IGB Meeting Update: October 2022

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.

On October 14, 2022, Governor Pritzker issued a statewide disaster proclamation in response to COVID-19. In response, the Illinois Gaming Board determined it is not practical or prudent, nor is it feasible, to hold an exclusively in-person meeting.

As such, the IGB’s monthly meeting on Thursday, October 27, 2022 was hybrid with in-person accessibility at 555 W. Monroe Street, First Floor Conference Room and via livestream. Board members present included Chairman Schmadeke, Member Hayden and Member Garcia.

The meeting began with the approval of the Regular Board Meeting Minutes from September 15, 2022 and continued with the Administrator’s comments as there were no comments from Board Members.

Administrator Comments

During his comments, the Administrator discussed the Video Gaming Rule 1800.2070 regarding progressive jackpot meters, which was recently approved by Joint Committee on Administrative Rules (JCAR) and the gaming revenue report.  The final rule will be published in an upcoming Illinois Register. The proposed rule can be found in the March 11, 2022 Illinois Register : Illinois Register (ilsos.gov) but, in summary, the rule would standardize how payouts will work for standalone VGTs or linked games within a location. While the rule has been approved, the Administrator stated that the IGB will not be able to implement the rule until the proper technology is in place.

Next, the Administrator provided his revenue report. He stated that currently, as of approximately October 25, 2022, there are 44,428 live VGTs in 8,148 licensed locations across the state. According to the Administrator’s report, the September NTI for video gaming locations was approximately $225 million and generated $65.3 million in tax revenue for the state and $11.3 million for the local municipality.

The Administrator also provided a summary of revenue generated by the entire gaming industry, January through September (with the exception of the unavailable September’s Sports Wagering amounts). In total, gaming activities have generated approximately $845 million in tax revenue for the state and $162 million in taxes for local host communities since January for a total of over $1.8 billion in taxable revenue.

Public Commentary

Although not included on the agenda, there were two individuals who asked to address the Board during the Public Commentary section.

James Murphy of Clark Hill, and as a representative of Midwest Electronics Gaming, LLC (Midwest), spoke to the Board to address a VGT placement issue. Mr. Murphy alleged that IGB staff allowed J&J Ventures Gaming, LLC to place VGTs in a licensed location that had a valid use agreement with Midwest and that the IGB did so with knowledge of Midwest’s valid use agreement. Midwest had removed its games during construction at the location and rather than being permitted to re-install its games, J&J was given the approval although, according to Mr. Murphy, J&J’s use agreement was not valid.

Next, Samantha Haggerty of Penn Entertainment, Inc. addressed the Board as a follow-up to the company’s previously issued press release in which the company discussed two potential growth projects for its Aurora and Joliet properties. Ms. Haggerty took her time to publicly thank the city officials, IGB Board, and IGB staff for their time and effort related to these projects. She stated that the potential relocation of these properties is set to begin in late 2023 and result in hundreds of jobs and larger amenities (such as restaurants and hotel rooms), as well as added convenience to the residents.

Administrative Matters

During his comments regarding Administrative Matters, the Administrator stated that during its closed session meeting prior, the Board voted against disseminating any additional closed session minutes, citing confidentiality is still required.

Next, the Board voted to grant the hearing request of an individual who was previously denied removal from the Self-Exclusion list. Given limits of confidentiality, no further details were provided.

Casino

The Casino portion of the meeting began with the initial consideration of HC Aurora, LLC d/b/a Hollywood Casino Aurora and the licensee’s presentation.

Next, the meeting continued with the approval ofRobert Lavan for his role as Vice President and Chief Financial Officer for The Rock Island Boatworks, LLC d/b/a Bally’s Quad Cities Casino & Hotel. Notably, Jeffrey Bryan Walker was listed on the agenda as a Key Person for Par-A-Dice Gaming Corporation d/b/a Par-A-Dice Hotel Casino, but this matter was not presented to the Board.

The meeting continued with the Administrator issuing a Casino Supplier license renewal to Ainsworth Game Technology, Inc. and the Board approving Alexander Lee Patterson for his role as Chief Operating Officer of CasinoMoney, Inc., Richard James Higgins for his role as Director of Security for HR Rockford, LLC d/b/a Hard Rock Casino Rockford and George A. Kollintzas for his role as Internal Audit Manager for HC Aurora, LLC d/b/a Hollywood Casino Aurora, HC Joliet, LLC d/b/a Hollywood Casino Joliet.

The meeting continued with the Board approving 54 Level 2 occupational licenses, and 47 Level 3 occupational licenses. The Board also issued one notice of denial.

Next, the Administrator issued renewals to the occupational licensees that were up for renewal and had provided updated information, timely paid their renewal fees, and complied with all other requirements.

Sports Wagering

The Sports Wagering section of the meeting began with the Administrator discussing the status of Master Sports Wagering Online Only. Currently there are no applicants for a Master Sports Wagering Online Only. As such, the IGB feels that a supplemental selection process for new applicants is fitting and appropriate. As such, there will be a new Master Sports Wagering Online Only application period starting Tuesday, November 1, 2022 and ending Wednesday, March 1, 2022.

Next, Gregory Cordivari was approved as a Level 1 Occupational Licensee for his role as Director, Strategic & Financial Planning for Penn Sports Interactive, LLC. Additionally, the Board approved 115 Level 2 occupational licensees. The Administrator then granted renewals to the Level 1, 2, and 3 licensees that were up for renewal, had provided updated information to the IGB, timely paid their renewal fees, and complied with all other requirements.

Video Gaming

The Administrator began the Video Gaming session, as he has the past meetings, by reiterating that the licenses for establishments, handlers, and technicians now have a term of two years, while suppliers, distributors, manufacturers and terminal operator licenses now have a term of four years and that though new license terms would begin today, annual fees are still due. He also reminded licensees that, due to technical difficulties including auto-generated notices and programming and system enhancements, licensees may receive letters or notices with one-year expiration dates, adding that IGB will be providing updates on the Sci Games portal and to please make notes of any discrepancies.

Following this, the Administrator renewed the terminal operator license of RCW Gaming, LLC for a period of four years.

Next, the Administrator renewed the terminal handler, technician, and location licensees which were up for renewal and had provided updated information to the IGB, timely paid their renewal fees, and complied with all other requirements. He also issued notices of nonrenewal to two technicians.

The meeting continued with initial licenses being issued to Ultra Gaming Systems, LLC (Terminal Operator), 37 terminal handlers, and 112 video gaming locations.

The Board also voted to rescind the previously issued denials/notices or non-renewals of Grandview Gaming Inc. d/b/a Grandview Gaming, Martin & Bayley, Inc. d/b/a Huck’s #379, HP DJ Operating, LLC d/b/a Benny’s Corner Market-Davis Junction, and Moonlight Bay Marina, LLC d/b/a Moonlight Bay Marina LLC and either granted licensure or granted license renewal.

The Board then denied the applications of the following eight locations, including four locations that were denied for statutory ineligibility:

• Beulah Wagoner d/b/a Faye’s Tavern;
• Cheeks on Madison, LLC d/b/a The Roxxx;
• Lilly’s Cafe LLC d/b/a Lilly’s Cafe;
• Ostry Enterprises LLC d/b/a Patsy’s;
• Hillgrove Tap Tinley Park, LLC d/b/a Hillgrove Tap;
• Ryan’s Repair LLC d/b/a The Vigilante;
• DRA LLC d/b/a Park Lanes; and
• NO. 4 Social Garage LLC d/b/a NO. 4 Social Garage.

The last matter of the day was the Rule 320 petition, 17-UP-004, between Accel Entertainment Gaming, LLC (Accel) and Midwest Electronics Gaming, LLC (Midwes”) regarding Hialeah Club, Inc. d/b/a Hialeah Club. The Administrator’s recommendation was that the location provided proper notification for termination and that Midwest’s machines should be removed and Accel’s machines should be installed. At the time of this publication, the final board order was not available on the IGB’s website, however, all final orders can be found here: Illinois Gaming Board - Video Rule 320 Petitions.

The meeting was then concluded with a final note that the next meeting is December 8, 2022.

Have a safe and happy Halloween!