traditional $5,000 fine.

This concluded the Casino portion of the meeting.

VIDEO GAMING

The Video Gaming session began with the Board voting to deny the Request for Leave to Withdraw the Manufacturer application of Creative Game Technologies, LLC and issuing a supplier license renewal to AGS, LLC.

Next, the Board approved the initial terminal operator license of WG-Illinois, LLC and, without explanation, denied the terminal operator application of Lakeview Gaming, LLC.

The meeting then continued with the Board granting a number of terminal operator license renewals to the following entities:

• Admira, LLC
• Andy’s Video Gaming Co.
• Illinois Gaming Systems, LLC
• Illinois Gold Rush, Inc.
• Illinois Video Slot Management Corp.
• J&J Ventures Gaming, LLC
• JHey Enterprises, LLC
• Quad Gaming, Inc.
• Sparrow Gaming, Inc.

The terminal hander, technician and location licensees who provided updated information to the IGB, timely paid their renewal fees and complied with all other requirements were also renewed. 

The meeting continued with initial licenses being issued to 58 terminal handlers and 107 video gaming locations.

The Board denied the applications of the following 7 locations:

• Bootsies Bakery LLC d/b/a Bootsies Kitchen
• Joseph Boyd d/b/a River Bottoms
• Sofies Whiskey and Wine, LLC d/b/a Sofie’s Whiskey & Wine
• AB Old School, Inc. d/b/a Old School Saloon
• Cubsessed, LLC d/b/a Swing Masters
• Snacks El Gordo Inc. d/b/a Snacks El Gordo
• Tinley Beef LLC d/b/a Pops Italian Beef

The Board received six requests for a hearing this month and took the following actions:

• Denied the request of Don Juan Gillam d/b/a George’s Pub;
• Granted the request of Angies Gaming Inc. d/b/a Angie’s;
• Denied the request of AJ Ventures II LLC d/b/a Jewel’s 67;
• Denied the request of The Illinois Lady LLC d/b/a Blue Fish Café;
• Granted the request of Ski-Four, Inc. d/b/a Neoga IGA; and
• Denied the request for a hearing of Christine Lindberg, but granted Ms. Lindberg leave to reapply immediately.

The IGB approved the requests to reapply for Charles Sine d/b/a The Club Broadway, Niemann Foods Inc. d/b/a Sav-A-Lot #474; GPN Investments, GPM Investments, LLC d/b/a Jiffy Stop #586; and Canal Port II Inc. d/b/a Canal Port.

LITIGATION/SETTLEMENTS

The Board granted authority to the Administrator to enter into settlements and dismiss the complaints when appropriate in the matters of Grand River Jackpot and Thomas Kraft.

In three other cases, the Board voted to rescind the denial and grant the location a license: Onesti Entertainment Corporation d/b/a Arcada Theatre; Sunshine USA Enterprises, Inc. d/b/a Morris Citgo; and Giovanni’s Catering Inc. d/b/a Giovanni’s Catering Inc.

ALJ RECOMMENDATIONS

The meeting concluded with the Board reviewed and accepting the Administrative Law Judge’s (ALJ) recommendations in two cases.

• In the matter of Fill-Up Mart, Inc. d/b/a Fill-Up Mart #12, the ALJ concluded that the Applicant failed to meet suitability requirements and the Board voted to adopt the ALJ Recommendation as a final board order.
• In the matter of Jeffrey Haynes, an occupational licensee whose licensed was revoked resulting from alleged sports wagering, the Board voted to adopt the ALJ Recommendation with modification and moved to suspend the occupational license for two years.

The Administrator added a last comment to remind attendees that the next meeting will be on March 12. The meeting was then adjourned.