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posted: 8/23/2013 5:30 AM

Sugar Grove American Legion fighting video gambling lawsuit

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American Legion Post 1271 in Sugar Grove has upped the ante in a lawsuit over video gambling machines.

The post wants a judge to dismiss a lawsuit from a company that says it has exclusive rights to video slot machines that were installed this year, saying when the contract was inked, it was with an unlicensed operator.

Attorneys also argue the agreement was signed when video gambling was illegal in the village and is therefore void, according to court records.

Gaming and Entertainment Management, LLC, sued in May, saying it had exclusive rights for five years to place video gambling machines at the post.

GEM argues the legion signed an agreement with Twin Oaks Music in April 2010 to install and manage the machines. Twin Oaks later assigned its rights to Illinois Gaming Investments, which then sold the agreement to GEM, the company's lawsuit stated.

Michael Coghlan, attorney for the legion, argues the agreement is not valid and not enforceable.

"Twin Oaks was not licensed (to oversee video gaming machines) when it executed the initial agreement. Therefore, the initial contract is 'null and void.' No 'exclusive rights' existed under the void contract," Coghlan wrote in his motion to dismiss. "Twin Oaks could not assign exclusive rights to IGI. In turn, IGI could not assign exclusive rights to GEM."

Greg Dorneden, commander of the post, also wrote in a sworn affidavit that the village of Sugar Grove had banned video gambling when the agreements were signed.

The Illinois General Assembly legalized video gambling in July 2009, but the measure did not go live until October 2012.

The Sugar Grove village board had outlawed video gambling, but reversed its stance in January 2013.

Both sides are due in court Oct. 3.

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