At Stake

June 3, 2016Newsletters

The Illinois Gaming Board (IGB) held its recent meeting on Thursday, June 2, 2016, in Chicago. Below is a summary of both the Riverboat and Video Gaming Meetings.

Riverboat Meeting

The Chairman’s opening remarks included an introduction and welcoming of new board member Steve Dolans. Mr. Dolans is a graduate of the University of Illinois and has been a CPA since 1992. The Chairman listed his numerous accomplishments and community charity endeavors.

Secondly, the Chairman discussed the minority spend account and thanked the riverboat casino industry for the timely submission of the requested information and listing their good faith efforts to meet the statute’s goals. The Chairman states that while he understands the challenges that face the industry, especially downstate, he believes there needs to be a higher level of effort and a formal waiver request if those goals cannot be met. The Chairman requested that the industry make an effort to increase minority spending and stated that it is not a mandate but it is a statutory directive.

The Administrator, during his opening comments, took time to thank former Board Member Lee Gould for his service to the IGB. The Administrator reiterated that Mr. Gould went above the call of duty in his position. The Chairman echoed the comments made by the Administrator. We and the rest of the industry also thank Lee for his service to the industry and the State of Illinois.

For board policy items, staff introduced amendments to Rule 245 changing the size and requirements of personal badges for occupational licensees at casinos.

The Casino Queen sought approval from the IGB to refinance its current Credit Facility/Master Lease. While the Board acknowledged the initial consideration for Casino Queen Inc., the Administrator stated that it would be discussed and voted on at a later date after a report is compiled.

The Board approved William Hayles, as a General Manger (Level 1 Occupational Licensee) for Hollywood Casino Aurora, Michael Wolff as a Staff Internal Auditor (Level 1 Occupational Licensee) for Des Plaines Development Limited Partnership d/b/a Harrah’s Joliet Hotel and Casino and Renato Ascoli as President/Director (Key Person) for IGT. Additional approvals included 62 Level 2 occupational licenses and 141 Level 3 occupational licenses. The Board denied 15 occupational licenses and revoked four occupational licenses: three for alleged theft and one revocation for allegedly abandoning a security post without approval. The Board also rescinded the denial of Pamela Grant and granted her a Level 2 occupational license.

Video Gaming Meeting

The Chairman discussed the self-exclusion policy and the inducement policy during his opening comments of the Video Gaming Meeting. He stated that the Board is slowly closing in on a probable solution regarding self-exclusion in video gaming for compulsive gamblers and he thanked those that have made suggestions. He stated that although there have been proposals such as putting up signs at video gaming locations discussing problem gaming or mandatory government issued approved player cards like a program in Sweden, he highlighted the shortcomings of each and stated that a middle ground is more favorable. The Chairman stated he likes the proposal of using redemptions devices as “gate keepers” but that it may prove to be unworkable. He continued to say that although there is no current solution to the problem, the IGB is working on the matter and he thanked everyone for their patience.

Secondly, the Chairman stated that the Board and its staff have been working on providing more guidance, explanation and direction regarding the inducement policy to reduce questions and provide more information. As many of you may know, a while back the IGB issued a new policy on inducements, advertising and promotions by video gaming licensees that was to become effective June 1, 2016. However, due to stakeholder feedback, the Chairman announced that the new policy statement’s effective date of June 1 is suspended and that licensees should instead look for guidance from the prior policy statement until further notice.

As for the Administrator’s report, Administrator Ostrowski noted that the following three matters that were listed on the monthly agenda were being tabled: FJC Technologies’ initial license application, Illinois Gaming Investors LLC license renewal and Tangent Gaming Capital license renewal. Next, the Administrator stated that there are 5,468 video gaming locations that are operational with a total of 23,400 live video gaming terminals. The Administrator also informed the audience that IGB agents recently executed a search warrant and made an arrest that resulted in felony charges being brought against an individual in the video gaming industry for alleged possession of illegal gambling machines. We will keep an eye on the case and report back.

There were three speakers during the public commentary portion of the meeting. Mr. Sam Toad, the president and CEO of the Illinois Restaurant Association, discussed the newly proposed inducement policy (the same one that the Chairman announced was suspended) and the burden the proposed changes would have on restaurant locations with video gaming if terminal operators were no longer allowed to cover various promotional costs for locations. Mr. Toad stated his association has been in contact with the IGB regarding this matter and he recommended that revised legislation more clearly define improper inducements while still allowing terminal operators to share location promotional costs.

Secondly, Mr. Ralph Dillon addressed the Board to discuss a pending truck stop location application and his opposition to its being licensed, as he did last month.

Lastly, at the request of the Board, Messrs. Joe Sellens and Steve Angelo of Scientific Gaming gave a presentation concerning the G2S protocol conversion for video gaming. This protocol update for the video game terminals is set to take place July/August and will continue for approximately 12-18 months. During the presentation, they outlined the additional costs that must be paid to Scientific Gaming for the new protocol due to the increased bandwidth that will be required. The current central communication system fee of .775 percent of net terminal income that is currently split between licensed locations and terminal operators will be increased to .8513 percent. For revoked software that needs to be upgraded, the manufacturers will have to pay a flat fee to Scientific Gaming.

The following terminal operators, manufacturers, distributor and suppliers had their licenses renewed:

  • AP Gaming LLC (terminal operator)
  • DSG Amusement, Ltd. (terminal operator)
  • Hyperactive Gaming, LLC (terminal operator)
  • LZ Entertainment LLC (terminal operator)
  • Tap Room Gaming LLC (terminal operator)
  • Happ Controls, Inc. (distributor)
  • Novomatic Americas Sales LLC (distributor, manufacturer and supplier)
  • Curo Group, LLC (supplier)
  • NRT Technology Corp. (supplier)

The Board issued notices of disassociation to three terminal operators. Accel Entertainment was directed to disassociate from Richard Grap and Family Amusements. Gold Rush Amusements, Inc. was directed to disassociate from Universal Holdings and Adventures LLC, Gezim Dzabiri and Mauro Raddi. Tap Room Gaming LLC was directed to disassociate from James McDaniel.

The Board approved 46 terminal handler licenses and one terminal technician license. The Board approved 112 location licenses and denied the following six locations:

  • Corvette U S A Inc.
  • Scoreboards Bar & Grill, Inc.
  • Country Tyme Lanes, Inc.
  • Sophia’s Coffee Co.
  • JV Springfield, Inc.
  • Mack Oil Corp. d/b/a Mack Oil Corporation (Algonquin)

The Board denied renewing the licenses of three locations:

  • Eaker, Inc. d/b/a The Shooters Bar & Grill
  • Eaker, Inc. d/b/a Rantoul Pizza Pub
  • Down-N-Dirty Sportsbar, Corp.

The Board denied the hearing requests to Romeo Lounge & Bar, KLMN Enterprises, Triple Location LLC and Chicago Truth Inc.

The Board rescinded the denial of Johnny’s Pizza, Inc. and granted requests to reapply for The Loaded Buffalo Bar and Grill Inc. and CR Thirteen Peoria Heights, LLC, but denied the request to reapply for Original Honey Dews Soul Food Inc. and JRW Electrical d/b/a Bottoms Up on 7th.

The Board issued the following disciplinary complaints:

  • DSG Amusements Ltd. – $15,000 fine for allegedly failing to provide staff documents and requested information in a timely fashion
  • Route 66 Gaming Parlor Inc. – Revocation of location license for allegedly failing to disclose information
  • Jackpots Café Inc. – Revocation of location license for allegedly failing to disclose information
  • Richard Grap – Revocation of terminal handler license for alleged possession of illegal video gaming devices
  • Nedzad Serdarevic – Revocation of terminal handler license for alleged possession of illegal video gaming devices
  • Rockford Parlors Inc. – Revocation of location license for allegedly operating video gaming terminals without a valid liquor license
  • Glendale Heights VFW Post #2377 – Revocation of location license for allegedly operating video gaming terminals without a valid liquor license
  • Beslidheje, Inc. – $5,000 fine for allegedly failing to prevent minors from accessing video gaming terminals
  • Winners 50 LLC – $5,000 fine for allegedly failing to prevent minors from accessing video gaming terminals
  • AG Entertainment Inc. – $5,000 fine for allegedly failing to prevent minors from accessing video gaming terminals
  • Stella’s Randall Pointe, LLC – $5,000 fine for allegedly failing to prevent minors from accessing video gaming terminals
  • Play Pub & Grub LLC – $5,000 fine for allegedly failing to prevent minors from accessing video gaming terminals
  • Prairie State Enterprise of Darien LLC – $10,000 fine for allegedly failing to prevent minors from accessing video gaming terminals twice

The Board granted the authority to the Administrator to enter into settlement agreements with the following licensees that have outstanding disciplinary actions:

  • Splash N Go Pub Inc. – $12,500 settlement
  • Carlo’s Sports Bar Inc. – $10,000 settlement
  • PG Pub Inc. – $10,000 settlement
  • JJJR Silver Creek – no settlement amount because outstanding state taxes paid
  • American Legion Clarence V. Shield Post #292 – $1,500 settlement
  • R Bar LLC – $1,500 settlement
  • Sportsmen Tap Inc. – $1,500 settlement
  • Stefanich Restaurant, Inc. – $42,000 settlement based on 1.5 times the net terminal income generated during the period of an invalid liquor license

The meeting was then adjourned.

As always, if you have any questions about the recent meeting, please feel free to call us.

Donna B. More
Partner, Fox Rothschild
312.517.9215
[email protected]

Bill Bogot
Partner, Fox Rothschild
312.517.9205
[email protected]