IGB Meeting Update - August 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 Thursday, August 8. The Board began by mentioning the possibility of rescheduling the September meeting. While no further details were provided, we will send out an email notification if the September meeting date changes.

The following members were present at today’s meeting: newly appointed Chairman Schmadeke; Member Dollins; Member Ramirez; and Member Hayden. Newly appointed Member Garcia was absent. Although the IGB’s website has not yet been updated to include the newest members’ biographies, you can learn more about them through this press release.

The meeting opened with the approval of last month’s meeting minutes and continued with the Chairman’s opening comments. In his comments, Chairman Schmadeke thanked Governor Pritzker for the honor of his appointment and also thanked the Administrator and staff for their hard work and dedication.

The Chairman continued his comments stating that the goals of gaming expansion are threefold: 1) assist in economic development; 2) promote tourism in Illinois; and 3) increase local and state revenues. He stated that these goals can only be achieved if the public has confidence in the process and he further said that, under this administration, issues relating to the integrity in gaming will not be compromised.

Following the Chairman’s comments, Member Dollins spoke briefly to welcome the Chairman.

The meeting continued with the Administrator’s comments which covered  the Chicago feasibility study to test the viability of the proposed casino locations and the need for gaming expansion rules.

In regards to the Chicago feasibility study, the Administrator stated that Union Gaming had been selected through the procurement process. He also stated that the study is expected to be completed by August 12, 2019 and the results will be released to the public in a timely manner.

The Administrator spoke at length regarding emergency and proposed permanent rules-making process. He stated that at today’s meeting there would be a presentation of rules for independent test lab licensing, but no sports wagering rules would be discussed and presented. He also stated that the legal department has requested that the Board delegate authority to the Administrator to issue emergency rules. He said that future proposed rules will be published in the Illinois Register (found on the Secretary of State’s website) as well as on the IGB’s website. 

Lastly, the Administrator stated there are currently 6,991 live video gaming locations operating 31,949 video gaming terminals (VGTs).

The floor was then opened to three individuals who requested to address the Board during public commentary:

• Anita Bedell, Executive Director of the Illinois Church Action on Alcohol and Addiction Problems, welcomed the new Board Members and asked that the IGB continue to protect and safeguard Illinois residents by preventing the involvement of organized crime in the industry, precluding access to gambling 24 hours a day (which is currently allowed under the new bill), avoiding expansion of hours of alcohol sales, implementing a self-exclusion list for VGTs and for the continued concern with underage gambling:

• John Alan Boryk, Illinois Coordinator of Stop Predatory Gambling, also welcomed the new Board Members and wished to echo the comments of Anita Bedell. He requested that the Board consider who profits from gaming expansion – who plays and who loses. He stated that it is highly unlikely that the financial goals of gaming expansion will be met and voiced concern about decreased property values, decreased employment and lack of economic development in areas with casinos;

• Ivan Fernandez, Executive Director of Illinois Gaming Machine Operators Association (IGMOA) introduced himself to the Board and described the VGT industry as an overlooked success story in Illinois. The industry has created 32,000 jobs while providing opportunities for individuals to work and spend money in their own communities. He requested that the Board develop new rules based on statutory amendments so that the industry can begin to implement the new provisions and generate additional revenue for local jurisdictions and the state of Illinois.

RIVERBOAT

The Riverboat session began with the Board delegating authority to the Administrator to issue emergency rules to assist in the implementation of the expansion legislation. Proposed new rule 3000.290 and 3000.291 were discussed that related to the licensing of testing laboratories. Rule 3000.290 will outline the application procedure and 3000.291 with outline the duties and responsibilities of these licensees.

Next, the Board heard a presentation by Des Plaines Development Limited Partnership d/b/a Harrah's Joliet Casino & Hotel regarding initial consideration of its owner's license renewal and a presentation by 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 regarding initial consideration for the following items related to the merger of Eldorado Resorts, Inc. and Caesars Entertainment Corporation: transfer of ownership; financing transactions; and master lease amendments.

The meeting continued with the following key persons being approved:

• Eric Golebiewski as Key Person of Des Plaines Development Limited Partnership d/b/a Harrah's Joliet Casino and Hotel and Southern Illinois Riverboat/Casino Cruises, LLC d/b/a Harrah's Metropolis for his role as Vice President of Enterprise Security Operations;

• Randall Kelley as Key Person of Casino Queen, Inc. for his role as Director of Casino Queen, Inc. and CQ Holding Company, Inc.; and

• Terrance Hanger as Key Person of Casino Queen, Inc. for his role as President and Director of Casino Queen, Inc. and CQ Holding Company, Inc.

The Board moved to deny one occupational licensee and approve 49 Level 2 and 96 Level 3 licenses. The Board also approved the following three Level 1 occupational licenses:

• Corrine Slinde-Mally as Staff Internal Auditor for Southern Illinois Riverboat/Casino Cruises LLC d/b/a Harrah's Metropolis Casino;

• David James Ruefer as Controller for The Rock Island Boatworks, Inc. d/b/a Jumers Casino & Hotel; and

• Faith Forkell and Julie Perhay as Internal Auditor and Director of Finance for Par-A-Dice Gaming Corporation d/b/a Par-A-Dice Hotel Casino.

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 were also renewed.

The Board issued three disciplinary complaints against Level 2 and Level 3 occupational licensees for allegedly failing to comply with casino policies at their respective riverboats.

The Riverboat session then concluded.

VIDEO GAMING

The Video Gaming session opened with emergency and proposed permanent rulemaking. Similar to the Riverboat session, the Board delegated authority to the Administrator to issue emergency rules and proposed rules addressing the technical standards for independent testing laboratories for VGTs and the development of application and licensing procedures. Additional rules will be issued to implement the following changes to the Video Gaming Act:

• Add a “large truck stop” definition;
• Impose an application fee for locations;
• Increase application and renewal fees for handlers and technicians;
• Key and lock security rules for handlers;
• Set specification for surveillance requirements;
• Add a subpart R for comprehensive of progression play; and
• Add a subpart S for implementation of new technology.

The meeting continued with the Board granting a number of license renewals. The terminal handler, technician and location licensees 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 were renewed. The following licensees were also renewed:

• American Vending Sales, Inc. (manufacturer/distributor/supplier);
• Aristocrat Technologies, Inc. (manufacturer/distributor/supplier);
• Bally Gaming, Inc. (manufacturer/distributor/supplier);
• CountR GMBH (supplier);
• H. Betti Industries, Inc. (manufacturer/distributor/supplier);
• IGT (manufacturer/distributor/supplier);
• JCM American Corporation (manufacturer/distributor/supplier);
• Konami Gaming, Inc. (manufacturer/distributor/supplier);
• M3 Technology Solutions, LLC (supplier);
• Al_Keshav Krupa LLC (terminal operator);
• Donico Gaming, LLC (terminal operator);
• FJC Technologies LLC (terminal operator);
• G.F.M. Gaming, LLC (terminal operator);
• Game On Entertainment, LLC (terminal operator);
• Illinois Gaming and Coin-Op LLC (terminal operator);
• Pocket Aces Gaming Inc. (terminal operator); and
• Veterans VGT, LLC (terminal operator).

The meeting continued with initial licenses being issued to:

• Action Video Gaming, LLC (terminal operator);
• Winner’s Choice Gaming, LLC (terminal operator);
• 73 terminal handlers;
• two terminal technicians; and
• 84 video gaming locations including a separate motion waiving the prohibition of a location being within 1000 feet of a horse racetrack or riverboat for J&Z Food Basket Inc. d/b/a J & Z Food Basket.

The Board also denied the applications of eight terminal handlers/technicians and the following nine locations:

• Bullheads Steakhouse LLC d/b/a Bullheads Steak House;
• C-Store Development Company d/b/a Creve Coeur Shell;
• Napoli Cucina L.L.C d/b/a Canta Napoli;
• Priya Tobacoo Inc. d/b/a The Tobacco Shop;
• Sauced Pub, Inc. d/b/a Sauced Pub;
• Shivansh Inc. d/b/a Livingston IGA;
• Tacos San Jose, Inc. d/b/a San Jose;
• The Big BM Inc. d/b/a Hoppers; and
• ZZA Factory Inc. d/b/a Zza Factory.

The Board received and denied two requests for a hearing: Richard Miller had his request for a hearing was denied as he allegedly failed to state a prima facie case; and Warden Williams had his request for a hearing denied as his request allegedly failed to satisfy certain procedural requirements.

The Board received and approved requests to reapply from El Nuevo Vallarta Sports Bar and Grill Inc. d/b/a El Nuevo Vallarta Sports Bar and Grill and Lou’s Tap, Inc. d/b/a Louie’s Tap House.

The Board granted authority to the Administrator and staff to enter into settlements and dismiss the complaints when appropriate in the following nine matters:

• Mexican Honorary Commission d/b/a Mexican Honorary Commission;
• Terrance Maloney;
• Bull Pen Inc. d/b/a Bull Pen Bar;
• Quikx One Convenience Store, Inc. d/b/a Shar’s Armanetti Fine Wine & Spirits;
• Karco Inc.;
• Eureka Entertainment, LLC;
• Jameson Pub d/b/a Skooter’s Roadhouse;
• Veterans VGT, LLC;
• Leisure Time Gaming & Amusements, Inc.; and
• Slager’s on 47^th d/b/a Slager’s on 47^th.

Finally, the Board reviewed five administrative hearing cases that were before Administrative Law Judges (ALJ):

• In the matter of Payal Gas and Food, Inc. d/b/a Payal Gas and Food, the Board voted to adopt the ALJ’s recommendation, however, they rejected the conclusions of law and, as a final Board order, issued a $5,000 fine to the establishment;
• In the matter of Springfield Pub d/b/a the Dublin Pub, the ALJ recommended licensure. The Board voted to adopt the ALJ’s findings of fact except finding #18, yet issued a final Board order denying licensure;
• In the matter of Porkchop Glenwood LLC d/b/a Porkchop, the Board voted to adopt the ALJ’s recommendation and issue a final Board order denying licensure;
• In the matter of Ulysses Garcia Leonardo, the Board voted to adopt the ALJ’s recommendation and issue a final Board order revoking licensure; and
• In the matter of Justin Laumbattus d/b/a Em’s Tavern, the Board voted to adopt the ALJ’s recommendation and issue a final Board order revoking licensure.

SPORTS WAGERING

The Sports Wagering session began and ended with the Board delegating authority to the Administrator to issue emergency rules.

The meeting then adjourned.