The Illinois Gaming Board (IGB) held its November monthly meeting on Friday, November 2, 2018 in Springfield. Member Robinson attended by telephone. In unusual fashion, the IGB combined the Riverboat and Video Gaming meetings. The meeting was one of the longest IGB has had. Still, it made the trip to Springfield all the more worthwhile! Below is a brief summary, but as always, the full audio recording is available on the IGB’s website.

The Chairman opened the meeting by welcoming everyone to Springfield and introducing a new lawyer, Jim Jozefowicz. The Chairman also briefly mentioned that we can expect new proposed rules on the Inducement Policy in the near future as the IGB staff has been working diligently on the matter.

The Board approved the September Riverboat and Video Gaming open meeting minutes.

The Board also approved a tentative partial schedule for 2019 meeting dates: January 29 and 30; February 28 and March 1^; and April 17 and 18. There were no additional comments from Board members, the Administrator, or the public.

RIVERBOAT

The Board took initial consideration on following owner-licensee matters:

• HC Aurora, LLC d/b/a Hollywood Casino Aurora made a presentation for renewal of its Owner’s License;

• Midwest Gaming & Entertainment, LLC d/b/a Rivers Casino-Des Plaines made a presentation regarding a refinancing transaction. Midwest and Churchill Downs, Inc. also appeared before the IGB requesting initial consideration of a transfer of ownership interest in which Churchill Downs Inc. would acquire at least 50.1% of equity in the company for $326 million.

The Board also moved for final consideration on the following owner-licensee matters:

• The request for a subsidiary guarantee of debt by Harrah’s Illinois, LLC and Southern Illinois Riverboat/Casino Cruises LLC d/b/a Harrah’s Metropolis Casino regarding the refinancing transaction to consolidate the existing debt at Caesars Resort Collection (CRC) and Caesars Entertainment Operating Company, LLC (CEOC) was approved;

• Brian C. Wasilefski was approved as a Key Person for Alton Casino, LLC d/b/a Argosy Casino Alton, HC Aurora, LLC d/b/a Hollywood Casino Aurora, and HC Joliet, LLC d/b/a Hollywood Casino Joliet for his role as Vice President Marketing Solutions and Application Architecture;

• David Robert Hughes was approved as a Key Person for Midwest Gaming & Entertainment, LLC d/b/a Rivers Casino-Des Plaines as Chair of Internal Audit and Compliance Committee;

• David Sambur was approved as a Key Person for Southern Illinois Riverboat/Casino Cruises LLC d/b/a Harrah’s Metropolis Casino and Des Plaines Development Limited Partnership d/b/a Harrah’s Joliet Casino & Hotel;

• Laura McAllister Cox was approved as a Key Person for Midwest Gaming & Entertainment, LLC d/b/a Rivers Casino-Des Plaines as a Member of Internal Audit and Compliance Committee;

• Takatomo Imai was approved as a Key Person for JCM American Corporation as President, Secretary, Treasurer, and Director;

• The October renewal of the Riverboat license was approved as was the initial Video Gaming license of Ainsworth Game Technology, Inc.;

• The license surrender request of American Gaming & Electronics, Inc. was approved.

The Board issued occupational licenses to 98 Level 2 and 171 Level 3 applicants, issued six notices of denial, and granted one Level 1 license to Tammy Elliott for her position as Security Manager of Southern Illinois Riverboat/Casino Cruises LLC d/b/a Harrah’s Metropolis Casino.

Lastly, the Board issued the following disciplinary complaints:

• Midwest Gaming & Entertainment, LLC dba Rivers Casino. The IGB issued a complaint alleging that the casino had slots on the gaming floor that were not tested by an independent lab. The casino self-reported this incident. There was discussion on the proposed fine amount with staff and the board members discussing a range of between $5,000 to $10,000. Ultimately, the complaint was issued with a $7,500 fine.
• Des Plaines Development LP dba Harrah’s Joliet Casino. The IGB issued a complaint alleging that the casino did not get approval for three promotions. The fine imposed was $30,000

• Penn National Gaming, Hollywood Casino Aurora and Hollywood Casino Joliet. The IGB issued a complaint against Hollywood Casino Aurora, Hollywood Casino Joliet and their parent company, Penn National Gaming. There was much discussion regarding the complaint by the IGB and staff. The allegations centered on the non-approval of a vendor who supplied temporary (non-gaming) employees to the casinos, issues with MBE and WBE contracting, and acceptance of gifts by casino employees from a vendor. The initial motion made by member Dolins was to fine Penn National Gaming $1 million, the Aurora casino $500,000 and the Joliet casino $250,000. Much discussion ensued. Member Robinson stated that she did not believe the fines were sufficient and suggested each of the above fine amounts be doubled. Mr. Lopinski (Deputy Administrator of Finance) agreed with her assessment. Mr. Lopinski stated that he believed there is a lack of consideration by the casinos for following their internal control systems and that Penn National Gaming has exhibited a culture of allowing these violations to occur. There was discussion about tabling this matter until the December meeting but no board member made the motion. Dolin’s motion to issue the complaint with his proposed fine amount was approved in a 3-1 vote. Member Robinson voted “no” as she wanted higher fines imposed.

Thereafter, the IGB issued complaints revoking the Level 2 occupational licenses of two individuals for their alleged misconduct and/or theft.

Finally, IGB delegated to the Administrator approval to enter into settlement agreements with Genesis regarding its late filing (the complaint was dismissed as the late filing was due to a flood) and with an occupational employee (approved withdrawal of license and the complaint was dismissed).

VIDEO GAMING

There was a report on some issue relating to a report on controls at a service organization, with the IGB adopting an Independent Auditor’s report.

Next up was a proposed amendment to video gaming rule 320(b). Jared Smith, on behalf of IGB legal, said that the current rule does not permit non-parties to participate in the petition process. The amendment would allow for participation or intervention of any third party that has a material and adverse interest in the outcome of the petition. The IGB approved the proposed amendment for first notice filing with JCAR.

Due to technical difficulties, the Administrator’s report of licensed locations and live Video Gaming Terminals (“VGTs”) was missing from his usual commentary.

The meeting continued with initial licenses being issued to the following: terminal operator applicant, National Gaming Operators LLC; 79 terminal handlers, 2 terminal technicians, and 154 locations.

There were also a number of license renewals granted. The terminal hander, technician, and location licensees that were up for renewal this month and who provided updated information to the IGB, timely paid their renewal fees, and complied with all other requirements were renewed, as was the license of Bally Gaming, Inc. In addition, the terminal operator licenses of Angelle & Green Gaming LLC, Barcade Gaming LLC, Dearborn Gaming, LLC, Empire Gaming, LLC, RCW Gaming, LLC, and William S. Stanford III were also renewed.

The Board denied the applications of one terminal handler/technician and the following six establishments:

• Cut Mart Inc. d/b/a Cut Mart Inc;

• G-Town Deuce Investments LLC d/b/a Red Deuce;

• Rachel’s Place, Inc. d/b/a Rachel’s Place;

• S & S Food Service, Inc. d/b/a S & S food Service;

• D D & M Petroleum, Inc. d/b/a MCCOOK BP; and

• Two Paw’s Pub & Grill, LLC d/b/a Two Paw’s Pub and Grill.

People’s Choice Cash & Pawn, Inc. d/b/a People’s Choice Cash & Pawn, Inc. and Schulte Ltd d/b/a Twyla’s Flower Shop were also granted licenses despite Member Robinson’s opposition.

The Board received eight Requests for Hearings. The request of G and G Valley Ridge LLC d/b/a Valley Ridge Golf Course was denied, while the following establishments’ requests were granted:

• Fill-Up Mart, Inc. d/b/a Fill-Up Mart #12;

• Caliber Management LLC d/b/a Caliber Management LLC;

• Lacey’s Place LLC Series Belvidere 2 d/b/a Lucky Penny’s;

• Lacey’s Place LLC Series Clinton d/b/a Lacey’s Place;

• Lacey’s Place LLC Series Crestwood 2 d/b/a Lacey’s Place;

• Lacey’s Place LLC Series DeKalb d/b/a Lacey’s Place LLC Series DeKalb; and

• Lacey’s Place LLC Series River Grove d/b/a Lacey’s Place.

The following three locations had their requests to reapply granted:

• Smilin Goat Inc.;

• Lucky John’s LLC; and

• Monkeyworks Inc. d/b/a Bighouse.

The Board issued a number of disciplinary complaints against Video Gaming licensees.

• The Board is seeking to revoke the terminal operator license of Global Gaming Industries, LLC due to alleged involvement of an individual the IGB believes is not suitable.

• The Board is seeking a $5,000 fine from Grand River Jackpot, LLC for allegedly providing an inducement to a location by providing a loan to the location. The loan allegedly took the form of sharing the cost of signage with a location but withholding, over time, the location’s portion from its VGT revenue.

• The Board is seeking to revoke the licenses of three handlers for alleged arrests and charges of theft.

• The Board is seeking a $1,000 fine from Robinson Lodge 1118 of the Benevolent and Protective Order of Elks d/b/a Elks Lodge #1188 for allegedly failing to disclose officer changes.

• The Board is seeking to revoke the license of EPM, Inc. d/b/a Pat’s Pub for allegedly failing to disassociate from a person for which the location was ordered to disassociate.

• The Board is seeking to revoke the license of RW Eveans, LLC d/b/a Alton Sports Tap for allegedly violating the Clean Air Act by allowing smoking. Yes, you read this correctly.

• The Board is seeking to revoke the license of Loose Screw, Inc. for allegedly having an unidentified owner and failing to cooperate with the IGB.

• The Board is seeking a $1,500 fine from Fuzzy’s, Inc. d/b/a Fuzzy’s Tavern for allegedly operating with an expired liquor license.

• The Board is seeking to revoke the license of James T. Sisco d/b/a Sisco’s Bar and Grill for the alleged involvement of a former owner with a felony.

• The Board is seeking to revoke the license of Bull Dog Ale House, Inc. for allegedly permitting minors to play VGTs and failing to cooperate with the IGB.

• The Board tabled disciplinary action against Karco, Inc. d/b/a Rollnup #16 Smoke Shop & Liquor and Eureka Entertainment, LLC. Allegedly, the VGTs were relocated without IGB approval, however, it has not been determined if the games were operational.

The Board issued two disassociation orders. Keeler-Adams Post No. 1168, Dept. of Illinois American Legion, Inc. d/b/a Keeler-Adams American Legion Post #1168 was issued a $2,000 fine and told to disassociate from two of its officers who allegedly have prohibitive background issues. Gaming & Entertainment Management – Illinois LLC was ordered to disassociate from Thelma Jackson.

The Board issued fines to two licensees for filing renewal documents late. Bally Gaming, Inc. received a $15,000 fine for allegedly filing documents 100 days late. Angelle & Green Gaming LLC received a $5,000 fine for filing documents 30 days late.

The Board voted to rescind two complaints issued at the September monthly meeting. DC-18-116 and DC-18-117 (allegedly, the IGB issued two complaints for the same conduct instead of one).

Lastly, the Board granted authority to the Administrator and staff to enter into a number of settlements of disciplinary actions:

• The IGB approved a $5,000 settlement with a nine-day suspension;

• Grand River Jackpot, LLC would receive a $10,000 fine in lieu of disassociation from Ron Whiteside;

• GTAV Gaming LLC has decided to withdraw its terminal operator application and the denial will be rescinded;

• Three locations corrected their tax liabilities and the IGB rescinded the denials; and

• Grumpy’s Smokehouse, Inc. d/b/a Grumpy’s Smokehouse surrendered its license so the IGB agreed to dismiss the complaint.