SUGAR GROVE – The Sugar Grove American Legion Post and a Schaumburg-based company that installs and operates video gambling machines will head to court this fall to ask a judge to decide their disagreement over whether the company has exclusive rights to install the electronic gambling machines in the Legion post’s bar.
Earlier this year, the company, Gaming and Entertainment Management, sued Sugar Grove American Legion Post 1271, claiming the post violated a contract the company held to serve as the exclusive operator of the post’s video gambling terminals.
GEM said it had purchased the contract from a different company, Illinois Gaming Investments, listed in court documents as being based in both Collinsville and Chicago, in 2012.
IGI had earlier purchased the supplier contract from Twin Oaks Music, of Aurora, in 2010, for $620,000, according to a copy of a contract included in the court filing.
Twin Oaks had secured the contract with Post 1271 in April 2010.
However, earlier this year, Post 1271 indicated it would allow a different company, Tiger Amusements, of Sugar Grove, to install the machines in the Legion Post’s hall.
GEM filed suit in May asking a Kane County judge to declare its exclusive rights agreement to be valid and enforceable and to declare Post 1271 in breach of contract.
The Legion post filed a response earlier this month, asking the judge to dismiss the suit.
Lawyers for Post 1271 argue that the contract with GEM is null and void because the contract was transferred to IGI at a time that IGI was not licensed by the state to operate the terminals, and at a time that the village of Sugar Grove had not made video gambling legal within its boundaries.
The Sugar Grove Village Board approved an ordinance permitting video gambling in January.
Since the contract with Twin Oaks and IGI was void, the contract could not be legally transferred to GEM, the Legion post’s lawyers argued.
GEM has argued the contract is enforceable, in part because the Illinois Gaming Board has allowed operators and establishments with “precursor contracts” in place or transferred to other operators to obtain video gambling licenses.
The two sides are scheduled to next appear in court in Geneva Oct. 3.