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B&B Harris Mgmt., LLC v. Illinois Gambling Bd.

United States District Court, N.D. Illinois, Eastern Division

December 4, 2013

B& B HARRIS MANAGEMENT, LLC, a Missouri limited liability company, Plaintiff,
v.
ILLINOIS GAMING BOARD; AARON JAFFE; LEE GOULD; MICHAEL HOLEWINSKI; and MARIBETH VANDER WEELE, in their official capacity as Members of the Illinois Gaming Board; and MARK OSTROWSKI, in his official capacity as Administrator of the Illinois Gaming Board, Defendants

Page 921

For B& B Harris Management, LLC, a Missouri limited liability company, Plaintiff: Kim Renee Walberg, Douglas Michael Ramsey, Shefsky & Froelich Ltd, Chicago, IL; Roger Joseph Kiley, Shefsky and Froelich, Chicago, IL.

For Illinois Gaming Board, Aaron Jaffe, Lee Gould, Michael Holewinski, Maribeth Vander Weele, in their official capacity as Members of the Illinois Gaming Board, Mark Ostrowski, in his official capacity as Administrator of the Illinois Gaming Board, Defendants: C. Vered Jona, LEAD ATTORNEY, Illinois Attorney General, Chicago, IL; Diane K Moshman, LEAD ATTORNEY, Assistant Attorney General, General Law Bureau, Chicago, IL.

Page 922

MEMORANDUM OPINION AND ORDER

John Z. Lee, U.S. District Court Judge.

Plaintiff B& B Harris Management, LLC (" B& B" ), a Missouri corporation with its principal place of business in Murphysboro, Illinois, was a licensed Video

Page 923

Gaming Terminal Operator in Illinois. Defendants, as Members and the Administrator of the Illinois Gaming Board (the " IGB" ), declined to renew B& B's Terminal Operator License, and B& B filed the instant lawsuit, alleging that the IGB has deprived B& B of due process in denying its renewal request. One day after filing this case, B& B also filed a Complaint for Administrative Review in Illinois state court, seeking relief pursuant to Illinois' Administrative Review Law, 735 Ill. Comp. Stat. 5/3-101 et seq. Defendants have moved to dismiss this case pursuant to the doctrine of Younger abstention and Fed.R.Civ.P. 12(b)(6). As set forth below, the motion is granted.

Background

The IGB is responsible for administering and implementing the Illinois Video Gaming Act, 230 Ill. Comp. Stat. 40/1 et seq. (the " Act" ). (Compl. ¶ ¶ 2, 3, 11.) The Act provides, in relevant part, that " Terminal Operators" may apply for and obtain licenses to operate Video Gaming Terminals (" VGT's" ) at " Licensed Establishments" as awarded by the IGB. ( Id. ¶ 9.) See 230 Ill. Comp. Stat. 40/5. The IGB also is responsible for overseeing renewals and revocations of such licenses and has promulgated rules governing these processes. ( Id. ¶ ¶ 11-19.)

Pursuant to the Illinois Administrative Code, the IGB " may only renew a license upon receipt of the applicable renewal fee and any renewal forms only if the licensee continues to meet all qualifications for licensure set forth in the [Video Gaming] Act" and the relevant sections of the Code. See 11 Ill. Admin. Code § 1800.570. The IGB has discretion to refuse to issue or renew a license to any applicant " (1) who is unqualified to perform the duties required of such applicant; (2) who fails to disclose or states falsely any information called for in the application; (3) who has been found guilty of a violation of [the Video Gaming] Act or whose prior gambling related license or application therefor has been suspended, restricted, revoked, or denied for just cause in any other state; or (4) for any other just cause." See 230 Ill. Comp. Stat. 10/9(d), (e); 230 Ill. Comp. Stat. 40/45.

In October 2010, B& B applied for a Terminal Operator License from the IGB, which it received in January 2012. ( Id. ¶ 24.) The license was renewable annually. ( Id. ¶ 27.) B& B took out two loans, in the amounts of $650,000.00 and $2,500,000.00, in order to install and operate VGTs in fourteen separate Licensed Establishments. ( Id. ¶ 25.) As of April 2013, B& B had contracts to operate VGTs with seventy-eight establishments in Illinois. ( Id. ¶ 26.)

In October 2012, B& B applied to the IGB to renew its Terminal Operator License. ( Id. ¶ 28.) On February 25, 2013, however, the IGB issued a Notice of Denial of B& B's application, concluding that B& B had not met the requirements for licensing under the Act. ( Id. ΒΆ 29.) Specifically, the Notice of Denial rejected the renewal of B& B's license on the grounds that B& B " owned, provided and/or continued to operate grey games in Illinois ... both before and while it was licensed by the IGB as a Terminal Operator" and ...


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