Two of the biggest Illinois gambling company executives have been locked into a bitter legal battle. The indirect result of this dispute has led to bigger trouble for each of the parties. It appears that the legal battle has uncovered some issues that have caught the eye of the Illinois Gaming Board.
The principles on both sides may have engaged in illegal business activities. A board investigation is looking into allegations of brides and sketchy business deals.
What Bigger Gaming Issues Does This Chicago Video Poker Dispute Lead To?
On one side of the ongoing dispute is Rick Heidner. He is the owner of Gold Rush Gaming. His company leases video poker machines to more than 500 retail locations across the state. State regulators are looking to revoke his license as a supplier of these machines.
There are allegations that Heidner offered a $5 million “illegal inducement” to protect his business interests. Ironically enough, that inducement was offered to his adversary in the other half of this legal battle.
Previously, the 60-year old businessman made a bid to build a horse racing track and casino in the Chicago area.
His plans were shutdown by Gov. JB Pritzker due to alleged ties to a convicted bookie and banker with local mob ties.
On the other side of this dispute is Dan Fischer. He is a dominant figure in the Illinois video poker café industry. He is also the developer behind the Hard Rock Casino project in Rockford. Back in 2018, Fischer acquired the Stella’s and Shelby’s chain of video poker cafes covering 57 locations.
This acquisition was the basis for the entire dispute. As part of the deal, Heidner’s machines would have been replaced in 44 of the 57 cafes. Fischer wanted to turn to a different machine supplier.
Along with the legal matter between Heidner and Fischer, the deal brought to light some issues with state regulators. The state investigation focused on the legality of the structure of the sale.
Everything came to a head in January of 2019. Heidner refused to remove his machines from the 44 cafes. Fischer then initiated the lawsuit to have them removed. What caught the eye of gambling regulators was the other video poker supplier involved in the deal. They questioned the financial role that company played in the recent acquisition.
Heidner’s initial response was to countersue based on certain legal improprieties in the whole matter.
Gaming board attorney Jared Smith added the following insight as follows:
“The communications requested in the subpoena involve a currently pending investigation by the board related to the Stella’s and Shelby’s deal. This investigation could result in disciplinary action by the board.”
Other parties involved started with Laredo Hospitality Ventures as the parent company of Stella’s and Shelby’s cafes. The price of the deal was set at $46.5 million. Fischer only paid $2 million out of his pocket to take ownership. Midwest SRO, as his new machine provider, paid the rest. Those payments covered and equity stake and a Laredo CEO buyout.
• Source: How a fight over slot machines led state investigators to probe two Illinois video gambling kings from Chicagotribune.com On February 3, 2021.
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