IGB Meeting Update: April 2021

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 IGB held its webinar-based monthly meeting on April 21, 2021. Members present included Member Ramirez, Member Garcia, Member Hayden and Chairman Schmadeke. The meeting began with the approval of the March meeting minutes.

The Chairman continued the meeting by briefly addressing racial equity. He stated the first goal of the IGB is to protect the integrity of gaming, but diversity, equality and inclusion are also important goals. In that vein, the Administrator also mentioned the staff commitment to diversity. 

The Administrator continued his comments by again reminding the industry to help rebuild Illinois and the gaming industry by continuing to wear masks, wash hands, respect social distancing protocols, and get vaccinated.

The Administrator then provided his revenue report. According to Administrator’s report, the State has received approximately $5 million in tax revenue from sports wagering activity in February. He also stated that Illinois recently surpassed Pennsylvania and is third after New Jersey and Nevada for sports wagering activity. He provided a preliminary estimate of tax revenue to the State for March Madness specifically. Although one casino’s numbers are still outstanding, so far it is calculated that March Madness generated approximately $2.1 million in tax revenue for the state. 

The Administrator then provided information related to video gaming. He stated that there was approximately $83 million in tax revenue generated in March, 2021. He then mentioned that there are 39,149 live video gaming terminals (VGTs) in 7,532 licensed locations, including the 3,837 locations with six or more machines.

In summary, the Administrator said that video gaming, sports wagering and casino industries brought in approximately $182 million, combined, in taxes to the State and approximately $37 million in tax revenue to localities.

The Administrator next discussed the Record Retention Schedules and stated that all casino, sports wagering and video gaming licensees will be held to the same requirements. This consistency will help maintain the integrity of gaming. The Record Retention Schedules will be available on the IGB’s website. As of the publishing of this summary, the schedules were not yet available online, however the Administrator did say they will be effective as of April 21, 2021.

Finally, the Administrator provided an update regarding the pending casino applications and said that they are hard at work on the investigations of the applications. The Administrator also included that the State RFP related to the bid process for an investment banker closed today (April 21, 2021) at 3 pm. We are hopeful that an investment banker can be selected and quickly brought on board.

PUBLIC COMMENT

Anita Bedell, Executive Director of the Illinois Church Action on Alcohol and Additional Problems, addressed the Board during the Public Comment Section. She addressed a number of concerns including companies defending themselves in disciplinary complaints, the alleged increase in the number of problem gamblers, the ease of placing bets online, a recent theft at a Video Gaming location, undo economic concentration, loyalty programs, and concerns with the suitability casino applicants that have been considered by the Board.

ADMINISTRATIVE MATTERS

The Administrator presented the following proposed amendments and new rules to the Casino, Video Gaming and Sports Wagering regulations and the Board approved submission of each to the Secretary of State Index Department:

• Proposed Amendment to Casino Rule 3000.210 Annual Fee Dates
• Proposed Casino Rule 3000.195 Reporting Prohibited Conduct
• Proposed Amendment to Video Gaming Rule 1800.320 Use Agreements
• Proposed Amendments to Sports Wagering Rules Streamlining and Revision

Proposed Amendment to Casino Rule 3000.210 Annual Fee Dates – Currently the timing for the submission of renewal fees of casino and sports wagering occupational licensees differ.

The amendment to this rule would unify and codify practices of the two industries so that the renewal fees would be due the last day of the month preceding the renewal month.

Proposed Casino Rule 3000.195 Reporting Prohibited Conduct – While this is a new casino rule, it also applies to video gaming per the Video Gaming Act. This new proposed rule would adopt a confidential hotline and online system for reporting prohibited conduct. This amendment would be in line with what is currently on file under the Sports Wagering Act and would provide a single reporting system across all industries.

Proposed Amendment to Video Gaming Rule 1800.320 Use Agreements – Currently, a Use Agreement is defined as an agreement between a “licensed terminal operator” and “licensed video gaming location.” This proposed amendment would amend the definition to include not only licensed locations, but applicants with a pending gaming application on file, and liquor license holders whose gaming applications are submitted to the Illinois Gaming Board within 10 days of signing the Use Agreement.

We understand that the proposed 10-day filing requirement in this amendment will likely be difficult for terminal operators to comply with given the number of hurdles that often present themselves during the location application process. As with all proposed amendments and new rules, if you would like us to submit comments to the IGB on your behalf, please contact us to discuss your concern.

Proposed Amendments to Sports Wagering Rules Streamlining and Revision – The Administrator proposed a number of changes to the sports wagering rules.

Rule 740(f)(2) – the minor amendment to this rule will replicate the above-mentioned Casino Rule 3000.210 and make the renewal fees due the last day of the month preceding the renewal month.

Rule 1170(b) – This rule addresses the cancellation of wagers if a sporting event is rescheduled. IGB is amending this rules to address operator concerns.

Rule 1180(c) – After thorough review and analysis of this rule, the Administrator and staff feel that it is unnecessary and does not add any benefit to the industry or transparency in regulation thus the Administrator proposes to repeal the rule. The rule is in regards to an operator offering both sides of any wager when there are only two possible outcomes. 

Rule 1250(g) – This rule relates to the responsible gaming tools and that a master sports wagering licensee shall not send digital marketing or promotional materials to a patron requesting such limitation.  Responsible gaming tool users often complained that they were not eligible for the same marketing and promotion opportunities as their peers and therefore it decreased their willingness to utilize the responsible gaming tools. Therefore, the IGB determined that this rule was having the opposite of its desired effect and the Administrator proposed repealing this rule.

Rule 1310(c)(1) – This rule prohibits gambling on events involving individuals in kindergarten through 12^th grade. After conversations with licensees and further consideration of international sports, the IGB acknowledges that is it difficult to monitor and comply with this rule. As such, the Administrator proposed repealing this rule.

CASINO

The Board next approved to table the request to amend the owner’s license application of Walker’s Bluff Casino Resort, LLC.

Next the following Key Persons were approved:

Howard William Shaw Par-A-Dice Gaming Corporation d/b/a Par-A-Dice Hotel Casino Senior Vice President of Operations;

Peter Broughton Southern Illinois Riverboat/Casino Cruises LLC d/b/a Harrah’s Metropolis Casino and Des Plaines Development Limited Partnership d/b/a Harrah’s Joliet Casino – Senior Vice President of Information Technology; and

Bret D. Yunker Southern Illinois Riverboat/Casino Cruises LLC d/b/a Harrah’s Metropolis Casino and Des Plaines Development Limited Partnership d/b/a Harrah’s Joliet Casino – Chief Financial Officer.

Next, the Board voted to deny the supplier application of The Joseph J. Castrogiovanni Revocable Declaration of Trust Dated November 8, 1999, and The Susan M. Castrogiovanni Revocable Declaration of Trust Dated November 8, 1999.  This proposed supplier owns the land that has been proposed for the site of the Rockford casino project.

The Administrator then approved:

• the supplier license of Landry Holdings, LLC d/b/a Casino Tech
• 53 Level 2 and 37 Level 3 occupational licensees
• the renewal of 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

SPORTS WAGERING

The Administrator approved 64 Level 2 occupational licensees and Hemal Patel of HC Aurora, LLC d/b/a Hollywood Casino Aurora as Sportsbook Manager.

VIDEO GAMING

The Video Gaming session began with the Board approving the initial manufacturer and distributor license of Entropy Cabinet Solutions, Inc. USA and denying the initial terminal operator license of Gaming Productions, LLC.

The Administrator then renewed the following terminal operator licenses:

Da Route LLC
Gaming & Entertainment Management – Illinois LLC
Lucky Day LLC
Midwest Electronics Gaming, LLC
Great Lakes Vending Corp.
Sinbad’s Castle Arcade, Ltd.
Top Notch Entertainment, LLC
T’s Gaming, LLC
Valasquez Gaming, LLC.

Next, the terminal hander, technician, and location licensees which were up for renewal and provided updated information to the IGB, timely paid their renewal fees, and complied with all other requirements were renewed.

Eight locations were issued notices of nonrenewal:

The West Frankfort Lodge #1340, Benevolent and Protective Order of the Elks of the United States of America d/b/a Elk’s Lodge
Hogs & Hydrants Inc. d/b/a Hogs & Hydrants
Hoffman House of East Rockford, Inc.
MVP Sports Club, Inc.
Jakari, Inc.
Aloste, Inc.
Bella Banquets, Inc.
IRHERE Tap, Inc.

For those interested, the reoccurring theme for locations that were issued notices of nonrenewal were often tied to a location’s alleged violations of COVID mitigation protocols.

The meeting continued with initial licenses being issued to 41 terminal handlers and 104 video gaming locations.

The Board next denied the license applications of the following 10 locations, including one for statutory ineligibility:

• Bravo Pizza of Poplar Grove, Inc. d/b/a Bravo Pizza of South Beloit;
• Cary Pub & Grill INC. d/b/a Cary Pub & Grill;
• Dag Sports Inc. d/b/a Dag Sports Inc.;
• Gomez Restaurant and Bar Inc. d/b/a Gomez Restaurant and Bar Inc.;
• Johnsburg Mobil LLC, d/b/a Sunnyside Mobil;
• Kellys Café 2 LLC d/b/a Kellys Café 2 LLC;
• Access Gaming Inc. d/b/a Access Gaming Inc.;
• Niemann Foods, Inc. d/b/a Haymakers 715;
• Oak Forest Marathon, Inc. d/b/a Oak Forest Marathon; and
• SNA Restaurant Group Inc.

The Board received one request for a hearing this month from Spring Hill Entertainment Inc. d/b/a Spring Hill Entertainment INC. which they denied as moot and instead granted its request to reapply within a calendar year.

Next, the Board was brought up to date on the Rule 320 Petition: J&J Ventures Gaming LLC, Petitioner v. Accel Entertainment Gaming, LLC, Respondent, and Action Gaming, LLC, Intervenors, Docket No. 17-UP-003. The IGB had previously adopted the Administrator’s recommendation.  Then J&J was given time to file exceptions to the recommendation.  The Board has now reviewed the whole record in this case and the Board adopted as a final order the Administrator’s recommendation.

LITIGATION

The Board reviewed and accepted Administrative Law Judge’s recommendations of denial in the cases of In re. Denial of Trudy’s Café LLC (Midtholian) and Trudy’s Café LLC (Sauk Village) and In re. Denial of Angies Gaming, Inc. (Berwyn) and it issued a final order of denial in each case.

Lastly, the Board delegated authority to the Administrator to settle the disciplinary complaint against Gold Rush Amusements, Inc. and the Notice of Disassociation related to Ron Bolger.

This concluded this month’s meeting.

As always, if you have any questions regarding what happened at this month’s meeting or any pending rules/regulations, please give us a call.