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Bust of 1,100 illegal video gambling machines underscores state's gamble on slots in bars

Published: Monday, Feb. 18, 2013 8:56 a.m. CST

(MCT) — When authorities swarmed a central Illinois warehouse last fall, they found more than 1,000 video gambling machines they declared illegal, proclaiming the discovery one of the largest such busts in state history.

Four months later, state gambling regulators are still closely watching for an arrest. They view it as a test case on whether the state can make good on key promises to eradicate the underworld business while embarking on a controversial expansion of legalized video gambling.

"It is essential," said Illinois Gaming Board Chairman Aaron Jaffe, who oversees the expansion of legal video gambling. "These are machines that would have been in competition with the state. They are not regulated."

The bust in Peoria Heights came on the same October day that the state switched on the first new video gambling machines in several suburban bars.

Those slot machines were just the first trickle in a growing wave of legal gambling now spreading through the state, bringing hopes of jackpots for gambling companies, bar owners and government coffers.

But as the future of regulated gambling in Illinois unfolds, the murkiness of the past lingers.

The Tribune has learned that the Peoria Heights bust centered on a warehouse rented by a felon, who has a gambling conviction and is the son of a politician who once had a stake in a bar game business and has supported legal video gambling.

The case illustrates the tough time regulators may have in separating the new video poker world from the old.

Out with the old

For decades, authorities struggled with enforcing gambling laws against the video poker machines typically labeled "for amusement only" and stowed in the corner of countless bars and clubs. Costly stings were needed to catch bartenders paying out winnings, and critics say charges were often dropped or reduced to misdemeanors anyway.

In selling legalization — and allowing up to five slot machines in bars across the state — lawmakers said they could ensure unregulated video poker would vanish and those who profited from it would be sidelined in the new gambling gold rush.

To do that, the law made it a felony to simply possess a video gambling machine that wasn't licensed by the Gaming Board. The rule was supposed to eliminate the need for authorities to actually catch someone paying out winnings from an unlicensed machine.

Since that rule took effect in August, a Gaming Board spokesman said, the board's officers have been involved in four other raids across the state, bringing in 14 video gambling machines.

Only one arrest has materialized so far.

Felony charges were brought about a month after authorities say they found four unregulated machines at a club in southwest suburban Alsip.

An October raid in west suburban Bellwood and January busts in the southern part of the state, in Danville and Centralia, have yet to yield charges.

Those busts, however, pale in comparison to the October raid in Peoria Heights.

At a nondescript warehouse just north of Peoria, authorities say they found 1,131 video gambling machines. Jaffe said the size of the bust indicates an expansive operation of illegal gambling across scores of bars and clubs in the region.

"I don't think anyone has ever had a bust like this," Jaffe said.

But he isn't going to celebrate until someone is convicted of possessing the machines. Jaffe said his employees have told him that there is enough evidence to make an arrest, though Peoria County State's Attorney Jerry Brady will make that call.

Politics and games

Brady told the Tribune he is weighing which agency should handle the prosecution, if there is a prosecution. He would not elaborate.

A Gaming Board spokesman and Jaffe declined to say who should be charged with possessing the machines.

William Patrick Prather, a convicted felon, was renting the warehouse where the machines were found, a Gaming Board spokesman said. Prather is not accused of wrongdoing.

Prather, 57, has spent years under the scrutiny of federal authorities.

The Peoria-area businessman was charged with illegal gun possession by a felon in 2003 while on probation for a gambling offense, federal court records show. Authorities said one of the guns at issue was a MAC-10submachine gun.

Prather pleaded guilty to those charges, then pleaded guilty in 2008 to filing a false tax return, records show.

In all, court records show, he served about two years in prison.

Prather didn't return phone calls seeking comment.

His father, William R. Prather, 80, is a longtime Democratic figure in Peoria County politics, serving for decades in county and township posts. He once rose to county chairman, though he didn't seek re-election to the board in 2010.

William R. Prather told the Tribune that he knows little about the Peoria Heights bust.

The father is no stranger to the bar gaming business — an industry that pushed for years to make video poker legal. The politician once owned a bar game company.

After the state legalized video gambling, he backed efforts to regulate the machines in Peoria County and opposed a local ban. Board meeting minutes offer a summary of Prather's statements during a 2010 debate on the issue: "Prather said that gambling is here, it's been here for years, and he supports the original resolution."

For nearly two decades, business records show, William R. Prather had an ownership interest in Bee-J Amusements. He said the company was never involved in illegal gambling, only bar amusement devices.

In with the new

In 2002, local bar game businessman Tyler Seibert said, he bought Bee-J Amusements from William R. Prather.

The state denied a lucrative video gambling license to Bee-J Amusements last fall.

Gaming Board officials accused Seibert of possessing illegal video gambling machines and associating with William Patrick Prather, the convicted felon.

In a letter to Gaming Board officials, one of Seibert's attorneys argued that his client never said more than a "hello" in passing to William Patrick Prather and that he only talked to the man's father, who "is well respected in his community."

The board eventually dropped the alleged association as an issue.

Seibert also argues that when agents found the machines at his business in June, they were legal because the law making them illegal didn't start until August.

Numerous companies operated similar machines and still landed video gambling licenses from the state, Seibert said, adding, "We all had them."

Bee-J Amusements is appealing the license denial in court.

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