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State video gaming chief says 'almost impossible' to keep mob out
By Joseph Ryan | Daily Herald Staff
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Published: 11/6/2009 1:05 PM

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The state regulator charged with legalizing video gambling in up to 15,000 bars, restaurants, clubs and truck stops statewide says it is "an almost impossible job" to keep the mob out and protect citizens from the social ills of such pervasive gambling.

But Illinois Gaming Board Chairman Aaron Jaffe promised to push tight regulations on the massive expansion to help contain the social impact on children and gambling addicts while weeding out corruption.

"As hard as it is, we are going to try and do that," he said Friday. "I know the board is committed to pass rules and do things that protect the people of the state of Illinois."

The comments by the former judge and lawmaker come as regulators get down into the nitty-gritty of deciding how to regulate an expected 45,000 slotlike machines that could rake in more than $1 billion in lost wagers a year.

Under the law signed by Gov. Pat Quinn this summer, up to five machines are allowed in bars, liquor-pouring restaurants, clubs and truck stops. But regulators don't expect to have a system in place to roll out the machines until the end of 2010.

At a public hearing on an early draft of broad rules Friday, regulators heard two distinctly different pleas on the approach.

On one side is a push to broaden some authority and duties to other agencies, like the state's liquor control commission, while treating establishments operating the so-called 'video poker' machines more like stores selling lottery tickets than "minicasinos."

On the other side, where good government groups and anti-gambling advocates have staked a claim, is pressure to aggressively investigate slot machine owners and operators and even those with limited financial interests in related establishments.

Regulators so far haven't come up with a plan on how aggressively to monitor gambling sites or on precisely how high of a bar to set for license applicants.

For example, one question that is so far unanswered is whether to allow legal machines at bars or clubs that have faced charges for operating illegal video gambling machines in the past. Illegal machines are often run by organized crime.

Jaffe said if he had his way, those who have faced charges for illegal machines in the past will be frozen out of the legal business. The entire board will have to vote on the rules.

"If they are doing something illegal, why should we give them a license?" said Jaffe. "Why would you all of a sudden say, 'You're doing great.'"

The issue was brought up by Mike Belletire, a former administrator at the gaming board who said he was hired by a company exploring whether to get into the video gambling business. Belletire told the board to be "upfront" about how it would treat companies that had "engaged in directing, supplying or promoting" illegal machines, which he phrased as "the existing industry."

Belletire also urged the board not to force establishment owners to monitor those using the machines to ensure they are not on the state's self-exclusion list set up for addicted gamblers to keep themselves out of casinos.

"Be balanced in your approach," he said.

After Belletire's presentation, Better Government Association Director Andy Shaw said the board should pass rules barring any license holder from giving money to political campaigns. He also pressed for full disclosure upfront from those lobbying the board on the issue.

"Make it pass the smell test," Shaw said, "or let's not do it."

Cook County Board Commissioner Bridget Gainer, of Chicago, who spearheaded a measure banning video slots in bars in unincorporated parts of the county, asked regulators to require bonds from machine operators to ensure any fines or related costs would be paid.

Opponents of the expansion were dealt a setback last week when lawmakers approved extra funding for the board to hire staff to get the rollout underway.

After Gov. Quinn signed legislation legalizing the machines, critics turned to the gaming board in hopes of delaying implementation to buy time for a reversal of the law, which was passed over the span of just a few days as part of a funding package to support $31 billion in new roads, schools and transit.

Meanwhile, about two dozen communities have taken advantage of an "opt out" provision in the law, choosing to ban the machines within their jurisdiction.

Supporters of the expansion point to the existence of illegal machines in countless locations across the state. They say the state might as well legalize them and take a hefty percentage of the gambling losses. Eventually, the machines are expected to bring the state up to $400 million a year.