Less than a week after the Illinois Gaming Board attempted to stop video gambling operators from selling their businesses without state approval, a panel of lawmakers in Springfield blocked the move.
The General Assembly’s Joint Committee on Administrative Rules voted 10-0 against the Gaming Board on Tuesday, rejecting the gambling regulators’ rationale for making the rule change on an emergency basis.
Gaming Board staff viewed their measure as an emergency step in response to the Tribune’s revelations last month about Rick Heidner, whose Gold Rush Gaming is one of the state’s largest operators.
Regulators argued they needed to close a loophole in state law that allows video gambling operators to sell their businesses without Gaming Board approval. The status quo would allow a business owner facing a misconduct investigation to sell the business at a profit without facing state disciplinary action.
Republican Rep. Keith Wheeler of Oswego, the committee co-chairman, introduced the motion to vote on the issue Tuesday. He said he agrees that the state should close the loophole but said committee members are frustrated because they believe the Gaming Board is using the emergency rule-making process inappropriately.
“There have been a series of rules promulgated by the Gaming Board under the guise of emergency rules that have not met the threshold,” Wheeler said.
“With all that (the Tribune) has exposed, it’s going to a charity,” he said.
Two Democrats on the panel, co-Chairman Sen. Don Harmon of Oak Park and Sen. Tony Munoz of Chicago, also have received campaign donations from Heidner’s businesses in recent years. Both lawmakers abstained from Tuesday’s vote.
Wheeler said he’s trying to meet Thursday with Gaming Board staff to reach an understanding about how to proceed. “I want to see that changed,” he said. “On its face, it makes more sense to (require prior Gaming Board approval).”
However, Wheeler added that he has heard from industry groups that such a change would harm their businesses. He mentioned the Illinois Gaming Machine Operators Association voicing such concerns. The lobbying group has given Wheeler’s campaign fund $2,000 since 2018.
The Gaming Board issued a statement Tuesday contending that the panel of lawmakers was going out of its way to create an “adversarial relationship” with the board and to undermine efforts to regulate the industry.
“Suspension of the emergency rule undermines the IGB’s regulatory efforts at a critical moment in gaming expansion. The very foundation of gaming regulation is knowledge of who holds ownership of gaming interests,” wrote Gaming Board Administrator Marcus Fruchter.
State law “authorizes an agency to adopt an emergency rule if it finds that a situation exists constituting a threat to the public interest, safety, or welfare. The board unanimously found that the rule regulating the transfer of ownership interests of a terminal operator met these stringent requirements,” Fruchter wrote.
During last week’s Gaming Board meeting, a staff attorney told the board that recent revelations about a video gaming operator had created an urgent need to change the rule.
“The urgency of the situation is magnified by recent news reports of alleged past questionable practices and potential illegal activity,” attorney Dan Gerber said at the meeting.
In October, the Tribune reported that Heidner won a 2012 video gambling license from the Gaming Board despite being in business with a convicted illegal sports bookmaker as well as a banker accused by the FBI of involving organized crime figures in a casino deal.
Since at least 2003, Heidner has formed a series of corporations to hold real estate with Parkway Bank Chairman Rocco Suspenzi, whom the FBI and the Gaming Board in 2003 accused of bringing organized crime figures into secret ownership stake in the Rosemont casino project. In addition, Heidner and convicted bookie Dominic Buttitta own a building that is leased to an Elgin bar that’s a venue for Gold Rush video gambling machines.
Through a spokesman, Heidner has said he has no intention of giving up control of his business.
Heidner spokesman Randall Samborn said Tuesday that Heidner has given campaign contributions to numerous lawmakers over the years and the donations were all “above board.”
“Rep. Wheeler, of course, is free to do whatever he wishes with the contributions, and the charities he chooses will benefit,” Samborn said. “Mr. Heidner is confident that when the full story is reported, it will show that he has nothing to hide and has done nothing wrong.”
Heidner also had plans to build a harness racing track and casino in Tinley Park on state-owned land. Following the Tribune story and Heidner’s name surfacing in federal search warrants, Gov. J.B. Pritzker’s administration said the land was no longer for sale.