IGB Meeting Update: October 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 monthly meeting on October 20, 2021. As mentioned last month, the IGB has decided to continue its webinar-based meetings. Board members present included Chairman Schmadeke, Member Garcia, Member Hayden and (newly appointed) Member Bell. You can find information on Member Bell’s experience here.

The meeting began with the approval of the September meeting minutes. There were no Board Member comments and the Administrator kept his comments to a minimum in the interest of saving time since this meeting did start at 11 a.m. and contained a full meeting agenda.

The Administrator opened his comments by directing those interested in additional casino bid comments/information to his remarks at the September 7 and October 13, 2021 meetings. He stated that these recordings are available on the IGB’s website, however, as of this publication, the recordings have not been posted. You can continue to check the IGB’s website. 

The Administrator continued his comments with notification of a newly scheduled IGB meeting on November 18, 2021. The Administrator said he expects the meeting to begin at 9 a.m., however, more details and an agenda will be released as the time nears. As always, Donna will send out the agenda when she receives it.

Next, the Administrator spoke briefly about the casino bid process. He stated that the Waukegan applicants interested in providing updated or additional information to the Board must do so by 5 p.m. today, October 20, 2021, as outlined in the special meeting from October 13, 2021

Finally, the Administrator provided his revenue report. He stated there are currently 41,675 live video gaming terminals (VGTs) in 7,856 licensed locations across the state. In August, these VGTs generated approximately $217 million in Net Terminal Income, with total tax revenue of approximately $73 million. The state received approximately $63 million in taxes with local municipalities receiving approximately $10 million. Illinois has the largest network of video gaming machines in the United States and is in the top three for distributed gaming in the world.

In summary, the Administrator said that the combined (video gaming, sports wagering and casino) gaming industry total tax revenue for January 1 through August 31, 2021 is approximately $653 million to the state and approximately $126 million in tax revenue to localities for a grand total of approximately $779 million.

Administrative Matters

After the Administrator’s comments, the meeting continued with the presentation of two proposed new rules for Casino and Video Gaming regulations, respectively. The proposed Casino rule seeks to clarify and codify the process of relocating gaming facilities from temporary to permanent and permanent to permanent in scenarios where riverboat casinos want to move to a land facility. Although we have not yet seen a draft of the proposed rule, the Administrator said that this rule will parallel the existing rules, including requiring a detailed submission for IGB review, an IGB evaluation of the proposed new facility, and Board permission to relocate.

The proposed Video Gaming rule, 1800.1421, would allow redemption of vouchers by mail. You may remember that since the beginning of COVID, there have been two nationwide coin shortages. These shortages were causing undue burdens on Terminal Operators and, as a result, the IGB passed two emergency rules to assist in this crisis. This proposed new rule would eliminate the need for future emergency rules should another coin shortage emerge. The proposed rule would allow individuals to redeem payout vouchers by mail and will outline the requirements of the process.

The Board approved the submission of these two proposed rules to the Secretary of State Index Department.

Casino

The Board began the Casino portion of the meeting with the consideration of matters related to the pending applications for the owner’s license to be located in the City of Waukegan and consideration of matters related to the pending applications for the owner’s license to be located in the South Suburbs of Cook County.

As a brief background, the IGB held a Special Meeting on October 13, 2021 in which the proposed applicants for each license were allowed to make presentations to the Board and answer follow-up questions from the Board Members and the Administrator. The Board said it would use these presentations to assist in its selection of advancing no more than three applicants for the South Suburban site. Currently, there are two applicants vying for the Waukegan license and therefore, no further action was required at this time but those applicants will have the ability to “sweeten” their proposals as they see fit.

At today’s meeting, the Board moved to advance two of four South Suburban applicants to the next round of consideration. The vote for each applicant is outlined below:

• Wind Creek IL LLC (Homewood/East Hazel Crest) – By a unanimous vote of four to none, the Board voted to advance the applicant
• Southland LIVE, LLC (Calumet City) – By a unanimous vote of four to none, the Board voted not to advance the applicant
• South Suburban Development LLC (Matteson)– By a unanimous vote of four to none, the Board voted to advance the applicant
• Southland Ho-Chunk Entertainment, LLC (Lynwood) – By a unanimous vote of four to none, the Board voted not to advance the applicant.

As was done for the Waukegan applicants, the remaining South Suburban applicants are being given an opportunity to address the Board with any new or additional information during a special meeting on October 28, 2021.  In addition, the Waukegan applicants may also make a follow-up presentation.

In the past, the Administrator stated that he expects the Board to have approved the bid winners and issued preliminary suitability to the respective applicants by mid-January, 2022.

The meeting continued with other licensing matters. The Board denied the approval of Cielo Concessions, LLC as aKey Person Business Entity of 815 Entertainment, LLC (the Rockford Applicant), it approved James Michael Brendel as a Key Person of Suzohapp Gaming Solutions, LLC in his role as Owner and  President, and it approved Kimihiko Higashio as a Key Person of Konami Gaming, Inc. for his role as Chairman and Director.

Next, the Board approved 94 Level 2 and 114 Level 3 occupational licensees and issued one notice of denial. The Administrator also approved the Level 1, Level 2 and Level 3 licensees that were up for renewal and provided updated information to the IGB, timely paid their renewal fees, and complied with all other requirements were renewed.

Sports Wagering

The Administrator approved 198 Level 2 occupational licensees and one Level 3 occupational licensee.

Next, the Administrator approved the Level 1, Level 2 and Level 3 licensees that were up for renewal and provided updated information to the IGB, timely paid their renewal fees, and complied with all other requirements were renewed.

Video Gaming

The Video Gaming session began with the Administrator renewing the suppliers, manufacturer and terminal operator licenses of SG Gaming, Inc. and RCW Gaming, LLC.

Next, the terminal handler, technician and location licensees that were up for renewal and provided updated information to the IGB, timely paid their renewal fees, and complied with all other requirements were renewed. One location, Macon Petroleum Inc. d/b/a P & V Quick Stop was issued a notice of nonrenewal for allegedly falling below the three-acre requirement of a truck stop licensee.

The meeting continued with initial licenses being issued to 90 terminal handlers, one technician, and 96 video gaming locations.

The Board denied the license applications of the following seven locations, including denials for statutory ineligibility:

• 101 South Commercial, LLC d/b/a Kay’s Place (Hillside);
• 101 South Commercial, LLC d/b/a Kay’s Place (Brighton);
• Burritoville, Inc. d/b/a Burritoville;
• Saloni Enterprises LLC d/b/a Conoco;
• Big Slots, LLC d/b/a Station 2 Pub;
• Lake County Sports Center and Entertainment Inc. d/b/a Lake County Sports Center; and
• Sonnenschein Hospitality Groupe, LLC d/b/a The Grand Bear Resort at Starved Rock.

Next, the Board tabled the Rule 320 Petition of Accel Entertainment Gaming, LLC, Petitioner (“Accel”) v. Jakari, Inc. d/b/a Pepe’s Mexican Restaurant, Respondent (“Pepe’s”) and Illinois Operators, Inc., et al., Docket No. 19-UP-028. The Board then approved granting Accel’s request to withdraw from the following 320 Petitions and made no findings of fact:

• Accel Entertainment Gaming, LLC, Petitioner (“Accel”) v. Midwest Electronics Gaming, LLC, Respondent (“Midwest”) re: Just Elsie’s, LLC d/b/a Just Elsie’s (“Elsie’s”) 18-UP- 018 and re: Michael J. Whitaker, Sr. d/b/a Charlie’s Off Main (“Charlie’s”) 19-UP-010;
• Accel Entertainment Gaming, LLC, Petitioner (“Accel”) v. Midwest Electronics Gaming, LLC, Respondent (“Midwest”) re: Lineman’s Lounge, LLC d/b/a Linemen’s (“Linemen’s”) 18-UP-023; re: Charles H & Sandra N Sine d/b/a The Pub Club Broadway (“Pub Club”) 19-UP-008; and re: Leighton Evatt Post No. 365, the American Legion, Collinsville, Illinois d/b/a American Legion Post 365 (“Post No. 365”) 19-UP-029;
• Accel Entertainment Gaming, LLC, Petitioner (“Accel”) v. Midwest Electronics Gaming, LLC, Respondent (“Midwest”) re: Lakeside Country Club, Inc. d/b/a Lakeside Country Club (“Midwest”) 19-UP-020; and
• Accel Entertainment Gaming, LLC, Petitioner (“Accel”) v. Midwest Electronics Gaming, LLC, Respondent (“Midwest”) re: DJ’s Pub & Grill, Inc. d/b/a DJ’s Pub & Grill (“DJ’s”) 21-UP-001.

The Board received one request to reapply this month. The request, from Jakari, Inc., was denied. No reason was provided. 

The meeting concluded with a brief reminder by the Administrator that an IGB meeting to address all matters (Casino, Sports Wagering and Video Gaming) has been scheduled for November 18, 2021 and that a special meeting for South Suburban casino applications has been scheduled for October 28, 2021. We will provide more information when it becomes available.

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.