Since Illinois expanded gambling to include video gaming terminals (VGT) in 2009, it’s been fair to ask if the benefits have been worth the cost. That query took another turn recently, with a potential inducement fine on the horizon.
The Illinois Gaming Board (IGB) is accusing the VGT operator Accel Entertainment of illegally offering money to potential clients in exchange for contracting with it to operate VGTs in their facilities instead of other operators.
There are questions, however, like whether the IGB will levy any penalty.
Story behind the Accel VGT fine includes DraftKings
Last week, the IGB filed an eight-page report making the allegations against Accel Entertainment. It states that Accel offered potential establishments $21,000 to deal with it.
IL law prohibits this kind of inducements. The scheme allegedly involved DraftKings, although the alleged activity would not comprise a violation of IL law on DraftKings’ part.
The IGB contends that Accel set up a commission structure with DraftKings. Accel would place DraftKings ads on its VGTs. In exchange, DraftKings would pay Accel a commission to Accel for each new depositor.
Accel allegedly planned to then pass on at least part of that commission to the facility owner. Because that would give Accel a competitive advantage over other VGT companies, it’s a potential inducement.
There’s nothing in IL law that says DraftKings shouldn’t buy ads on VGTs or pay the operator of those machines a commission for successful referrals. It would also be completely legal for DraftKings to pay referral bonuses directly to owners of facilities where VGTs abide in IL.
Accel denies the IGB’s allegations. If the IGB is successful in its efforts, the potential fine could be as much as $5 million. At this point, however, there is no mention of trying to revoke Accel’s licensure.
That might be because the IGB doesn’t have a sparking record in censuring VGT companies. As a matter of fact, previous attempts have come up empty.
IGB at odds with other VGT Illinois operators
For the sake of thoroughness, this isn’t the first spat between Accel and the IGB. Earlier this year, allegations that Accel used its connections within the board to get a leg up on the competition for facilities came out in a ProPublica report.
The IGB’s investigation into that alleged activity, also potentially illegal, continues. However, this narrative about the IGB’s shortcomings with regulating VGTs is bigger.
The IGB has also raised allegations about Lucky Lincoln Gaming. In December 2017, the IGB alleged that Lucky Lincoln also offered incentives to facility owners. At the time, it threatened a $300,000 fine and the revocation of the company’s license.
Since that time, the IGB also accused the company’s owner, Jeffrey Rehberger, harassed one of the board’s key witnesses against him. That’s just one of the snags for the IGB over the past three years, which has thus far failed to produce any result.
Then there’s Gold Rush Gaming. That company became implicated with now-deceased former IL Sen. Martin Sandoval in the corruption charges that derailed his political career. In January, Sandoval pleaded guilty to accepting bribes and falsifying tax returns.
Gold Rush allegedly was among the companies that bribed Sandoval in exchange for political favors. As is the case with the others, the IGB is conducting an investigation into the alleged illegal activity.
Gold Rush Gaming’s owner Rick Heidner has since filed a lawsuit against the IGB, stating he believes an investigator for the board crossed a line in its probe of the company’s records. He is seeking damages as he alleges that the IGB’s improper revelation of proprietary information resulted in the company’s loss of its bid to open a casino in Tinley Park.
So, where is this all going?
It’s difficult to say what the end of all these investigations may come to, or even when there might be some resolutions. The IGB is tight-lipped, as should be the case in regard to ongoing investigations and litigation.
Even if the board does eventually levy fines and/or revoke licenses and those penalties stick, the length of time it took to reach those ends may have made the punishment not fit the crime. In other words, companies, such as Accel, made more than enough profit during the time it took to conduct the investigation off of the illegal activity to pay the fine and move on.
At the same time, it’s hard to pin all the blame on the IGB. Like any other state agency, it has its budget and staff. Additionally, state law limits its powers. For example, the FBI, not the IGB, busted Sandoval on corruption charges.
In the end, state law enforcement may handle these situations. It’s on the IGB to present enough evidence to invoke that involvement, though. For now, that’s an ongoing operation.