Illinois Gaming Board Considers $5m Fine Against Video Gambling Company Over Alleged Inducements

  • Accel Entertainment allegedly offered business owners incentives to host its gambling machines
  • Operator plans to challenge the Illinois Gaming Board's claims that it paid $21k in commissions
  • DraftKings reportedly gave Accel $200 for each new customer it directed to the sportsbook
  • Previous accusations maintain the firm leveraged connections within the state gaming board
illuminated video gambling machine buttons
The Illinois Gaming Board is seeking to hit video gambling operator Accel Entertainment with a $5m fine for allegedly offering inducements to business partners. [Image: Shutterstock.com]

Board claims operator provided inducements

The Illinois Gaming Board is looking to impose a $5m fine on Accel Entertainment, one of the biggest video gambling operators in the United States.

According to the complaint from the gambling regulator, the company made an agreement with sports betting operator DraftKings to pay commissions that would incentivize business owners to house Accel gambling machines at their premises. 

Accel’s payout of $21,000 worth of commissions was in violation of the Illinois Gaming Act

It is currently illegal for operators of video gambling machines in Illinois to provide “inducements” to retain business or gain new market share. The regulatory body alleges that Accel’s payout of $21,000 worth of commissions was in violation of the Illinois Gaming Act.

Accel CEO and president Andrew Rubenstein did not comment on the complaint when contacted on December 20 by WBEZ. However, he confirmed that the company plans to fight the allegations, saying: “This was two public companies that absolutely knew what they were doing and following the law.”

An agreement with DraftKings

The eight-page complaint outlines how Accel would provide advertising space to DraftKings on the screens of its video gambling devices. The operator would pocket $200 for each customer who joined the sportsbook through its efforts, subject to certain conditions being met. Accel would then share a portion of the profits with business owners hosting the machines mainly in bars and restaurants.

The gaming board received a copy of email correspondence that passed between the chief commercial officer at Accel and DraftKings. Here, the former asks for the final agreement to state that Accel would forward part of the revenue coming from DraftKings to the said business owners, saying:

We want it in the agreement so the gaming board can see that we are operating as a pass through for the commissions.”

Another email from Accel sought further essential clarifications to the agreement. This would ensure that the video gambling firm did not appear to violate Illinois Gaming Board rules by compensating local business partners from its own financial resources, but rather that “we are passing these funds from (DraftKings) to the (video gambling establishments).” 

According to the gaming board’s complaint, Accel was in full control of the payments from DraftKings and was using them to secure priority with existing and future partners. 

Video gambling is big business in Illinois. More of these machines are in the Prairie State than in any other state. Accel has a presence in 2,300 locations and operates almost one-third of Illinois video gambling machines.

Not the first time in hot water

This is not the first time Accel has faced accusations of wrongdoing in Illinois. ProPublica Illinois published allegations in March that the operator had leveraged Illinois Gaming Board connections when video gambling regulations were in their draft stage. This happened at a time of fierce competition among operators to secure lucrative gambling locations. 

Accel reportedly received internal board documents containing details on competitors. Meanwhile, certain board decisions taken favored Accel’s market access and put other operators at a disadvantage. 

In light of these allegations, the gaming board started an investigation into the correspondence between its former top lawyer and Accel. The board has not provided any updates on the progress of the investigation.