Plans for a new casino in Rockford could receive a crucial vote of support from Illinois gambling regulators at a special meeting scheduled for Thursday.
The investors in the Rockford gambling venture presented their plans to the Illinois Gaming Board last week, with businessman Dan Fischer of Naperville acting as the point person for the group’s pitch.
But left unsaid was that the gaming board also is conducting a separate, disciplinary investigation into a deal involving another company owned by Fischer.
Although that investigation was not mentioned during the gaming board’s public discussion of the Rockford proposal on Jan. 27, court records show board investigators are probing and weighing possible sanctions against Fischer’s Illinois Cafe & Service Co.
The company, based in Des Plaines, runs the Dotty’s chain of video-gambling outlets in Illinois and has faced state scrutiny of its deal to buy another group of gambling parlors in 2018, according to the court records obtained by WBEZ.
“This investigation could result in disciplinary action by the Board,” a lawyer for the gaming board said in a filing in Cook County Circuit Court in June.
The gaming board has not taken any disciplinary action against Fischer’s company, and a spokesman for the agency declined to discuss the matter on Tuesday.
“It could go either way,” the gaming board’s spokesman, Joe Miller, said of the probe into Illinois Cafe & Service Co.’s expansion deal. “We don’t comment on any potential, current or ongoing investigation.”
Miller also would not reply when asked whether the pending investigation into Fischer’s video-gambling company could affect the licensing process for the Rockford casino plan.
In a statement Tuesday, Fischer’s lawyer told WBEZ that there was nothing wrong with the deal involving Illinois Cafe & Service Co.
“We have the utmost respect for our regulatory responsibilities and the regulatory process, and we remain confident that the facts will speak for themselves,” said William O’Neil, the lawyer for Fischer.
The agenda for Thursday’s gaming board meeting includes a single item: Determining whether the Rockford group’s proposal meets the state’s “preliminary suitability” standard for a new casino.
The vote would be a significant step in the licensing process for the Rockford casino, clearing the way for the investors to arrange financing, order gambling machines and start construction of the casino.
Illinois has 10 licensed casinos, and in 2019, lawmakers and Democratic Gov. JB Pritzker approved a massive expansion of gambling in the cash-strapped state, including a new Rockford facility and five other casinos around Illinois.
Besides Fischer, the Rockford group’s investors include the wife of Cheap Trick guitarist Rick Nielsen and a former mayor of the blue-collar city 90 miles from Chicago. The group proposing to build what’s touted as the “Hard Rock International” casino beat two other bids to win support from Rockford officials last year.
“This is something that has been a long time coming for the community in Rockford,” said Miller, the gaming board’s spokesman. “We take that responsibility seriously.”
During the gaming board’s meeting last week, Fischer introduced himself as the “managing member” of the Rockford casino effort, and he said the company was planning to invest $310 million there.
“We are thankful and incredibly humbled to have been chosen by the city of Rockford,” Fischer told the gaming board. “Revenues are expected to exceed $150 million to $180 million.”
Fischer, who is white, said the participation of investors who are minorities or women in exceeded requirements.
The new casino would be built at the site of the old Clock Tower Resort, near Interstate 90, and the project also would include an entertainment venue.
Fischer is no newcomer to gambling in Illinois, having led the efforts of the Dotty’s Cafe chain to expand from its roots on the West Coast into this state. Dotty’s became a major player in the state after officials allowed video gambling about a decade ago.
Since then, the state has allowed the machines at thousands of businesses, and Illinois now has more places to bet than any other state, a 2019 investigation by ProPublica Illinois and WBEZ found.
But Fischer’s attempts to further grow Dotty’s in Illinois have led to a legal battle with another key figure in that industry. Rick Heidner’s Gold Rush Gaming has alleged in Cook County court that Illinois Cafe & Service Co. was part of a “sham transaction” when it bought dozens of Stella’s Place and Shelby’s video-gambling cafes in 2018.
In that litigation, Heidner’s company — which is fighting the gaming board’s effort to shut it down — asked the state to turn over information about the deal involving Illinois Cafe & Service Co. The gaming board sought to avoid doing so, by citing its ongoing investigation of the deal.
But internal agency emails that have surfaced in the court case in recent months show top regulators also had concerns about the deal.
“I do not think the IGB should agree to this transaction,” Jim Lopinski, who was the acting deputy administrator of the gaming board’s Financial and Audit Unit, wrote in a September 2018 email to several others at the agency, including the top gaming administrator at the time.
On Tuesday, Fischer’s lawyer said the company had disclosed the transaction to the gaming board and answered the board’s questions about it “well in advance of its closing.”
Records show Fischer also is part of an effort to bring another new casino to Chicago’s south suburbs.
Dan Mihalopoulos is an investigative reporter on WBEZ’s Government & Politics Team.