Illinois Gaming Board OKs gaming license for clout-heavy lawyer James J. Banks in an about-face
But the state agency won’t say what new evidence prompted it to approve James J. Banks — an Illinois Tollway board member under five governors — for video poker machines and other gambling devices.
By Tim Novak and Robert Herguth
Jan 13, 2023, 5:30am CST
Nearly two years ago, the Illinois Gaming Board denied a coveted and potentially lucrative video gambling license sought by James J. Banks, a clout-heavy Chicago lawyer and banker who’d served on the Illinois Tollway board under five governors, saying his “associations” threatened to impugn the gaming industry.
But now the gaming board has reversed course, voting 3-0 in December to allow Banks’ Gaming Productions, LLC, to secure what’s called a terminal operator license. That means he can now distribute and draw income from video poker machines and similar devices in businesses such as bars and restaurants in Illinois communities where such gambling is legal. Video gambling machines, though allowed in many suburbs and downstate communities, are illegal in Chicago.
Why the change of heart?
Gaming regulators won’t talk about exactly why, citing privacy rules.
But they say Banks’ company provided evidence that eased concerns outlined in an April 27, 2021, license denial letter from Marcus D. Fruchter, the administrator of the agency that regulates legal gambling in Illinois.
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Fruchter’s letter noted that applicants for gaming licenses are required to have “good character, honesty and integrity” and said Banks “did not meet the requirements.”
“The board conducted an investigation which included a review of your business and social associations,” Fruchter wrote to Banks then. “Based on the results of that investigation, the board finds that your business and social associations would adversely affect public confidence and trust in video gaming and would discredit or tend to discredit the Illinois gaming industry.”
As a result, Fruchter wrote, the gaming board decided that granting Banks’ company the license it wanted “would not serve the interests of the citizens of Illinois.”
Illinois Gaming Board administrator Marcus Fruchter.
He also said that Illinois law says the board “may not grant any video gaming license until the board is satisfied that the applicant is” someone who “does not present questionable business practices and financial arrangements incidental to the conduct of video gaming activities” and who doesn’t associate with “persons of notorious or unsavory reputation or who have extensive police records.”
Fruchter didn’t name names regarding the gaming board’s concerns over Banks’ associations.
And he says he still won’t discuss those.
Asked about the about-face in granting Banks a license, Charles Schmadeke, who chairs the gaming board, says Banks’ company provided “further evidence” to address the previous concerns and that, based on an additional “review” by the agency, he and his two colleagues on the board voted to give Banks the license.
“He provided additional information to show there was nothing in his background that should make him ineligible to be involved in the gaming industry,” Schmadeke says.
Illinois Gaming Board chairman Charles Schmadeke.
He says the gaming board hadn’t erred in raising the previous questions but that he and the other board members have now decided Banks’ associations wouldn’t “have any sort of negative impact on gaming.”
Banks and his attorney Paul T. Jenson won’t talk about the people who previously were flagged by the gaming regulators or what evidence they offered to get the gaming board to award Banks a gambling license.
In a written statement, Banks’ spokeswoman said: “The IGB previously made a decision to deny Gaming Productions a license based on the information it had at the time. After Mr. Banks provided additional extensive documentation, the IGB rescinded its preliminary decision and determined Mr. Banks provided sufficient information and therefore qualified for a terminal operator license for Gaming Productions.”
Banks’ late father Samuel V.P. Banks was a criminal defense lawyer who represented reputed mob figures. Banks now runs what was his father’s law firm, but it no longer specializes in criminal defense and focuses on helping developers get zoning approval from City Hall.
Former Ald. William J.P. Banks, Banks’ uncle, represented the Northwest Side’s 36th Ward on the Chicago City Council for more than 25 years and was long its zoning committee chairman, which led him to recuse himself from voting on matters brought to the committee by his nephew.
In 2006, Banks founded Belmont Bank & Trust on the Northwest Side and is the chairman of its board.
His father was once on the board of directors, and other members of the bank’s board have included Fred B. Barbara, a longtime friend of former Mayor Richard M. Daley and waste-hauling magnate whose trucking company made a fortune hauling garbage for the city of Chicago, and former state Sen. James A. DeLeo, a longtime Banks friend and business associate who once owned a casino in Aruba.
Barbara is no longer on the bank board, but he and Banks remain business partners as the longtime landlords of Tavern on Rush, a popular restaurant owned by Phil Stefani whose lease expired a few months ago. Banks and Barbara plan to open a new restaurant in the building.
The names of four current or past Belmont Bank board members — Banks, his father, DeLeo and Barbara — came up during the landmark 2007 Operation Family Secrets trial of Chicago Outfit bosses and others, though none of the four was charged:
A convicted burglar testified that he bribed police officers by passing money through Samuel Banks.
A mobster’s widow testified that James Banks and DeLeo cheated her when she sold them a restaurant.
And Nick Calabrese — a mob hit man who, at the Family Secrets trial, became the first “made” member ever to testify against the Chicago Outfit — testified that Barbara participated in the bombing of an Elmwood Park restaurant in the early 1980s.
Former state Sen. James DeLeo.
While a state legislator, DeLeo was indicted in 1989 by a federal grand jury in the Operation Greylord investigation, charged with failing to pay taxes on bribes that prosecutors said he took when he was a top aide to Cook County’s chief traffic court judge. The jury couldn’t reach a verdict, and DeLeo ended up pleading guilty to a misdemeanor in a deal that let him hold onto his legislative seat.
Belmont Bank has been a regular contributor to political campaigns, including giving $2,000 in October to former Illinois House Republican leader Jim Durkin’s campaign fund, and $1,000 in 2021 to the campaign fund for Elmwood Park Mayor Angelo “Skip” Saviano, a former state legislator.
Gaming board members are appointed by the governors. Two of the five seats are currently vacant. Fruchter wouldn’t say whether he had discussed Banks’ gambling license with Gov. J.B. Pritzker or his staff.
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A Pritzker spokeswoman says, “The governor’s office respects the independence of the Illinois Gaming Board” and that nobody from Pritzker’s office “has ever given the IGB any directives, instructions or pressure about what items should or shouldn’t be on the agenda or what actions or decisions the board should take on any particular regulatory, licensure or disciplinary matter.”
Asked whether Banks or anyone acting on his behalf contacted Pritzker, the governor’s spokeswoman says: “I am not aware of any outreach directly to the governor. An attorney for Banks reached out to a governor’s office staffer in November 2021, and the staffer never returned the call.”
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