IGB Meeting Update: October 2023

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 Thursday, Oct. 26, 2023. The meeting was hybrid with in-person accessibility at 160 N. LaSalle St., Fifth Floor Auditorium and via livestream. Board members present at this meeting included Chairman Schmadeke, Member Hayden, and Member Garcia.

Before providing a summary of the meeting’s events, we wanted to quickly remind everyone that since the new license terms were enacted (Terminal Operator licenses are valid for four years, while Location, Handler and Technician licenses are valid for two), licensees are still required to pay an annual renewal fee. The IGB should and does send out emails related to these fees. However if you do not believe you received an email, please contact us as failure to pay the renewal fee may result in disciplinary actions.

The open meeting session began with the approval of the minutes from the regular board meeting on Thursday, Sept. 14, 2023 and continued with the Administrator’s brief comments as there were no comments from board members.

Administrator Comments

Administrator Fruchter began his comments by reminding Terminal Operators (TOs) that pursuant to R. 350, TOs cannot pay for marketing costs on behalf of a location. All marketing and promotional costs (advertising both the TO and a location) must be split equally with locations. As the TOs know, the IGB recently issued an email reminding TOs of the reporting requirements under Rule 350(c)(6) related to the filing of quarterly reports detailing the splitting costs. Even if no costs are split, a TO must still file a report. All TOs are required to submit information related to Rule 350 via the DUS system by Tuesday, October 31, 2023. If you have any questions regarding this requirement, please contact us immediately for assistance.

The Administrator also took a moment to remind TOs about the Sales Agent disclosure requirement outlined in Rule 220(E)(2) in which TOs need to report Sales Agents to the IGB. Failure to adhere to these filing and reporting obligations may result in disciplinary actions. If you need assistance regarding disclosing sales agents or checking the status of sales agent approvals, please reach out.

Next, the Administrator mentioned that the recently submitted Video Gaming Rule 1750, regarding responsible gaming signage, was approved by the Joint Action Committee of Rulemaking (JCAR). While the finalized rule has not yet been added to the IGB’s website, the draft rule as it appeared in the Secretary of State Register can be found here, and states, in part, that each terminal operator shall provide to each licensed video gaming location at which it operates video gaming terminals signs to inform patrons how to obtain assistance with problem gambling.

The Administrator also took some time to briefly discuss the Vertical Integration Rule. He stated that the intention is to file a second notice with JCAR within the next month or so taking into consideration all of the testimony, comments and notes from the public. We will provide an update and highlight any revisions made on the basis of public comment received when the Second Notice to JCAR becomes available. However, we suggest interested parties visit the IGB’s website and listen to the discussion at the previously held public hearing, which can befound here.

The Administrator continued his comments by addressing Video Gaming Rule 440 concerning Undue Economic Concentration. He stated that the board hired Christenson Capital to produce a study researching the concept of undue economic concentration in the video gaming industry. The study has now been completed and this may lead to some additional rules to be promulgated. The study will be published on the IGB’s website in the near future.

Before reporting the industry’s monthly revenue numbers, the Administrator briefly mentioned the competitive bidding process for online-only sports wagering applicants. He said that he recently granted leave to withdraw the application of the remaining applicant and, as such, this supplemental bidding process has been completed without an award of a license.

According to the Administrator, there are almost 8,500 live video gaming locations operating in Illinois offering approximately 46,740 Video Gaming Terminals (VGTs). In September, these VGTs generated a Net Terminal Income (NTI) of over $237 million resulting in $80 million in taxes with the state’s share being approximately $68 million and the location municipalities receiving approximately $11 million. This September, casinos saw more than 1 million in admissions and generated an AGR of over $132 million with $32 million in taxes being made by the state and $7 million by host communities. Total Sports Wagering AGR (for August) had a total reported handle of $676 million for a total AGR of $46 million ($7 million in taxes to the state and over $508,000 to Cook County). To date for 2023, the combined industries of Video Gaming, Sports Wagering, and Casino activity have generated over $1.1 billion in taxes with the state’s share being roughly $930 million and the local municipalities sharing $178 million.

The Administrator continued his comments by briefly stating that the Fall Veto Session is currently taking place and he reemphasized the IGB’s stance against any and all illegal gaming, including but certainly not limited to, sweepstake machines and skill games.

Finally, the Administrator took a moment to acknowledge the contributions of Jim Pierce, Field Office Supervisor of the Rock Island casino. The Administrator and Chairman thanked him for his service and congratulated him on a well-earned retirement.

Casino

The casino portion of this meeting began with the approval the Owners License Renewal of Alton Casino, LLC d/b/a Argosy Casino Alton.

Next, the Board heard and approved the Final Consideration of Owners License of 1) Danville Development, LLC d/b/a Golden Nugget Danville; 2) Walker’s Bluff Casino Resort, LLC d/b/a Walker’s Bluff Casino Resort; and 3) Bally’s Chicago Operating Company, LLC d/b/a Bally’s Chicago (“Bally’s”). Additionally, the Board granted Bally’s Request to Extend Operations at its Temporary Casino Facility. This portion of the meeting included presentations from these casino applicants and licensees which we did not summarize here. We encourage those interested to visit the IGB’s website for a full recording of this meeting for more information.

The board then approved the following Key Persons: 

• Mark Arndt for his role as Chief Financial Officer for Rush Street Gaming, LLC, Midwest Gaming & Entertainment, LLC d/b/a Rivers Casino Des Plaines
• Caesars Holdings, Inc. as owner of Des Plaines Development Limited Partnership d/b/a Harrah’s Joliet Casino & Hotel

This was erroneously missed from last month’s meeting so this inclusion was merely a correction related to the approval of Des Plaines Development Limited Partnership d/b/a Harrah’s Joliet Casino & Hotel and not new information.

The meeting continued with the board granting an initial supplier license to Acres Manufacturing Company and approving the Level 1 occupational licenses of the following applicants:

• Gregory Axtell for his role of Director of Property Operations for Elgin Riverboat Resort d/b/a Grand Victoria Casino
• Corrine Slinde-Mally for her role of Senior Internal Auditor for Elgin Riverboat Resort d/b/a Grand Victoria Casino
• Dennis Weber for his role as Director of Casino Operations for Elgin Riverboat Resort d/b/a Grand Victoria Casino
• Chue Xiong for his role as Vice President of Slot Operations for Midwest Gaming & Entertainment, LLC d/b/a Rivers Casino Des Plaines

The meeting continued with the approval of 87 Level 2 and 83 Level 3 occupational licenses, with six denials of occupational applicants.

The Administrator then 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 brief Sports Wagering section of the meeting began with the board tabling consideration for the Initial Management Services Provider License of Unibet Illinois LLC. The board approved the Initial Supplier License of Amelco UK Limited and the Level 1 Occupational License for Hecham Ghazal as Chief Technology Officer for Penn Sports Interactive, LLC. The finding of suitability for Hecham Ghazal at last month’s meeting was a mistake. As such, that approval was rescinded and he was granted a Level 1 Occupation License.

The board then granted 59 Level 2 or Level 3 occupational licenses. The Administrator next 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 Video Gaming meeting began with granting initial terminal operators licenses to Jaguar Gaming, LLC and LB Gaming, LLC.

Next, the Board granted 18 Terminal Handler licenses and 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.

The meeting continued with the IGB approving 92 locations and denying a total of nine locations, of which three were alleged statutory denials:

• Alisa Vaughn d/b/a Jewelbox Gaming Lounge
• Alton Market Inc. d/b/a Alton Market Inc.
• Ambica 9 Inc.d/b/a Alden Quick Mart
• JPS Dining, Inc. d/b/a Eggville Café
• Mikey’s Bar and Grill, LTD. d/b/a The Junkyard Bar and Grill
• Pagliai’s Pizza of Carbondale, Inc. d/b/a Pagliai’s Pizza
• Galindo Inc. d/b/a La Calle
• Torrence Liquors Corp. d/b/a Bevda’s
• Bevda’s Inc. d/b/a Bevda’s

During the recission matters, the Board moved to rescind and grant location licenses to the following three applicants:

• Sunrise Motel Enterprises, Inc. d/b/a Manny’s
• Cheeks on Madison, LLC d/b/a The Roxxx
• Corral’s Tavern LLC d/b/a Corral’s Tavern LLC

The meeting concluded with the board denying the hearing requests of three applicants for either allegedly failing to prove a prima facie case for allegedly not meeting hearing request requirements: 

• GU ILCO LLC
• Amazing Video Slots, LLC d/b/a AVS Leisure
• Cairo Cutmart, Inc. d/b/a Drive Thru 51

Regarding Requests for Hearings, we wanted to point out that while board action is required to deny requests for hearings, granting hearing requests can be done by the Administrator and thus no longer needs to take place at board meetings. As such, we have had success in the past with hearing requests that are not covered in these meetings.

Next, the board voted to adopt the Administrative Law Judge’s decision as a final board order in the Rule 320 matter 18-UP-002. As a reminder, all Rule 320 decisions are available on the IGB’s website and can be found here: Illinois Gaming Board - Video Rule 320 Petitions.

The final matter of the meeting was the issuance of notice of Disassociation to Gaming Productions, LLC regarding Luke Sandler. The Administrator also pointed out that Rule 330(G) prohibits all licensees from engaging in economic association with any person who has been subject to any final board order of economic disassociation.

The meeting concluded with the Administrator reminding everyone that there will not be a November meeting and the next meeting is December 7. As such, Happy Halloween and Happy Thanksgiving!