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Delaware North acquires Illinois-based video gaming terminal operator

Delaware North, the Buffalo-based hospitality and tourism giant, has acquired Gaming Entertainment & Management, the third-largest video gaming terminal route operator in Illinois, the Buffalo company announced Thursday.

GEM, based in Naperville, Ill., operates about 1,800 terminals at 438 high-traffic locations such as bars, restaurants and convenience stores across the state. Illinois puts a restriction of no more than five terminals per route location, and revenue from the terminals is split roughly equally among the location owner, the terminal operator and the state.

Delaware North, which operates regional destination casinos, said the video gaming terminal industry has grown steadily since the system launched in Illinois in 2012, and GEM has grown significantly since buying a smaller terminal operator last fall. Delaware North officials said in a statement that they believe the Illinois video gaming terminal model is likely to be repeated in other states and territories.

The company said the acquisition of GEM complements Delaware North’s existing holdings of traditional casinos. Terms of the acquisition were not disclosed.

The GEM transaction is the second major acquisition for Delaware North’s gaming business in 2016.

In March, the company bought Ruby Seven Studios, a maker of casino-related games that people play on their smartphones and through their Facebook accounts. In April, the Ruby Seven Studios launched Lucky North, Delaware North’s own mobile and online social gaming site.