102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB3169

 

Introduced 2/19/2021, by Rep. Robert Rita

 

SYNOPSIS AS INTRODUCED:
 
230 ILCS 40/5
230 ILCS 40/45
230 ILCS 40/60
230 ILCS 40/65

    Amends the Video Gaming Act. Provides that a video gaming terminal is not an amusement for purposes of the Illinois Municipal Code and is a gambling device as defined under federal law. Provides that imposing fees for establishments authorized to conduct video gaming, terminal operators, and video gaming terminal players is an exclusive power and function of the State and that a home rule municipality unit may not impose fees for establishments authorized to conduct video gaming, terminal operators, and video gaming terminal players. Adds that the providing and operating of video gaming terminals in accordance with the Act is an occupation not subject to tax by any home rule unit of local government. Prohibits a home rule municipality from imposing a fee for the operation of a video gaming terminal in excess of $250 per year, unless a home rule municipality imposed a fee in excess of $250 a year on or before January 1, 2020 (in which case the fee may not be increased).


LRB102 16987 SMS 22407 b

FISCAL NOTE ACT MAY APPLY
HOME RULE NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3169LRB102 16987 SMS 22407 b

1    AN ACT concerning gaming.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Video Gaming Act is amended by changing
5Sections 5, 45, 60, and 65 as follows:
 
6    (230 ILCS 40/5)
7    Sec. 5. Definitions. As used in this Act:
8    "Board" means the Illinois Gaming Board.
9    "Credit" means one, 5, 10, or 25 cents either won or
10purchased by a player.
11    "Distributor" means an individual, partnership,
12corporation, or limited liability company licensed under this
13Act to buy, sell, lease, or distribute video gaming terminals
14or major components or parts of video gaming terminals to or
15from terminal operators.
16    "Electronic card" means a card purchased from a licensed
17establishment, licensed fraternal establishment, licensed
18veterans establishment, licensed truck stop establishment, or
19licensed large truck stop establishment for use in that
20establishment as a substitute for cash in the conduct of
21gaming on a video gaming terminal.
22    "Electronic voucher" means a voucher printed by an
23electronic video game machine that is redeemable in the

 

 

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1licensed establishment for which it was issued.
2    "In-location bonus jackpot" means one or more video gaming
3terminals at a single licensed establishment that allows for
4wagers placed on such video gaming terminals to contribute to
5a cumulative maximum jackpot of up to $10,000.
6    "Terminal operator" means an individual, partnership,
7corporation, or limited liability company that is licensed
8under this Act and that owns, services, and maintains video
9gaming terminals for placement in licensed establishments,
10licensed truck stop establishments, licensed large truck stop
11establishments, licensed fraternal establishments, or licensed
12veterans establishments.
13    "Licensed technician" means an individual who is licensed
14under this Act to repair, service, and maintain video gaming
15terminals.
16    "Licensed terminal handler" means a person, including but
17not limited to an employee or independent contractor working
18for a manufacturer, distributor, supplier, technician, or
19terminal operator, who is licensed under this Act to possess
20or control a video gaming terminal or to have access to the
21inner workings of a video gaming terminal. A licensed terminal
22handler does not include an individual, partnership,
23corporation, or limited liability company defined as a
24manufacturer, distributor, supplier, technician, or terminal
25operator under this Act.
26    "Manufacturer" means an individual, partnership,

 

 

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1corporation, or limited liability company that is licensed
2under this Act and that manufactures or assembles video gaming
3terminals.
4    "Supplier" means an individual, partnership, corporation,
5or limited liability company that is licensed under this Act
6to supply major components or parts to video gaming terminals
7to licensed terminal operators.
8    "Net terminal income" means money put into a video gaming
9terminal minus credits paid out to players.
10    "Video gaming terminal" means any electronic video game
11machine that, upon insertion of cash, electronic cards or
12vouchers, or any combination thereof, is available to play or
13simulate the play of a video game, including but not limited to
14video poker, line up, and blackjack, as authorized by the
15Board utilizing a video display and microprocessors in which
16the player may receive free games or credits that can be
17redeemed for cash. The term does not include a machine that
18directly dispenses coins, cash, or tokens or is for amusement
19purposes only. "Video gaming terminal" is not an amusement for
20purposes of Section 11-42-5 of the Illinois Municipal Code.
21"Video gaming terminal" is a gambling device as defined under
2215 U.S.C. 1171.
23    "Licensed establishment" means any licensed retail
24establishment where alcoholic liquor is drawn, poured, mixed,
25or otherwise served for consumption on the premises, whether
26the establishment operates on a nonprofit or for-profit basis.

 

 

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1"Licensed establishment" includes any such establishment that
2has a contractual relationship with an inter-track wagering
3location licensee licensed under the Illinois Horse Racing Act
4of 1975, provided any contractual relationship shall not
5include any transfer or offer of revenue from the operation of
6video gaming under this Act to any licensee licensed under the
7Illinois Horse Racing Act of 1975. Provided, however, that the
8licensed establishment that has such a contractual
9relationship with an inter-track wagering location licensee
10may not, itself, be (i) an inter-track wagering location
11licensee, (ii) the corporate parent or subsidiary of any
12licensee licensed under the Illinois Horse Racing Act of 1975,
13or (iii) the corporate subsidiary of a corporation that is
14also the corporate parent or subsidiary of any licensee
15licensed under the Illinois Horse Racing Act of 1975.
16"Licensed establishment" does not include a facility operated
17by an organization licensee, an inter-track wagering licensee,
18or an inter-track wagering location licensee licensed under
19the Illinois Horse Racing Act of 1975 or a riverboat licensed
20under the Illinois Gambling Act, except as provided in this
21paragraph. The changes made to this definition by Public Act
2298-587 are declarative of existing law.
23    "Licensed fraternal establishment" means the location
24where a qualified fraternal organization that derives its
25charter from a national fraternal organization regularly
26meets.

 

 

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1    "Licensed veterans establishment" means the location where
2a qualified veterans organization that derives its charter
3from a national veterans organization regularly meets.
4    "Licensed truck stop establishment" means a facility (i)
5that is at least a 3-acre facility with a convenience store,
6(ii) with separate diesel islands for fueling commercial motor
7vehicles, (iii) that sells at retail more than 10,000 gallons
8of diesel or biodiesel fuel per month, and (iv) with parking
9spaces for commercial motor vehicles. "Commercial motor
10vehicles" has the same meaning as defined in Section 18b-101
11of the Illinois Vehicle Code. The requirement of item (iii) of
12this paragraph may be met by showing that estimated future
13sales or past sales average at least 10,000 gallons per month.
14    "Licensed large truck stop establishment" means a facility
15located within 3 road miles from a freeway interchange, as
16measured in accordance with the Department of Transportation's
17rules regarding the criteria for the installation of business
18signs: (i) that is at least a 3-acre facility with a
19convenience store, (ii) with separate diesel islands for
20fueling commercial motor vehicles, (iii) that sells at retail
21more than 50,000 gallons of diesel or biodiesel fuel per
22month, and (iv) with parking spaces for commercial motor
23vehicles. "Commercial motor vehicles" has the same meaning as
24defined in Section 18b-101 of the Illinois Vehicle Code. The
25requirement of item (iii) of this paragraph may be met by
26showing that estimated future sales or past sales average at

 

 

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1least 50,000 gallons per month.
2(Source: P.A. 101-31, eff. 6-28-19.)
 
3    (230 ILCS 40/45)
4    Sec. 45. Issuance of license.
5    (a) The burden is upon each applicant to demonstrate his
6suitability for licensure. Each video gaming terminal
7manufacturer, distributor, supplier, operator, handler,
8licensed establishment, licensed truck stop establishment,
9licensed large truck stop establishment, licensed fraternal
10establishment, and licensed veterans establishment shall be
11licensed by the Board. The Board may issue or deny a license
12under this Act to any person pursuant to the same criteria set
13forth in Section 9 of the Illinois Gambling Act.
14    (a-5) The Board shall not grant a license to a person who
15has facilitated, enabled, or participated in the use of
16coin-operated devices for gambling purposes or who is under
17the significant influence or control of such a person. For the
18purposes of this Act, "facilitated, enabled, or participated
19in the use of coin-operated amusement devices for gambling
20purposes" means that the person has been convicted of any
21violation of Article 28 of the Criminal Code of 1961 or the
22Criminal Code of 2012. If there is pending legal action
23against a person for any such violation, then the Board shall
24delay the licensure of that person until the legal action is
25resolved.

 

 

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1    (b) Each person seeking and possessing a license as a
2video gaming terminal manufacturer, distributor, supplier,
3operator, handler, licensed establishment, licensed truck stop
4establishment, licensed large truck stop establishment,
5licensed fraternal establishment, or licensed veterans
6establishment shall submit to a background investigation
7conducted by the Board with the assistance of the State Police
8or other law enforcement. To the extent that the corporate
9structure of the applicant allows, the background
10investigation shall include any or all of the following as the
11Board deems appropriate or as provided by rule for each
12category of licensure: (i) each beneficiary of a trust, (ii)
13each partner of a partnership, (iii) each member of a limited
14liability company, (iv) each director and officer of a
15publicly or non-publicly held corporation, (v) each
16stockholder of a non-publicly held corporation, (vi) each
17stockholder of 5% or more of a publicly held corporation, or
18(vii) each stockholder of 5% or more in a parent or subsidiary
19corporation.
20    (c) Each person seeking and possessing a license as a
21video gaming terminal manufacturer, distributor, supplier,
22operator, handler, licensed establishment, licensed truck stop
23establishment, licensed large truck stop establishment,
24licensed fraternal establishment, or licensed veterans
25establishment shall disclose the identity of every person,
26association, trust, corporation, or limited liability company

 

 

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1having a greater than 1% direct or indirect pecuniary interest
2in the video gaming terminal operation for which the license
3is sought. If the disclosed entity is a trust, the application
4shall disclose the names and addresses of the beneficiaries;
5if a corporation, the names and addresses of all stockholders
6and directors; if a limited liability company, the names and
7addresses of all members; or if a partnership, the names and
8addresses of all partners, both general and limited.
9    (d) No person may be licensed as a video gaming terminal
10manufacturer, distributor, supplier, operator, handler,
11licensed establishment, licensed truck stop establishment,
12licensed large truck stop establishment, licensed fraternal
13establishment, or licensed veterans establishment if that
14person has been found by the Board to:
15        (1) have a background, including a criminal record,
16    reputation, habits, social or business associations, or
17    prior activities that pose a threat to the public
18    interests of the State or to the security and integrity of
19    video gaming;
20        (2) create or enhance the dangers of unsuitable,
21    unfair, or illegal practices, methods, and activities in
22    the conduct of video gaming; or
23        (3) present questionable business practices and
24    financial arrangements incidental to the conduct of video
25    gaming activities.
26    (e) Any applicant for any license under this Act has the

 

 

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1burden of proving his or her qualifications to the
2satisfaction of the Board. The Board may adopt rules to
3establish additional qualifications and requirements to
4preserve the integrity and security of video gaming in this
5State.
6    (f) A non-refundable application fee shall be paid at the
7time an application for a license is filed with the Board in
8the following amounts:
9        (1) Manufacturer..........................$5,000
10        (2) Distributor...........................$5,000
11        (3) Terminal operator.....................$5,000
12        (4) Supplier..............................$2,500
13        (5) Technician..............................$100
14        (6) Terminal Handler........................$100
15        (7) Licensed establishment, licensed truck stop
16    establishment, licensed large truck stop establishment,
17    licensed fraternal establishment, or licensed
18    veterans establishment...............................$100
19    (g) The Board shall establish an annual fee for each
20license not to exceed the following:
21        (1) Manufacturer.........................$10,000
22        (2) Distributor..........................$10,000
23        (3) Terminal operator.....................$5,000
24        (4) Supplier..............................$2,000
25        (5) Technician..............................$100
26        (6) Licensed establishment, licensed truck stop

 

 

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1    establishment, licensed large truck stop establishment,
2    licensed fraternal establishment, or licensed
3    veterans establishment..........................$100
4        (7) Video gaming terminal...................$100
5        (8) Terminal Handler............................$100 
6    (h) A terminal operator and a licensed establishment,
7licensed truck stop establishment, licensed large truck stop
8establishment, licensed fraternal establishment, or licensed
9veterans establishment shall equally split the fees specified
10in item (7) of subsection (g).
11    (i) Imposing fees for licensed establishments, licensed
12truck stop establishments, licensed large truck stop
13establishments, licensed fraternal establishments, licensed
14veterans establishments, terminal operators, and video gaming
15terminal players is an exclusive power and function of the
16State. A home rule municipality unit may not impose fees for
17licensed establishments, licensed truck stop establishments,
18licensed large truck stop establishments, licensed fraternal
19establishments, licensed veterans establishments, terminal
20operators, and video gaming terminal players.
21(Source: P.A. 100-1152, eff. 12-14-18; 101-31, eff. 6-28-19.)
 
22    (230 ILCS 40/60)
23    Sec. 60. Imposition and distribution of tax.
24    (a) A tax of 30% is imposed on net terminal income and
25shall be collected by the Board.

 

 

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1    Of the tax collected under this subsection (a),
2five-sixths shall be deposited into the Capital Projects Fund
3and one-sixth shall be deposited into the Local Government
4Video Gaming Distributive Fund.
5    (b) Beginning on July 1, 2019, an additional tax of 3% is
6imposed on net terminal income and shall be collected by the
7Board.
8    Beginning on July 1, 2020, an additional tax of 1% is
9imposed on net terminal income and shall be collected by the
10Board.
11    The tax collected under this subsection (b) shall be
12deposited into the Capital Projects Fund.
13    (c) Revenues generated from the play of video gaming
14terminals shall be deposited by the terminal operator, who is
15responsible for tax payments, in a specially created, separate
16bank account maintained by the video gaming terminal operator
17to allow for electronic fund transfers of moneys for tax
18payment.
19    (d) Each licensed establishment, licensed truck stop
20establishment, licensed large truck stop establishment,
21licensed fraternal establishment, and licensed veterans
22establishment shall maintain an adequate video gaming fund,
23with the amount to be determined by the Board.
24    (e) The State's percentage of net terminal income shall be
25reported and remitted to the Board within 15 days after the
2615th day of each month and within 15 days after the end of each

 

 

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1month by the video terminal operator. A video terminal
2operator who falsely reports or fails to report the amount due
3required by this Section is guilty of a Class 4 felony and is
4subject to termination of his or her license by the Board. Each
5video terminal operator shall keep a record of net terminal
6income in such form as the Board may require. All payments not
7remitted when due shall be paid together with a penalty
8assessment on the unpaid balance at a rate of 1.5% per month.
9    (f) The providing and operating of video gaming terminals
10in accordance with this Act is an occupation not subject to tax
11by any home rule unit. This subsection (f) is a limitation,
12pursuant to subsection (g) of Section 6 of Article VII of the
13Illinois Constitution, on the power of home rule units to tax.
14(Source: P.A. 101-31, eff. 6-28-19.)
 
15    (230 ILCS 40/65)
16    Sec. 65. Fees. Except as provided in this Section, a
17non-home rule unit of government may not impose any fee for the
18operation of a video gaming terminal in excess of $25 per year.
19The City of Rockford may not impose any fee for the operation
20of a video gaming terminal in excess of $250 per year.
21    Except as provided in this Section, a home rule
22municipality may not impose any fee for the operation of a
23video gaming terminal in excess of $250 per year; however, a
24home rule municipality unit imposing a fee for the operation
25of a video gaming terminal in excess of $250 on or before

 

 

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1January 1, 2020 may retain its fee structure in place before
2January 1, 2020 but may not increase fees beyond the limit
3provided in this Section.
4    A home rule municipality unit may not impose a fee for the
5operation of a video gaming terminal in a manner inconsistent
6with this Section. This Section is a limitation under
7subsection (i) of Section 6 of Article VII of the Illinois
8Constitution on the concurrent exercise by home rule units of
9powers and functions exercised by the State.
10(Source: P.A. 101-337, eff. 1-1-20.)