Posted on: November 22, 2022, 12:14h.
Last updated on: November 22, 2022, 02:56h.
A judge in Illinois ruled last week in favor of Gold Rush Amusements in a complex, ongoing legal case the video gaming terminal (VGT) operator has with a competitor in the state.
Cook County Circuit Judge Patrick J. Sherlock ruled to dismiss Accel Entertainment’s case against Gold Rush. He also allowed parts of Gold Rush’s case to proceed.
The case revolves around two loans equaling $30 million Gold Rush took from Accel in July 2019. The loan agreements included options for Accel to convert the loans into an equity stake in Gold Rush should the company not be able to pay back the loan. That’s even though Accel CEO Andy Rubenstein allegedly assured Gold Rush owner Rick Heidner that the provision would not be enforced.
However, in July 2021, Accel moved to take an ownership provision, but the Illinois Gaming Board (IGB) rejected the move. That led to Accel suing Gold Rush, and Gold Rush filed a countersuit that claimed Accel refused to offer a payoff amount in March of this year and refused an $8.6 million payment in July 2021 toward the loan.
Gold Rush also claims Rubenstein established a bounty program for Accel sales reps, giving them incentives to win business away from proprietors who were hosting Gold Rush games.
The two suits were consolidated, with Gold Rush and Accel seeking to dismiss at least parts of each other’s case.
Accel Ownership Claim Tossed
In his ruling, Sherlock found that Gold Rush did not violate the terms of its deal with Accel because of the IGB’s decision, and dismissed Accel’s case on that matter.
The IGB is an independent body tasked with ensuring the video gaming community and public at large is protected,” the judge wrote. “It made its independent decision and by operation of the law, Gold Rush cannot comply with the term in the contract.”
Sherlock said the companies “could have, and should have, anticipated the possibility” of the board’s action, and developed a contingency plan regarding the Gold Rush ownership stake.
However, he also gave Accel until Dec. 14 to amend its complaint to recover the loans and interest, and gave Gold Rush until Jan. 11 to respond to that complaint.
Further, while Sherlock dismissed Gold Rush’s claim for a declaratory judgment, he did rule Gold Rush could continue its case. He also said that it deserves damages for interest owed to another lender as it was prepared to pay off the Accel loan.
Accel also has until Dec. 14 to answer the remaining counts in Gold Rush’s case.
Major VGT Operators in Illinois
Sherlock set a status hearing for Jan. 17.
The lawsuit pits two large VGT operators. Accel is the largest in the US and Illinois, while Gold Rush, which has 675 locations in Illinois, is the third-largest operator in the state.
As of last month, according to IGB data, there were 44,311 VGT machines located in 8,134 establishments across Illinois. More than $2.7 billion was wagered in the machines last month, with the terminals producing $234.6 million in revenue.
The IGB reported nearly $79.8 million in taxes were generated last month. The state received $68 million, with the municipalities where the games are located splitting $11.7 million.