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LLC v. Gaming and Entertainment Management-Illinois, LLC

Court of Appeals of Illinois, Third District

July 26, 2013

TRIPLE 7 ILLINOIS, LLC, an Illinois Limited Liability Company, Plaintiff-Appellant,
v.
GAMING AND ENTERTAINMENT MANAGEMENT-ILLINOIS, LLC, an Illinois Limited Liability Company, Defendant-Appellee.

Held[*]

In an action seeking to declare an exclusive placement agreement between a restaurant and a video gaming terminal operating business invalid under the Video Gaming Act, the trial court properly dismissed the action on the ground that the agreement did not violate the Act or the associated regulations.

Appeal from the Circuit Court of La Salle County, No. 12-MR-165; the Hon. R.J. Lannon, Jr., Judge, presiding.

Robert M. Riffle (argued) and Lane G. Alster, both of Elias, Meginnes, Riffle & Seghetti, P.C., of Peoria, for appellant.

Douglas R. Ramsey (argued) and Kimberly R. Walberg, both of Shefsky & Froelich Ltd., of Chicago, and Thomas J. Arkell, of Dunn Law Firm LLP, of Bloomington, for appellee.

Panel JUSTICE LYTTON delivered the judgment of the court, with opinion. Justices Carter and O'Brien concurred in the judgment and opinion.

OPINION

LYTTON, Justice.

¶ 1 Plaintiff Triple 7 Illinois appeals from the trial court's dismissal of its declaratory judgment action, seeking to declare defendant Gaming & Entertainment Management-Illinois's (GEM) exclusive placement agreement with Da Lee's Fine Dining invalid under the Video Gaming Act (Act) (230 ILCS 40/1 et seq. (West 2010)). We affirm.

¶ 2 In June 2010, Lee Sember, the owner of Da Lee's, signed an "Exclusive Placement Agreement" (Da Lee's Agreement) with Metro Amusements, Inc., a video gaming terminal operating business. Under the agreement, Sember granted Metro the exclusive right to place video gaming terminals in his restaurant for a period of 10 years following installation and operation of the first terminal in accordance with the Act. The miscellaneous provision at the end of the contract provided:

"This agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representative, successors and permitted assigns. Prior to Terminal Operator being licensed as a 'terminal operator' pursuant to the Video Gaming Law [Video Gaming Act], Terminal Operator may freely assign and/or transfer this Agreement and its rights and/or obligations hereunder, subject to the Video Gaming Law [Video Gaming Act]. After Terminal Operator becomes a licensed terminal operator, Terminal Operator may not assign and/or transfer this Agreement and its rights and/or obligations hereunder except: (i) to another licensed terminal operator, or (ii) as may be permitted by the Video Gaming Law [Video Gaming Act]."

When the parties signed the Da Lee's Agreement, Metro was not a licensed terminal operator under the Act.

¶ 3 On September 2, 2010, Metro and Best Gaming, LLC, entered an asset purchase agreement in which Best acquired the business and operations of Metro and most of its assets and properties, including the Da Lee's Agreement. At the time Best acquired Metro's assets, Best's application for licensure as a video gaming terminal operator had not been granted.

¶ 4 On July 2, 2012, the Illinois Gaming Board issued a notice that it was denying Best's application for a terminal operator's license. Best immediately filed a request for hearing to contest the denial. On July 17, 2012, Best assigned the Da Lee's Agreement to GEM, a licensed terminal operator under the Act. On July 19, 2012, the Board denied Best's request for a hearing.

¶ 5 On July 26, 2012, Sember was approached by a representative from Triple 7, another licensed terminal operator, and asked to sign an agreement for the exclusive placement of video gaming terminals in Da Lee's upon becoming a licensed establishment.[1] Sember ...


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