MIDWEST ELECTRONICS GAMING, LLC, Plaintiff-Appellee, v. THE ILLINOIS GAMING BOARD, an agency of the State of Illinois, and CHARLES SCHMADEKE, DIONNE R. HAYDEN, SEAN BRANNON, JIM KOLAR, and MARCUS FRUCHTER, in their official capacities as Members of The Illinois Gaming Board, Defendants-Appellants.
No. 1-24-1076
APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT
June 24, 2025
2025 IL App (1st) 241076-U
JUSTICE HOWSE delivered the judgment of the court. Justices McBride and Ellis concurred in the judgment.
SECOND DIVISION. NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1). Appeal from the Circuit Court of Cook County. No. 22 CH 12175. Honorable Anna M. Loftus, Judge Presiding.
Held: The judgment of the circuit court of Cook County is reversed; an automatic extension provision contained in plaintiff‘s use agreement is invalid; the use agreement adopted subsequent amendments to the rules by its own terms; therefore it was bound by a rule of the Illinois Gaming Board adopted after the date of the use agreement which prohibited automatic extensions; therefore, whether the rule was retroactive is irrelevant.
¶ 1 Plaintiff, Midwest Electronics Gaming, LLC (Midwest), is a video gaming terminal operator under the Illinois Video Gaming Act (Act). Midwest entered into a use agreement with a licensed establishment authorized by the Act to have a video gaming terminal (VGT) placed in
¶ 2 Plaintiff filed a complaint for declaratory judgment seeking a declaration that (1) the new rule does not apply to any use agreements entered into by plaintiff prior to the date the new rule was adopted, (2) the Board‘s “new interpretation” of the rule in its communications with plaintiff (that the rule applies to the use agreement at issue in this case) is an unauthorized “rule” under the Administrative Procedure Act, and (3) retroactive application of the new rule is unconstitutional. The parties filed cross-motions for summary judgment. Following a hearing on the motions, the circuit court of Cook County granted plaintiff‘s motion in part and denied it in part, and granted defendants’ motion in part and denied it in part. At issue in this appeal is the circuit court‘s judgment that the automatic renewal provision in plaintiff‘s use agreement remained valid after the effective date of the new rule because plaintiff entered the use agreement before the effective date of the new rule.
¶ 3 For the following reasons, we find that the new provision prohibits the automatic renewal provision contained in the use agreement and that the use agreement by its own terms adopted subsequent changes in the rules. Therefore, we affirm in part, and reverse in part.
¶ 4 BACKGROUND
“jurisdiction over and shall supervise all gaming operations governed by this Act. The Board shall have all powers necessary and proper to fully and effectively execute the provisions of this Act, including, but not limited to, the following:
* * *
(3) To adopt rules for the purpose of administering the provisions of this Act and to prescribe rules, regulations, and conditions under which all video gaming in the State shall be conducted.”
230 ILCS 40/78(a) (West 2024).
¶ 6 The Act provides that, “No video gaming terminal may be placed in any licensed establishment * * * unless the owner or agent of the owner of the licensed establishment * * * has entered into a written use agreement with the terminal operator for placement of the terminals.”
“A contractual agreement between a licensed terminal operator and a licensed video gaming location establishing terms and conditions for placement and operation of video gaming terminals by the licensed terminal operator within the premises of the licensed video gaming location, and complying with all of the
minimum standards for use agreements contained in Section 1800.320.” 11 Ill. Adm. Code 1800.110.
¶ 7 Plaintiff‘s complaint for declaratory judgment alleged that prior to March 2017 plaintiff entered use agreements under the Act with various licensed establishments and that many of those use agreements contained a provision stating that the term of the use agreement would automatically renew unless the establishment provided written notice of intent to terminate the use agreement.
¶ 8 Beginning in March 2017, the Board began proposing an amendment to Rule 1800.320 (hereinafter, “Rule 320“). On February 2, 2018, the Board adopted rule 320(a)(7) which states that a use agreement must “Not provide for automatic renewal in the absence of cancellation.” 11 Ill. Adm. Code 1800.320(a)(7) (eff. Feb. 2, 2018). (The rule is now codified as rule 320(a)(9)). The “first notice” and “second notice” for the rulemaking surrounding rule 320(a)(7), as well as the final notice of the new rule and its effective date, published in the Illinois Register, all stated that the proposed rulemaking was to impose requirements “on all use agreements entered into between terminal operators and licensed video gaming locations on or after [the rulemaking‘s] effective date.”
¶ 9 Plaintiff‘s complaint alleged that on or about October 1, 2015, it entered a use agreement with a certain establishment with a provision that the agreement would automatically renew effective May 16, 2022. The complaint further alleged that in April 2022, an agent of the Board informed plaintiff that it must execute a new use agreement with that establishment without an automatic renewal provision or, alternatively execute an addendum to the use agreement with that establishment that eliminates the automatic renewal clause. Plaintiff attached copies of email correspondence between plaintiff‘s counsel and the Board to its complaint.
“After review, the use agreement is effective now and should not hinder the relocation or addition of machines at [the establishment.] * * * However, Paragraph 28 [of the use agreement] provides that rule revisions affecting use agreements ‘shall be considered as being fully incorporated into and made part of’ the use agreement. Accordingly, Rule 320(a)(7) is incorporated and the agreement does not automatically renew.”
In subsequent email correspondence, plaintiff and the Board disagreed on whether rule 320(a)(7) applies to use agreements entered prior to its effective date, based on, inter alia, the statements during the rulemaking process mentioned above.
¶ 11 The use agreement at issue contains the following provision:
“28. Should the [Board] make any revisions, addendums, and/or modifications to the rules and regulations as they relate to VGTs that in any way affect this Agreement, then such revisions, addendums, and/or modifications shall be considered as being fully incorporated into and made part of this Agreement and may be added as additional Exhibits and considered part of this Agreement without any additional consent or signatures required by Terminal Operator
[(plaintiff)] or Establishment and all parties shall be fully bound by the provisions of the Agreement including the additional Exhibits.”
¶ 12 The use agreement at issue also provides as follows:
“1. Establishment agrees that Terminal Operator shall have the exclusive right to install, service and maintain at a minimum one (1) Video Gaming Terminal hereinafter ‘VGT‘, subject to the terms and conditions of this Agreement and in compliance with the definitions as described in Illinois Video Gaming Act, hereinafter ‘Act‘, and subsequent acts, legislation, rules and regulations as promulgated by the State of Illinois, and in compliance with and as regulated by the [Board,] or any other regulatory body as set forth by the State of Illinois. * * * THIS AGREEMENT IS INTENDED TO COMPLY WITH THE ACT AND, WHEREVER POSSIBLE INCORPORATE THE LANGUAGE OF THE ACT. ANY DIRECT CONFLICT BETWEEN LANGUAGE IN THIS AGREEMENT AND THE ACT IS STRICTLY UNINTENTIONAL.” (All capitals in original.)
¶ 13 Plaintiff‘s complaint alleged that the Board‘s interpretation of rule 320(a)(7) is unauthorized by law as it constitutes a new, unauthorized rule in violation of the Administrative Procedure Act; “enaction of a new rule that invalidates auto renewal clauses in previously-use [sic] agreements executed prior to the effective date of the rule would constitute unconstitutional ‘retrospective legislation;‘” and that rule 320(a)(7) is “illegal and void” because it “contains use agreement restrictions beyond those set forth in the Act.” The complaint sought a declaratory judgment including, specifically, a judgment, “Declaring that Rule 320(a)(7) does not apply to any use agreements entered into by and between Midwest * * * and a licensed establishment prior to February 2, 2018.”
¶ 15 In pertinent part, the Board‘s motion for summary judgment argued that paragraph 1 of the use agreement obligates plaintiff to comply with subsequent rules and act “in compliance with and as regulated by” the Board. The Board argued that in entering this use agreement, plaintiff “undertook a risk in that it could not predict what subsequent rules and regulations [the Board] would provide.” The Board argued that, nevertheless, as plaintiff‘s operation must comply with subsequently enacted rules and regulations, plaintiff cannot escape from the application of Rule 320(a)(7).
¶ 16 The Board also argued that pursuant to paragraph 28 of the use agreement, plaintiff “undertook an obligation to be bound by future-enacted revisions, addendums, and/or modifications to the rules and regulations relating to Video Gaming Terminals.” The Board argued that under paragraph 28 of the use agreement the modification to rule 320 “is fully incorporated into the Use Agreement, and Plaintiff is fully bound by it.” The Board refuted plaintiff‘s argument that its “interpretation” of rule 320(a)(7) to apply to the use agreement was itself a new rule, arguing that the plain language of the rule does not support that argument and,
¶ 17 Furthermore, the Board argued that plaintiff‘s complaint is moot because plaintiff entered into a new use agreement on May 17, 2022, and “the video gaming terminals at the establishment are active,” therefore, “there is no actual controversy between the parties” as required for a declaratory judgment complaint. In response to the Board‘s mootness argument, plaintiff argued that, although it did enter into an addendum to the existing use agreement with the establishment extending the term of the use agreement for an additional five years, that addendum “does not delete or otherwise amend the autorenew provision in the use Agreement that is at issue in this action;” therefore, plaintiff argued, “a live controversy continues to exist.” Alternatively, plaintiff argued that according to an affidavit attached to the response, “there are identical use agreements currently in force that contain the exact same autorenew provisions.” Plaintiff argued that this case is subject to review under the mootness exception for issues capable of repetition yet evading review. The Board‘s reply did not address the exception to mootness argument but did argue that the addendum acknowledges that the use agreement at issue expired because the addendum extends the use agreement for an additional five years after the expiration of the current agreement. The Board argued that plaintiff cannot both argue that Rule 320 does not apply to the Use Agreement and that the Use Agreement auto-renews, and simultaneously enter into an agreement acknowledging that the Use Agreement expired.
“even if the addendum made any declaratory judgment action moot, I agree with plaintiff that this case is subject to an exception to the mootness doctrine. Notably [the Board] does not address the exception argument in its reply.
This case is subject to review by this Court because it contains issues capable of repetition yet evading review. Specifically that one of the factors is the challenged action must be too short in duration to be fully litigated before its end. And the second factor is there must be a reasonable expectation that the complaining party will be subject to the same action again. It does not appear to be any dispute that those two factors have been met so this case meets both of those requirements.”
¶ 19 The trial court found that the “compliance with subsequent Acts, legislation, rules, and regulations” referenced in paragraph 1 relates only to the agreement to install a VGT and the right to service and maintain one VGT at the establishment.
¶ 20 The trial court construed paragraph 28 of the use agreement and found that the limitation to amendments “that relate to VGTs” “means something.” The court found that the reference in the use agreement to rules and regulations that “relate to VGTs” references the statute that specifies the number of VGTs certain establishments can have on site. Moreover, the court found that the rule does not “affect this agreement because it did not become effective until 2018 and
¶ 21 The trial court found that the Board‘s representation to plaintiff that plaintiff‘s use agreement incorporates the new rule is not a statement of general applicability—and therefore is not a new rule—because incorporation of the rule by a change in law provision would depend on the language of the change in law provision in each use agreement. The court also found that the Board‘s rules “requiring certain provisions to be included in the use agreements does not expand or limit the scope of the Act‘s provision regarding use agreements.”
¶ 22 The trial court‘s written judgment declared that rule 320(a)(7) “is to be applied prospectively, not retrospectively.” The court rejected the argument that “the change in law clause” in the use agreement incorporates rule 320(a)(7) and therefore applies to the use agreement at issue in this case (without specifically referencing paragraph 1 or paragraph 28, or both). The court declared that, “Rule 320(a)(7) does not apply to any use agreements entered into by and between Plaintiff and a licensed establishment containing the same change in law clause as at issue in this case prior to February 2, 2018.” The trial court denied plaintiff‘s request “for a judicial declaration that the [Board‘s] new interpretation of Rule 320(a)(7) is an unauthorized rule under the Administrative Procedure Act.” The court found that the Board‘s interpretation “was limited to the facts surrounding Plaintiff‘s use agreement and not a Rule of general applicability.” The court also denied plaintiff‘s request for a declaration that rule 320(a) exceeds the scope and authority of section 25 of the Act.
¶ 23 This appeal followed.
¶ 24 ANALYSIS
¶ 26 “When parties file cross-motions for summary judgment, they agree that only a question of law is involved and invite the court to decide the issues based on the record. [Citation.] However, the mere filing of cross-motions for summary judgment does not establish that there is no issue of material fact, nor does it obligate a court to render summary judgment.” Pielet v. Pielet, 2012 IL 112064, ¶ 28. “Under a de novo standard of review, we use the same analysis that a trial court would with no deference to the trial court‘s decision.” Hampton v. Metropolitan Water Reclamation District of Greater Chicago, 2025 IL App (1st) 231381, ¶ 46. “This court may affirm a grant of summary judgment on any basis appearing in the record, regardless of whether the lower courts relied upon that ground.” Village of Bartonville v. Lopez, 2017 IL 120643, ¶ 34.
¶ 27 Plaintiff filed the complaint pursuant to section 2-701 of the Code of Civil Procedure (
“Section 2-701(a) of the Code provides that a circuit court may, ‘in cases of actual controversy, make binding declarations of rights, having the force of final judgments,’ including ‘the construction of any * * * contract or other written instrument, and a declaration of the rights of the parties interested.’
735 ILCS 5/2-701(a) (West 2022). The declaratory judgment statute is ‘liberally construed and should not be restricted by unduly technical interpretations’ ([citation]), though its application must still comport with the general rule that ‘[c]ourts cannot pass judgment on mere abstract propositions of law, render advisory opinions, or give legal advice as to future events’ ([citation]). Declaratory relief is only proper if there is an actual legal controversy between the parties, i.e., if there is [a] ‘concrete dispute admitting of an immediate and definitive determination of the parties’ rights, the resolution of which will aid in the termination of the controversy or some part thereof.’ [Citation.]If the controversy is theoretical, rather than actual, then the claim is premature. [Citation.]” RSA Properties Mission Hills, P.C. v. Mission Hills Homeowners Ass‘n, 2024 IL App (1st) 231526, ¶¶ 22-23.
¶ 28 We initially address the question of whether this appeal is moot. The Board does not pursue the mootness issue on appeal. Nonetheless, “we must review whether this case is moot, even if neither party raises the issue, because mootness is a question of jurisdiction.” Tirio v. Dalton, 2019 IL App (2d) 181019, ¶ 21. “It is a basic tenet of justiciability that reviewing courts will not decide moot or abstract questions or render advisory opinions. [Citations.] An appeal is considered moot where it presents no actual controversy or where the issues involved in the trial court no longer exist because intervening events have rendered it impossible for the reviewing
“[T]here are three established exceptions to the mootness doctrine: (1) the ‘public interest’ exception, applicable where the case presents a question of public importance that will likely recur and whose answer will guide public officers in the performance of their duties; (2) the ‘capable of repetition’ exception, applicable to cases involving events of short duration that are capable of repetition, yet evading review; and (3) the ‘collateral consequences exception,’ applicable where the involuntary treatment order could return to plague the respondent in some future proceedings or affect other aspects of the respondent‘s life.” In re Marcus S., 2022 IL App (3d) 170014, ¶ 43.
¶ 29 The Board argued that the case is moot because plaintiff entered an addendum to its use agreement with the establishment, which the Board contends eliminated the auto-renew provision from the use agreement.
¶ 30 Plaintiff disputes the contention that the addendum with the establishment eliminated the auto-renew provision and asserts that the auto-renew provision remains in place, therefore the case is not moot.
¶ 31 We find that this controversy is moot because intervening events have rendered it impossible for this court to grant effectual relief to plaintiff. In re J.T., 221 Ill. 2d at 349-50. Our judgment will not affect the parties because plaintiff has entered a separate agreement to renew the use agreement with the named establishment rendering the auto-renew provision irrelevant to the present controversy. See In re Tekela, 202 Ill. 2d at 292-93 (“the case is rendered moot because a ruling on the issue cannot have any practical effect on the controversy. [Citations.]
¶ 32 Nonetheless, we find that the public interest exception applies. The regulation of gambling is a matter of public interest and importance. As the Board argued, it is authorized to “adopt rules for the purpose of administering the provisions of [the] Act and to prescribe rules, regulations, and conditions under which all video gaming in the State shall be conducted. Such rules and regulations are to provide for the prevention of practices detrimental to the public interest * * *.”
¶ 33 Turning to the merits, the Board argues that rule 320(a)(7) applies to the use agreement at issue because plaintiff “chose to draft and enter into a use agreement that incorporated that future rule change.” The Board argues that pursuant to paragraph 1 of the use agreement, plaintiff conditioned the use agreement on compliance with “subsequent acts, legislation, rules and regulations as promulgated by the State of Illinois, and in compliance with and as regulated by the [Board.]” The Board argues that “paragraph 1 alone would warrant concluding that the Agreement incorporated Rule 320(a)(7).”
¶ 35 Regarding paragraph 28, plaintiff refutes that rule 320(a)(7) either relates to VGTs or affected the use agreement at issue. Specifically, plaintiff argues that rule 320(a)(7) does not relate to physical VGTs and, therefore, does not fall within the scope of paragraph 28. Plaintiff also argues that rule 320(a)(7) did not affect the use agreement here because rule 320(a)(7) applies only prospectively and, therefore, had no affect on the use agreement entered prior to its effective date.
¶ 36 We have no need to resolve the parties’ disagreement on the question of whether rule 320(a)(7) “relates to VGTs” or “affects the use agreement” because we agree with the Board that, pursuant to paragraph 1 of the use agreement, plaintiff bound itself to comply with rule 320(a)(7)‘s disallowance of auto-renewals. We state expressly that we reach this conclusion without any deference to the Board‘s interpretation of the use agreement. “As a general rule, the construction, interpretation, or legal effect of a contract is a matter to be determined by the court as a question of law.” Village of Riverdale v. Nosmo Kings, LLC, 2023 IL App (1st) 221380, ¶ 16. See also Rural Electric Convenience Co-op. Co. v. Illinois Commerce Comm‘n, 75 Ill. 2d 142, 149 (1979) (“A greater degree of certainty can be obtained by adherence to established principles of contractual interpretation than by undue deference to a given agency‘s particular expertise.“). Therefore, the parties’ respective arguments concerning whether deference is owed to either party‘s interpretation of the use agreement, and plaintiff‘s argument that the Board “has no basis for arguing what [plaintiff‘s] own contractual language is interpreted to mean,” are inapposite. We find that the use agreement is clear and unambiguous and we have construed the
¶ 37 In support of the argument that the parties to the use agreement could contractually adopt a new rule that did not apply “retroactively” the Board cites one case from a foreign jurisdiction: Angora Enterprises v. Cole, 439 So. 2d 832, 834-35 (Fla. 1983). In Cole, the issue was whether the parties to a condominium contract “expressly consented to the incorporation of [a certain statute] into the terms of the contract by virtue of the language in the [contract.]” Cole, 439 So. 2d at 834. The contract in that case stated that certain property was “submitted to Condominium ownership, pursuant to the Condominium Act of the State of Florida * * * and the provisions of said Act are hereby incorporated by reference and included herein thereby * * *.” Id. The contract later defined the Condominium Act as the “Condominium Act * * * as the same may be amended from time to time.” (Emphasis omitted.) Id. In an earlier case, the court held that the statute “could not be applied to pre-1974 leases because the legislature did not intend retroactive effect.” Id. at 835. The lease at issue was a pre-1974 lease. Id. at 833. The Supreme Court of Florida found that the controlling difference between the earlier case finding that the statute did not have retroactive effect and the Cole case, in which the court found the statute did apply to the contract, was that in the earlier case, “there was no language in the * * * documents evidenc[ing] consent on the part of the lessor to incorporate the Condominium Act and its future amendments into the contract.” Cole, 439 So. 2d at 835. The Supreme Court of Florida found that “the parties intended to be bound by future amendments to the condominium act and as such [the statute] is applicable and enforceable under the facts of the instant case.” Cole, 439 So. 2d at 834.
¶ 39 The Comptroller argued that “if a future amendment was not retroactive, then it was not applicable to the existing contracts [that were the subject of the settlement] and no amendment to the trust agreement would be required.” Id. at 656. The Comptroller also argued that only a retroactive amendment would result in “excess funding” but, “if any amendment has only a prospective effect, then there would be no excess funding to return.” Memorial Consultants, Inc., 224 Ill. App. 3d at 656. On appeal, the court found that the settlement agreement required the Comptroller to amend the funding requirement on the existing contracts “only if an amendment to the [law] applies retroactively.” Memorial Consultants, Inc., 224 Ill. App. 3d at 657. The court relied on the “if applicable” language in the agreement and found that “if an amendment to the
¶ 40 In this case, paragraph 1 of the use agreement does not contain language, similar to the “if applicable” language in Memorial Consultants, Inc., in any way limiting the parties’ agreement to be bound by subsequent changes in the law. On the contrary, paragraph 1 evinces the parties’ intent to be, and to remain, in compliance with the Act and rules “wherever possible.” We concede paragraph 28 may contain such limiting language, but we do not construe what that language means in this context because doing so in this case would amount to an advisory opinion. The particular facts of Memorial Consultants, Inc. may further distinguish this case from Memorial Consultants, Inc. as it applies to paragraph 28, if at all; but those questions are not before this court.
¶ 41 We also find that there is no “impairment” of a contract right because the parties to the contract agreed to the change in their rights. Therefore, plaintiff‘s reliance on Griffin v. City of North Chicago, 112 Ill. App. 3d 901 (1983), is misplaced. In Griffin, the court recognized that,
“The legislature cannot pass a retrospective law impairing the obligation of a contract nor deprive a party of a vested right. [Citation.] A vested right is more than a mere expectation based upon an anticipated continuance of existing law; it must have become a title, legal or equitable, to the present or future enjoyment of property. [Citations.] If an existing law changes by amendment or repeal prior to the vesting of a right, no cause to object arises.” Griffin, 112 Ill. App. 3d at 905.
¶ 43 Plaintiff cites no authority for the proposition that the parties to a contract cannot voluntarily modify their obligations conditioned on subsequent legislative events. Nor is that the law. See Jones v. Loaleen Mutual Benefit Ass‘n, 337 Ill. 431, 438 (1929) (“Neither the old association nor the Legislature could take any action which would impair the contract of the certificate holder, unless such certificate holder consented to such change.” (Emphasis added.)). Plaintiff and the establishment consented to modify their obligations upon the occurrence of a subsequent event, that event being the adoption of a new rule by the Board. We find that paragraph 1 of the use agreement binds the parties to abide by rule 320(a)(7) which, in this instance, means that the parties are bound not to utilize the automatic renewal provision, because that provision is not “in compliance with * * * subsequent * * * rules * * * as promulgated by the State of Illinois.” We do not find plaintiff‘s arguments to the contrary persuasive.
¶ 44 First, plaintiff argues that rule 320(a)(7) does not relate to its right to “install, service, and maintain VGTs,” therefore, paragraph 1 does not apply to rule 320(a)(7). “The placement of
¶ 45 Second, plaintiff argues that its “obligation to continually comply with Board Rules does not require it to amend contractual terms, absent the promulgation of a constitutional, retrospective rule.” “Because we presume that parties agree to contractual language purposefully, we read the provisions of a contract in light of the whole, not in isolation, and we give effect to each and every word, if possible. Thus, we will not interpret a contract in a way that would nullify its provisions or render them meaningless.” (Internal quotation marks and citations omitted.) Vision Energy, LLC v. Smith, 2025 IL App (3d) 240114, ¶ 54. Accepting plaintiff‘s implicit concession that pursuant to paragraph 1 of the use agreement it must continually comply with Board rules (i.e., subsequent rules), a limitation on that obligation to “retrospective rule[s]”
¶ 46 The Board‘s preadoption statements and this court‘s jurisprudence concerning the prospective application of the amended rule are irrelevant. Plaintiff complains the Board stated the rule would apply prospectively “without exception” but claims that now the Board is implementing an “exception” for use agreements with a change in law provision. We do not find that the Board is implementing an exception to the prospective application of the rule. We also do not find that the Board is departing from its preadoption statements that the rule would apply to use agreements entered on or after its effective date. “The Board” is not applying the rule to plaintiff‘s use agreement—plaintiff did that. The Board is doing nothing more than recognizing the parties’ right to contract for their mutual obligations under the use agreement and that under this use agreement, the parties agreed to be bound by subsequent rule amendments. See generally, Triple 7 Illinois, LLC v. Gaming & Entertainment Management-Illinois, LLC, 2013 IL App (3d) 120860, ¶ 22 (citing Braye v. Archer–Daniels–Midland, Co., 175 Ill. 2d 201, 222 (1997), for the proposition that “laws and public policy of the state permit and require freedom of contracting between competent parties“).
¶ 47 Plaintiff obligated itself to place VGTs at the establishment in compliance with subsequent rules. That obligation was not prohibited by the rules when plaintiff entered it. (Nor was it required at the time plaintiff entered the use agreement at issue in this case, although now
¶ 48 Because the obligation to comply with future rules was a voluntary undertaking by plaintiff, we have no need to address plaintiff‘s alternative argument that the Board‘s alleged “new interpretation” of rule 320(a)(7) is a “new rule” in violation of the Administrative Procedure Act. Plaintiff‘s obligation to comply with rule 320(a)(7) does not arise by operation of any “rule” or pronouncement of the Board. We reject plaintiff‘s argument that rule 320 is itself void because it is more restrictive than the Act. Plaintiff argues that the only restriction on use agreements in the Act is that they be in writing, whereas rule 320 imposes many more restrictions on use agreements without clear guidance from the legislature.
¶ 49 “[A]dministrative rules can neither limit nor extend the scope of a statute.” (Internal quotation marks and citation omitted.) Outcom, Inc. v. Illinois Department of Transportation, 233 Ill. 2d 324, 340 (2009). Video gaming is controlled by the strictures of the Act. J & J Ventures Gaming, LLC, 2016 IL 119870, ¶ 26 (“gambling on video gaming terminals is permitted in Illinois only as authorized by the Act“). We find that implementing rules setting minimum requirements for the use agreements that are required by the Act is an exercise of the authority granted to the Board by the Act, not an expansion of the scope of the Act. Nonetheless, “intelligible standards or guidelines must accompany legislative delegations of power.” Thygesen v. Callahan, 74 Ill. 2d 404, 408 (1979) (citing Stofer v. Motor Vehicle Casualty Co., 68 Ill. 2d 361 (1977)). Our supreme court has found an unlawful delegation of legislative power where the legislature fails to provide any standards to guide an agency‘s discretion or to communicate the harm the agency is intended to prevent. Thygesen, 74 Ill. 2d at 411. However, the court has found that,
“a legislative delegation is valid if it sufficiently identifies:
‘(1) The Persons and Activities potentially subject to regulations;
(2) the Harm sought to be prevented; and
(3) the general Means intended to be available to the administrator to prevent the identified harm.‘” Thygesen, 74 Ill. 2d at 409 (quoting Stofer, 68 Ill. 2d 361).
¶ 50 We find each requirement is met in this case. The Act sets out the Board‘s authority.
“adopt rules for the purpose of administering the provisions of this Act and * * * prescribe rules, regulations, and conditions * * * (i) regarding the inspection of such establishments and the review of any permits or licenses necessary to operate an establishment under any laws or regulations applicable to establishments, (ii)
to impose penalties for violations of this Act and its rules, and (iii) establishing standards for advertising video gaming.” Id.
The Act mandates use agreements like the one at issue in this case (
¶ 51 We do not agree with plaintiff that only limiting the Board‘s authority to administering the provisions of the Act to the prevention of practices detrimental to the public or video gaming constitutes an “uncabined discretion” granted to the Board. See Thygesen, 74 Ill. 2d at 411. In Thygesen, our supreme court did not find that that limitations such as “promot[ing] economic benefit and stability to * * * the public” were not a sufficient limitation on the administrative agency‘s discretion; rather, the court found that those limitations did not apply to the authority at issue in that case. See Thygesen, 74 Ill. 2d at 411. Further, the Thygesen court based its holding that the legislature unlawfully delegated its power in that case on the combination of the legislature‘s failure “to provide any additional standards to guide [the agency‘s] discretion [or to] communicate to [the agency] the harm it intended to prevent.” Thygesen, 74 Ill. 2d at 411. In this case, the legislature has done both. Furthermore, as the Board points out, our supreme court has acknowledged, without question, that, “Pursuant to its authority under the Act, the Board has adopted regulations” that “define the term ‘use agreement’ * * * and establish the minimum standards that use agreements must satisfy.” J & J Ventures Gaming, LLC, 2016 IL 119870, ¶¶ 28-29. We find that rule 320 is not void.
¶ 52 We affirm the trial court‘s judgments that rule 320(a)(7) is not an unauthorized rule under the Administrative Procedure Act and that rule 320 is not void. We reverse the trial court‘s judgment that the change in law clause in paragraph 1 of the use agreement does not incorporate rule 320(a)(7).
¶ 54 For the foregoing reasons, the judgment of the circuit court of Cook County is affirmed in part, and reversed in part.
¶ 55 Affirmed in part, reversed in part.
JUSTICE HOWSE
APPELLATE COURT OF ILLINOIS