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BGA Public Eye: State OKs gambling malls while ripping ‘backdoor casinos’

Donald Tracy, Illinois Gaming Board

By Brett Chase

Illinois’ gaming regulators have railed for months against what one called “backdoor casinos,” saying such commercial strips with multiple video gambling parlors amount to an end-run around state law.

Yet they have gone ahead and signed off on licenses for so many new gambling locations that the effect has been to create just the sort of mini-casinos they’ve complained about.

In November, for instance, the Illinois Gaming Board approved a license allowing video poker and video slot machines at Macho Taco in Justice. That made it the third video gambling location the state agency approved in the same small strip mall in the southwest suburb.

Less than two months earlier, the board had denied three gambling licenses in nearby Hometown because the businesses wanted to operate in the same shopping center.

That resulted in a lawsuit that points out that the gaming board has approved multiple gambling venues under the same roof elsewhere, including in Villa Park.

“There are dozens, if not hundreds, of sites,” the Hometown lawsuit says.

Gaming board members don’t dispute that there are multiple video gambling locations sharing the same block or even building.

“The distinction is: If we know there’s a plan to create what we consider a mini-casino, there’s not going to be support for it,” says Donald Tracy, the gaming board’s chairman.

At a gaming board meeting last year, Tracy criticized such clusters of gambling parlors as “backdoor casinos.”

The gambling license for Macho Taco was granted as part of a slate of more than 100 applicants from around the state.

Thomas A. Dunn, Illinois Gaming Board

Only one board member — Thomas A. Dunn, who opposes the expansion of video gambling — voted against the list of applicants. An early proponent of riverboat gambling in Illinois, Dunn says he thinks the video machines are hurting casinos.

“There are 5,200 places in the state with video gambling licenses,” Dunn says. “Pretty soon, we’ll have one in every bathroom.”

Video gambling at Illinois bars, restaurants and other places that pour liquor was legalized in 2012. The law created a rush for local liquor licenses — which municipal governments award — and state approvals for video gambling, even if the businesses aren’t traditional bars.

On one side of Macho Taco in Justice, there’s a place called Elsie’s — a cafe with video poker. On the other side is the Duett Bar, which also has gambling machines.

Kris Wasowicz, Justice village president. | Sun-Times file photo

Kris Wasowicz, the village president in Justice, who also serves as his town’s liquor commissioner, says officials hadn’t planned to create a gambling mall. “Absolutely not,” he says. “No way.

“We control the liquor licenses,” he says. “And eventually the [gaming] board decides whether they get gambling or not.”

But the businesses do bring in taxes. Justice took in nearly $145,000 in gambling taxes last year from 10 businesses with a total of 48 video gaming machines, according to state records.

In Hometown, with a population of about 4,300 and little commerce, Mayor Kevin Casey backs bringing in more gambling. Casey promoted the idea of a strip mall with as many as nine stores with video gambling. Initially, three businesses applied for licenses — all of them rejected by the gaming board in September. They were looking to join an existing business already licensed for video gambling in a Hometown mall.

“I have a town that has a high unemployment rate,” Casey says. “This would’ve been a place creating 30 or 40 jobs.”

The mall’s developer and two of the businesses that were turned down for gambling licenses in Hometown are now suing the gaming board in Cook County Circuit Court, arguing they were illegally denied the licenses.

Tracy says the Hometown mall would have effectively been a casino. He says he thinks the law allowing video gambling needs to be revised, to be made more precise, to ward off lawsuits like the Hometown case.