IGB Meeting Update - March 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.  

At Stake

March 4, 2019 – Newsletters by Donna B. More and William Bogot

The Illinois Gaming Board (IGB) held its March monthly meeting in Chicago on Friday, March 1, 2019. Due to elevator problems in the building, the Chairman generously began the meeting a little late allowing audience members to arrive. Chairman Tracy, Member Robinson and Member Alejandre were all present for both sessions while Member Dolins participated by phone and left just before the Video Gaming session.

The Chairman opened the meeting by covering a few different items. First, he mentioned the next meeting is scheduled for April 17, 2019. Next, he briefly mentioned sports wagering. The Chairman stated that while they have not been given any formal direction at this time, he understands that more work is coming to the IGB and that they have received an increased budget. Lastly, the Chairman continued his comments by again thanking IGB staff member Jim Lopinski for his service. The Chairman said that while Mr. Lopinski has retired, he is willing to come back for a few months, on contract, to assist his replacement with handling the transition. The Chairman and Member Robinson also thanked Tammy Compton for undertaking more responsibility during this transition.

During member commentary, Member Robinson addressed the upcoming minority contract deadlines. She stated she is looking forward to the licensee’s submissions and would like the submissions to model economic inclusion. She mentioned that the IGB issued a guide to assist in this endeavor and she addressed the “good faith effort” stated in the regulations and her view that such efforts require a more active role by licensees.

The Administrator followed Member Robinson’s comments. He said that, like the elevator issues this morning, they were also experiencing computer difficulties and he was unable to retrieve his report on the number of live locations and live video gaming terminals (VGTs).

The meeting continued with the Board approving the dissemination of closed session minutes in 2018 and approving the January Riverboat and Video Gaming meeting minutes.

There were two speakers scheduled for the public commentary section, however, Mayor Irvin of Aurora chose to address the Board during the final consideration of HC Aurora d/b/a Hollywood Casino Aurora license renewal. Andy Sotiropoulos, Gaming Manager/Owner of Connies & Giannis, Inc., addressed the Board to request assistance in a contract dispute involving his use agreement’s termination and auto-renewal provisions.

RIVERBOAT

The Board began the Riverboat session by addressing the final considerations of two licensees. These considerations resulted in one of the longest Riverboat meetings in recent history, which included two separate recesses and a number of speakers. If you’d like to hear the full meeting recording, it can be found on the Illinois Gaming Board’s website.

The following casino license was renewed.

• HC Aurora, LLC d/b/a Hollywood Casino Aurora – License Renewal;

The following transaction and key persons were approved relating to Churchill Downs Inc.’s acquisition of a majority equity stake in the Rivers Casino, conditioned upon a good faith effort over the next 90 days to search for a statutorily eligible minority/women 10% investor:

• Midwest Gaming & Entertainment, LLC d/b/a Rivers Casino-Des Plaines – Transfer of Ownership – Acquisition by Churchill Downs Inc. through its wholly owned subsidiary, HCRH, LLC of partial ownership in Midwest Gaming & Entertainment, LLC d/b/a Rivers Casino-Des Plaines held through its parent, Midwest Gaming Holdings, LLC;
• Austin Miller – Key Person – Midwest Gaming & Entertainment, LLC d/b/a Rivers Casino-Des Plaines – Senior Vice President of Gaming Operations for Churchill Downs Inc.; Secretary of HCRH, LLC;
• Churchill Downs Incorporated – Key Person – Midwest Gaming & Entertainment, LLC d/b/a Rivers Casino-Des Plaines – Business Entity;
• HCRH, LLC – Key Person – Midwest Gaming & Entertainment, LLC d/b/a Rivers Casino-Des Plaines – Business Entity;
• Marcia Dall – Key Person – Midwest Gaming & Entertainment, LLC d/b/a Rivers Casino-Des Plaines – Executive Vice President and Chief Financial Officer for Churchill Downs Inc.; Treasurer of HCRH, LLC;
• William Carstanjen – Key Person – Midwest Gaming & Entertainment, LLC d/b/a Rivers Casino-Des Plaines – Chief Executive Officer for Churchill Downs Inc.; and
• William Mudd – Key Person – Midwest Gaming & Entertainment, LLC d/b/a Rivers Casino-Des Plaines – President and Chief Operating Officer for Churchill Downs Inc.; President of HCRH, LLC.

The Board also moved to approve the final consideration of supplier licensee, Konami Gaming, Inc. and issue occupational licenses to 37 Level 2 and 85 Level 3 applicants.

Lastly, the Board denied two occupational licensees and issued one disciplinary complaint seeking to revoke the occupational license of an individual who allegedly failed to disclose an arrest.

The Riverboat session then concluded.

VIDEO GAMING

After the very lengthy Riverboat meeting, the Video Gaming session began with a hurried effort by the Board. The Board granted the supplier license of Patriot Gaming & Electronics, Inc. and the meeting continued with initial licenses being issued to the following:

• 25 terminal handlers;
• 1 terminal technician; and
• 61 video gaming locations.

There were also a number of license renewals granted. The terminal hander, technician and location licensees that were up for renewal this month were all renewed given that the IGB was provided with updated information, renewal fees were timely paid, and all necessary requirements were satisfied. The following terminal operator licensees were also renewed:

• Abraham Gaming, LLC;
• American Video Gaming, LLC;
• Awesome Hand Services, LLC;
• Dragonfly Gaming, Inc.;
• Gold Rush Amusements, Inc.;
• Laurel Gaming, LLC;
• Lattner Entertainment Group, Illinois, LLC;
• Melody Gaming, LLC;
• Mississippi Gaming & Amusements, LLC;
• Renville Gaming, LLC;
• Skyhigh Gaming, LLC; and
• WAMI Gaming, LLC.

The Board tabled the motion for CH House Corp. d/b/a The Coach House Bar & Grill and denied the applications of the following three establishments:

• Corvette U S A Inc. d/b/a C.C.’s Grove Inn;
• Hog Daddy BBQ LLC d/b/a Hog Daddy BBQ LLC; and
• Smooth Fox Inc. d/b/a Smooth Fox.

The Board also denied the applications of three terminal handlers: Michael Morris; Verna Agboola; and Gerald Hall. Immediately after denying these individuals, the Board took further action and granted Michael Morris permission to reapply and ordered Illinois Gaming Investors LLC d/b/a Prairie State Gaming, LLC to disassociate from Verna Agboola and Gerald Hall.

The Board received five Requests for Hearings and, in surprising fashion, granted all five requests. The Board granted the requests of Jameson Pub. INC d/b/a Skooter’s Roadhouse; Rough Road LLC d/b/a Freedom Bar; TNT Securities Inc. d/b/a TNT; Wild Money Gaming, LLC; and Cicero Citgo, Inc. d/b/a 12^th St. BP.

The following three requests to reapply were also granted:

• Calm & Chaos LLC d/b/a The Irish Legend;
• Alexander Kahmann; and
• Niemann Foods Inc. d/b/a County Market Express.

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

• The Board is seeking to revoke the license of Michael O’Reillyalthough reasons were unclear.
• The Board is seeking a $1,000 fine from Club Havana LLC d/b/a Townhouse Loungefor allegedly falling of out good standing with the Illinois Secretary of State’s office multiple times in the last fifteen months.
• The Board ordered WW Ventures, LLC d/b/a Shelton’s Barto disassociate from its video gaming manager for an alleged felony conviction.
• The Board is seeking a $5,000 fine from AG Entertainment Inc. d/b/a Booker’s Bar & Grill for allegedly serving alcohol to a minor and allowing a minor to play VGTs.
• The Board is seeking a $5,000 fine from Blackhawk Restaurant Group LLC d/b/a Penny’s Placefor allegedly serving alcohol to a minor and allowing a minor to play VGTs.
• The Board is seeking a $5,000 fine from the following seven locations for allegedly allowing underage minors to play VGTs:

o   Pilot Travel Centers LLC d/b/a Pilot Travel Center #643;
o   Effingham Chrome Shop, Inc. d/b/a Effingham Chrome Shop;
o   Downtown Lounge, Inc. d/b/a Downtown Lounge;
o   Mexphil Enterprises Incorporated d/b/a Quick Stop Package Liquor;
o   TA Operating LLC d/b/a TravelCenters of America;
o   Speedway LLC d/b/a Speedway #7503; and
o   Gopher’s Grill, Inc. d/b/a Gopher’s Grill.

Lastly, the Board granted authority to the Administrator and staff to enter into settlements and dismiss the complaints when appropriate to the following eight licensees:

• Bootleggers Pizza, Inc. d/b/a Bootlegger’s Pizza;
• Clover Restaurant Group LLC d/b/a Shamrock Café;
• Fuzzy’s, Inc. d/b/a Fuzzy’s Tavern;
• Play Pen, Inc. d/b/a Play Pen;
• Mazzarisi Gaming Inc. d/b/a Maria’s Gaming Lounge;
• Panino’s Italian Sandwiches & Crab Shack, LLC d/b/a Panino’s Italian Sandwiches & Crab Shack;
• Grand River Jackpot, LLC; and
• Bally Gaming, Inc.

The meeting was then adjourned.

While we all are anxiously waiting for spring, we wanted to briefly remind licensees that illegal gambling, such as NCAA brackets, is strictly prohibited and violators are subject to disciplinary complaints resulting in fines or possible revocation of licenses.

We also wanted to bring your attention to the new location application fee. Once an application has been submitted, location owners will receive an email correspondence from the IGB informing them that a nonrefundable $100 application fee is required. This is separate and apart from the $100 licensing fee that is required after a location has been approved for licensure.