A federal jury in Chicago has found James T. Weiss guilty on multiple counts of fraud, bribery, and making false statements to the FBI. Weiss is the manager of Collage LLC, a company manufacturing retail gaming devices, which it claims are a form of sweepstakes, legal under federal law. The charges against him stem from accusations that he bribed a state lawmaker in an attempt to pass legislation to help the sweepstakes industry.
According to a press release from the Department of Justice, evidence at trial revealed that in 2018 and 2019, Weiss paid thousands of dollars in bribes to Luis Arroyo through the latter’s private lobbying firm, Spartacus 3 LLC. Arroyo was an elected official in the House of Representatives at the time. Reportedly, Collage was transferring $2,500 to Spartacus monthly, ostensibly to lobby Chicago City Council against banning the machines.
The two then attempted to expand the scheme to include then-Senator Terry Link. At that point, everything came crashing down.
Arroyo was also charged with wire fraud for accepting the bribes and pleaded guilty in 2021. The following year, he received a sentence of five years in federal prison and remains behind bars.
Weiss awaits sentencing but could end up with a stiffer penalty than Arroyo. The wire fraud charges carry a maximum sentence of 20 years in federal prison apiece. The maximum for the bribery charges is 15 years, and lying to federal agents could be up to another five.
Sweepstakes Machines a Contentious Issue in Illinois
Video gaming terminals (VGTs) have become an essential part of the Illinois economy. Fears of the impact on VGT revenue are one reason the state hasn’t had much success passing iGaming legislation.
However, they’re not available everywhere in the state. Municipalities can decide on an individual basis whether or not to allow them. Where they’re not legal, sweepstakes businesses like Collage see an opportunity.
Their devices operate on a legal logic similar to Chumba Casino, Pulsz, and other sweepstakes-model online casinos, but in the retail space. While some of those companies have faced lawsuits related to their underlying social casino operations, the sweepstakes component itself hasn’t faced a legal test. However, Fliff, a sportsbook-like product using the same model, is now accused of violating California’s laws against sports betting.
Weiss had attempted to bribe Arroyo and Link to pass legislation to formalize the legality of his machines. He wanted to ensure they could continue operating, even in municipalities that had said “no” to VGTs.
Even now, sweepstakes machines can be found in many parts of the state. An attempt is underway in the legislature to do the opposite of what Weiss wanted and formally outlaw them. However, the retailers that host the devices are opposed to the plan. The bill was successfully passed in the Senate but appears to be stalled in committee in the House. The legislature has now adjourned for the year. However, sessions in Illinois last two years, so the bill will remain active in 2024 and could pass at that time.
This is a familiar scenario. Economic pressures tend to make it difficult to clarify the legal status of gray market products once they’ve taken root. Attempts to ban them meet resistance from constituents who rely on the revenue they bring. Conversely, attempts to legalize and regulate them come under fire from anti-gambling groups and the legal gambling industry alike.
Link Admits to Wearing a Wire
Following Arroyo’s arrest in 2019, there was intense speculation that Link had helped gather evidence for the FBI. The charges against Arroyo included mentions of a cooperating witness, but even now, federal authorities haven’t officially said who.
Last week, however, Link acknowledged that he wore a wire and recorded Arroyo’s attempts to bribe him on Weiss’s behalf. He did so in federal court, testifying while awaiting sentencing on tax evasion charges.
It was those charges that led to Link agreeing to cooperate with the FBI in the first place.
Link has admitted to underreporting his income tax and improperly spending money from his campaign account. Some of the money, he says, went to help friends. However, he has also admitted to using some of it for gambling.
Between Arroyo’s guilty plea and Link’s testimony, Weiss faced long odds in court. However, unlike Arroyo, he maintained his innocence until the end. The jury was unconvinced. His sentencing date has been set for Oct. 11, 2023.