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updated: 5/10/2013 8:05 PM

Sugar Grove American Legion Post sued over video gambling

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Video gambling at the Sugar Grove American Legion Post 1271 is off to a rocky start.

A video gaming company filed a lawsuit in Kane County this week seeking to have a judge rule that it has exclusive rights to place video gambling machines at the post for up to five years.

"The complaint fairly and fully sets out the position of our client," said Douglas Ramsey, attorney for Gaming and Entertainment Management LLC. "If there are gaming machines there, they don't belong to my client."

Messages left for Post Commander Greg Dorneden were not returned. Other legion members declined to comment, but a man who answered the phone at the post Friday confirmed video gambling machines are present and operating there.

In the lawsuit, GEM argues that it has exclusive rights to put video poker and slot machines at the post. The legion signed an agreement with Twin Oaks Music in April 2010 to install and manage the machines. Twin Oaks later assigned exclusive rights to Illinis Gaming Investments, which then sold the agreement to GEM, according to the lawsuit.

"Post 1271 has refused to abide by the terms of the exclusive location agreement and has indicated its intention to repudiate it by using another terminal operator," the suit argues.

The next court date is listed for Aug 22, but it is likely the parties will be in court before then because GEM has asked for an expedited hearing.

The General Assembly legalized video gambling in July 2009, but the measure did not go live until October 2009. The Sugar Grove village board last year voted to outlaw video gaming, but reversed its stance this past January.

A nonbinding, advisory referendum was held this spring, with 632 people voting in favor of it and 586 opposed. Turnout was about 21 percent,

Post representatives have estimated the three gaming machines, which would be used Thursday through Sundays in the bar area during events, would raise about $10,000 a year for the post. The legion is allowed up to five machines.

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