Illinois Gaming Board Investigating Business Owned by Key Hard Rock Rockford Investor
Posted on: February 3, 2021, 11:58h.
Last updated on: February 4, 2021, 10:30h.
UPDATE (2/4 12:30 pm ET) – The Illinois Gaming Board met in closed session Thursday morning to discuss the Hard Rock Rockford casino proposal. An open session is set for 3 pm CT/4 pm ET Thursday.
The Illinois Gaming Board is set to meet Thursday morning to consider giving initial approval for a $310 million casino in Rockford. However, the agency considering the decision is also investigating another gaming business owned by a key stakeholder in the proposed casino.
Court records obtained by Casino.org indicate that the IGB has an ongoing inquiry related to the acquisition of 63 Laredo Hospitality Ventures gaming cafes by Illinois Cafe and Service Company, which is owned by Dan Fischer. Fischer gave the presentation for the Hard Rock Rockford casino at last week’s IGB meeting.
Fischer’s Illinois Cafe and Service Company owns dozens of cafes in Illinois. A filing in a lawsuit between it and an Illinois gaming terminal vendor disclosed the investigation, and noted the board may take action in the case.
The lawsuit by Gold Rush Gaming claims Fischer paid just $2 million for 63 cafes in the Chicago area, while gaming machine vendor Midwest SRO paid the owner of those cafes more than $44 million. Gold Rush, which is also being sued by Fischer’s company, claims the plan was to remove its machines from 44 of the locations and install Midwest SRO units instead. Gold Rush says the deal violates state gaming laws, which state separate companies must own the cafe (or truck stop or fraternal organization) and the machines located inside them.
An IGB spokesperson told WBEZ Chicago earlier this week that it would not comment on “any potential, current, or ongoing investigation.”
Fischer is also the primary investor in 815 Entertainment LLC, which includes Hard Rock International and other local stakeholders. That company would own and operate the proposed 65,000-square foot casino. It would feature 1,500 slot machines and 55 tables. Developers expect the casino to generate up to $60 million in new tax revenue for the community, and up to 1,000 jobs.
Investors Asked About Suitability
The investigation involving Fischer’s cafe business did not come up directly during last week’s IGB meeting.
However, IGB Administrator Marcus Fruchter did ask Fischer and Hard Rock COO Jon Lucas about licensee suitability and the steps they would take in case the board had concerns about one or more partners.
I asked that question not with anything other than just wanting to get an understanding of the plans and preparations that an applicant had,” Fruchter said. “I’m not previewing or speculating or guessing what the board may or may not do… We want to make sure you’ve thought about all the different things that could happen with this very important license.”
Lucas told Fruchter that provided the board found Hard Rock suitable, the company would step in and take on that additional equity.
That scenario is similar to what Hard Rock is experiencing next door in Northwest Indiana. Hard Rock has offered to buy out the shares of former Spectacle Entertainment Chairman and CEO Rod Ratcliff in the $300 million Hard Rock Northern Indiana casino, currently under construction in Gary.
However, Ratcliff, who faces the potential revocation of his gaming license as part of an ongoing Indiana Gaming Commission investigation, has declined the company’s offer. In a lawsuit against the IGC, Ratcliff claims the state agency tried to coerce the long-time gaming executive to sell at a discount.
Rockford Set to be First Approved Among New Casinos
If the IGB gives the OK Thursday, it would also be the first casino to receive preliminary approval that was part of the expanded gaming law the state legislature passed in 2019.
That law will allow six new casinos in addition to the 10 currently in operation.
One of the new casinos is slated to be a resort destination complex in downtown Chicago. The other new ones are slated to be built, pending IGB approval, in Danville, Waukegan, Williamson County, and a to-be-determined southern suburb of Chicago.
The 2019 law also allowed racetracks to offer casino gaming. Both Hawthorne Park and Fairmount Park have received preliminary approval. The tracks expected to open their casinos later this year.