Gold Rush Amusements and Accel Entertainment, two of the three largest video gaming terminal (VGT) operators in Illinois, have been engaged in a heated battle since July 2021.
That’s when Accel tried to convert two loans it made to Gold Rush in 2019, totaling $30 million, into debt equity. In December, Illinois Gaming Board (IGB) Administrator Marcus Fruchter rejected Accel’s request. In February, the board voted unanimously to uphold Fruchter’s decision.
Now, Gold Rush has filed a 25-page lawsuit in Cook County, Illinois, accusing Accel of “illegal and tortious conduct.” In the court filing, Gold Rush alleges Accel CEO Andy Rubenstein “expressly assured Rick Heidner of Gold Rush that Accel would not exercise the conversion rights unless Gold Rush was unable to pay back the loans.”
In addition, the lawsuit states Rubenstein said Accel was not interested in being a minority shareholder of Gold Rush prior to the execution of the 2019 loan documents. The two sides amended the original agreement in December 2020, giving Gold Rush the “unequivocal right to repay the loans at any time with no prepayment penalty.”
Gold Rush further claims that soon after the original loan was executed, Accel representatives spread false statements, saying that Gold Rush was going to lose its license, Accel would own Gold Rush, Gold Rush’s VGTs would be shut off and that Heidner would be indicted.
The lawsuit also claims Rubenstein knew about Accel’s misinformation campaign against Gold Rush but did nothing to stop it. Also, the suit states Rubenstein “issued a directive to his sales team that Accel would pay a ‘bounty’ for any account Accel could take away from Gold Rush.”
In July 2021, Gold Rush alleges Accel began the process to convert the loan into debt equity despite the previous promises Rubenstein supposedly made to Heidner. On July 30, Gold Rush was able to procure enough cash to pay off one of the loans and made a wire transfer to Accel, which was returned a few days later. Eventually, however, Accel emailed a conversion notice of the wired funds to Gold Rush.
This past March, Gold Rush informed Accel it had funds available to repay the full loan amount, plus interest, and requested an exact payoff amount. Court papers claim Accel refused to provide payoff amounts. Accel then then filed lawsuits against Gold Rush, for allegedly breaching the loan contract, and against the IGB, challenging the decision to not allow the debt to be converted to equity.
In the lawsuit, Gold Rush noted Accel operates about 14,000 VGTs, nearly four times as many as Gold Rush; Accel has grown by acquiring competitors throughout Illinois.
The bottom line: Gold Rush claims that “as a result of Accel’s wrongful conduct and unfair competition,” the company’s “standing, reputation, prestige, goodwill and business were damaged,” which “resulted in a loss of revenue and profits for Gold Rush.”
The company seeks compensatory and punitive damages plus interest, attorney’s fees and other court costs covering six counts, including violations of the Illinois Antitrust Act, Fraudulent Inducement, Breach of Contract and the Illinois Declaratory Judgment Act.
