IGB Meeting Update - November 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 November monthly meeting on Thursday, November 7, 2019 in Chicago. Please remember the November 21, 2019 meeting has been canceled and the next meeting is December 19, 2019.

All members were present. The meeting began with the approval of last month’s meeting minutes and continued with the Chairman’s opening comments. In his comments, Chairman Schmadeke commended Illinois State Police (ISP) on a recent arrest. He stated that such investigative work is part of maintaining the integrity of the gaming industry.

The meeting continued with the Administrator’s comments, which covered quite a few topics. Administrator Fruchter began by also briefly commending ISP agents on the recent arrest. He continued his remarks by thanking the public for submitting comments regarding sports wagering. He stated that the comments are being taking into consideration and that the IGB expects to be releasing applications and rules for sports wagering in advance of or contemporaneously with the scheduled December 19, 2019 meeting.

Next, the Administrator discussed the recently submitted casino applications. He stated that the IGB received 10 casino applications in conjunction with the two racetrack applications submitted over the summer. All of the 5.1 Disclosure information for these applicants is now available on the IGB’s website. Relatedly, Administrator Fruchter reminded attendees of the meeting that the IGB recently implemented a new rule, Rule 3000.190, outlining ethical conduct of casino applicants, including providing notification to the IGB when there are alleged violations of said ethical code. This rule, and all other casino rules, can be found here.

The Administrator continued his comments with the following proposed 2020 meeting schedule:

• January 30, 2020;
• March 12, 2020;
• April 22, 2020;
• June 11, 2020;
• July 30, 2020;
• September 17, 2020;
• November 5, 2020; and
• December 17, 2020.

At the time of publishing this newsletter, the calendar had not been posted to the IGB’s website.

Lastly, the Administrator took a few moments to discuss the manner and candor in which applicants and their representatives should address the Board and submit materials. He stated that while it is not the norm in the industry, he has seen a negative trend in these areas. He noted that applicants and/or their representatives are not providing full information or are filing last minute requests and stated that he would like to see a change in this behavior.

The floor was then opened to the IGB’s General Counsel, Agostino Lorenzini, who spoke briefly of the passing of Mr. John Janicek. Mr. Lorenizini and Administrator Fruchter took time to recognize Mr. Janicek’s contributions to the gaming industry and stated he was a “credit to the bar.”

The meeting continued with the public commentary section in which four individuals addressed the Board.

Mr. David Barr, representing Community Financial Service Centers (CFSC), addressed the Board to briefly describe his company and its products. Specifically, Mr. Barr stated Cash Hero, a product of CFSC, is a funds distributions platform that CFSC believes would be a good fit for the Illinois gaming market and would allow players to visit a number of locations to redeem mobile winnings instantly in full. After Mr. Barr’s commentary, the Administrator stated that the Board uses the state’s procurement procedures for vendors and that allowing CFSC to present at the monthly meeting was not indicative of the IGB’s support for CFSC.

Mr. Andy Sotiropoulos, owner of Connie’s Restaurant, addressed the Board to voice his discontent with the IGB’s use agreement policies, including the petition procedure. Mr. Sotiropoulos stated he wished to change operators, however has not been able to do so because of the IGB’s policies.

Mr. Bob Collimore, a self-proclaimed Waukegan resident, spoke to the Board briefly to provide his opinion on the Waukegan casino and Waukegan’s bidding process. He specifically spoke about the potential for political corruption, cannibalization of already existing Illinois gaming revenue, and his view that there should have been four bids accepted instead of three.

Lastly, Ms. Anita Bedell stated concern over the recent indictment of State Representative Luis Arroyo, his connection to the gaming industry, and other recently exposed allegations involving organized crime and gaming licensees. Specifically, Ms. Bedell wanted to know if 1) the IGB has hired more or trained more staff to investigate the involvement of organized crime in the gaming industry and 2) what steps the IGB is taking to prevent involvement of organized crime outfits.

CASINO

The Casino session began with the Board voting to approve three proposed new rules and one rule amendment. During its presentation, the IGB’s legal department stated the changes made were minimal but necessary given gaming expansion. The new rules include Rule 3000.520 regarding organized gaming facilities, Rule 3000.530 regarding modification of organized gaming facilities, and 3000.540 regarding temporary gaming facility requirements. The amended rule includes 3000.320 regarding casino internal controls and seeks to clarify and reduce unnecessary provisions to streamline the process.

The meeting continued with Owner Licensee items. The Board moved to waive the two meeting rule requirement and approved the Refinancing Transaction of Par-A-Dice Gaming Corporation d/b/a Par-A-Dice Hotel Casino. The Board also waived the two meeting rule requirement and approved land-based gambling operations at Midwest Gaming & Entertainment, LLC d/b/a Rivers Casino-Des Plaines. The Board continued by approving the final consideration of the license renewal of Alton Casino, LLC d/b/a Argosy Casino Alton. Lastly, the Board approved Anthony Rodio for his role as Chief Executive Officer and Board Member, Caesars Entertainment Corporation, in relation to Des Plaines Development Limited Partnership d/b/a Harrah’s Joliet Casino & Hotel and Southern Illinois Riverboat/Casino Cruises LLC d/b/a Harrah’s Metropolis Casino.

Next, the Board reviewed Supplier Licensee items and approved the license renewal of NRT Technology Corporation but tabled the consideration of Ainsworth Game Technology, Inc., and Bally Gaming, Inc. pending the outcome of current investigations by other jurisdictions.

The Board approved Yasushi Shigeta for his role as President & CEO of Gaming Partners International USA Inc. and Angel Holdings Godo Kaisha as Key Person Business Entity of Gaming Partners International USA Inc.

The Board moved to deny two occupational licensees and approve 88 Level 2 and 136 Level 3 licenses.

The Board renewed the occupational licensees that that were up for renewal this month and who provided updated information to the IGB, timely paid their renewal fees and complied with all other requirements.

The Board issued seven disciplinary complaints against Level 2 and Level 3 occupational licensees. In six of the seven cases, the Board is seeking revocation for individuals that allegedly violated the internal policies of their respective casinos; in the seventh complaint, the Board voted to issue a $150 fine to a Level 3 licensee who was tardy in reporting conduct of her supervisor that violated company policies.

This concluded the Casino session.

VIDEO GAMING

The Video Gaming session began with the Board voting to approve a proposed emergency rule and three rule amendments. The proposed emergency rule, Rule 1800.340, requires that any ownership transfer of a terminal operator be approved prior to close of the transaction. The IGB’s Legal Department stated that this rule meets qualifications for an emergency because there is an immediate threat to the public interest. The proposed rule amendments include amending items related to underage compliance checks. Specifically, Rules 1800.2120, 1800.2130, and 1800.2150 provide clarification regarding the consideration of agents, confidential sources and operation procedures. The goal of these amendments is to provide greater transparency to the process of underage compliance checks.

Next, the IGB voted to approve a standard form use agreement and established an effective use date of December 1, 2019. We have not seen a finalized version of this use agreement; however, the Administrator stated that it was amended to incorporate certain comments provided by the public during the open commentary period. While the use agreement will be available on the IGB’s website, it is not posted yet.

Next, the Board approved the initial terminal operator licenses of CCFVG, Inc., Elite Gaming, LLC, Illinois Gaming Entertainment, LLC, and United Gaming Operator LLC.

The meeting then continued with the Board granting a number of license renewals. The terminal handler, technician and location licensees who provided updated information to the IGB, timely paid their renewal fees and complied with all other requirements were renewed, as were the following  terminal operator licenses:

• Barcade Gaming LLC (November);
• Dearborn Gaming, LLC (November);
• Empire Gaming LLC (November);
• National Gaming Operators LLC (November); and
• RCW Gaming, LLC (October).

The Board issued notices of non-renewal to three locations: Corey Gillam d/b/a George’s Pub, Blue Tin Martini Lounge, LLC d/b/a Blue Tin Martini Lounge, LLC and Room 183, Inc. d/b/a Room 183.

The meeting continued with initial licenses being issued to 79 terminal handlers, two terminal technicians, and 162 video gaming locations.

The Board also denied the applications of two terminal handlers/technicians and the following 16 locations:

• Circuit Corp. d/b/a Angel’s Palace;
• El Jefe Azteca Inc. d/b/a El Jefe Azteca Inc.;
• Greenbriar Restaurant, Inc. d/b/a Brickstone Restaurant & Brewery;
• Grinner’s Place LLC d/b/a Grinner’s Place;
• Hart One Inc. d/b/a El Mariache;
• Jalisco Maroa Inc. d/b/a Jalisco;
• Juanita’s Restaurant, Inc. d/b/a Juanita’s Restaurant, Inc.;
• La Hacienda Del Agave Corp. d/b/a Rito’s Mexican Restaurant;
• Lady Lucks Slots LLC d/b/a Lady Luck Slots;
• Nicholas Rose Holding Corporation d/b/a Taylor Street Deli;
• Not Too Far Bar and Gill, LLC d/b/a Not Too Far Bar and Grill;
• Rickerd, Inc. d/b/a Port Noir;
• Romano Mercato Italiano Inc. d/b/a Romano’s;
• Angies Gaming Inc. d/b/a Angie’s;
• Debra Wells d/b/a Deb’s Red Rose; and
• Village Pub of Crest Hill, Inc. d/b/a Village Pub of Crest Hill.

In a separate motion, the Board voted to deny the request to withdrawal the applications of  Trudy’s Café LLC (Sauk Village) and Trudy’s Café LLC (Midlothian) and moved to deny the locations’ applications.

The Board received two requests for a hearing this month. Charles H & Sandra N Sine d/b/a The Pub Club Broadway had its request for a hearing denied as it allegedly failed to state a prima facie case and allegedly failed to follow Board rules regarding the filing of its request. Giovanni’s Catering Inc. d/b/a Giovanni’s Catering Inc., however, had its request for a hearing granted.

Lastly, the Board granted authority to the Administrator and staff to enter into settlements and dismiss the complaints when appropriate in the following six matters:

• Priya Tobacco Inc. d/b/a The Tobacco Shop;
• Napoli Cucina L.L.C. d/b/a Canta Napoli;
• CH House Corp. d/b/a The Coach House Bar & Grill;
• WML Enterprises, LLC d/b/a Jen G’s Pizza & Pub;
• Stanislaus Pasieka; and
• De’Ante Young.

The meeting was then adjourned.

As last month, there were no items presented related to sports wagering, however as previously noted the Administrator stated that the public comments are being taking into consideration and that the IGB expects to be releasing applications and rules for sports wagering in advance of or contemporaneously with the scheduled December 19, 2019 meeting.