SB2207 97TH GENERAL ASSEMBLY

LRB097 09206 ASK 49341 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB2207

Introduced 2/15/2011, by Sen. James F. Clayborne, Jr.

SYNOPSIS AS INTRODUCED:

230 ILCS 5/33.5 new

Amends the Illinois Horse Racing Act of 1975. Provides that the Illinois Racing Board shall issue licenses for the conducting of exchange wagering, subject to certain conditions. Defines "exchange wagering" as a form of pari-mutuel wagering in which 2 or more persons place identically opposing wagers in a given market. Sets forth provisions concerning definitions, exchange wagering accounts, security policies and safeguards to ensure player protection and integrity, powers of the Board, exchange revenues, fees, and severability. Makes other changes. Effective January 1, 2012.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning gaming.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Horse Racing Act of 1975 is amended by adding Section 33.5 as follows:

(230 ILCS 5/33.5 new)

Sec. 33.5. Exchange wagering license.

(a) As used in this Section:

"Back" means to wager on a selected outcome occurring in a given market.

"Board" means the Illinois Racing Board.

"Exchange" means a system operated by an exchange wagering licensee in which the exchange wagering licensee maintains one or more markets in which persons may back or lay a selected outcome.

"Exchange revenues" means all charges and fees of any kind assessed or collected by an exchange wagering licensee in connection with the submission of any exchange wagers to the exchange wagering licensee by residents of this State.

"Exchange wagers" means wagers submitted to an exchange wagering licensee to be posted in a market on an exchange.

"Exchange wagering" means a form of pari-mutuel wagering in which 2 or more persons place identically opposing wagers in a given market.

"Exchange wagering account" means the account established with an exchange wagering licensee by a person participating in exchange wagering and may include an account established with an advance deposit wagering licensee, as defined in Section 3.29 of this Act.

"Exchange wagering licensee" means a person located within or outside of this State that is authorized to conduct exchange wagering pursuant to this Section.

"Identically opposing wagers" means wagers in which one or more persons offer to lay a selected outcome at the same price at which one or more persons offer to back that same outcome, with the amount subject to the lay being proportionately commensurate to the amount subject to the back.

"Lay" means to wager on a selected outcome not occurring in a given market.

"Market" means, in relation to a given horse race or a given set of horse races, a particular outcome that is subject to exchange wagering as determined by an exchange wagering licensee.

"Matched wager" means the wager that is formed when 2 or more persons are confirmed by the exchange operator as having placed identically opposing wagers in a given market on the exchange.

"Net winnings" means the aggregate amounts payable to a person as a result of that person's winning matched wagers in a pool less the aggregate amount paid by that person as a result of that person's losing matched wagers in that pool.

"Pari-mutuel wagering" means any system whereby wagers with respect to the outcome of a horse race are placed with, or in, a wagering pool conducted by an authorized person, and in which the participants are wagering with each other and not against the person conducting the wagering pool.

"Pool" or "wagering pool" when used in connection with exchange wagering means total of all matched wagers in a given market.

"Price" means the odds for a given exchange wager.

"Unmatched wager" means a wager or portion of a wager placed in a given market within an exchange that does not become part of a matched wager because there are not one or more available exchange wagers in that market with which to form one or more identically opposing wagers.

(b) Notwithstanding any other law or rule to the contrary, exchange wagering by residents of this State and residents of jurisdictions outside of this State on the results of horse races conducted in this State or jurisdictions outside of this State shall be lawful if:

(1) the exchange wagering is conducted by an exchange wagering licensee under this Act;

(2) the exchange wagering is conducted pursuant to, and in compliance with, this Section, any rules adopted by the Board pursuant to this Section, and the provisions of the Interstate Horse Racing Act of 1978, 15 U.S.C. 3001 through 3007, as amended; and

(3) the exchange wagers are submitted to, and accepted by, an exchange wagering licensee in-person, over a direct telephone call, or via communication through other electronic media, including, but not limited to, the Internet and other wireless devices.

(c) A person shall not be permitted to open an exchange wagering account, or place an exchange wager, except in accordance with federal law, this Section, and rules adopted by the Board pursuant to this Section. Only persons with valid exchange wagering accounts may place wagers through an exchange. To establish an exchange wagering account, a person shall be at least 21 years of age and a resident of this State or of another jurisdiction within which the placement of exchange wagers would not be unlawful under federal law or the laws of that jurisdiction.

(d) Prior to issuing an exchange wagering license, the Board must approve of the license applicant's security policies and safeguards to ensure player protection and integrity, including, but not limited to, the following:

(1) Provisions governing the acceptance of electronic applications for persons establishing exchange wagering accounts.

(2) Location and age verification confirmation for persons establishing exchange wagering accounts.

(3) The use of identifying factors to ensure security of individual accounts.

(4) The requirements for management of funds in exchange wagering accounts.

An exchange wagering licensee may not accept from an exchange wagering account holder an exchange wager or series of exchange wagers if the results of the exchange wager or series of exchange wagers would create a liability for the exchange wagering account holder in excess of funds on deposit in his or her exchange wagering account. An exchange wagering licensee shall have the right to suspend or close an exchange wagering account at its discretion.

(e) The Board shall have the power to:

(1) adopt rules setting forth the conditions under which exchange wagering may be conducted in this State consistent with this Section, including the manner in which exchange wagers may be accepted and the requirements for any person to participate in exchange wagering;

(2) adopt rules setting forth the conditions under which all exchange wagering licenses are issued or renewed in this State, including requiring an annual audit of the exchange wagering licensee's books and records pertaining to exchange wagering;

(3) revoke, suspend, or refuse to renew a license pursuant to the authority granted to the Board under this Section;

(4) adopt rules governing when an exchange wagering licensee may cancel or void a matched wager or part of a matched wager and the actions that an exchange wagering licensee may take when all or part of a matched wager is cancelled or voided;

(5) reasonably require the licensure or registration of officers or directors of any exchange wagering licensee; and

(6) adopt any other rules necessary for the enforcement of this Section.

(f) An exchange wagering licensee shall not be required to include any pools of exchange wagers in the wagering pools at the track or fair conducting the races nor shall an exchange wagering licensee be required to retain, withhold, or take out any amounts from any exchange wagers, nor pay any tax, fee, surcharge, or assessment in connection with any exchange wagering, except as set forth in subsection (h) of this Section.

(g) Subject to the approval of the Board, an exchange wagering licensee shall be permitted to collect exchange revenues in the manner and amounts determined by the exchange wagering licensee, including, but not limited to, assessing a surcharge on any person's net winnings.

(h) The Board may require each exchange wagering licensee to (1) pay a annual fee to cover any reasonable costs of the Board associated with the licensing or regulation of exchange wagering by the exchange wagering licensee and (2) pay such portions of the exchange wagering licensee's exchange revenues as may be required under this Act.

(i) An exchange wagering licensee may cancel or allow to be cancelled any unmatched wagers, without cause, at any time.

(j) Exchange wagers placed on a market after the start of a race shall be lawful if authorized by the Board and the race track or fair conducting the races on which the exchange wager is made.

(k) The provisions of this amendatory Act of the 97th General Assembly are severable under Section 1.31 of the Statute on Statutes.

Section 99. Effective date. This Act takes effect January 1, 2012.