## Facts

- Hometown Plaza, LLC (Hometown) owned a shopping center in Illinois.
- After the Illinois legislature enacted the Video Gaming Act (VGA), which authorized video-gaming terminals in certain licensed establishments, Hometown planned to convert part of its shopping center into an “entertainment center” offering video-gaming terminals.
- Bella’s Hometown, LLC (Bella’s) and Gigi’s Hometown, LLC (Gigi’s) agreed to operate as tenants in Hometown’s entertainment center and applied to the Illinois Gaming Board (Board) for video-gaming location licenses.
- When Bella’s and Gigi’s applied, three other establishments in the entertainment-center area already held Board-issued video-gaming location licenses.
- The Board conducted investigations into the applications and took public input.
- Some members of the community objected that the VGA did not contemplate “video-gaming malls,” meaning multiple connected establishments operating in a single commercial complex with a large concentration of terminals.
- Other community members, including the mayor, supported the applications based on anticipated revenue and job creation.
- The Board denied the applications. In doing so, it noted the shopping center could house up to eight video-gaming establishments and reasoned that, with three already licensed and additional tenants potentially licensed, the center could operate as many as 55 video-gaming terminals.
- The Board concluded that this concentration would function like a mini-casino without typical casino safeguards (such as dedicated security measures) and stated that similar clustered arrangements had harmed communities elsewhere.
- Hometown, Bella’s, and Gigi’s filed suit seeking declaratory relief and related remedies challenging the denials.
- The circuit court reversed the Board’s decisions, reasoning that the VGA did not authorize the Board to regulate the density or concentration of licensed video-gaming establishments in a given area.
- The Board appealed.

## Issues

1. Whether the Video Gaming Act permits the Illinois Gaming Board to deny video-gaming location licenses based on the cumulative effect of multiple adjacent licensed establishments operating as a “video-gaming mall” or mini-casino.
2. Whether the Board acted within its discretion when it considered the overall layout and total number of terminals that could operate within the shopping center if additional tenants were licensed.
3. Whether the circuit court erred on administrative review by substituting its judgment for the Board’s on matters committed to the Board’s licensing discretion.

## Decision

- The Illinois Appellate Court, First District, reversed the circuit court and reinstated the Board’s denials of Bella’s and Gigi’s license applications.
- The court concluded the Board acted within the authority granted by the VGA when it considered whether approving additional licenses at the shopping center would create a casino-like concentration of terminals inconsistent with the statutory scheme.
- The court held that the Board’s stated reasons—protecting the security and integrity of video gaming in Illinois and avoiding a mini-casino arrangement lacking casino-style safeguards—were supported by the record and were not arbitrary or capricious.
- The court emphasized the limited role of courts on administrative review and rejected the circuit court’s reading of the VGA as barring the Board from considering density and clustering effects.
- The disposition was issued as an unpublished order under Illinois Supreme Court Rule 23 and is nonprecedential except as allowed by that rule.

## Legal Principles

- The Illinois Gaming Board has broad statutory responsibility under the Video Gaming Act to regulate video gaming in a manner that protects the public and the integrity of the system.
- In deciding whether to grant or deny a video-gaming location license, the Board may consider the real-world operation and combined effect of multiple proposed locations within a single development, not merely whether each applicant meets baseline criteria.
- The Board may deny licenses when approving them would effectively create a casino-like gaming venue through clustering, especially where the arrangement would operate without safeguards commonly associated with regulated casinos.
- On administrative review, courts generally defer to an agency’s factual findings and discretionary licensing judgments when supported by the record and when not arbitrary, capricious, or an abuse of discretion.
- A circuit court may not reweigh evidence or replace the agency’s policy judgment with its own where the legislature has assigned the agency discretion in licensing decisions.

## Conclusion

In *Hometown Plaza, LLC v. Illinois Gaming Board*, the Illinois Appellate Court reinstated the Gaming Board’s denial of video-gaming location licenses to two prospective tenants in a shopping-center entertainment complex, holding the Board could consider the cumulative, casino-like effect of a clustered set of adjacent gaming establishments and could deny licenses to prevent a mini-casino arrangement inconsistent with the Video Gaming Act’s regulatory aims.


Hometown Plaza, LLC v. Illinois Gaming Board, 2017 WL 3707249 (2017)