For nearly three years, Jeffrey Rehberger has fought the state of Illinois’ attempts to take away his company’s lucrative video-gambling license.

Gambling regulators say Rehberger’s Lucky Lincoln Gaming violated state law, doing business in a way “that would discredit or tend to discredit the Illinois gaming industry or the state of Illinois,” records show.

And they also allege Rehberger engaged in “witness harassment” to try to get a former sales representative to change his testimony against him in an Illinois Gaming Board investigation.

But those big licensing problems with the gaming board did not prevent Rehberger from putting himself in prime position to cash in on the huge, new state-regulated bonanza — cannabis dispensary licenses.

Despite the state’s long-running efforts to close down Lucky Lincoln, another company led by Rehberger has emerged as one of only 21 applicants deemed qualified to split the 75 new state licenses for pot shops.

That decision by officials regulating the licensing process has prompted heated criticism, with losing bidders and some Illinois lawmakers alleging the process has been secretive and unfair to minorities.

In response to the outcry, Democratic Gov. JB Pritzker announced last month that the rejected applicants would be allowed to try to correct weaknesses in their bids, effectively getting a second chance to enter a lottery for the licenses.

But the Illinois Department of Financial and Professional Regulation — which is overseeing the dispensary licenses — already says Rehberger’s application was strong enough to meet the agency’s highest standards.

IDFPR officials announced on Sept. 3 that Rehberger’s Fortunate Son Partners LLC would have a chance at winning licenses in 17 of 18 regions of the state, where officials plan to spread out the new dispensaries. Fortunate Son Partners is vying to win as many as 10 of the 47 licenses allocated for the Chicago-Naperville-Elgin region, according to IDFPR’s announcement last month.

Like they did with gambling, Illinois officials have promised to strictly regulate the legalization of marijuana, vowing never to prioritize profit over integrity and enacting strict standards to rule out operators with checkered pasts.

Rehberger says his marijuana venture’s application got a perfect score. That’s despite the fact the Illinois gaming board has been pushing to take away Lucky Lincoln’s license since late 2017, alleging a long list of violations, and Rehberger remains locked in a court battle with regulators.

The pot-shop licensing process required Rehberger and all the “principal officers” of companies seeking to run the dispensaries to disclose regulatory issues that their other companies may have encountered. According to IDFPR’s website, applicants have to answer this question: “Have you ever been a principal officer, manager, board member or owner of a business or non-for-profit organization, other than a cannabis business, that had its license or registration fined, censured, suspended or revoked?”

In an interview with WBEZ this week, Rehberger said he is a principal officer of Fortunate Son Partners but he said he could not recall whether he told IDFPR about his issues with state gambling regulators.

“To be honest, it’s been about a year since we went through that” application process, Rehberger said. “I know we responded to all of the questions truthfully and accurately.”

WBEZ filed a request under the Illinois open-records law for his company’s successful application. IDFPR officials denied the request, saying the applications for the pot-dispensary licenses are “confidential” under an exemption to the state’s Freedom of Information Act and the Illinois statute that legalized marijuana.

Rehberger also declined to specifically discuss the gaming board charges against Lucky Lincoln, saying only, “It’s been going slower than we would have hoped. It’s with the attorneys. I know there’s been some dialogue with the gaming board. I hope there will be a resolution to all those matters.”

Almost immediately after the state went after Lucky Lincoln’s license, the company sued gaming regulators in a case that remains mired in court, records show.

Through a spokesman, the Illinois Gaming Board’s administrator, Marcus Fruchter, declined to be interviewed. The spokesman said the agency could not comment on “pending disciplinary actions or investigations.”

A major player in video gambling

But state documents and Cook County Circuit Court records reveal the extended and bitter legal wrangling over Lucky Lincoln’s video-gambling license, with the regulators once considering a fine of about $300,000 against the thriving company.

Illinois legalized video gambling in 2009. In addition to the state’s 10 casinos, as many as six machines are now permitted at each of the thousands of licensed video-gambling locations across the state. The devices have transformed Illinois into the state with the most places to place a bet in the country, surpassing even Nevada, a 2019 investigation by ProPublica Illinois and WBEZ found.

Illinois has one of the lowest taxes on video gambling in the country, with the state and municipalities keeping a total of 34 percent of the take from the machines. The rest of the profit is divided equally between the businesses that house the machines and what are known as “terminal operators.”

Rehberger, 33, said he began Lucky Lincoln in 2013 when he was living at his mother’s house in Highland, Ill., near St. Louis, and he still is the sole owner of the company, now based in the Portage Park neighborhood on Chicago’s Northwest Side.

Lucky Lincoln got a terminal operator’s license in 2014. Now, Rehberger boasts in his online networking profile that Lucky Lincoln has nearly 1,000 machines at more than 170 locations, making it one of the 10 biggest terminal operators in Illinois.

According to the gaming board, Lucky Lincoln’s income from the machines grew to $48.7 million in 2019, and the company’s devices earned it another $29.8 million between the start of the year and Sept. 30, despite the temporary suspension of video gambling because of the coronavirus pandemic.

Yet, just as Rehberger was seeing how fortunate you can get as a terminal operator in Illinois, he also began to learn how tightly regulated the video-gambling industry can be, too.

In December 2017, the gaming board filed a “complaint for disciplinary action” against Lucky Lincoln, putting its license at risk of revocation within 21 days. According to the original complaint and two subsequent filings, Lucky Lincoln faces a litany of detailed charges from Illinois gambling regulators.

The state alleged that the company broke the law against terminal operators offering any “incentive” to businesses that host video-gambling machines. As proof of that infraction, the gaming board cited a September 2017 email from Rehberger to a business owner in Pana, a town in central Illinois. Lucky Lincoln allegedly offered the potential client “to pay for your entire gaming room construction and signage.”

In the email, Rehberger wrote that the gaming board had changed its rules to allow that, although nothing of the sort had happened, according to state officials. And Rehberger allegedly said Lucky Lincoln had “assisted with a lot of construction” at other locations where it did business in Pana and elsewhere across the state.

Another charge focused on accusations that Lucky Lincoln did business with a man who had been the subject of a disciplinary case in 2015. In that situation, the gaming board issued a $300,000 fine against a different video-gambling terminal operator and ordered it to “disassociate” from the man, Chad Michael.

A few months later, in February 2016, regulators learned that Michael was working with Lucky Lincoln. They requested a meeting with Lucky Lincoln, and at the meeting, Rehberger promised Michael would have “absolutely no connection” with his company, according to state records. The gaming board’s administrator told Lucky Lincoln any violation of that promise “would result in disciplinary action.”

But a state investigation “yielded evidence” that Michael continued to associate with Lucky Lincoln after the meeting with regulators, with Michael allegedly communicating with village officials in west suburban Darien and negotiating leases for businesses that used the company’s machines. On Thursday, Michael said gaming officials “had no authority” to tell him not to work with Lucky Lincoln but that he had stopped working with Rehberger anyway after the board said he had to leave the company.

A third charge in the state’s 2017 disciplinary case accused Rehberger of failing to disclose his “significant influence” over another company that runs 39 licensed video-gambling parlors in Illinois.

$5,000 cash and a Rolex for a ‘good account’

The gambling board’s aggressive action to try to take Lucky Lincoln’s license was exceedingly rare.

The agency has granted more than 70 terminal operator licenses since 2012, and the board has managed to revoke the license of only one of those companies, according to agency’s website. Besides Lucky Lincoln, the state currently is trying to shut down just one more terminal operator, Rick Heidner’s Gold Rush Gaming.

Lucky Lincoln sued the gaming board 20 days after receiving “notification of disciplinary action” from the agency. The suit alleges that the board violated the state’s Open Meetings Act because officials “did not properly move to go into closed session,” where they discussed the sanction.

In court filings, the company denied the gaming board’s disciplinary charges.

Representing Lucky Lincoln in the case are two lawyers who had served as general counsel to the gaming board.

One of them, Donna More, made two unsuccessful runs for the Democratic nomination for Cook County state’s attorney, including her campaign in the primary in March.

The other, William Bogot, has faced his own investigation by the gaming board. ProPublica Illinois reported in March on Bogot’s correspondences with a childhood friend who became the biggest terminal operator in the state.

More and Bogot are partners in the Chicago law firm of Fox Rothschild LLP. According to Bogot’s bio on the firm’s website, “Bill is Co-Chair of the firm’s Cannabis Law Practice.

More and Bogot did not return phone and email messages.

But the lawsuit against gaming regulators did not deter the state from continuing to investigate Lucky Lincoln — and from leveling additional, more serious charges against Rehberger.

In March 2018, the state amended its disciplinary complaint against Lucky Lucky to allege that the company’s sales agents offered $5,000 in cash to businesses that agreed to work with them. In one case, a Lucky Lincoln employee named Fatmir Dikenoski and another sales agent offered money and a Rolex to a restaurant owner, state officials allege.

Dikenoski cooperated with the probe, allegedly telling gaming board agents that Rehberger directed him to offer the inducements to the potential clients. According to state records, Rehberger told Dikenoski, “When it is a good account, we will offer anything to make it happen.”

When Rehberger learned about Dikenoski’s cooperation with the investigation, regulators say he tried to convince him to change his story, suggesting Dikenoski “would benefit financially from recanting his prior testimony.”

And yet another gaming board complaint against Lucky Lincoln in December 2019 alleged Rehberger “sought to improperly influence witness testimony and threatened to sue the witness if the witness did not change his testimony and recant prior statements made to the board about alleged misconduct by [Lucky Lincoln Gaming] and Rehberger.”

Dikenoski could not be reached for comment.

Alleged robbery in DuPage County

At almost exactly the same time its legal battle with the gaming board was beginning, Lucky Lincoln found itself at the center of a still-unsolved criminal case in Downers Grove. Records obtained by WBEZ show police in the DuPage County suburb and state police have been working together to investigate a major robbery that was reported at a Lucky Lincoln facility in Downers Grove.

According to gaming board records, the agency put out a “security alert” about the “armed robbery” that happened at about 9 p.m. on Jan. 11, 2018.

“Three masked offenders brandishing a handgun ambushed a collector of Terminal Operator Lucky Lincoln Gaming LLC as the employee entered the company’s storage facility in Downers Grove,” the gaming board said in the alert to terminal operators. “The offender stole in excess of $300,000 US currency. The offender beat the employee and tied him up. The employee managed to pull the fire alarm after the offenders left the facility.”

Six days after the incident in the suburbs, a special agent from the Illinois State Police’s Statewide Gaming Command told Downers Grove police that Lucky Lincoln was facing revocation of its license for “questionable business practices” and that the situation with regulators “may have relevance to the case” of the heist.

“The estimated fine the [Illinois Gaming] Board was moving towards was roughly $300,000,” the special agent, Darin Cygan, wrote in an email to a Downers Grove detective.

Within a couple months, emails show, investigators suspected the burglary was an inside job. A former Lucky Lincoln employee told police he thought a man who works with the company was responsible for the alleged crime, Downers Grove Det. Robert Bylls told Cygan in March 2018.

Nearly three years later, though, nobody has been charged. Downers Grove police denied WBEZ’s requests for its records of the case, saying they could not release them because their investigation is ongoing.

The gaming board’s spokesman also declined to comment, and Rehberger said he had no further information about the incident.

‘Every single point counts’

As Lucky Lincoln continued to fight with the gambling board, Rehberger started Fortunate Son Partners, the pot-shot company, nearly a year ago, state records show. At the time, he was listed as the sole manager and registered agent. Two months later, the company added one other manager, Christopher Colantino of Springfield.

Rehberger said he met Colantino through the man’s brother. “Putting the application together, I needed a partner,” Rehberger said.

Rehberger credited the application’s perfect score to Colantino’s status as a military veteran.

“A lot of people thought [having a veteran on the team] wasn’t a necessary requirement,” Rehberger said. “Every single point counts.”

Rehberger would not say which branch of the military Colantino had served in but he said Colantino now is majority owner of Fortunate Son Partners. Colantino did not respond to messages.

Fortunate Son Partners and the other winning applicants for the cannabis license lottery were in line to receive licenses quickly. But the process immediately generated a huge outcry, particularly from the unsuccessful bidders. They allege that the process favored white, wealthy and well-connected applicants, even though Illinois leaders had promised they would spread around the wealth of the newly legalized marijuana licenses.

State Rep. La Shawn Ford, D-Chicago, called for re-evaluating not only those who lost and want to re-submit their application — as the governor has promised to allow — but also all the winners, too.

Told about the allegations against Rehberger, Ford said if they’re true, he was “definitely the type of business owner the state would not want to give a new license.”

Illinois’ cannabis law allows the state to deny a license to anyone “who has engaged in a pattern or practice of unfair or illegal practices, methods, or activities in the conduct of owning a cannabis business establishment or other business.”

“I think the question is, did [marijuana-shop regulators] know about this and did they do a thorough investigation,’ Ford said of Rehberger. “Did they say, ‘Oh, it’s OK, we accept his transgressions’? Or did they not investigate him at all?’

IDFPR officials declined to say whether they were aware of Rehberger’s legal battle with state gambling regulators. And the gaming board’s spokesman also said he had “no comment” when asked whether the agency had been in contact with IDFPR officials about its disciplinary cases against Lucky Lincoln.

Dan Mihalopoulos is an investigative reporter on WBEZ’s Government & Politics Team. Mariah Woelfel is a general assignment reporter.