At StakeDecember 23, 2015 – Newsletters
The Illinois Gaming Board (IGB) held its monthly meeting on Wednesday, December 16. Below is a summary of both the Riverboat and Video Gaming Meetings held that day.
The Chairman declined to make any opening remarks during this meeting and deferred opening comments to the Administrator who thanked the hosts and participants of the Diversity Business Symposium that was held on November 17 at the Par-a-Dice Hotel in East Peoria.
During the public comments section, three individuals addressed the Board.
- Bill Hayles of Penn National Gaming, Inc., as the newly approved general manager of Harrah’s Aurora and Harrah’s Joliet, introduced himself and spoke about his credentials and his work history in the casino and hospitality industries.
- Cori Rutherford, the vice president of marketing for the Par-a-Dice Hotel and Casino, thanked everyone involved in the Diversity Business Symposium including the vendors, participants and Administrator Ostrowski. According to Ms. Rutherford, all casinos were represented and 62 vendors participated. She continued by describing the day’s events. The symposium as a whole was very successful; Par-a-Dice has signed five new vendors as a result and they will reach out to other casinos for similar information.
- Ron Neumann addressed the Board regarding an incident at the Grand Victoria Casino Elgin in which he has been prohibited from playing blackjack. According to Mr. Neumann, he was cashed out and asked to leave the premises after playing blackjack for approximately 13 minutes. Allegedly Mr. Neumann was told that he could no longer play blackjack at the casino because he had been deemed an “advantaged gambler” after hitting a “winning streak.” The casino, however, permitted him to participate in an array of other games such as slots or craps.
The Chairman provided the 2016 Board Meeting dates and indicated that they would be provided to the public on the IGB website. All meetings will be held in Chicago except for the June and November meetings, which will be held in Springfield.
Owner and Supplier licensee items included: 1) approval of Anton D. Nikodemus as Executive Committee Member and Key Person of Elgin Riverboat Resort d/b/a Grand Victoria Casino; 2) discussion of MGM’s REIT Transaction and Corporate Reorganization in which the parties are negotiating financial investments in a real estate matter – this matter was not up for any decision by the Board at this time; 3) granting the surrender of GTECH USA, LLC’s license; 4) granting Patriot Gaming & Electronics, Inc. supplier renewal license; 5) approval of Mark Nocco and Mark Komorowski as Key Persons for Patriot Gaming & Electronics, Inc.
The Board approved 52 Level-2 and 126 Level-3 occupational licenses without issuing any denials. The following two individuals were denied Requests for Hearings after previously being denied occupational licenses, allegedly for not meeting the requirements for such: John Constantino and Travis Thomas.
The Board moved to issue the following four disciplinary complaints against the following occupational licensees:
- Anthony Vick’s Level-3 – license shall be revoked due to the alleged conduct that resulted in being terminated from Harrah’s Joliet;
- Patrick Wadlow – shall be fined $500 for alleged failure to inform the IGB about an arrest and conviction. Comments were made to remind the industry that any interaction with law enforcement should be disclosed to the Board and the application should be updated when applicable;
- Sonya Dedo – license shall be revoked due to her alleged involvement in the theft of a coworker’s personal items on the riverboat property;
- Iris Ignacio – license shall be suspended for 30 days due to her alleged failure to update her criminal history and violating the Board rules.
A Final Board Order was entered affirming the Administrative Law Judge’s order against Daniel Palmer resulting in a $500 fine.
Chairman Tracy discussed the Delaware North, Rock Island Casino litigation, which concerns a dispute as to who owes the state taxes from before Delaware North’s acquisition of the casino.
Video Gaming Meeting
During the Chairman’s comments he addressed two specific areas: 1) location applications, and 2) ideas for a video gaming self-exclusion list.
Within the video gaming location application, specifically Section 4- Questions/Answers, Subsection Legal, Tax, Licensing Information, Question A, “Has the Applicant ever been convicted of a felony offense?” and Question B “Has the Applicant ever been convicted of a crime involving dishonesty, gambling and/or moral turpitude?” According to the Chairman, these questions are asking about both the corporation and its shareholders and as a result answers should be yes if either have a qualifying history. Please note, however, that this interpretation is a departure from the IGB’s prior interpretation and that the Video Gaming Location application specifically distinguishes between Applicant and Owners.
The Chairman acknowledged that the Board is currently researching the implementation of a Self-Exclusion List for video gaming. The Board has found this very challenging and frustrating, specifically because nowhere in the United States does any jurisdiction implement such a program for video gaming or similar models outside of casinos. The Chairman discussed Sweden’s current policy and described it as very restrictive due to its limiting playing to Swedish residents only, decreasing revenue by upwards of 30 percent and raising privacy concerns. Also of note is Canada’s policy that uses timed and playing limits in which regulation would be difficult to implement in Illinois. While the Board is currently in the research phase, the plan is to approach the industry for ideas and solutions. The Chairman mentioned the industry’s desire for player rewards cards and identified this as a potential solution that will require more thought and research.
The Administrator acknowledged the importance of working with the industry to come up with a solution for a video gaming Self- Exclusion List and reported that there are 5,216 statewide locations in operation with a total of 21,984 VGTs.
There was one speaker during the public commentary portion of the meeting. Kathy Gilroy requested that the Board further address so-called “casino malls,” specifically stating that there needs to be a definition of what constitutes a “casino mall.” According to Ms. Gilroy, Villa Park already has a “casino mall” with three licensed locations within one strip mall. She also raised issues regarding allowing licensed locations to have “coin pusher games,” which according to her research are illegal gambling devices. At the conclusion of her comments, Chairman Tracy asked Ms. Gilroy to write to her state representative or state senator regarding getting a requirement for the Video Gaming Act to prohibit “casino malls.”
Next, the IGB proposed new regulations. IGB staff has proposed an amendment to delegate to Administrator Ostrowski the authority to grant surrenders of all licenses under the Video Gaming Act if presented with a written request and there is no objection. This would be similar to the current procedures of withdrawing a license.
The Board approved the initial terminal operator license of Springfield Gaming, LLC and the initial supplier license of Illinois Rewards, Inc. and renewed IGT’s manufacturer and distributor license.
The Board approved 56 terminal handler licenses, two terminal technician licenses and it denied three handler licenses: Goran Illijevski, Marc Lang and Mark Daniel Sullivan.
Video Gaming Location Licensee Items:
The Board approved 116 location licenses, denied the request to reapply to Springfield Pub Inc. d/b/a The Dublin Pub and denied the following 16 location licenses:
- Pete's Bar and Grill, Inc.
- Hodge Podge Lodge, LLC
- Barb & Ray Inc.
- D&W And Associates LLC
- O'Fallon Restaurant Inc.
- Tuckaway Development, LLC
- Virden Columbus Home Association d/b/a Virden Columbus Home Association KC Council #2321
- PHAT & SHAI INC.
- LADY NAN, INC.
- ADAM BIESEMEYER d/b/a Deb's Red Rose
- ZAJAS, INCORPORATED
- Shawn's Corral, Inc.
- Lakeside Bar & Grill
- Springfield Gas and Wash
- Smitty's Tap Inc.
The Board denied a total of 10 hearing requests based on previous location application denials, allegedly according to the Board for failing to show a prima facie case:
- Blue Ridge Club, Inc.
- Terrence Maloney
- Wine Company, LLC. d/b/a Roundhouse Wine Company
- Dino's Den Inc.
- Fitz Inn Inc.
- Jose Garza Jr. d/b/a Perla's
- The Roost of Fithian, Inc.
- Terry Wray d/b/a Towne Lounge
- Norbert J. Goetten d/b/a Norby's Slots
- George Anderson Investments, L.L.C. d/b/a Comeaux Daiquiri Depot
The Board rescinded the denial notice of Roni L. Meyers d/b/a Happy Holler and placed this location back to pending status.
The IGB issued disciplinary complaints and revocation of licenses to the following three Terminal Handlers: David Schmitt was fined $500 for allegedly not updating his application regarding his criminal history; Joseph Pirelli fined $500 for allegedly not updating his application regarding his criminal history; and Bryan Burkhardt had his licensed revoked for statutory ineligibility due to his conviction of a prohibitive crime.
The IGB issued disciplinary complaints to the following locations: Al's Bella Vista, Inc. was fined $10,000 for alleged use of tip boards [illegal gambling]; Beavers Tap Inc. d/b/a Tekes Bar & Grill, Carbo's Sports Bar, Inc. and Harbo’s Sports Bar were each fined $15,000 for alleged illegal sports gambling. Disciplinary complaints were also issued seeking revocation of the following location licenses: Christopher P. Sipula d/b/a. Sipper's Too Bar; Grill Machelle C. Senica d/b/a Machelle's Back Street; and, The 50 Yard Line. Member Gould commented that the Board takes illegal gambling very seriously and will make sure the message is heard and understood clearly. Additionally, Member Robinson directed her comment to Ms. Gilroy, of the public comments section, and acknowledged that they take illegal gambling very seriously.
The IGB next rescinded the disciplinary complaint it filed months ago for a $100,000 fine against terminal operator Gold Rush. The IGB’s general counsel stated that staff felt comfortable that Gold Rush has confirmed its disassociation that the IGB required between Gold Rush and a location “finder.”
Administrative Law Judge Recommendations
A Final Board Order was entered in which the Board rejected the administrative law judge’s recommendation in the In re M3 Technologies, Inc. disciplinary action. In that case, in which the IGB sought to impose a $5,000 fine for alleged tardy renewal filings, the administrative law judge after a trial on the merits recommended that the IGB not impose any fine whatsoever, or at least “substantially” reduce the $5,000 fine. According to the administrative law judge, M3 Technologies’ alleged tardy filings did not discredit the gaming industry, nor did it constitute just cause to impose discipline. The IGB thereafter instead reduced the fine from $5,000 to $4,000. M3 Technologies can appeal the IGB’s rejection of the administrative law judge’s recommendation on administrative review.
Lastly, a Final Board Order was entered in which the Board rejected the administrative law judge’s recommended decision to license 27 of what the IGB refers to as “non-traditional” video gaming location applicants. The IGB has yet to define what a non-traditional location is, an issue of concern with the administrative law judge. The administrative law judge held that the IGB did not have discretion to deny such location applicants and there is nothing in the Video Gaming Act or legislative history that indicates any intent by the legislature to deny video gaming location licenses to so-called non-traditional establishments. Likely, an appeal of the IGB’s rejection of the administrative law judge’s recommendation will ensue. Despite the administrative law judge’s decision, Chairman Tracy commented that just because a location has a license to pour or otherwise serve alcohol, the Board does not necessarily consider such a pouring location, specifically referencing packaged goods and self-service clubs.
That’s it for this month’s IGB meeting. Have a happy holiday and New Year.
Donna and Bill
Donna B. More
Partner, Fox Rothschild
Partner, Fox Rothschild