Video game operator faces multi-million dollar fine from Illinois regulator over DraftKings deal

By Ucatchers

The Illinois gambling regulator is seeking to fine a video game machine operator for an agreement the company has entered into with an online sports betting operator to pay commissions to business owners who host their devices in their establishments.

Accel Entertainment could face a $ 5 million fine from the Illinois Gaming Board if the regulator shows that its advertising deal with sports betting company DraftKings violates state rules and regulations.

Headquartered in Bolingbrook, a southwestern Chicago suburb, Accel is one of the largest video game operators in the U.S. The company obtained its Illinois Gaming Board license in 2012 and has grown its operations to more than 10,000 video game terminals in more than 2,000 authorized establishments since then.

In a complaint filed last Friday, the Illinois gambling enforcement agency alleges that Accel has reached an agreement with DraftKings to pay commissions to the owners of bars, restaurants and other establishments to install their machines.

Under state gambling law, video game operators cannot offer “incentives” in an attempt to boost your business. According to the Illinois Gaming Board complaint, Accel has paid more than $ 21,000 in commissions as part of its settlement with DraftKings.

What did the agreement include?

The Gaming Board said in its presentation that, as part of its agreement, Accel offered ad space to DraftKings on its video game terminals. The company would get $ 200 from the sports betting operator for each new client he handled for the latter, provided that certain conditions were met.

The agreement also allowed Accel to share payments with the establishments that host the machines. The Illinois regulator cited in its complaint an email from Accel’s commercial director requesting the settlement to specify that Accel would share some of the payments you received from DraftKings with business owners.

The email said that Accel wanted the agreement to specify that so the state gambling watchdog “can see that we are operating as a intermediary for commissions. “ A separate email noted that the wording of the deal should make it clear that Accel was passing funds to video game establishments, as it was not allowed to provide compensation to its partners, as that violated state incentive rules.

The Illinois Gaming Board argued that Accel actually had full control over commissions and planned to use the money to attract potential business partners.

Accel Chairman and CEO Andrew Rubenstein said the deal was signed between two public companies “who absolutely knew what they were doing and they complied with the law. “ DraftKings went public last spring through a merger with a special-purpose acquisition company.

This isn’t the first time that Accel has faced scrutiny from the Illinois Gaming Board in the past year. In March, ProPublica Illinois released a report claiming that the company had leveraged connections with the state gaming regulator at a time when regulations were being created for the provision of video game services.

The company allegedly gained access to internal documents about its competitors who also applied for video game licenses. The Gaming Board launched an investigation into the matter, but declined to provide information on its progress.

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