Windy City Promotions, LLC v. Illinois Gaming Board

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Appellate Court Date: 2017.12.21
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Windy City Promotions, LLC v. Illinois Gaming Board, 2017 IL App (3d) 150434
Appellate Court WINDY CITY PROMOTIONS, LLC, and PIER2 HOLDINGS, LLC,
Caption Plaintiffs, v. THE ILLINOIS GAMING BOARD, Defendant-
Appellee (Pier2 Holdings, LLC, Plaintiff-Appellant).
District & No. Third District
Docket Nos. 3-15-0434, 3-15-0451, 3-15-0461 cons.
Filed July 19, 2017
Decision Under Appeal from the Circuit Court of Grundy County, No. 14-LM-133; the
Review Hon. Joseph P. Hettel, Judge, presiding.
Judgment Reversed.
Counsel on Matthew J. Mueller, of Cortina, Mueller & Frobish, P.C., of Morris,
Appeal for appellant.
Lisa Madigan, Attorney General, of Chicago (Carolyn E. Shapiro and
David L. Franklin, Solicitors General, and Evan Siegel and Timothy
M. Maggio, Assistant Attorneys General, of counsel), for appellee.
Panel JUSTICE McDADE delivered the judgment of the court, with
opinion.
Justices Lytton and Carter concurred in the judgment and opinion.
OPINION
¶1 The defendant, the Illinois Gaming Board (Gaming Board), had posted a document to its
website (the Website Document) opining, inter alia, that certain devices called “Electronic
Product Promotion Kiosks” (the Kiosks) violated section 35 of the Video Gaming Act (230
ILCS 40/35 (West 2014)). Shortly thereafter, the Gaming Board seized two of the Kiosks
belonging to plaintiff Windy City Promotions, LLC (Windy City), from a health club in
Morris. In response, Windy City sued the Illinois Gaming Board for declaratory relief and
replevin, alleging that the Gaming Board lacked the authority both to issue the Website
Document and to seize the Kiosks. Plaintiff Pier2 Holdings, LLC (Pier2), which had
provided the software for the Kiosks, was allowed to intervene. The plaintiffs and the
Gaming Board filed motions for judgment on the pleadings. The circuit court ruled in favor
of the Gaming Board on the Website Document issue and in favor of the plaintiffs on the
seizure issue. Pier2 appealed, arguing that the circuit court erred when it ruled in the Gaming
Board’s favor regarding the Website Document. In a cross-appeal, the Gaming Board argues
that the circuit court erred when it ruled that the Gaming Board lacked the authority to seize
the Kiosks. We reverse.
¶2 FACTS
¶3 On July 10, 2014, Windy City filed a replevin action against the Gaming Board, alleging
that the Gaming Board wrongfully seized two of Windy City’s Kiosks from a health club in
Morris. In part, Windy City described the Kiosks as “stand-alone or table top devices
featuring several buttons, a touch screen and a bill acceptor.” A participant would insert
paper money into the machine in exchange for a coupon that could be applied toward
products sold by a particular company. The Kiosk would also automatically enter the
purchaser into a sweepstakes. The purchaser could either instantly reveal the results of the
sweepstakes entry or “elect to reveal the results of his or her entries more slowly via an
entertaining display of the customer’s choosing on the screen.” The “entertaining display”
was a choice of games, “which mimic the look of slots, poker, keno and bingo.” Windy City
alleged that the sweepstakes winners were “pre-determined by the internal promotional
sweepstakes software. The customer cannot influence the sweepstakes results after the
random choice is made.” If the purchaser was a sweepstakes winner, he or she would receive
a ticket that could be exchanged for a cash prize with the location hosting the Kiosk.
¶4 On September 26, 2014, Windy City amended its complaint to request an expedited
hearing, declaratory relief, and replevin. In addition to a request for the return of the Kiosks,
Windy City sought declaratory rulings that its Kiosks were not unlawful gambling machines
and that the Gaming Board lacked the authority to post the Website Document. The amended
complaint contained a new description of the Kiosks, but it was substantially similar to the
description given in the original complaint.
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¶5 The Website Document referenced by the complaint was dated December 5, 2013, and
titled “The legality of Electronic Promotion Sweepstakes Kiosks in Illinois.” In full, it stated
the following:
“The Illinois Gaming Board (IGB) has become aware that Electronic Product
Promotion Sweepstakes Kiosks (Devices) have entered the Illinois market. These
Devices allow a patron to insert cash and purchase credits in addition to receiving a
coupon that can be redeemed via a website. The patron is then able to wager credits
by playing electronic sweepstakes games that look like casino style slots. As credits
are won or lost, they are represented on the screen by a running credits total. To cash
out, the patron presses a button that removes and resets the credits shown on the
screen and prints the total credits on a ticket/coupon. That ticket/coupon can be
redeemed for cash at the location.
These Devices violate Section 35 of the Video Gaming Act (VGA), which
provides that it is a felony to own, operate, possess or permit to be kept ‘any device
that awards credits and contains a circuit, meter, or switch capable of removing and
recording the removal of credits when the award of credits is dependent upon
chance.’ 230 ILCS 40/35(a). Effective January 1, 2014, Public Act 098-0111 amends
section 35(a) of the VGA by adding the following language:
Nothing in this Section shall be deemed to prohibit the use of a game device only
if the game device is used in an activity that is not gambling under section (b) of
Section 28-1 of the Criminal Code of 2012.
The Criminal Code codified the common law definition of gambling, which has
three elements: (1) consideration or purchase, (2) chance, and (3) opportunity for a
prize. If any one of these elements is missing, there is no illegal gambling. Thus, in
order for these Devices to not constitute illegal gambling, both the Criminal Code and
the Illinois Prizes and Gifts Act dictate that no purchase be required. 815 ILCS
525/20, 720 ILCS 5/28-2(b)(13) [sic].
Promoters of these Devices (much like electronic raffle machines, internet cafes
or Lucky Shamrock Vending Machines), attempt to exploit what they deem a ‘legal
loophole’ in Illinois gambling laws by arguing that the purchase paid into the kiosks
is for a coupon and not for the wagering of credits. This argument has been
universally rejected in jurisdictions across the country. [Footnote 1: Courts from New
York, Indiana, Ohio, Alabama, North Dakota, Florida, Hawaii, North Carolina all
have rejected this argument.] Additionally, a promotion under the Illinois Prizes and
Gifts Act that allows the opportunity for an alternate means of entry (‘no purchase
necessary’) does not cancel out the element of consideration or purchase. The obvious
purpose of these Devices is to offer a chance to win a prize for consideration. Finally,
the Illinois Prizes and Gifts Act also requires that written promotional offers must
contain all nine (9) elements outlined in a clear and conspicuous statement at the
onset of the offer. These Devices might not meet all nine elements and accordingly
would not comply with the Illinois Prizes and Gift [sic] Act.
It is the opinion of the IGB that Electronic Product Promotion Sweepstakes
Kiosks fit the definition of a gambling device. These devices will not be licensed by
the IGB. An owner of a Licensed Video Gaming Location found to be in possession
of such a Device could be charged with a felony under the Video Gaming Act. At a
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minimum, possession of such a Device will jeopardize suitability for initial or
continued licensure.”
¶6 In response to Windy City’s amended complaint, the Gaming Board filed an answer,
affirmative defense, and counterclaim, which, in part, sought a ruling that the Kiosks were
illegal and an injunction prohibiting Windy City from distributing the Kiosks. In part, the
Gaming Board’s pleading alleged that the Kiosks in question had been seized by “IGB
special agents” and that “IGB special agents are either employed by the Illinois State Police
pursuant to [section 5(c)(20.7) of the Riverboat Gambling Act (230 ILCS 10/5(c)(20.7)
(West 2014))] or are otherwise considered a ‘local authority’ as construed under [section
28-5 of the Criminal Code of 2012 (720 ILCS 5/28-5 (West 2014))].”
¶7 On November 7, 2014, Pier2 was allowed to intervene.
¶8 On November 19, 2014, Windy City and Pier2 filed a motion for judgment on the
pleadings. On February 27, 2015, the Gaming Board filed a responsive pleading in which it
specifically alleged, for the first time, that the Kiosks had been seized by three Illinois State
Police officers assigned to the Gaming Board. The officers’ affidavits were attached to the
filing.
¶9 On February 10, 2015, the circuit court held a hearing on the outstanding matters, and it
issued its written decision on March 13, 2015. First, the court ruled that the Gaming Board
lacked the authority to seize the Kiosks, finding (1) the Gaming Board was not authorized by
section 28-5 of the Criminal Code of 2012 (720 ILCS 5/28-5 (West 2014)) to conduct the
seizure, as that section authorized only the Department of State Police and municipal or local
authorities to take such action; (2) the seizure powers granted to the Gaming Board in the
Riverboat Gambling Act and the Video Gaming Act were limited to activities connected with
riverboat gambling and licensed video gambling terminals; and (3) the seizure powers
granted to the Gaming Board by section 35 of the Video Gaming Act referred back to section
28-5 of the Criminal Code of 2012, which gives seizure power exclusively to the Department
of State Police or local law enforcement.
¶ 10 Second, the court ruled, without further clarification, that the plaintiffs had failed to
convince the court that it had the authority to enjoin the Gaming Board from posting
documents to its website. Further, the court stated that it “makes no findings as to Plaintiffs’
contention that the [Gaming Board] exceeded its statutory authority in its publication and
dissemination of the legal Opinion concerning Electronic Product Promotion Kiosks.”
¶ 11 Third, the court struck the affidavits of the officers that the Gaming Board had filed with
its February 27, 2015, pleading.
¶ 12 Both parties filed motions for partial reconsideration of the circuit court’s judgment. 1 In
their motion, the plaintiffs also sought leave to voluntarily dismiss their declaratory judgment
claim regarding the legality of the Kiosks. The plaintiffs argued that because the court had
ruled that the Gaming Board lacked the authority to seize the Kiosks, it was not the proper
party to sue regarding the issue.
¶ 13 At the hearing on the motions, the plaintiffs argued that the Website Document
constituted administrative rulemaking, whereas the Gaming Board argued that it did not. At
1
Notably, during the pendency of the motions for partial reconsideration, the Gaming Board told
the circuit court that it had returned the Kiosks to Windy City.
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the close of the hearing, the circuit court denied both parties’ motions and granted the
plaintiffs’ request for leave to voluntarily dismiss the Kiosk-legality issue. The court decided
to consider the affidavits of the three Illinois State Police officers assigned to the Gaming
Board, but the court stated that its consideration of the affidavits did not change its March 13,
2015, ruling. The court did modify its March 13 ruling, however, to clarify that it had ruled
in favor of the Gaming Board on the Website Document issue. In that regard, the court
stated, “I’m not saying they have the authority to make the opinion or the opinion is correct,
I’m saying that I don’t have the authority to tell them what they can and cannot put on their
website based on the pleadings.”
¶ 14 Windy City, Pier 2, and the Gaming Board all appealed. Windy City has since dropped its
appeal, but they have filed a responsive brief, which we have considered in resolving this
appeal.
¶ 15 ANALYSIS
¶ 16 Initially, we emphasize that the legality of the Kiosks is not at issue in this appeal. We
also note that the Gaming Board has returned the Kiosks to Windy City. However, we
believe that neither the absence of the Kiosk-legality issue nor the return of the Kiosks
precludes consideration of the merits of the parties’ arguments. The questions raised in the
appeal and cross-appeal relate only to the authority of the Gaming Board to take the actions
in question—namely, whether it could issue the Website Document and seize the Kiosks
from the Morris health club. There is nothing in the Riverboat Gambling Act, Video Gaming
Act, or section 28-5 of the Criminal Code of 2012 that requires a pre-seizure judicial
determination that a particular device is, in fact, an illegal gambling device. See 230 ILCS
10/1 et seq. (West 2014); 230 ILCS 40/1 et seq. (West 2014); 720 ILCS 5/28-5 (West 2014).
Indeed, requiring such a determination would seem to run afoul of these statutes. See, e.g.,
230 ILCS 10/2(b) (West 2014) (noting that the provisions in the Riverboat Gambling Act
“are designed to strictly regulate the facilities, persons, associations and practices related to
gambling operations pursuant to the police powers of the State, including comprehensive law
enforcement supervision” (emphasis added)); 720 ILCS 5/28-5(c) (West 2014) (providing for
a forfeiture hearing, when criminal charges have been filed, to determine whether a device
constituted a gambling device at the time of seizure); 720 ILCS 5/28-5(d) (West 2014)
(listing available procedures when criminal charges have not been filed, or when the charges
were permanently terminated or indefinitely discontinued; procedures include persons having
property interests in the seized device commencing civil proceedings). In sum, we conclude
that controversies still exist in this appeal and cross-appeal, despite the absence of the
Kiosk-legality issue and the fact that the Gaming Board has returned the Kiosks to Windy
City.
¶ 17 This appeal and cross-appeal involve the circuit court’s rulings on a motion for judgment
on the pleadings. A motion for judgment on the pleadings is similar to a motion for summary
judgment except that the resolution of the motion is limited to the pleadings. Fagel v.
Department of Transportation, 2013 IL App (1st) 121841, ¶ 26. When ruling on a motion for
judgment on the pleadings, a circuit court “ ‘must consider only those facts apparent from the
face of the pleadings, judicial admissions in the record and matters subject to judicial
notice.’ ” Id. (quoting Illinois ToolWorks, Inc. v. Commerce & Industry Insurance Co., 2011
IL App (1st) 093084, ¶ 16). The moving party admits all well-pled facts in the nonmoving
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party’s pleading and the reasonable inferences from those facts. Pekin Insurance Co. v.
Wilson, 237 Ill. 2d 446, 455 (2010). “Judgment on the pleadings is properly granted if the
pleadings disclose no genuine issue of material fact and that the movant is entitled to
judgment as a matter of law.” Id. When faced with a challenge to a circuit court’s decision on
a motion for judgment on the pleadings, our review is de novo. Fagel, 2013 IL App (1st)
121841, ¶ 26.
¶ 18 I. APPEAL
¶ 19 In its appeal, Pier2 argues that the circuit court erred when it ruled in the Gaming Board’s
favor regarding the Website Document. Variously, Pier2 claims that (1) the Gaming Board
exceeded its authority when it posted the Website Document, (2) the Gaming Board does not
have the statutory authority to issue “advisory legal opinions,” and (3) the Gaming Board
should be enjoined from unauthorized rulemaking. The Gaming Board responds briefly that
because it has since removed the Website Document from its website, Pier2’s appeal is moot.
¶ 20 An appeal can become moot when an intervening event has transpired that prevents the
reviewing court’s ability to grant effectual relief. In re Donald L., 2014 IL App (2d) 130044,
¶ 18. Generally, courts will not decide moot questions. In re Alfred H.H., 233 Ill. 2d 345, 351
(2009). However, exceptions exist that allow for the review of an otherwise moot question.
In re Kurtis C., 2015 IL App (3d) 130605, ¶ 16. One such exception is the “capable of
repetition yet evading review exception.” (Internal quotation marks omitted.) Id. “The
‘capable of repetition yet evading review’ exception requires the complaining party to show
that (1) the challenged action is too short in duration to be fully litigated prior to its cessation,
and (2) there is a reasonable expectation that the same complaining party would be subjected
to the same action again.” Id. ¶ 18 (quoting In re Vanessa K., 2011 IL App (3d) 100545,
¶ 14).
¶ 21 We believe that this issue qualifies for the “capable of repetition yet evading review”
exception to the mootness doctrine. First, the challenged action was too short because while
the Gaming Board’s action of posting the Website Document had no duration, the Gaming
Board decided to pull the document from its website. Second, the Gaming Board could repost
the Website Document and thereby resurrect the same controversy. It would be inherently
unfair to allow the Gaming Board to manipulate the process and avoid review of this issue
through the simple removal of a disputed document from its website. Accordingly, we reject
the Gaming Board’s mootness claim.
¶ 22 In addressing the merits of Pier2’s argument, we examine the Gaming Board’s
administrative authority. The Gaming Board is an administrative agency created by the
Riverboat Gambling Act under the following terms:
“There is hereby established the Illinois Gaming Board, which shall have the powers
and duties specified in this Act, and all other powers necessary and proper to fully
and effectively execute this Act for the purpose of administering, regulating, and
enforcing the system of riverboat gambling established by this Act. Its jurisdiction
shall extend under this Act to every person, association, corporation, partnership and
trust involved in riverboat gambling operations in the State of Illinois.” 230 ILCS
10/5(a)(1) (West 2014).
The Gaming Board’s jurisdiction also extends to matters under the Video Gaming Act (230
ILCS 40/78(a) (West 2014)). Both the Riverboat Gambling Act and the Video Gaming Act
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contain provisions that extend their provisions to each other, unless two provisions conflict
(230 ILCS 10/24 (West 2014); 230 ILCS 40/80 (West 2014)).
¶ 23 Among the powers granted to the Gaming Board is the power to adopt administrative
rules. 230 ILCS 10/5(b)(3) (West 2014) (stating that the Gaming Board’s duties include
“promulgat[ing] such rules and regulations as in its judgment may be necessary to protect or
enhance the credibility and integrity of gambling operations authorized by [the Riverboat
Gambling Act] and the regulatory process hereunder”); 230 ILCS 40/78(a)(3) (West 2014)
(stating that the Gaming Board’s powers include “adopt[ing] rules for the purpose of
administering the provisions of [the Video Gaming Act] and to prescribe rules, regulations,
and conditions under which all video gaming in the State shall be conducted”). Pursuant to
section 78(b) of the Video Gaming Act, the legislature has mandated that when the Gaming
Board seeks to adopt a rule, it must follow the procedures for emergency rulemaking set forth
in section 5-45 of the Illinois Administrative Procedure Act (5 ILCS 100/5-45 (West 2014)).
230 ILCS 40/78(b) (West 2014).
¶ 24 In relevant part,2 section 1-70 of the Illinois Administrative Procedure Act defines a
“rule” as an “agency statement of general applicability that implements, applies, interprets,
or prescribes law or policy.” (Emphasis added.) 5 ILCS 100/1-70 (West 2014). “An
interpretive rule is any rule an agency issues without exercising delegated legislative power
to make law through rules.’ ” United Consumers Club, Inc. v. Attorney General, 119 Ill. App.
3d 701, 704 (1983) (quoting 2 Kenneth Culp Davis, Administrative Law Treatise § 7:8, at 36
(2d ed. 1979)). More specifically, an interpretive rule has been described as “one that is
issued by an agency to advise the public of the agency’s construction of the statutes and rules
which it administers. [Citation.] An interpretive rule thus represents the agency’s reading of
statutes and rules rather than an attempt to make new law or modify existing law. [Citation.]”
(Internal quotation marks omitted.) Guerra v. Shinseki, 642 F.3d 1046, 1051 (Fed. Cir.
2011). Interpretive rules are not law and are not binding on the courts. United Consumers
Club, Inc., 119 Ill. App. 3d at 704-05 (quoting Joseph v. United States Civil Service Comm’n,
554 F.2d 1140, 1154 n.26 (D.C. Cir. 1977)).
¶ 25 Based on the above-cited authority, it is clear that the Gaming Board is empowered to
adopt interpretive rules; i.e., rules that represent the Gaming Board’s reading of statutes it
administers. See Illinois Bell Telephone Co. v. Illinois Commerce Comm’n, 362 Ill. App. 3d
652, 656 (2005) (holding that “[a]n agency may adopt a rule and regulate an activity only
insomuch as a statute empowers the agency to do so”); see also Metropolitan School District
v. Davila, 969 F.2d 485, 490 (7th Cir. 1992) (“All agencies charged with enforcing and
administering a statute have ‘inherent authority to issue interpretive rules informing the
public of the procedures and standards it intends to apply in exercising its discretion.’ ”
(quoting Production Tool Corp. v. Employment & Training Administration, United States
Department of Labor, 688 F.2d 1161, 1166 (7th Cir. 1982))). The Website Document, at least
in part, contained the Gaming Board’s interpretation of section 35(a) of the Video Gaming
Act (230 ILCS 40/35(a) (West 2014)) in relation to the Kiosks. Additionally, to the extent
that the Website Document also contained a policy statement—i.e., the Gaming Board’s
future intentions—the Illinois Administrative Procedure Act’s definition of a rule includes
2
Enumerated exceptions to the definition of a rule have been omitted because they do not apply to
this case.
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policy statements (5 ILCS 100/1-70 (West 2014)) and therefore empowers the Gaming Board
to issue policy statements.
¶ 26 We acknowledge that in the circuit court, the parties and the court itself struggled to
classify the Website Document. We also note that the Gaming Board itself argued during the
reconsideration hearing that the Website Document was merely an “opinion” and not an
attempt at rulemaking. However, simply because the Gaming Board argued as such does not
change the fact that the Website Document was interpretive and policy-setting in nature. As
we have stated above, the Gaming Board is authorized to adopt interpretive rules and policy
statements. See 230 ILCS 10/5(b)(3) (West 2014); 230 ILCS 40/78(a)(3) (West 2014); 5
ILCS 100/1-70 (West 2014). Therefore, we conclude that the Gaming Board had the
authority to attempt to adopt the contents of the Website Document.
¶ 27 The plaintiffs further contend that if the Gaming Board had the authority to issue the
Website Document, it did not follow the appropriate rulemaking procedures. We agree. Our
review of the pleadings filed in this case reveal nothing to indicate that the Gaming Board
followed the appropriate rulemaking procedures when it issued the Website Document. In
fact, as previously noted, the Gaming Board took the position in the circuit court that the
Website Document did not even constitute a rule.
¶ 28 However, we disagree with the plaintiffs that the appropriate remedy for the Gaming
Board’s failure to follow the appropriate rulemaking procedures is to enjoin the Gaming
Board. The appropriate remedy is for this court simply to strike down the attempted rule. See
Senn Park Nursing Center v. Miller, 104 Ill. 2d 169, 181 (1984) (holding that “[s]ince we
believe that the amended procedure was a rule within the meaning of the Illinois
Administrative Procedure Act and since the agency did not, and does not contend that it did,
follow the proper procedure for adoption of a rule, the rule is invalid”); see also 5 ILCS
100/5-10(c) (West 2014); Walk v. Department of Children & Family Services, 399 Ill. App.
3d 1174, 1184 (2010) (“Rules not properly promulgated are invalid, not effective against any
person or entity, and may not be invoked by an administrative agency for any purpose.
[Citation.]” (Internal quotation marks omitted.)); Riverboat Development Corp. v. Illinois
Gaming Board, 268 Ill. App. 3d 257, 259 (1994) (“If an agency does not ‘follow the proper
procedure for adoption of a rule, the rule is invalid.’ [Citation.]”). Pursuant to the foregoing
authority and analysis, we hold that the Gaming Board had authority to issue an interpretive
rule and to post it but that, because it failed to follow the appropriate rulemaking procedures,
the attempted rule is invalid. To the extent that the circuit court made a contrary finding, its
judgment is reversed.
¶ 29 II. CROSS-APPEAL
¶ 30 In its cross-appeal, the Gaming Board argues that the court erred when it ruled that the
Gaming Board lacked the authority to seize the Kiosks from a health club in Morris. For the
following reasons, we agree.
¶ 31 The legislature granted sweeping power to the Gaming Board under the Riverboat
Gambling Act. Section 2 states the following regarding legislative intent:
“(a) This Act is intended to benefit the people of the State of Illinois by assisting
economic development and promoting Illinois tourism and by increasing the amount
of revenues available to the State to assist and support education.
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(b) While authorization of riverboat gambling will enhance investment,
development and tourism in Illinois, it is recognized that it will do so successfully
only if public confidence and trust in the credibility and integrity of the gambling
operations and the regulatory process is maintained. Therefore, regulatory provisions
of this Act are designed to strictly regulate the facilities, persons, associations and
practices related to gambling operations pursuant to the police powers of the State,
including comprehensive law enforcement supervision.” 230 ILCS 10/2 (West 2014).
To effectuate these goals, the Riverboat Gambling Act created the Gaming Board, “which
shall have the powers and duties specified in this Act, and all other powers necessary and
proper to fully and effectively execute this Act for the purpose of administering, regulating,
and enforcing the system of riverboat gambling established by this Act.” 230 ILCS 10/5(a)(1)
(West 2014). Further, the Gaming Board’s “jurisdiction shall extend under this Act to every
person, association, corporation, partnership and trust involved in riverboat gambling
operations in the State of Illinois.” Id.
¶ 32 The Video Gaming Act also grants sweeping power to the Gaming Board. Section 78
employs language similar to that used in the Riverboat Gambling Act in describing the
responsibilities of the Gaming Board regarding the regulation of video gaming operations.
230 ILCS 40/78(a)(1) (West 2014).
¶ 33 As pointed out in our analysis of Pier2’s appeal, both the Riverboat Gambling Act and
the Video Gaming Act contain provisions that extend their provisions to each other, unless
two provisions conflict (230 ILCS 10/24 (West 2014); 230 ILCS 40/80 (West 2014)). This
extension of provisions is especially significant for the purposes of this case due to the
provisions related to seizure powers granted to the Gaming Board.
¶ 34 Both the Riverboat Gambling Act and the Video Gaming Act grant the Gaming Board the
power to appoint investigators with the rights and powers of peace officers, which include
the power to conduct investigations, searches, seizures, and arrests. 230 ILCS 10/5(c)(20.6)
(West 2014); 230 ILCS 40/79 (West 2014). However, the power of these appointed
investigators is limited. The Riverboat Gambling Act limits this power essentially “to
offenses or violations occurring or committed on a riverboat or dock” (230 ILCS
10/5(c)(20.6) (West 2014)), and the Video Gaming Act limits it essentially to the licensing
and supervising of video gaming operations (230 ILCS 40/78 (West 2014)).
¶ 35 Another significant provision for our purposes is section 5(c)(20.7) of the Riverboat
Gambling Act, which allows the Gaming Board to contract with the Department of State
Police and the Department of Revenue to use personnel from those agencies to aid the
Gaming Board in carrying out its duties. 230 ILCS 10/5(c)(20.7) (West 2014). Personnel
from both agencies are granted the power “to conduct investigations, searches, seizures,
arrests, and other duties imposed under this Act and to exercise all of the rights and powers
of peace officers.” However, section 5(c)(20.7) limits the powers of the Department of
Revenue personnel (called “investigators”) essentially to “offenses or violations occurring or
committed on a riverboat or dock,” whereas there is no such limitation placed on personnel
from the Department of State Police (called “qualified State police officers” rather than
“investigators”). Id.
¶ 36 This distinction is key because, historically, the power to seize unlawful gambling
devices has rested with the Department of State Police or local authority with jurisdiction
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over the location in which the devices are seized. 720 ILCS 5/28-5(a) (West 2014). Section
28-5(a) of the Criminal Code of 2012 states:
“(a) Every device designed for gambling which is incapable of lawful use or
every device used unlawfully for gambling shall be considered a ‘gambling device’,
and shall be subject to seizure, confiscation and destruction by the Department of
State Police or by any municipal, or other local authority, within whose jurisdiction
the same may be found. As used in this Section, a ‘gambling device’ includes any slot
machine, and includes any machine or device constructed for the reception of money
or other thing of value and so constructed as to return, or to cause someone to return,
on chance to the player thereof money, property or a right to receive money or
property. With the exception of any device designed for gambling which is incapable
of lawful use, no gambling device shall be forfeited or destroyed unless an individual
with a property interest in said device knows of the unlawful use of the device.” 720
ILCS 5/28-5(a) (West 2014).
¶ 37 A review of the Riverboat Gambling Act and the Video Gaming Act reveals that while
the legislature appears to have created a means for the Department of State Police and
Gaming Board to collaborate in enforcing the state’s gambling laws (i.e., 230 ILCS
10/5(c)(20.7) (West 2014)), the legislature did not intend to change the historical locus of
power to seize unlawful gambling devices except in the very limited circumstances provided
by those particular acts. In fact, to the extent that the Gaming Board is authorized to seize
unlicensed gambling devices, that power relates back to section 28-5 of the Criminal Code of
2012. Section 35(a) of the Video Gaming Act provides, in relevant part:
“Every gambling device found in a licensed establishment, licensed truck stop
establishment, licensed fraternal establishment, or licensed veterans establishment
operating gambling games in violation of this Act shall be subject to seizure,
confiscation, and destruction as provided in Section 28-5 of the Criminal Code of
2012. *** No person may own, operate, have in his or her possession or custody or
under his or her control, or permit to be kept in any place under his or her possession
or control, any device that awards credits and contains a circuit, meter, or switch
capable of removing and recording the removal of credits when the award of credits is
dependent upon chance.
Nothing in this Section shall be deemed to prohibit the use of a game device only
if the game device is used in an activity that is not gambling under subsection (b) of
Section 28-1 of the Criminal Code of 2012.
A violation of this Section is a Class 4 felony. All devices that are owned,
operated, or possessed in violation of this Section are hereby declared to be public
nuisances and shall be subject to seizure, confiscation, and destruction as provided in
Section 28-5 of the Criminal Code of 2012.” 230 ILCS 40/35(a) (West 2014).
¶ 38 The import of these statutes for this case is that the seizure of the Kiosks—i.e., unlicensed
devices—from the health club in Morris—i.e., an unlicensed establishment—was lawful only
if had it been conducted by the Department of State Police or local authority. See 230 ILCS
10/5(c)(20.7) (West 2014); 230 ILCS 40/35(a) (West 2014). The Gaming Board’s pleadings
stated that it contracts with the Department of State Police for the use of its police officers,
and there is nothing in the pleadings to indicate that those officers failed to conduct the
seizure of the Kiosks in accordance with section 28-5 of the Criminal Code of 2012. Under
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these circumstances, the pleadings indicate that the seizure was a valid exercise of
administrative authority. Accordingly, we hold that the circuit court erred when it ruled that
the seizure of the Kiosks was unauthorized.
¶ 39 CONCLUSION
¶ 40 For the foregoing reasons, we hold that (1) the Gaming Board has the authority to adopt
interpretive rules and policy statements and to post them to its website, but that it failed to
follow the appropriate procedures for doing so when it composed and posted the Website
Document and (2) the circuit court erred when it ruled that the Gaming Board lacked the
authority to conduct the seizure of the Kiosks. Accordingly, the judgment of the circuit court
of Grundy County is reversed.
¶ 41 Reversed.
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