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Full Text of HB0479  100th General Assembly

HB0479sam001 100TH GENERAL ASSEMBLY

Sen. Kwame Raoul

Filed: 5/31/2017

 

 


 

 


 
10000HB0479sam001LRB100 06768 AMC 27359 a

1
AMENDMENT TO HOUSE BILL 479

2    AMENDMENT NO. ______. Amend House Bill 479 by replacing
3everything after the enacting clause with the following:
 
4
"Article 1. Fantasy Sports Contest Act

 
5    Section 1-1. Short title. This Article may be cited as the
6Fantasy Sports Contest Act. References in this Article to "this
7Act" mean this Article.
 
8    Section 1-5. Legislative intent.
9    (a) The General Assembly hereby finds and declares that:
10        (1) Interactive fantasy sports contests are contests
11    of skill in which fantasy or simulation teams are selected
12    based upon the skill and knowledge of the participants and
13    not based solely on the membership of an actual team.
14        (2) Interactive fantasy sports contests are not wagers
15    on future contingent events not under the contestants'

 

 

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1    control or influence because contestants have control over
2    which players they choose and the outcome of each contest
3    is not dependent upon the performance of any one player or
4    any one actual team. The outcome of any interactive fantasy
5    sports contest does not correspond to the outcome of any
6    one real-life competitive event. Instead, the outcome
7    depends on how the performances of participants' fantasy
8    roster choices compared to the performance of others'
9    roster choices.
10    (b) Based on the findings in this Section, the General
11Assembly declares that interactive fantasy sports contests do
12not constitute gambling as defined in Section 28-1 of the
13Criminal Code of 2012.
14    (c) The General Assembly further finds that as the Internet
15has become an integral part of society, and interactive fantasy
16sports contests a major form of entertainment for many
17consumers, any interactive fantasy sports enforcement and
18regulatory structure must begin from the bedrock premise that
19participation in a lawful and licensed interactive fantasy
20sports industry is a privilege and not a right, and that
21regulatory oversight is intended to safeguard the integrity of
22the games and participants and to ensure accountability and the
23public trust.
 
24    Section 1-10. Definitions. As used in this Act:
25    "Authorized player" means an individual located in this

 

 

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1State that participates in an interactive fantasy sports
2contest offered by an interactive fantasy sports operator.
3    "Beginner fantasy sports player" means an individual who is
4at least 21 years of age and who has entered fewer than 51
5interactive fantasy sports contests offered by a single
6interactive fantasy sports operator.
7    "Board" means the Illinois Gaming Board.
8    "Collegiate sport or athletic event" means a sport or
9athletic event offered or sponsored by or played in connection
10with a public or private institution that offers education
11services beyond the secondary level.
12    "Entry fee" means cash or cash equivalent that is paid by
13an authorized player to an interactive fantasy sports operator
14to participate in an interactive fantasy sports contest offered
15by that interactive fantasy sports operator.
16    "High school sport or athletic event" means a sport or
17athletic event offered or sponsored by or played in connection
18with a public or private institution that offers education
19services at the secondary level.
20    "Highly experienced player" means an authorized player who
21has:
22        (1) entered more than 1,000 interactive fantasy sports
23    contests offered by a single interactive fantasy sports
24    operator; or
25        (2) won more than 3 prizes valued at $1,000 each or
26    more from a single interactive fantasy sports operator.

 

 

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1    "Interactive fantasy sports contest" means a fantasy
2contest, in which:
3        (1) the value of all prizes and awards offered to
4    winning participants are established and made known to the
5    participants in advance of the contest and their value is
6    not determined by the number of participants or the amount
7    of any fees paid by those participants;
8        (2) all winning outcomes are determined predominantly
9    by accumulated statistical results of the performance of
10    individual athletes in real-world professional athletic
11    competitions; a professional athletic competition does not
12    include any amateur or collegiate level sport; and
13        (3) no winning outcome is based on the score, point
14    spread, or any performance or performances of any single
15    actual team or combination of such teams or solely on any
16    single performance of an individual athlete or player in
17    any single actual event.
18    "Interactive fantasy sports gross revenue" means the
19amount equal to the total of all entry fees that an interactive
20fantasy sports operator collects from all players, multiplied
21by the location percentage for the State.
22    "Interactive fantasy sports operator" means a person or
23entity that engages in the business of offering, by means of
24the Internet, a smart phone application, or other similar
25electronic or digital media or communication technologies,
26multiple interactive fantasy sports contests to persons.

 

 

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1    "Interactive fantasy sports platform" means any website,
2smart phone application, or other portal providing access to an
3interactive fantasy sports contest.
4    "Location percentage" means, for each interactive fantasy
5sports contest, the percentage, rounded to the nearest tenth of
6a percent, of the total entry fees collected by an interactive
7fantasy sports operator from players located in this State,
8divided by the total entry fees collected by an interactive
9fantasy sports operator from all players in interactive fantasy
10sports contests.
11    "Minor" means a person under the age of 21 years.
12    "Permitted sports event" means a professional sport or
13athletic event or other competitive event. "Permitted sports
14event" does not include a prohibited sports event.
15    "Prohibited sports event" means an amateur sport or
16athletic event, a collegiate sport or athletic event, or a high
17school sport or athletic event.
 
18    Section 1-15. Applicability. This Act and all rules adopted
19under the authority of this Act shall apply only to interactive
20fantasy sports contests for which an authorized player pays an
21entry fee.
 
22    Section 1-20. Licensing.
23    (a) No interactive fantasy sports operator shall
24administer, manage, or otherwise make available an interactive

 

 

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1fantasy sports platform to persons located in the State unless
2licensed by the Board under this Act.
3    (b) A qualified person may apply to the Board for an
4interactive fantasy sports operator license to conduct
5interactive fantasy sports contests as provided in this Act.
6The application shall be made on forms provided by the Board.
7The burden is upon each applicant to demonstrate suitability
8for licensure. Each interactive fantasy sports operator shall
9be licensed by the Board. The Board may issue a license for a
10period of up to 2 years or, in the case of interactive fantasy
11sports operators with annual interactive fantasy sports gross
12revenues less than $100,000, for up to 3 years.
13    (c) Each person seeking and possessing a license as an
14interactive fantasy sports operator shall submit to a
15background investigation conducted by the Board with the
16assistance of the State Police or other law enforcement. To the
17extent that the corporate structure of the applicant allows,
18the background investigation shall include any or all of the
19following as the Board deems appropriate or as provided by
20rule: (i) each beneficiary of a trust, (ii) each partner of a
21partnership, (iii) each member of a limited liability company,
22(iv) each director and officer of a publicly or non-publicly
23held corporation, (v) each stockholder of a non-publicly held
24corporation, (vi) each stockholder of 5% or more of a publicly
25held corporation, or (vii) each stockholder of 5% or more in a
26parent or subsidiary corporation.

 

 

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1    (d) Each person seeking and possessing a license as an
2interactive fantasy sports operator shall disclose the
3identity of every person, association, trust, corporation, or
4limited liability company having a greater than 1% direct or
5indirect pecuniary interest in the interactive fantasy sports
6operator for which the license is sought. If the disclosed
7entity is a trust, the application shall disclose the names and
8addresses of the beneficiaries; if a corporation, the names and
9addresses of all stockholders and directors; if a limited
10liability company, the names and addresses of all members; or
11if a partnership, the names and addresses of all partners, both
12general and limited.
13    (e) All information, records, interviews, reports,
14statements, memoranda, or other data supplied to or used by the
15Board in the course of its review or investigation of an
16application for a license or a renewal under this Act shall be
17privileged and strictly confidential and shall be used only for
18the purpose of evaluating an applicant for a license or a
19renewal. The information, records, interviews, reports,
20statements, memoranda, or other data shall not be admissible as
21evidence nor discoverable in any action of any kind in any
22court or before any tribunal, board, agency, or person, except
23for any action deemed necessary by the Board.
24    (f) No person may be licensed as an interactive fantasy
25sports operator if that person has been found by the Board to:
26        (1) have a background, including a criminal record,

 

 

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1    reputation, habits, social or business associations, or
2    prior activities, that poses a threat to the public
3    interests of the State or to the security and integrity of
4    interactive fantasy sports contests;
5        (2) create or enhance the dangers of unsuitable,
6    unfair, or illegal practices, methods, and activities in
7    the conduct of interactive fantasy sports contests; or
8        (3) present questionable business practices and
9    financial arrangements incidental to the conduct of
10    interactive fantasy sports contests.
11    (g) Any applicant for a license under this Act has the
12burden of proving his or her qualifications to the satisfaction
13of the Board. The Board may adopt rules to establish additional
14qualifications and requirements to preserve the integrity and
15security of interactive fantasy sports contests in this State.
16    (h) An interactive fantasy sports operator that has been
17operating in Illinois for at least 6 months on December 23,
182015 may operate in Illinois until a final decision is rendered
19on the application for an interactive fantasy sports operator
20license.
21    (i) The Board, by rule, shall establish a process for
22license renewal.
23    (j) The Board shall publish a list of all interactive
24fantasy sports operators licensed in this State under this
25Section on the Board's website for public use.
 

 

 

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1    Section 1-25. Operators; required safeguards; minimum
2standards.
3    (a) As a condition of licensure in this State, each
4interactive fantasy sports operator shall implement and
5maintain commercially reasonable measures to:
6        (1) limit each authorized player to one username and
7    one account and verify a fantasy sports player's true
8    identity;
9        (2) prohibit minors from participating in an
10    interactive fantasy sports contest, including:
11            (A) if the interactive fantasy sports operator
12        becomes or is made aware that a minor has participated
13        in one of its interactive fantasy sports contests,
14        promptly refund any deposit received from the minor,
15        whether or not the minor has engaged in or attempted to
16        engage in an interactive fantasy sports contest;
17        however, any refund may be offset by any prizes already
18        awarded;
19            (B) publishing and facilitating parental control
20        procedures to allow parents or guardians to exclude
21        minors from access to any interactive fantasy sports
22        contest or interactive fantasy sports platform; and
23            (C) taking appropriate steps to confirm that an
24        individual opening an account is not a minor;
25        (3) when referencing the likelihood of winning in
26    advertisements or upon interactive fantasy sports contest

 

 

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1    entry, make clear and conspicuous statements that are not
2    inaccurate or misleading concerning the likelihood of
3    winning and the number of winners;
4        (4) enable authorized players to restrict themselves
5    from interactive fantasy sports contests and take
6    reasonable steps to prevent these players from entering an
7    interactive fantasy sports contest from which they have
8    excluded themselves; these restrictions shall include, but
9    not be limited to: (A) interactive fantasy sports contest
10    entry limits, (B) limiting play to interactive fantasy
11    sports contest with entry fees below an established limit,
12    and (C) self-imposed deposit limits less than allowed under
13    this Act; interactive fantasy sports operators shall
14    implement and prominently publish procedures for fantasy
15    sports players to implement the restrictions; fantasy
16    sports players shall have the option to adjust these limits
17    to make them more restrictive of gameplay as often as they
18    like, but shall not have the option to make limits less
19    restrictive of gameplay within 90 days after setting the
20    limits;
21        (5) offer introductory procedures for authorized
22    players, that shall be prominently displayed on the
23    interactive fantasy sports operator's interactive fantasy
24    sports platform, that explain interactive fantasy sports
25    contest play and how to identify a highly experienced
26    player;

 

 

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1        (6) identify all highly experienced players in an
2    interactive fantasy sports contest by a symbol attached to
3    the players' user names, or by other easily visible means,
4    on all interactive fantasy sports platforms supported by an
5    interactive fantasy sports operator;
6        (7) disclose the number of entries a single authorized
7    player may submit to each interactive fantasy sports
8    contest;
9        (8) disclose the maximum number of total entries
10    allowed for each interactive fantasy sports contest;
11        (9) implement measures to comply with all applicable
12    State and federal requirements for data security,
13    including, but not limited to, age verification and
14    location software;
15        (10) offer all authorized players access to his or her
16    account history and account details;
17        (11) ensure funds in fantasy sports players' accounts
18    are held in segregated accounts by the interactive fantasy
19    sports operators for the fantasy sports players that
20    establish the accounts; interactive fantasy sports
21    operators shall implement and prominently publish
22    procedures that:
23            (A) prevent unauthorized withdrawals from fantasy
24        sports player accounts by interactive fantasy sports
25        operators or others;
26            (B) prevent commingling of funds in a fantasy

 

 

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1        sports player's account with other funds, including,
2        without limitation, funds of the interactive fantasy
3        sports operator; fantasy sports player funds shall be
4        segregated from interactive fantasy sports operators'
5        operational funds and any other funds held by the
6        interactive fantasy sports operator; and
7            (C) address reporting on complaints by fantasy
8        sports players that their accounts have been
9        misallocated, compromised, or otherwise mishandled;
10        (12) provide on the interactive fantasy sports
11    platform, in a prominent place, information concerning
12    assistance for compulsive play;
13        (13) prohibit the extension of credit from an
14    interactive fantasy sports operator to an authorized
15    player;
16        (14) develop policies to prevent the use of proxy
17    servers for the purpose of misrepresenting a player's
18    location in order to engage in interactive fantasy sports
19    contests; and
20        (15) prevent one fantasy sports player from acting as a
21    proxy for another.
22    (b) No interactive fantasy sports operator employee,
23principal, officer, director, or contractor shall play any
24interactive fantasy sports contest offered to the general
25public or play in such contest through another person as a
26proxy. For the purposes of this subsection (b), a contractor is

 

 

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1limited to a contractor who can access information of an
2interactive fantasy sports operator related to the conduct of
3an interactive fantasy sports contest that is not available to
4other fantasy sports players. Interactive fantasy sports
5operators shall make these restrictions known to all affected
6individuals and corporate entities.
7    (c) No interactive fantasy sports operator employee,
8principal, officer, director, or contractor shall disclose
9confidential information that may affect interactive fantasy
10sports contest gameplay to any person permitted to engage in
11interactive fantasy sports contest gameplay. Interactive
12fantasy sports operators shall make these restrictions known to
13all affected individuals and corporate entities.
14    (d) No interactive fantasy sports operator shall allow a
15professional athlete whose individual statistics or
16performance may be used to determine any part of the outcome of
17any interactive fantasy sports contest to enter interactive
18fantasy sports contests in the sports in which he or she
19participates. An interactive fantasy sports operator shall
20take commercially reasonable efforts to prevent a sports agent,
21team employee, referee, or league official associated with any
22competition that is the subject of interactive fantasy sports
23contests to enter interactive fantasy sports contests in the
24sport in which he or she participates, nor shall such athlete,
25sports agent, team official, team representative, referee, or
26league official play through another person as a proxy.

 

 

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1        (1) Interactive fantasy sports operators shall take
2    commercially reasonable efforts to obtain lists of persons
3    described in this subsection (d) for the purpose of
4    implementing this subsection (d).
5        (2) Interactive fantasy sports operators, upon
6    learning of a violation of this subsection (d), shall bar
7    the individual committing the violation from playing in any
8    interactive fantasy sports contest by suspending the
9    individual's account and banning the individual from
10    further play, shall terminate any existing promotional
11    agreements with the individual, and shall refuse to make
12    any new promotional agreements that compensate the
13    individual.
14        (3) Interactive fantasy sports operators shall make
15    these restrictions known to all affected individuals and
16    corporate entities.
17    (e) Each interactive fantasy sports operator shall:
18        (1) ensure the value of any prizes and awards offered
19    to authorized players are established and made known to the
20    players in advance of the interactive fantasy sports
21    contest;
22        (2) ensure all winning outcomes reflect the relative
23    knowledge and skill of the authorized players and are
24    determined predominantly by accumulated statistical
25    results of the performance of individuals in permitted
26    sports events;

 

 

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1        (3) ensure no winning outcome is based on the score,
2    point spread, or performance of a single sports team, or a
3    combination of sports teams;
4        (4) ensure no winning outcome is based solely on a
5    single performance of an individual athlete in a single
6    sport or athletic event; and
7        (5) ensure no interactive fantasy sports contest is
8    based on a prohibited sports event.
9    (f) Interactive fantasy sports operators shall implement
10and prominently publish procedures that allow any fantasy
11sports player to permanently close an account at any time and
12for any reason. The procedures shall allow for cancellation by
13any means, including, without limitation, by a fantasy sports
14player on any interactive fantasy sports contest used by that
15fantasy sports player to make deposits into a fantasy sports
16player account. A copy of an interactive fantasy sports
17operator's procedures shall be submitted to the Board and any
18changes shall be submitted within 30 days.
19    (g) When a fantasy sports player account is closed, the
20interactive fantasy sports operator shall refund all funds in
21the account no later than 5 business days after submission of
22the request or 10 business days after submission of any tax
23reporting information required by law, whichever is later,
24unless the interactive fantasy sports operator makes a good
25faith determination that the fantasy sports player engaged in
26fraudulent or other conduct that would constitute a violation

 

 

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1of this Act, rules adopted pursuant to this Act, or the
2interactive fantasy sports operator's policies, in which case,
3upon notice to the fantasy sports player of that determination,
4the withdrawal may be held pending a reasonable investigative
5period to resolve its investigation. For the purposes of this
6subsection (g), a request for withdrawal shall be considered
7honored if it is processed by the interactive fantasy sports
8operator, but delayed by a payment processor, a credit card
9issuer, or the custodian of the financial account.
10    (h) If a prize is awarded to a fantasy sports player with a
11closed account, that prize, to the extent it consists of funds,
12shall be distributed by the interactive fantasy sports operator
13within 5 business days, or 10 business days of submission of
14any tax reporting information required by law, unless the
15interactive fantasy sports operator makes a good faith
16determination that the fantasy sports player engaged in
17fraudulent or other conduct that would constitute a violation
18of this Act or rules adopted pursuant to this Act. If such
19determination is made, then the prize may be withheld, provided
20that it is then awarded to another fantasy sports player in the
21same interactive fantasy sports contest who would have won the
22prize had the fantasy sports player with the closed account not
23participated.
24    (i) An interactive fantasy sports operator shall
25prominently publish all contractual terms and conditions and
26rules of general applicability that affect a fantasy sports

 

 

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1player's account. Presentation of such terms, conditions, and
2rules at the time of on boarding a new fantasy sports player
3shall not suffice.
4    (j) Interactive fantasy sports operators shall have
5prominently published rules that govern when each interactive
6fantasy sports contest shall close or lock. Each interactive
7fantasy sports contest operator shall also prominently
8disclose contest-specific information about the time that the
9interactive fantasy sports contest closes or locks in
10connection with each interactive fantasy sports contest
11offered. An interactive fantasy sports operator shall strictly
12enforce all disclosed closing or lock times.
13    (k) Fantasy sports player's deposits shall be limited to no
14more than $1,000 per month. However, an interactive fantasy
15sports operator may establish and prominently publish
16procedures for temporarily or permanently increasing a fantasy
17sports player's deposit limit, at the request of the fantasy
18sports player, above $1,000 per month. Such procedures shall be
19submitted to the Board.
20    If established by an interactive fantasy sports operator,
21such procedures shall include evaluation of information,
22including income or asset information, sufficient to establish
23that the fantasy sports player can afford losses that might
24result from gameplay at the deposit limit level requested.
25    When a temporary or permanent deposit level limit increase
26is approved, the interactive fantasy sports operator's

 

 

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1procedures shall provide for annual re-certification of a
2player's financial ability to afford losses.
3    (l) The following entry limits apply:
4        (1) interactive fantasy sports operators shall not
5    allow players to submit more than one entry in an
6    interactive fantasy sports contest involving 12 entries or
7    fewer;
8        (2) interactive fantasy sports operators shall not
9    allow players to submit more than 2 entries in an
10    interactive fantasy sports contest involving more than 13
11    entries but fewer than 36 entries;
12        (3) interactive fantasy sports operators shall not
13    allow players to submit more than 3 entries in an
14    interactive fantasy sports contest involving 36 or more
15    entries but fewer than 101 entries; and
16        (4) interactive fantasy sports operators shall not
17    allow fantasy sports players to submit more than 3% of all
18    entries in an interactive fantasy sports contest involving
19    101 or more entries.
20        An interactive fantasy sports operator may establish
21    interactive fantasy sports contests, representing less
22    than 2% of the total number of interactive fantasy sports
23    contests that the interactive fantasy sports operator
24    offers, in which there is no restriction on the number of
25    entries, provided that (i) the interactive fantasy sports
26    operator clearly discloses that there are no limits on the

 

 

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1    number of entries by each player in the interactive fantasy
2    sports contest and (ii) that the cost of participating in
3    the interactive fantasy sports contest is $50 or more per
4    entry.
5    (m) Interactive fantasy sports operators shall not offer an
6interactive fantasy sports contest based on a prohibited sports
7event.
8    (n) An interactive fantasy sports operator shall not
9participate in an interactive fantasy sports contest offered by
10the interactive fantasy sports operator.
11    (o) An interactive fantasy sports operator shall not permit
12unauthorized scripts to be used on interactive fantasy sports
13platforms and shall use commercially reasonable efforts to
14monitor for and to prevent use of such scripts.
15    (p) Interactive fantasy sports operators shall develop and
16prominently display procedures on the interactive fantasy
17sports operator's interactive fantasy sports platform for the
18filing of a complaint by the authorized player against the
19interactive fantasy sports operator. The interactive fantasy
20sports operator shall give an initial response to the player
21within 48 hours after the player files the complaint. The
22interactive fantasy sports operator shall give a complete
23response to the player filing the complaint within 10 business
24days after the initial response is issued. An authorized player
25may file a complaint alleging a violation of the provisions of
26this Act with the Board.

 

 

10000HB0479sam001- 20 -LRB100 06768 AMC 27359 a

1    (q) An interactive fantasy sports operator shall close any
2fantasy player account that is inactive for 2 years and notify
3the account holder that the account has been closed by email to
4the account holder's last known email address. When a fantasy
5sports player account is closed due to inactivity, the
6interactive fantasy sports operator shall take commercially
7reasonable steps to refund all funds in the fantasy sports
8player account within 30 days, subject to the receipt of any
9tax information required by law. In the event that funds in a
10closed fantasy sports player account exceed $5 and cannot be
11refunded and remain unclaimed, the interactive fantasy sports
12operator shall provide notice of the existence of funds to the
13fantasy sports player. Such notice shall be provided by email
14to the account holder's last known email address. In the event
15that funds in a closed fantasy sports player account cannot be
16refunded and remain unclaimed by the fantasy sports player
17after 3 years, such funds shall be paid by the interactive
18fantasy sports operator to the Unclaimed Property Trust Fund in
19the Office of the State Treasurer. The interactive fantasy
20sports operator shall provide notice to the fantasy sports
21player's email address at least 60 days prior to paying the
22funds to the Unclaimed Property Trust Fund.
23    (r) Interactive fantasy sports operators shall develop
24games that are limited to beginner fantasy sports players and
25shall prohibit individuals who are not beginner fantasy sports
26players from participating in those games either directly or

 

 

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1through another person as a proxy. An interactive fantasy
2sports operator shall suspend the account of an individual who
3is not a beginner fantasy sports player and who enters a game
4limited to beginner fantasy sports players and shall ban the
5player from future play.
6    (s) All interactive fantasy sports operators shall develop
7games in which highly experienced fantasy sports players cannot
8participate either directly or through another person as a
9proxy. An interactive fantasy sports operator shall suspend the
10account of a highly experienced fantasy sports player who
11enters a game that excludes highly experienced fantasy sports
12players directly or through another person as a proxy and shall
13ban the individual from future play.
 
14    Section 1-30. Multiple interactive fantasy sports
15platforms; interactive fantasy sports contests. A licensee may
16use multiple interactive fantasy sports platforms and offer
17multiple types of interactive fantasy sports contests.
 
18    Section 1-35. Advertising.
19    (a) Advertisements of interactive fantasy sports operators
20shall not feature: (1) minors (other than professional athletes
21who may be minors), (2) students, (3) schools, colleges, or
22universities, or (4) school, college, or university settings.
23However, incidental depiction of non-featured minors or minors
24accompanying adults shall not be a violation of this subsection

 

 

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1(a).
2    (b) Interactive fantasy sports operators shall not
3advertise on school, college, or university campuses.
4    (c) Interactive fantasy sports operators shall not
5advertise at amateur athletic competitions, except to the
6extent that those competitions are played in stadiums where
7professional competitions are held and where non-digital
8advertisements have been posted, erected, or otherwise
9displayed in a manner that would require substantial effort to
10remove.
 
11    Section 1-40. Powers and duties of the Board.
12    (a) The Board has jurisdiction over and shall supervise all
13interactive fantasy sports contests governed by this Act. The
14Board has all powers and duties necessary and proper to fully
15and exclusively execute the provisions of the Act, including,
16but not limited to, the following:
17        (1) To investigate applicants and determine the
18    eligibility of applicants that best serve the interests of
19    the citizens of Illinois.
20        (2) To provide for the establishment and collection of
21    all fees, fines, and taxes imposed by this Act and the
22    rules adopted under this Act.
23        (3) To suspend, revoke, or restrict licenses; to
24    require the removal of an interactive fantasy sports
25    operator or an employee of an interactive fantasy sports

 

 

10000HB0479sam001- 23 -LRB100 06768 AMC 27359 a

1    operator for a violation of this Act; and to impose civil
2    penalties of an amount up to $5,000 against individuals and
3    $10,000 against licensees for each violation of the
4    provisions of this Act.
5        (4) To approve and deny applications for licensure to
6    conduct interactive fantasy sports contests in this State,
7    and to suspend, refuse or renew, or revoke a license issued
8    under this Act.
9        (5) To accept and investigate complaints of any kind
10    from an authorized player and attempt to mediate the
11    complaints where appropriate.
12        (6) To investigate alleged violations of this Act.
13        (7) To initiate proper enforcement proceedings where
14    such action is deemed by the Board to be necessary or
15    appropriate.
16        (8) To exercise all powers and duties assigned by this
17    Act.
18    (b) The Board shall adopt rules to implement the provisions
19of and effectuate the policy and objectives of this Act as the
20Board may deem necessary or advisable, including, but not
21limited to, the development of the initial form of the
22application for licensure. These rules shall include, but not
23be limited to, responsible protections with regard to
24compulsive play and safeguards for fair play. The Board shall
25not adopt rules limiting or regulating:
26        (1) the rules or the administration of an individual

 

 

10000HB0479sam001- 24 -LRB100 06768 AMC 27359 a

1    interactive fantasy sports contest;
2        (2) the statistical makeup of an interactive fantasy
3    sports contest; or
4        (3) the digital interactive fantasy sports platform of
5    an interactive fantasy sports operator.
6    (c) The Board shall adopt emergency rules to administer
7this Act in accordance with Section 5-45 of the Illinois
8Administrative Procedure Act. For the purposes of the Illinois
9Administrative Procedure Act, the General Assembly finds that
10the adoption of rules to implement this Act is deemed an
11emergency and necessary for the public interest, safety, and
12welfare.
 
13    Section 1-45. Annual report.
14    (a) Each licensee shall annually submit a report to the
15Board by no later than June 30 of each year that shall include
16the following information as it applies to accounts held by
17authorized players located in this State:
18        (1) the number of accounts held by authorized players
19    on all interactive fantasy sports platforms offered by the
20    interactive fantasy sports operator and the number of
21    accounts held by highly experienced players on all
22    interactive fantasy sports platforms offered by the
23    interactive fantasy sports operator;
24        (2) the total number of new accounts established in the
25    preceding year as well as the total number of accounts

 

 

10000HB0479sam001- 25 -LRB100 06768 AMC 27359 a

1    permanently closed in the preceding year;
2        (3) the total amount of entry fees received from
3    authorized players;
4        (4) the total amount of prizes awarded to authorized
5    players;
6        (5) the total amount of interactive fantasy sports
7    gross revenue received by the licensee; and
8        (6) the total number of authorized players that
9    requested to exclude themselves from interactive fantasy
10    sports contests.
11    (b) The Board shall annually publish a report based on the
12aggregate information provided by all interactive fantasy
13sports operators in accordance with this Section, that shall be
14published on the Board's website no later than 180 days after
15the deadline for the submission of individual reports as
16specified in this Section.
 
17    Section 1-50. State tax.
18    (a) A privilege tax is imposed on persons engaged in the
19business of operating an interactive fantasy sports contest in
20this State. For the privilege of conducting interactive fantasy
21sports contests in the State, interactive fantasy sports
22operators shall pay a tax at the following graduated rates:
23        (1) 5% of annual interactive fantasy sports gross
24    revenue up to and including $1,000,000;
25        (2) 7.5% of annual interactive fantasy sports gross

 

 

10000HB0479sam001- 26 -LRB100 06768 AMC 27359 a

1    revenue in excess of $1,000,000 but not exceeding
2    $3,000,000;
3        (3) 10% of annual interactive fantasy sports gross
4    revenue in excess of $3,000,000 but not exceeding
5    $8,000,000;
6        (4) 15% of annual interactive fantasy sports gross
7    revenue in excess of $8,000,000.
8    (b) The tax imposed by this Section shall be paid by the
9interactive fantasy sports operator to the Board not later than
10the 15th day of every month for the previous month's privilege
11taxes.
 
12    Section 1-55. Disposition of taxes. The Board shall pay
13into the Education Assistance Fund all taxes imposed by this
14Act, any interest and penalties imposed by the Board relating
15to those taxes, all penalties levied and collected by the
16Board, and the appropriate funds, cash, or prizes forfeited
17from interactive fantasy sports contests.
 
18    Section 1-60. Audits. All interactive fantasy sports
19operators with annual interactive fantasy sports contest gross
20revenue of $100,000 or more shall annually be subject to an
21audit of the financial transactions and condition of the
22interactive fantasy sports operator's total operations as they
23relate to the offering and operating of interactive fantasy
24sports contests and to ensure compliance with all of the

 

 

10000HB0479sam001- 27 -LRB100 06768 AMC 27359 a

1requirements in this Act. Interactive fantasy sports operators
2with annual interactive fantasy sports contest gross revenues
3less than $100,000 shall every 3 years be subject to an audit
4of the financial transactions and condition of the interactive
5fantasy sports operator's total operations as they relate to
6the offering and operating of interactive fantasy sports
7contests and to ensure compliance with all of the requirements
8in this Act. All audits and compliance engagements shall be
9conducted by certified public accountants or an independent
10testing laboratory approved by the Board. The compensation for
11each certified public accountant or independent testing
12laboratory shall be paid directly by the interactive fantasy
13sports operator to the certified public accountant or
14independent testing laboratory. The audit shall be conducted
15and submitted to the Board by June 30 of each year.
 
16    Section 1-65. Limitation on the taxation of interactive
17fantasy sports operators. Interactive fantasy sports operators
18shall not be subjected to an excise tax, license tax, permit
19tax, privilege tax, amusement tax, or occupation tax that is
20imposed upon the licensee by the State or any political
21subdivision thereof, except as provided in this Act.
 
22    Section 1-70. Application fees; license fees.
23    (a) A non-refundable application fee shall be paid at the
24time an application for licensure is filed with the Board in

 

 

10000HB0479sam001- 28 -LRB100 06768 AMC 27359 a

1the following amounts:
2        (1) Interactive fantasy sports operators with annual
3    interactive fantasy sports gross revenue greater than
4    $10,000,000 ......................................... $25,000
5        (2) Interactive fantasy sports operators with annual
6    interactive fantasy sports gross revenue greater than
7    $5,000,000 but not more than $10,000,000 ............ $12,500
8        (3) Interactive fantasy sports operators with annual
9    interactive fantasy sports gross revenue greater than
10    $1,000,000 but not more than $5,000,000 .............. $7,500
11        (4) Interactive fantasy sports operators with annual
12    interactive fantasy sports gross revenue of at least
13    $100,000 but not more than $1,000,000 ................ $5,000
14        (5) Interactive fantasy sports operators with annual
15    interactive fantasy sports gross revenue less than
16    $100,000 ............................................... $500
17    (b) The Board shall establish a fee for each license not to
18exceed the following for the initial licensure period:
19        (1) Interactive fantasy sports operators with annual
20    interactive fantasy sports gross revenue greater than
21    $10,000,000 ......................................... $50,000
22        (2) Interactive fantasy sports operators with annual
23    interactive fantasy sports gross revenue greater than
24    $5,000,000 but not more than $10,000,000 ............ $25,000
25        (3) Interactive fantasy sports operators with annual
26    interactive fantasy sports gross revenue greater than

 

 

10000HB0479sam001- 29 -LRB100 06768 AMC 27359 a

1    $1,000,000 but not more than $5,000,000 ..............$15,000
2        (4) Interactive fantasy sports operators with annual
3    interactive fantasy sports gross revenue of at least
4    $100,000 but not more than $1,000,000 ............... $10,000
5        (5) Interactive fantasy sports operators with annual
6    interactive fantasy sports gross revenue less than
7    $100,000 ............................................. $1,500
8    (c) For subsequent licensure periods, the renewal fee shall
9not exceed the following:
10        (1) Interactive fantasy sports operators with annual
11    interactive fantasy sports gross revenue greater than
12    $10,000,000 ......................................... $37,500
13        (2) Interactive fantasy sports operators with annual
14    interactive fantasy sports gross revenue greater than
15    $5,000,000 but not more than $10,000,000 ............ $18,750
16        (3) Interactive fantasy sports operators with annual
17    interactive fantasy sports gross revenue greater than
18    $1,000,000 but not more than $5,000,000 ............. $11,250
19        (4) Interactive fantasy sports operators with annual
20    interactive fantasy sports gross revenue of at least
21    $100,000 but not more than $1,000,000 .................$7,500
22        (5) Interactive fantasy sports operators with annual
23    interactive fantasy sports gross revenue less than
24    $100,000 ............................................. $1,125
25    (d) All fees collected under this Section shall be
26deposited into the State Gaming Fund.

 

 

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1    (e) All fees collected under this Section shall be used for
2the administration of this Act.
 
3    Section 1-75. Interactive fantasy sports contests
4authorized. Interactive fantasy sports contests conducted in
5accordance with the provisions of this Act are hereby
6authorized.
 
7    Section 1-80. Interactive fantasy sports contests
8prohibited. The conduct of interactive fantasy sports contests
9by unlicensed operators is prohibited.
 
10    Section 1-85. Interactive fantasy sports contests;
11Criminal Code of 2012. Interactive fantasy sports contests
12offered in accordance with the provisions of this Act shall not
13constitute gambling as defined in Section 28-1 of the Criminal
14Code of 2012.
 
15    Section 1-900. Repeal. This Act is repealed on January 1,
162021.
 
17
Article 5. Internet Gaming Act

 
18    Section 5-1. Short title. This Article may be cited as the
19Internet Gaming Act. References in this Article to "this Act"
20mean this Article.
 

 

 

10000HB0479sam001- 31 -LRB100 06768 AMC 27359 a

1    Section 5-5. Legislative findings and intent. The General
2Assembly finds that the Internet has become an integral part of
3everyday life for a significant number of Illinois residents,
4not only in regard to their professional life, but also in
5regard to personal business and communication. Internet
6wagering on games of chance and games of skill is a core form
7of entertainment for millions of individuals worldwide. In
8multiple jurisdictions across the world, Internet gaming is
9legal, regulated, and taxed, generating millions of dollars in
10revenue for governments.
11    The General Assembly further finds that Illinois residents
12participate in illegal online gambling on unregulated Internet
13websites operated by offshore operators who are not subject to
14regulation or taxation in the United States. Neither federal
15nor Illinois laws provide sufficient consumer protections for
16Illinois residents who play games of chance or skill on these
17illegal websites, nor does the State realize any benefits from
18the revenues generated nor jobs created by illegal online
19gaming.
20    In an opinion dated September 20, 2011, the United States
21Department of Justice reversed its previous interpretation of
22the federal Wire Act, 18 U.S.C. 1084, allowing states, subject
23to certain restrictions, to legalize and regulate Internet
24gaming and capture the revenue for the benefit of state
25governments. The Department of Justice's opinion was prompted

 

 

10000HB0479sam001- 32 -LRB100 06768 AMC 27359 a

1in part by a request made by the Department of Revenue pursuant
2to Public Act 96-34. In order to protect Illinois residents who
3wager on games of chance and skill through the Internet and to
4capture revenues and create jobs generated from Internet
5gaming, it is in the best interest of the State and its
6citizens to regulate this activity by authorizing and
7establishing a secure, responsible, fair, and legal system of
8Internet gaming that complies with the United States Department
9of Justice's September 2011 opinion concerning the federal Wire
10Act.
11    The General Assembly additionally finds that pursuant to
12the federal Unlawful Internet Gambling Enforcement Act of 2006
13(UIGEA), 31 U.S.C. 5361, the provisions of this Act are
14consistent and comply with the UIGEA and specifically authorize
15use of the Internet to place, receive, or otherwise knowingly
16transmit a bet or wager where Internet wagering complies with
17this Act and rules adopted pursuant to this Act.
 
18    Section 5-10. Definitions. As used in this Act:
19    "Authorized participant" means a person who has a valid
20Internet wagering account with an Internet gaming licensee and
21is at least 21 years of age.
22    "Board" means the Illinois Gaming Board.
23    "Division" means the Division of Internet Gaming within the
24Illinois Gaming Board.
25    "Fee-based game" means a game determined by the Division to

 

 

10000HB0479sam001- 33 -LRB100 06768 AMC 27359 a

1be a fee-based game, where the Internet gaming licensee charges
2a fee, rake, or commission for operating the game.
3    "Gross fee-based gaming revenue" means the fee, rake, or
4commission charged by the Internet gaming licensee for
5operation of fee-based games.
6    "Gross gaming revenue" is the aggregate of gross fee-based
7gaming revenue and gross non-fee-based gaming revenue.
8    "Gross non-fee-based gaming revenue" means the aggregate
9of the amount of net wins received on all non-fee-based games.
10    "Internet" means the international computer network of
11interoperable packet-switched data networks, inclusive of such
12additional technological platforms as mobile, satellite, and
13other electronic distribution channels approved by the Board.
14    "Internet game" means a fee-based or non-fee-based game of
15skill or chance that is offered by an Internet gaming licensee,
16as authorized by the Board. "Internet game" includes gaming
17tournaments conducted via the Internet in which players compete
18against one another in one or more of the games authorized in
19this definition or by the Division or in approved variations or
20composites as authorized by the Division. "Internet game" does
21not include an interactive fantasy sports contest under the
22Fantasy Sports Contest Act.
23    "Internet gaming licensee" means a person, corporation,
24partnership, or other entity receiving an Internet gaming
25license from the Board to conduct Internet wagering.
26    "Internet gaming platform" means the combination of

 

 

10000HB0479sam001- 34 -LRB100 06768 AMC 27359 a

1hardware and software or other technology designed and used to
2manage, conduct, and record Internet gaming and the wagers
3associated with internet gaming, as approved by the Board.
4"Internet gaming platform" includes an emerging or new
5technology deployed to advance the conduct and operation of
6Internet gaming, as approved through rulemaking by the Board.
7    "Internet gaming skin" means the brand used by the Internet
8gaming licensee as presented through a portal, Internet
9website, or computer or mobile application or app through which
10authorized Internet gaming is made available to authorized
11participants by an Internet gaming licensee.
12    "Internet gaming vendor" means a person, corporation,
13partnership, or other entity that is certified by the Division
14to provide or offer to provide goods, software, or services to
15an Internet gaming licensee related to or supporting: (i) the
16acceptance, testing, auditing, management, operation, support,
17administration, or control of Internet wagers, Internet games,
18Internet wagering accounts, or Internet gaming platforms or
19(ii) the management, operation, administration, or control of
20payment processing systems. Notwithstanding this definition,
21the licensing of trademarks, names, likenesses, graphics, or
22other images, without more, shall not render a licensor of such
23intellectual property an Internet gaming vendor.
24    "Internet wagering" means the placing of wagers with an
25Internet gaming licensee by persons who are either physically
26present in Illinois when placing a wager or otherwise permitted

 

 

10000HB0479sam001- 35 -LRB100 06768 AMC 27359 a

1to place a wager by law. The intermediate routing of electronic
2data in connection with Internet wagering, including across
3state lines, shall not determine the location or locations in
4which a wager is initiated, received, or otherwise made.
5    "Internet wagering account" means an electronic ledger
6wherein the following types of transactions relative to the
7Internet gaming platform are recorded: (i) deposits; (ii)
8withdrawals; (iii) amounts wagered; (iv) amounts paid on
9winning wagers; (v) service or other transaction-related
10charges authorized by the patron, if any; (vi) adjustments to
11the account; and (vii) any other information required by the
12Division.
13    "Net wins" means the amount of Internet wagers received by
14the Internet gaming licensee on non-fee based games less the
15amount paid by the Internet gaming licensee as winnings on that
16non-fee based game.
17    "Non-fee-based game" means a game determined by the Board
18to be a non-fee-based game, where (i) the player plays against
19the Internet gaming licensee and (ii) the Internet gaming
20licensee is banking the game and its bottom line is affected by
21players' wins and losses.
 
22    Section 5-15. Authorization. Internet wagering, as
23defined in this Act, is hereby authorized to the extent that it
24is carried out in accordance with the provisions of this Act.
 

 

 

10000HB0479sam001- 36 -LRB100 06768 AMC 27359 a

1    Section 5-20. Division of Internet Gaming. The Division of
2Internet Gaming is established within the Illinois Gaming Board
3and shall have all of the powers and duties specified in this
4Act and all other powers necessary and proper to enable it to
5fully and effectively execute the provisions of this Act for
6the purpose of administering, regulating, and enforcing the
7system of Internet gaming established by this Act. The Division
8of Internet Gaming's jurisdiction shall extend under this Act
9to every person, corporation, partnership, or other entity
10involved in Internet gaming operations. To the extent
11consistent with the provisions of this Act, the Division shall
12be subject to and governed by the laws and rules applicable to
13the Board. The Division of Internet Gaming is also authorized
14to enter into agreements with other gaming entities within the
15United States, including any State or United States territory
16or possession, for the purpose of facilitating, administering,
17and regulating Internet gaming to the extent consistent with
18federal laws and the laws of any State or United States
19territory or possession that is a party to the
20multijurisdictional agreement. The Division shall not
21authorize, administer, or otherwise maintain a system for
22offering wagering on any amateur or professional sporting event
23or contest. Notwithstanding any other provision of this Act,
24wagers may be accepted from persons who are in the United
25States but not physically present in this State if the Division
26determines that such wagering is not inconsistent with federal

 

 

10000HB0479sam001- 37 -LRB100 06768 AMC 27359 a

1law and the law of the United States jurisdiction in which any
2such person is located or such wagering is conducted in
3accordance with a multijurisdictional agreement that is not
4inconsistent with federal law to which this State is a party.
5The Division shall be funded with moneys appropriated to the
6Illinois Gaming Board.
 
7    Section 5-25. Application and eligibility for licensure.
8The Division of Internet Gaming is authorized to issue Internet
9gaming licenses to persons, firms, partnerships, or
10corporations that apply for such licensure upon a determination
11by the Division that the applicant is eligible for an Internet
12gaming license under this Act and rules adopted by the
13Division. An Internet gaming license issued under this Act
14shall be valid for a period of 5 years after the date of
15issuance and shall be renewable thereafter for an additional 5
16years based on a determination by the Division that the
17licensee continues to meet all the requirements of this Act and
18the Division's rules. Notwithstanding any other law to the
19contrary, any assignment or transfer of an interest in an
20Internet gaming license, or a greater than 10% interest, direct
21or indirect, in any entity holding such a license, is subject
22to the written approval by the Division. Approved transferees
23are subject to a $250,000 non-refundable application fee.
24Eligibility for application for an Internet gaming license
25shall be limited to any person or entity that holds a valid and

 

 

10000HB0479sam001- 38 -LRB100 06768 AMC 27359 a

1unrevoked: (1) owners license issued pursuant to the Riverboat
2Gambling Act, or any affiliate thereof as defined by the Board
3in its administrative rules implementing such Act, or any
4person or entity who as of January 1, 2017 was designated by
5the Illinois Gaming Board as a key person of an owners licensee
6or is controlled by one or more key persons of an owners
7licensee; (2) organization license issued pursuant to the
8Illinois Horse Racing Act of 1975, but only if the organization
9licensee conducted more than 30 days of live racing in calendar
10year 2016, except that 2 additional internet gaming licenses
11may be issued to entities awarded organization licenses after
122016 that exclusively conduct standardbred racing; or (3)
13advance deposit wagering license issued pursuant to the
14Illinois Horse Racing Act of 1975, but only if the advance
15deposit wagering licensee conducted advance deposit wagering
16in Illinois and handled in excess of $1,000,000 in calendar
17year 2016.
18    A qualified applicant may apply to the Division for an
19Internet gaming license to offer wagering on Internet games as
20provided in this Act. The application shall be made on forms
21provided by the Division and shall contain such information as
22the Division prescribes, including, but not limited to,
23detailed information regarding the ownership and management of
24the applicant, detailed personal information regarding the
25applicant, financial information regarding the applicant, and
26the gaming history and experience of the applicant in the

 

 

10000HB0479sam001- 39 -LRB100 06768 AMC 27359 a

1United States and other jurisdictions. Each application shall
2be accompanied by a non-refundable application fee of $250,000.
3An incomplete application shall be cause for denial of a
4license by the Division.
5    All information, records, interviews, reports, statements,
6memoranda, or other data supplied to or used by the Division in
7the course of its review or investigation of an application for
8an Internet gaming license or a renewal under this Act is
9subject to Section 5.1 and Section (d) of Section 6 of the
10Riverboat Gambling Act.
11    Any person, association, corporation, partnership, or
12entity who (i) knowingly makes materially false statements in
13order to obtain an Internet gaming license; (ii) knowingly
14advertises within the State of Illinois any game, product, or
15feature that is not authorized by his or her license; or (iii)
16violates any other provision of this Act or any rule adopted
17under this Act is guilty of a Class B misdemeanor for the first
18violation and is guilty of a Class A misdemeanor for a second
19or subsequent violation. In the case of an association,
20corporation, partnership, or entity, imprisonment may be
21imposed upon its officers who knowingly participated in the
22violation.
23    An application shall be filed and considered in accordance
24with the rules of the Division. The Division shall adopt rules
25to effectuate the provisions of this Section within 30 days
26after the effective date of this Act.

 

 

10000HB0479sam001- 40 -LRB100 06768 AMC 27359 a

1    A license fee of $10,000,000 shall be paid to the Division
2by an Internet gaming licensee at the time of issuance of the
3license. All application and license fees shall be deposited
4into the State Gaming Fund. The license fee imposed by this
5Section shall constitute an advance payment of Internet
6wagering taxes owed by the Internet gaming licensee under
7Section 5-55 of this Act.
 
8    Section 5-26. Initial license and renewal requirements for
9Internet gaming licenses obtained by an organization licensee.
10    (a) No internet gaming license may be awarded to or renewed
11for any entity that is eligible for an Internet gaming license
12because of an organization license awarded by the Illinois
13Racing Board, unless they meet the following criteria:
14        (1) The entity must hold a valid organization license
15    awarded by the Illinois Racing Board for the term of the
16    license.
17        (2) The entity must hold an inter-track wagering
18    license awarded by the Illinois Racing Board for the term
19    of the license.
20        (3) The entity, for the term of the license, must have
21    a signed contract with the horsemen association
22    representing the largest number of owners, trainers,
23    jockeys, or standardbred drivers who race horses at that
24    organization licensee's racing meeting, the right to
25    execute or decline such contract being without condition,

 

 

10000HB0479sam001- 41 -LRB100 06768 AMC 27359 a

1    and that stipulates:
2            (A) the number of races to be conducted at the
3        racing meeting and penalties for failure to conduct
4        those races;
5            (B) the amounts to be distributed to purse accounts
6        and penalties for failure to timely make such
7        distributions; and
8            (C) the reduction and ultimate elimination of
9        money payable from purses to organization licensees
10        under paragraph (13) of subsection (g) of Section 26 of
11        the Illinois Horse Racing Act of 1975, with such
12        reduction and elimination achieved as agreed either
13        through reimbursement or non-acceptance.
14        (4) The entity may not receive any proceeds from gross
15    gaming revenue during any period that gross gaming revenues
16    are not being deposited into the purse accounts as provided
17    in the signed contract with the applicable horsemen
18    association.
19    (b) The Illinois Gaming Board shall study the viability and
20benefit of providing an Internet gaming license to the horsemen
21association representing the largest number of owners,
22training jockeys, or standardbred drivers who race horses at an
23organization licensee's racing meetings, and shall prepare a
24report for the Illinois General Assembly and the Governor no
25later than 12 months after the effective date of this Act.
 

 

 

10000HB0479sam001- 42 -LRB100 06768 AMC 27359 a

1    Section 5-27. Initial license and renewal requirements for
2Internet gaming licenses obtained by an advance deposit
3wagering licensee.
4    (a) No Internet gaming license may be awarded to or renewed
5for any entity that is eligible for an Internet gaming license
6because of an advance deposit wagering license awarded by the
7Illinois Racing Board, unless it meets the following criteria:
8        (1) The entity must hold a valid advance deposit
9    wagering license awarded by the Illinois Racing Board for
10    the term of the Internet gaming license.
11        (2) The entity must have a signed contract with both
12    the organization licensee and the horsemen association
13    representing the largest number of owners, trainers,
14    jockeys, or standardbred drivers who race horses at that
15    organization licensee's racing meeting, the right to
16    execute or decline such contract being without condition,
17    and that stipulates:
18            (A) the number of races to be conducted at the
19        racing meeting and penalties for failure to conduct
20        those races;
21            (B) the amounts to be distributed to purse accounts
22        and penalties for failure to timely make such
23        distributions; and
24            (C) the reduction and ultimate elimination of
25        money payable from purses to organization licensees
26        under paragraph (13) of subsection (g) of Section 26 of

 

 

10000HB0479sam001- 43 -LRB100 06768 AMC 27359 a

1        the Illinois Horse Racing Act of 1975, with such
2        reduction and elimination achieved as agreed either
3        through reimbursement or non-acceptance.
4        (3) The entity may not receive any proceeds from gross
5    gaming revenue during any period that gross gaming revenues
6    are not being deposited into the purse accounts as provided
7    in the signed contract with the applicable horsemen
8    association.
 
9    Section 5-30. Certification of Internet gaming vendors.
10The Division is authorized to certify Internet gaming vendors
11to provide goods, software, or services to Internet gaming
12licensees. Certification by the Division of an Internet gaming
13vendor shall be for a period of 5 years and shall be renewable
14thereafter for an additional 5 years based on a determination
15by the Division that the Internet gaming vendor continues to
16meet all the requirements of this Act and the Division's rules.
17The Division shall have the sole and exclusive jurisdiction to
18determine what persons, corporations, partnerships, or other
19entities require certification under this Act and the rules
20adopted under this Act.
21    A person, corporation, partnership, or other entity may
22apply to the Division to become an Internet gaming vendor as
23provided in this Act and the rules of the Division. The
24application shall be made on forms provided by the Division and
25shall contain such information as the Division prescribes,

 

 

10000HB0479sam001- 44 -LRB100 06768 AMC 27359 a

1including, but not limited to, detailed information regarding
2the ownership and management of the applicant, detailed
3personal information regarding the applicant, financial
4information regarding the applicant, and the gaming history and
5experience of the applicant in the United States and other
6jurisdictions. Each application shall be accompanied by a
7non-refundable application fee, the amount of which shall be
8determined by the Division, but shall not exceed $250,000. An
9incomplete application shall be cause for denial of
10certification. No certification shall be granted to an Internet
11gaming vendor who has accepted wagers via the Internet in
12contravention of this Act or in contravention of any law of the
13United States.
14    All information, records, interviews, reports, statements,
15memoranda, or other data supplied to or used by the Division in
16the course of its review or investigation of an application for
17certification as an Internet gaming vendor is strictly
18confidential and shall only be used for the purpose of
19evaluating an applicant for a certification. Notwithstanding
20any law to the contrary, such information is subject to Section
215.1 and subsection (d) of Section 6 of the Riverboat Gambling
22Act.
23    Any person, association, corporation, partnership, or
24entity who (i) knowingly makes materially false statements in
25order to obtain certification as an Internet gaming vendor or
26(ii) violates any other provision of this Act or any rule

 

 

10000HB0479sam001- 45 -LRB100 06768 AMC 27359 a

1adopted under this Act is guilty of a Class B misdemeanor for a
2first offense and is guilty of a Class A misdemeanor for a
3second or subsequent offense. In the case of an association,
4corporation, partnership, or entity, imprisonment may be
5imposed upon its officers who knowingly participate in the
6violation.
7    The Board shall adopt rules to ensure that all licensees
8are treated and all licensees act in a non-discriminatory
9manner and develop processes and penalties to enforce those
10rules.
 
11    Section 5-35. Authority of the Division.
12    (a) The Division shall have all the powers necessary or
13desirable to effectuate the provisions of this Act, including,
14but not limited to, the following powers:
15        (1) To develop qualifications, standards, and
16    procedures for approval and licensure of Internet gaming
17    licensees and certification of Internet gaming vendors.
18        (2) To decide promptly and in reasonable order all
19    license applications and to approve, deny, suspend,
20    revoke, restrict, or refuse to renew Internet gaming
21    licenses and Internet gaming vendor certifications. Any
22    party aggrieved by an action of the Division denying,
23    suspending, revoking, restricting, or refusing to renew a
24    license may request a hearing before the Division. A
25    request for hearing must be made to the Division in writing

 

 

10000HB0479sam001- 46 -LRB100 06768 AMC 27359 a

1    within 5 days after service of notice of the action by the
2    Division. Notice of action by the Division shall be served
3    either by personal delivery or by certified mail, postage
4    prepaid, to the aggrieved party. Notice served by certified
5    mail shall be deemed complete on the business day following
6    the date of such mailing. The Division shall conduct all
7    requested hearings promptly and in reasonable order.
8        (3) To conduct all hearings pertaining to civil
9    violations of this Act or rules adopted under this Act.
10    Such hearings shall be governed by Section 5 of the
11    Riverboat Gambling Act. The Division shall further adopt
12    hearing rules and procedures for conducting hearings under
13    this Act. In such hearings, reproduced copies of any of the
14    Division's records relating to an Internet gaming licensee
15    or Internet gaming vendor, including (i) any notices
16    prepared in the Division's ordinary course of business and
17    (ii) any books, records, or other documents offered in the
18    name of the Division under certificate of the Executive
19    Director, or any officer or employee of the Division
20    designated in writing by the Executive Director, shall,
21    without further proof, be admitted into evidence in any
22    hearing before the hearing officers or any legal proceeding
23    and shall be prima facie proof of the information contained
24    therein. The Office of the Attorney General shall prosecute
25    all criminal violations of this Act or rules adopted under
26    this Act.

 

 

10000HB0479sam001- 47 -LRB100 06768 AMC 27359 a

1        (4) To provide for the establishment and collection of
2    all license and certification fees and taxes imposed by
3    this Act and the rules adopted under this Act. All such
4    fees and taxes shall be deposited into the State Gaming
5    Fund.
6        (5) To develop and enforce testing, audit, and
7    certification requirements and schedules for Internet
8    gaming platforms, Internet gaming skins, Internet
9    wagering, and Internet wagering accounts, including,
10    without limitation, age and identification verification
11    software, geolocation software, Internet games, and gaming
12    hub software.
13        (6) To develop and enforce requirements for
14    responsible gaming and player protection, including
15    privacy and confidentiality standards and duties.
16        (7) To develop and enforce requirements for accepting
17    Internet wagers, Internet wagering accounts, and
18    authorized participants and minimum insurance
19    requirements.
20        (8) To develop and promote standards governing
21    contracts between Internet gaming licensees and the
22    payments industry.
23        (9) To develop and enforce standards and requirements
24    regarding anti-fraud, anti-money laundering, and
25    anti-collusion methods.
26        (10) To develop protocols related to the security of

 

 

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1    and disputes arising over Internet wagers and Internet
2    wagering accounts.
3        (11) To be present through its inspectors and agents
4    upon the premises of any location where Internet gaming
5    operations are conducted by an Internet gaming licensee or
6    where components of an Internet gaming licensee's Internet
7    gaming platform are located, housed, or otherwise
8    maintained.
9        (12) To adopt by rule a code of conduct governing
10    Division employees that ensures, to the maximum extent
11    possible, that persons subject to this Act avoid
12    situations, relationships, or associations that may
13    represent or lead to an actual or perceived conflict of
14    interest.
15        (13) To develop and administer civil penalties for
16    Internet gaming licensees and Internet gaming vendors who
17    violate this Act or the rules adopted under this Act.
18        (14) To audit and inspect, on reasonable notice, books
19    and records relevant to Internet gaming operations,
20    Internet wagers, Internet wagering accounts, Internet
21    gaming skins, Internet games, or Internet gaming
22    platforms, including, without limitation, those books and
23    records regarding financing or accounting, marketing or
24    operational materials, or any other such materials held by
25    or in the custody of any Internet gaming licensee or
26    Internet gaming vendor. The Division may assert such

 

 

10000HB0479sam001- 49 -LRB100 06768 AMC 27359 a

1    authority by administrative subpoena, which may further
2    set forth relevant document requests and interrogatories
3    and which shall be enforceable in the Circuit Court of Cook
4    County in the State of Illinois.
5        (15) To determine whether an Internet game is a
6    fee-based game or non-fee-based game.
7        (16) To acquire or lease real property and make
8    improvements thereon and acquire by lease or by purchase
9    personal property, including, but not limited to:
10            (A) computer hardware;
11            (B) mechanical, electronic, and online equipment
12        and terminals; and
13            (C) intangible property, including, but not
14        limited to, computer programs, software, and systems.
15        (17) To adopt rules for the purpose of administering
16    the provisions of this Act and to prescribe rules and
17    conditions under which all Internet gaming in the State
18    shall be conducted. Such rules are to provide for the
19    prevention of practices detrimental to the public interest
20    and for the best interests of Internet gaming, including
21    rules (i) regarding the inspection of licensees and the
22    review of any permits or licenses necessary to operate
23    under any applicable laws or rules, (ii) to impose
24    penalties for violations of this Act and its rules, and
25    (iii) establishing standards for advertising of Internet
26    gaming.

 

 

10000HB0479sam001- 50 -LRB100 06768 AMC 27359 a

1    (b) The Division shall adopt and enforce such rules
2governing the administration and conduct of Internet gaming as
3it deems necessary to carry out the purpose of this Act. These
4rules shall be subject to the provisions of the Illinois
5Administrative Procedure Act and may include, but shall not be
6limited to:
7        (1) the types of Internet games to be offered;
8        (2) price points for Internet games;
9        (3) player fees and percentage of rake commission or
10    other fee for Internet games;
11        (4) forms of payment accepted for Internet games;
12        (5) the number, type, and amount of prizes for Internet
13    games;
14        (6) the method of selecting winners and validating
15    winnings;
16        (7) the frequency of Internet games;
17        (8) responsible gaming;
18        (9) technical and financial standards for Internet
19    wagering, Internet wagering accounts, and Internet gaming
20    platforms, systems, and software or other electronic
21    components for Internet gaming; and
22        (10) such other matters necessary or desirable for the
23    efficient and economical operation and administration of
24    Internet gaming and for the convenience of authorized
25    Internet gaming participants and Internet gaming licensees
26    and certified Internet gaming vendors.

 

 

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1    (c) Notwithstanding any law to the contrary, the Board
2shall hire an Executive Director of the Division for a 5-year
3term who shall be responsible to the Board and shall serve
4subject only to removal by the Board for incompetence, neglect
5of duty, or malfeasance in office. The Executive Director shall
6be responsible for the supervision and direction of the
7Division staff and for the necessary administrative activities
8of the Division, subject only to the direction and approval of
9the Board notwithstanding any law to the contrary.
10    Notwithstanding any law to the contrary, the Executive
11Director shall hire and employ employees as may be necessary to
12carry out the provisions of this Act or to perform the duties
13and exercise the powers conferred by law upon the Division. All
14employees of the Division shall receive the compensation fixed
15by the Executive Director, and approved by the Board. The
16Board, Executive Director, and Division employees shall be
17reimbursed for all actual and necessary traveling and other
18expenses and disbursements necessarily incurred or made by them
19in the discharge of their official duties. The Board and
20Executive Director may also incur necessary expenses for office
21space, furniture, stationery, printing, operations, and other
22incidental expenses.
23    The Executive Director shall report monthly to the Gaming
24Board a full and complete statement of Internet gaming
25revenues, other expenses for each month, and the amounts to be
26transferred to the State Gaming Fund in accordance with this

 

 

10000HB0479sam001- 52 -LRB100 06768 AMC 27359 a

1Act. The Executive Director shall also make an annual report,
2which shall include a full and complete statement of Internet
3gaming revenues and other expenses, that shall be publicly
4disclosed on the Board's Internet website. All reports required
5by this subsection shall be public, and copies of all such
6reports shall be sent to the Speaker of the House of
7Representatives, the President of the Senate, the Minority
8Leader of the House of Representatives, and the Minority Leader
9of the Senate.
10    The Executive Director shall apprise himself or herself of:
11(i) the operation and the administration of similar Internet
12gaming laws that may be in effect in other states or countries;
13(ii) any relevant literature on Internet gaming that from time
14to time may be published or available; (iii) any federal laws
15and regulations that may affect the operation of Internet
16gaming; and (iv) the reaction of Illinois citizens to existing
17and potential features of Internet gaming with a view to
18recommending or effecting changes that will tend to serve the
19purposes of this Act.
 
20    Section 5-40. Internet gaming skins. Each internet gaming
21licensee shall be limited to not more than 2 Internet gaming
22skins, each of which must reflect a brand owned by the licensee
23or any affiliate of the licensee in the United States.
24    As used in this Section, "affiliate" means a person that
25directly, or indirectly through one or more intermediaries,

 

 

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1controls, is controlled by, or is under common control with a
2licensee.
 
3    Section 5-45. Place of public accommodation.
4    (a) No organization or commercial enterprise shall operate
5a place of public accommodation, club, including a club or
6association limited to dues-paying members or similar
7restricted groups, or similar establishment in which computer
8terminals or similar access devices are advertised or made
9available to be used principally for the purpose of accessing
10Internet games. No holder of (i) an owners license issued under
11the Riverboat Gambling Act or (ii) an organization license or
12advance deposit wagering license under the Illinois Horse
13Racing Act of 1975 shall offer or make available computer
14terminals or similar access devices to be used principally for
15the purpose of accessing Internet games within the premises of
16such license holder.
17    (b) Nothing in this Section shall be construed:
18        (1) to require the owner or operator of a hotel or
19    motel or other public place of general use in this State to
20    prohibit or block guests from playing Internet games; or
21        (2) to require an Internet gaming license holder to
22    prohibit authorized participants within the premises of
23    the license holder from playing Internet games.
 
24    Section 5-50. Age verification and responsible gaming.

 

 

10000HB0479sam001- 54 -LRB100 06768 AMC 27359 a

1    (a) An Internet gaming licensee's Internet gaming platform
2shall provide one or more mechanisms to reasonably verify that
3a participant is 21 years of age or older and that wagering on
4Internet games is limited to transactions that are initiated
5and received or otherwise made exclusively within the State of
6Illinois. A participant must satisfy the verification
7requirements before he or she may establish an Internet gaming
8account and wager on Internet games offered by Internet gaming
9licensees. All servers on which any Internet games are operated
10and conducted, and all underlying material technology, shall be
11located in the State of Illinois, unless the Division has
12otherwise authorized another location, which the Division may
13so authorize in its discretion if it maintains the ability to
14access or obtain all relevant data from such servers in such
15manner as it may specify. At such a time that a legally
16compliant mechanism is established to permit wagering on
17Internet games by individuals physically located outside of the
18State, the Division may adopt rules and procedures to allow and
19govern wagering by those individuals and shall have the
20authority to enter into multijurisdictional agreements and
21related and ancillary agreements in order to effectuate such
22wagering. An Internet gaming licensee's Internet gaming
23platform shall also provide mechanisms designed to detect and
24prevent the unauthorized use of Internet wagering accounts and
25to detect and prevent fraud, money laundering, and collusion.
26If a participant in Internet gaming violates any provision of

 

 

10000HB0479sam001- 55 -LRB100 06768 AMC 27359 a

1this Act or rule adopted by the Division, then the
2participant's winnings shall be forfeited. Forfeited winnings
3shall be deposited into the State Gaming Fund.
4    The following persons shall not be authorized to establish
5Internet gaming accounts or wager on Internet games offered by
6Internet gaming licensees, except where required and
7authorized by the Division for testing purposes or to otherwise
8fulfill the purposes set forth in this Act: (i) a minor under
921 years of age; (ii) a current member of the Lottery Control
10Board; (iii) a current officer or other person employed by the
11Department of the Lottery, the Division of Internet Gaming, the
12Illinois Racing Board, or the Illinois Gaming Board; (iv) a
13spouse, civil union partner, child, brother, sister, or parent
14residing as a member of the same household in the principal
15place of abode of any persons identified in (ii) or (iii); and
16(iv) an individual whose name appears in the Division's
17responsible gaming database.
18    (b) The Division shall develop responsible gaming
19measures, including a statewide responsible gaming database
20identifying individuals who shall be prohibited from
21establishing an Internet wagering account or participating in
22Internet gaming offered by an Internet gaming licensee. The
23Executive Director may place a person on the responsible gaming
24database if that person (i) has been convicted in any
25jurisdiction of a felony or a crime involving gaming; (ii) has
26violated this Act, the Illinois Horse Racing Act of 1975, the

 

 

10000HB0479sam001- 56 -LRB100 06768 AMC 27359 a

1Riverboat Gambling Act, the Raffles and Poker Runs Act, the
2Illinois Pull Tabs and Jar Games Act, the Bingo License and Tax
3Act, the Charitable Games Act, or the Video Gaming Act; (iii)
4has performed any act or had a notorious or unsavory reputation
5that would adversely affect public confidence and trust in
6gaming; or (iv) has his or her name on any valid and current
7exclusion list from another jurisdiction in the United States
8or foreign jurisdiction. By rule, the Division shall adopt
9procedures for the establishment and maintenance of the
10responsible gaming database. The Illinois Gaming Board and the
11Illinois Racing Board, in a format specified by the Division,
12provide the Division with names of individuals to be included
13in the responsible gaming database. The Division may impose
14reasonable fees on persons authorized to access and use the
15responsible gaming database.
16    An Internet gaming licensee's Internet gaming platform
17shall offer in a clear, conspicuous, and accessible manner,
18responsible gambling services and technical controls to
19participants, including both temporary and permanent
20self-exclusion for all games offered; the ability for
21participants to establish their own periodic deposit and
22wagering limits and maximum playing times; referrals to crisis
23counseling and referral services for individuals and families
24experiencing difficulty as a result of problem or compulsive
25gambling; and other services as the Division reasonably may
26determine are necessary or appropriate to reduce and prevent

 

 

10000HB0479sam001- 57 -LRB100 06768 AMC 27359 a

1problem gambling. Any authorized participant who is allowed to
2participate in Internet gaming may voluntarily prohibit
3themselves from establishing an Internet gaming account. The
4Division shall incorporate the voluntary self-exclusion list
5into the responsible gaming database and maintain both the
6self-exclusion list and the responsible gaming database in a
7confidential manner. Notwithstanding any law to the contrary,
8the self-exclusion list and responsible gaming database are not
9public records subject to copying and disclosure under the
10Freedom of Information Act.
11    (c) There is created the Responsible Internet Gaming
12Advisory Board to make recommendations to the Executive
13Director regarding the development of rules and procedures to
14reduce and prevent problem or compulsive gambling and youth
15gambling and to ensure the conduct of safe, fair, and
16responsible Internet gaming. The Advisory Board shall consist
17of the following members:
18        (1) the Chairman of the Illinois Gaming Board, who
19    shall be an ex officio member and shall serve as
20    Chairperson;
21        (2) the Executive Director of the Division of Internet
22    Gaming, who shall be an ex officio member;
23        (3) one representative from a national organization
24    dedicated to the study and prevention of problem gambling,
25    appointed by the Board;
26        (4) one member who is an academic professional engaged

 

 

10000HB0479sam001- 58 -LRB100 06768 AMC 27359 a

1    in the study of problem gambling at a university or other
2    institution of higher learning, appointed by the Board;
3        (5) one member who has professional experience and
4    expertise in the field of technical and systemic controls
5    for responsible Internet gaming, appointed by the Board;
6    and
7        (6) one member who is an Illinois citizen and a member
8    of the public, appointed by the Board.
9    Each Advisory Board member shall serve for a term of 4
10years and until his or her successor is appointed and
11qualified. However, in making initial appointments, 2 shall be
12appointed to serve for 2 years and 2 shall be appointed to
13serve for 4 years. Appointments to fill vacancies shall be made
14in the same manner as original appointments for the unexpired
15portion of the vacated term. Initial terms shall begin on the
16effective date of this Act. Each member of the Advisory Board
17shall be eligible for reappointment at the discretion of the
18Board. A member of the Advisory Board may be removed from
19office for just cause. Advisory Board members shall receive no
20compensation, but shall be reimbursed for expenses incurred in
21connection with their duties as Advisory Board members.
22    Four members shall constitute a quorum. A majority vote of
23the Advisory Board is required for an Advisory Board decision.
24The Advisory Board shall meet no less often than once every 6
25months and shall meet as often as the Chairperson deems
26necessary. Advisory Board members shall not be liable for any

 

 

10000HB0479sam001- 59 -LRB100 06768 AMC 27359 a

1of their acts, omissions, decisions, or any other conduct in
2connection with their duties on the Advisory Board, except
3those involving willful, wanton, or intentional misconduct.
4    The Advisory Board may have such powers as may be granted
5by the Executive Director to carry out the provisions of this
6Act regarding responsible Internet gaming.
 
7    Section 5-55. Tax rate and distribution.
8    (a) Except as otherwise provided in this subsection (a), a
9tax is hereby imposed on Internet gaming licensees, based on
10the gross gaming revenue received by an Internet gaming
11licensee from Internet games authorized under this Act, at the
12rate of 15% of annual gross gaming revenue for all fee-based
13games and all non-fee-based games.
14    The taxes imposed by this Section shall be paid by the
15Internet gaming licensee to the Division no later than 5:00
16p.m. on the day after the day when the wagers were made.
17    In recognition of the advance tax revenue paid by the
18Internet gaming licensee in its license fee, an Internet gaming
19licensee shall be taxed at the following rates during the
20initial 5-year license term:
21        (1) for all non-fee-based games, the tax shall be 10%
22    of annual gross non-fee-based gaming revenue up to and
23    including $100,000,000 of gross gaming revenue and 15% of
24    annual gross non-fee-based gaming revenue in excess
25    $100,000,000 of gross gaming revenue; and

 

 

10000HB0479sam001- 60 -LRB100 06768 AMC 27359 a

1        (2) for all fee-based games, the tax shall be 10% of
2    annual gross fee-based gaming revenue up to and
3    $100,000,000 of gross gaming revenue and 15% of annual
4    gross fee-based gaming revenue in excess $100,000,000 of
5    gross gaming revenue.
6    (b) $10,000,000 from the tax revenue deposited in the State
7Gaming Fund under this Act shall be paid annually to the
8Department of Human Services for the administration of programs
9to treat problem gambling.
10    (c) From the tax revenue deposited into the State Gaming
11Fund under this Act, 5% shall be transferred into the Depressed
12Communities Economic Development Fund annually.
13    (d) After the amounts specified in subsections (b) and (c)
14have been paid or transferred, all remaining tax revenue
15deposited in the State Gaming Fund in accordance with this Act
16shall be transferred in equal parts to the Pension
17Stabilization Fund and Education Assistance Fund.
 
18    Section 5-57. Horse racing Internet purse distributions.
19    (a) Each Internet gaming licensee holding an Internet
20gaming license because of an organization license or advance
21deposit wagering license awarded by the Illinois Racing Board
22shall timely make purse distributions in the total amount
23stipulated in the contract signed by the applicable horsemen
24association. That total amount shall be divided as follows:
25        (1) 31% of the moneys to organization licensees

 

 

10000HB0479sam001- 61 -LRB100 06768 AMC 27359 a

1    conducting standardbred racing, distributed pro rata based
2    on racing days awarded by the Illinois Racing Board.
3        (2) 69% of the moneys to organization licensees
4    conducting thoroughbred racing, distributed pro rata based
5    on racing days awarded by the Illinois Racing Board.
6    (b) The purse distributions are not tax proceeds nor
7property of the State.
 
8    Section 5-60. Applicability of the Riverboat Gambling Act
9and the Uniform Penalty and Interest Act. The provisions of the
10Riverboat Gambling Act, and all rules adopted thereunder, shall
11apply to the Internet Gaming Act, except where there is a
12conflict between the 2 Acts. All provisions of the Uniform
13Penalty and Interest Act shall apply, as far as practicable, to
14the subject matter of this Act to the same extent as if such
15provisions were included herein.
 
16    Section 5-65. Rulemaking. The Board shall adopt emergency
17rules to administer this Act in accordance with Section 5-45 of
18the Illinois Administrative Procedure Act. For the purposes of
19the Illinois Administrative Procedure Act, the General
20Assembly finds that the adoption of rules to implement this Act
21is deemed an emergency and necessary to the public interest,
22safety, and welfare.
 
23
Article 90. Amendatory Provisions

 

 

 

10000HB0479sam001- 62 -LRB100 06768 AMC 27359 a

1    Section 90-5. The State Finance Act is amended by adding
2Section 5.878 as follows:
 
3    (30 ILCS 105/5.878 new)
4    Sec. 5.878. The Depressed Communities Economic Development
5Fund.
 
6    Section 90-10. The Department of Commerce and Economic
7Opportunity Law of the Civil Administrative Code of Illinois is
8amended by adding Section 605-530 as follows:
 
9    (20 ILCS 605/605-530 new)
10    Sec. 605-530. The Depressed Communities Economic
11Development Board.
12    (a) The Depressed Communities Economic Development Board
13is created as an advisory board within the Department of
14Commerce and Economic Opportunity. The Board shall consist of
15the following members:
16        (1) 2 members appointed by the Governor, one of whom
17    shall be appointed to serve an initial term of one year and
18    2 of whom shall be appointed to serve an initial term of 2
19    years;
20        (2) 2 members appointed by the Speaker of the House of
21    Representatives, one of whom shall be appointed to serve an
22    initial term of one year and one of whom shall be appointed

 

 

10000HB0479sam001- 63 -LRB100 06768 AMC 27359 a

1    to serve an initial term of 2 years;
2        (3) 2 members appointed by the President of the Senate,
3    one of whom shall be appointed to serve an initial term of
4    one year and one of whom shall be appointed to serve an
5    initial term of 2 years;
6        (4) 2 members appointed by the Minority Leader of the
7    House of Representatives, one of whom shall be appointed to
8    serve an initial term of one year and one of whom shall be
9    appointed to serve an initial term of 2 years; and
10        (5) 2 members appointed by the Minority Leader of the
11    Senate, one of whom shall be appointed to serve an initial
12    term of one year and one of whom shall be appointed to
13    serve an initial term of 2 years.
14    The members of the Board shall elect a member to serve as
15chair of the Board. The members of the Board shall reflect the
16composition of the Illinois population with regard to ethnic
17and racial composition.
18    After the initial terms, each member shall be appointed to
19serve a term of 2 years and until his or her successor has been
20appointed and assumes office. If a vacancy occurs in the Board
21membership, then the vacancy shall be filled in the same manner
22as the initial appointment. No member of the Board shall, at
23the time of his or her appointment or within 2 years before the
24appointment, hold elected office or be appointed to a State
25board, commission, or agency. All Board members are subject to
26the State Officials and Employees Ethics Act.

 

 

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1    (b) Board members shall serve without compensation, but may
2be reimbursed for their reasonable travel expenses from funds
3available for that purpose. The Department of Commerce and
4Economic Opportunity shall provide staff and administrative
5support services to the Board.
6    (c) The Board must make recommendations, which must be
7approved by a majority of the Board, to the Department of
8Commerce and Economic Opportunity concerning the award of
9grants from amounts appropriated to the Department from the
10Depressed Communities Economic Development Fund, a special
11fund created in the State treasury. The Department must make
12grants to public or private entities submitting proposals to
13the Board to revitalize an Illinois depressed community. Grants
14may be used by these entities only for those purposes
15conditioned with the grant. For the purposes of this subsection
16(c), plans for revitalizing an Illinois depressed community
17include plans intended to curb high levels of poverty,
18unemployment, job and population loss, and general distress. An
19Illinois depressed community is an area where the poverty rate,
20as determined by using the most recent data released by the
21United States Census Bureau, is at least 3% greater than the
22State poverty rate as determined by using the most recent data
23released by the United States Census Bureau.
 
24    Section 90-15. The Criminal Code of 2012 is amended by
25changing Sections 28-1, 28-1.1, 28-3, and 28-5 as follows:
 

 

 

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1    (720 ILCS 5/28-1)  (from Ch. 38, par. 28-1)
2    Sec. 28-1. Gambling.
3    (a) A person commits gambling when he or she:
4        (1) knowingly plays a game of chance or skill for money
5    or other thing of value, unless excepted in subsection (b)
6    of this Section;
7        (2) knowingly makes a wager upon the result of any
8    game, contest, or any political nomination, appointment or
9    election;
10        (3) knowingly operates, keeps, owns, uses, purchases,
11    exhibits, rents, sells, bargains for the sale or lease of,
12    manufactures or distributes any gambling device;
13        (4) contracts to have or give himself or herself or
14    another the option to buy or sell, or contracts to buy or
15    sell, at a future time, any grain or other commodity
16    whatsoever, or any stock or security of any company, where
17    it is at the time of making such contract intended by both
18    parties thereto that the contract to buy or sell, or the
19    option, whenever exercised, or the contract resulting
20    therefrom, shall be settled, not by the receipt or delivery
21    of such property, but by the payment only of differences in
22    prices thereof; however, the issuance, purchase, sale,
23    exercise, endorsement or guarantee, by or through a person
24    registered with the Secretary of State pursuant to Section
25    8 of the Illinois Securities Law of 1953, or by or through

 

 

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1    a person exempt from such registration under said Section
2    8, of a put, call, or other option to buy or sell
3    securities which have been registered with the Secretary of
4    State or which are exempt from such registration under
5    Section 3 of the Illinois Securities Law of 1953 is not
6    gambling within the meaning of this paragraph (4);
7        (5) knowingly owns or possesses any book, instrument or
8    apparatus by means of which bets or wagers have been, or
9    are, recorded or registered, or knowingly possesses any
10    money which he has received in the course of a bet or
11    wager;
12        (6) knowingly sells pools upon the result of any game
13    or contest of skill or chance, political nomination,
14    appointment or election;
15        (7) knowingly sets up or promotes any lottery or sells,
16    offers to sell or transfers any ticket or share for any
17    lottery;
18        (8) knowingly sets up or promotes any policy game or
19    sells, offers to sell or knowingly possesses or transfers
20    any policy ticket, slip, record, document or other similar
21    device;
22        (9) knowingly drafts, prints or publishes any lottery
23    ticket or share, or any policy ticket, slip, record,
24    document or similar device, except for such activity
25    related to lotteries, bingo games and raffles authorized by
26    and conducted in accordance with the laws of Illinois or

 

 

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1    any other state or foreign government;
2        (10) knowingly advertises any lottery or policy game,
3    except for such activity related to lotteries, bingo games
4    and raffles authorized by and conducted in accordance with
5    the laws of Illinois or any other state;
6        (11) knowingly transmits information as to wagers,
7    betting odds, or changes in betting odds by telephone,
8    telegraph, radio, semaphore or similar means; or knowingly
9    installs or maintains equipment for the transmission or
10    receipt of such information; except that nothing in this
11    subdivision (11) prohibits transmission or receipt of such
12    information for use in news reporting of sporting events or
13    contests; or
14        (12) knowingly establishes, maintains, or operates an
15    Internet site that permits a person to play a game of
16    chance or skill for money or other thing of value by means
17    of the Internet or to make a wager upon the result of any
18    game, contest, political nomination, appointment, or
19    election by means of the Internet. This item (12) does not
20    apply to activities referenced in items (6), and (6.1) ,
21    (15), or (16) of subsection (b) of this Section.
22    (b) Participants in any of the following activities shall
23not be convicted of gambling:
24        (1) Agreements to compensate for loss caused by the
25    happening of chance including without limitation contracts
26    of indemnity or guaranty and life or health or accident

 

 

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1    insurance.
2        (2) Offers of prizes, award or compensation to the
3    actual contestants in any bona fide contest for the
4    determination of skill, speed, strength or endurance or to
5    the owners of animals or vehicles entered in such contest.
6        (3) Pari-mutuel betting as authorized by the law of
7    this State.
8        (4) Manufacture of gambling devices, including the
9    acquisition of essential parts therefor and the assembly
10    thereof, for transportation in interstate or foreign
11    commerce to any place outside this State when such
12    transportation is not prohibited by any applicable Federal
13    law; or the manufacture, distribution, or possession of
14    video gaming terminals, as defined in the Video Gaming Act,
15    by manufacturers, distributors, and terminal operators
16    licensed to do so under the Video Gaming Act.
17        (5) The game commonly known as "bingo", when conducted
18    in accordance with the Bingo License and Tax Act.
19        (6) Lotteries when conducted by the State of Illinois
20    in accordance with the Illinois Lottery Law. This exemption
21    includes any activity conducted by the Department of
22    Revenue to sell lottery tickets pursuant to the provisions
23    of the Illinois Lottery Law and its rules.
24        (6.1) The purchase of lottery tickets through the
25    Internet for a lottery conducted by the State of Illinois
26    under the program established in Section 7.12 of the

 

 

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1    Illinois Lottery Law.
2        (7) Possession of an antique slot machine that is
3    neither used nor intended to be used in the operation or
4    promotion of any unlawful gambling activity or enterprise.
5    For the purpose of this subparagraph (b)(7), an antique
6    slot machine is one manufactured 25 years ago or earlier.
7        (8) Raffles and poker runs when conducted in accordance
8    with the Raffles and Poker Runs Act.
9        (9) Charitable games when conducted in accordance with
10    the Charitable Games Act.
11        (10) Pull tabs and jar games when conducted under the
12    Illinois Pull Tabs and Jar Games Act.
13        (11) Gambling games conducted on riverboats when
14    authorized by the Riverboat Gambling Act.
15        (12) Video gaming terminal games at a licensed
16    establishment, licensed truck stop establishment, licensed
17    fraternal establishment, or licensed veterans
18    establishment when conducted in accordance with the Video
19    Gaming Act.
20        (13) Games of skill or chance where money or other
21    things of value can be won but no payment or purchase is
22    required to participate.
23        (14) Savings promotion raffles authorized under
24    Section 5g of the Illinois Banking Act, Section 7008 of the
25    Savings Bank Act, Section 42.7 of the Illinois Credit Union
26    Act, Section 5136B of the National Bank Act (12 U.S.C.

 

 

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1    25a), or Section 4 of the Home Owners' Loan Act (12 U.S.C.
2    1463).
3        (15) Interactive fantasy sports contests and
4    participation in interactive fantasy sports contests
5    authorized under the Fantasy Sports Contest Act.
6        (16) Internet wagering when conducted in accordance
7    with the Internet Gaming Act.
8    (c) Sentence.
9    Gambling is a Class A misdemeanor. A second or subsequent
10conviction under subsections (a)(3) through (a)(12), is a Class
114 felony.
12    (d) Circumstantial evidence.
13    In prosecutions under this Section circumstantial evidence
14shall have the same validity and weight as in any criminal
15prosecution.
16(Source: P.A. 98-644, eff. 6-10-14; 99-149, eff. 1-1-16.)
 
17    (720 ILCS 5/28-1.1)   (from Ch. 38, par. 28-1.1)
18    Sec. 28-1.1. Syndicated gambling.
19    (a) Declaration of Purpose. Recognizing the close
20relationship between professional gambling and other organized
21crime, it is declared to be the policy of the legislature to
22restrain persons from engaging in the business of gambling for
23profit in this State. This Section shall be liberally construed
24and administered with a view to carrying out this policy.
25    (b) A person commits syndicated gambling when he or she

 

 

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1operates a "policy game" or engages in the business of
2bookmaking.
3    (c) A person "operates a policy game" when he or she
4knowingly uses any premises or property for the purpose of
5receiving or knowingly does receive from what is commonly
6called "policy":
7        (1) money from a person other than the bettor or player
8    whose bets or plays are represented by the money; or
9        (2) written "policy game" records, made or used over
10    any period of time, from a person other than the bettor or
11    player whose bets or plays are represented by the written
12    record.
13    (d) A person engages in bookmaking when he or she knowingly
14receives or accepts more than five bets or wagers upon the
15result of any trials or contests of skill, speed or power of
16endurance or upon any lot, chance, casualty, unknown or
17contingent event whatsoever, which bets or wagers shall be of
18such size that the total of the amounts of money paid or
19promised to be paid to the bookmaker on account thereof shall
20exceed $2,000. Bookmaking is the receiving or accepting of bets
21or wagers regardless of the form or manner in which the
22bookmaker records them.
23    (e) Participants in any of the following activities shall
24not be convicted of syndicated gambling:
25        (1) Agreements to compensate for loss caused by the
26    happening of chance including without limitation contracts

 

 

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1    of indemnity or guaranty and life or health or accident
2    insurance;
3        (2) Offers of prizes, award or compensation to the
4    actual contestants in any bona fide contest for the
5    determination of skill, speed, strength or endurance or to
6    the owners of animals or vehicles entered in the contest;
7        (3) Pari-mutuel betting as authorized by law of this
8    State;
9        (4) Manufacture of gambling devices, including the
10    acquisition of essential parts therefor and the assembly
11    thereof, for transportation in interstate or foreign
12    commerce to any place outside this State when the
13    transportation is not prohibited by any applicable Federal
14    law;
15        (5) Raffles and poker runs when conducted in accordance
16    with the Raffles and Poker Runs Act;
17        (6) Gambling games conducted on riverboats when
18    authorized by the Riverboat Gambling Act;
19        (7) Video gaming terminal games at a licensed
20    establishment, licensed truck stop establishment, licensed
21    fraternal establishment, or licensed veterans
22    establishment when conducted in accordance with the Video
23    Gaming Act; and
24        (8) Savings promotion raffles authorized under Section
25    5g of the Illinois Banking Act, Section 7008 of the Savings
26    Bank Act, Section 42.7 of the Illinois Credit Union Act,

 

 

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1    Section 5136B of the National Bank Act (12 U.S.C. 25a), or
2    Section 4 of the Home Owners' Loan Act (12 U.S.C. 1463);
3    and .
4        (9) Internet wagering when conducted in accordance
5    with the Internet Gaming Act.
6    (f) Sentence. Syndicated gambling is a Class 3 felony.
7(Source: P.A. 98-644, eff. 6-10-14; 99-149, eff. 1-1-16.)
 
8    (720 ILCS 5/28-3)   (from Ch. 38, par. 28-3)
9    Sec. 28-3. Keeping a Gambling Place. A "gambling place" is
10any real estate, vehicle, boat or any other property whatsoever
11used for the purposes of gambling other than gambling conducted
12in the manner authorized by the Riverboat Gambling Act,
13Internet Gaming Act, or the Video Gaming Act. Any person who
14knowingly permits any premises or property owned or occupied by
15him or under his control to be used as a gambling place commits
16a Class A misdemeanor. Each subsequent offense is a Class 4
17felony. When any premises is determined by the circuit court to
18be a gambling place:
19    (a) Such premises is a public nuisance and may be proceeded
20against as such, and
21    (b) All licenses, permits or certificates issued by the
22State of Illinois or any subdivision or public agency thereof
23authorizing the serving of food or liquor on such premises
24shall be void; and no license, permit or certificate so
25cancelled shall be reissued for such premises for a period of

 

 

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160 days thereafter; nor shall any person convicted of keeping a
2gambling place be reissued such license for one year from his
3conviction and, after a second conviction of keeping a gambling
4place, any such person shall not be reissued such license, and
5    (c) Such premises of any person who knowingly permits
6thereon a violation of any Section of this Article shall be
7held liable for, and may be sold to pay any unsatisfied
8judgment that may be recovered and any unsatisfied fine that
9may be levied under any Section of this Article.
10(Source: P.A. 96-34, eff. 7-13-09.)
 
11    (720 ILCS 5/28-5)  (from Ch. 38, par. 28-5)
12    Sec. 28-5. Seizure of gambling devices and gambling funds.
13    (a) Every device designed for gambling which is incapable
14of lawful use or every device used unlawfully for gambling
15shall be considered a "gambling device", and shall be subject
16to seizure, confiscation and destruction by the Department of
17State Police or by any municipal, or other local authority,
18within whose jurisdiction the same may be found. As used in
19this Section, a "gambling device" includes any slot machine,
20and includes any machine or device constructed for the
21reception of money or other thing of value and so constructed
22as to return, or to cause someone to return, on chance to the
23player thereof money, property or a right to receive money or
24property. With the exception of any device designed for
25gambling which is incapable of lawful use, no gambling device

 

 

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1shall be forfeited or destroyed unless an individual with a
2property interest in said device knows of the unlawful use of
3the device.
4    (b) Every gambling device shall be seized and forfeited to
5the county wherein such seizure occurs. Any money or other
6thing of value integrally related to acts of gambling shall be
7seized and forfeited to the county wherein such seizure occurs.
8    (c) If, within 60 days after any seizure pursuant to
9subparagraph (b) of this Section, a person having any property
10interest in the seized property is charged with an offense, the
11court which renders judgment upon such charge shall, within 30
12days after such judgment, conduct a forfeiture hearing to
13determine whether such property was a gambling device at the
14time of seizure. Such hearing shall be commenced by a written
15petition by the State, including material allegations of fact,
16the name and address of every person determined by the State to
17have any property interest in the seized property, a
18representation that written notice of the date, time and place
19of such hearing has been mailed to every such person by
20certified mail at least 10 days before such date, and a request
21for forfeiture. Every such person may appear as a party and
22present evidence at such hearing. The quantum of proof required
23shall be a preponderance of the evidence, and the burden of
24proof shall be on the State. If the court determines that the
25seized property was a gambling device at the time of seizure,
26an order of forfeiture and disposition of the seized property

 

 

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1shall be entered: a gambling device shall be received by the
2State's Attorney, who shall effect its destruction, except that
3valuable parts thereof may be liquidated and the resultant
4money shall be deposited in the general fund of the county
5wherein such seizure occurred; money and other things of value
6shall be received by the State's Attorney and, upon
7liquidation, shall be deposited in the general fund of the
8county wherein such seizure occurred. However, in the event
9that a defendant raises the defense that the seized slot
10machine is an antique slot machine described in subparagraph
11(b) (7) of Section 28-1 of this Code and therefore he is exempt
12from the charge of a gambling activity participant, the seized
13antique slot machine shall not be destroyed or otherwise
14altered until a final determination is made by the Court as to
15whether it is such an antique slot machine. Upon a final
16determination by the Court of this question in favor of the
17defendant, such slot machine shall be immediately returned to
18the defendant. Such order of forfeiture and disposition shall,
19for the purposes of appeal, be a final order and judgment in a
20civil proceeding.
21    (d) If a seizure pursuant to subparagraph (b) of this
22Section is not followed by a charge pursuant to subparagraph
23(c) of this Section, or if the prosecution of such charge is
24permanently terminated or indefinitely discontinued without
25any judgment of conviction or acquittal (1) the State's
26Attorney shall commence an in rem proceeding for the forfeiture

 

 

10000HB0479sam001- 77 -LRB100 06768 AMC 27359 a

1and destruction of a gambling device, or for the forfeiture and
2deposit in the general fund of the county of any seized money
3or other things of value, or both, in the circuit court and (2)
4any person having any property interest in such seized gambling
5device, money or other thing of value may commence separate
6civil proceedings in the manner provided by law.
7    (e) Any gambling device displayed for sale to a riverboat
8gambling operation or Internet gaming operation or used to
9train occupational licensees of a riverboat gambling operation
10or Internet gaming operation as authorized under the Riverboat
11Gambling Act or Internet Gaming Act is exempt from seizure
12under this Section.
13    (f) Any gambling equipment, devices and supplies provided
14by a licensed supplier or licensed Internet gaming vendor in
15accordance with the Riverboat Gambling Act or Internet Gaming
16Act which are removed from a the riverboat or Internet gaming
17facility for repair are exempt from seizure under this Section.
18    (g) The following video gaming terminals are exempt from
19seizure under this Section:
20        (1) Video gaming terminals for sale to a licensed
21    distributor or operator under the Video Gaming Act.
22        (2) Video gaming terminals used to train licensed
23    technicians or licensed terminal handlers.
24        (3) Video gaming terminals that are removed from a
25    licensed establishment, licensed truck stop establishment,
26    licensed fraternal establishment, or licensed veterans

 

 

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1    establishment for repair.
2(Source: P.A. 98-31, eff. 6-24-13.)".