102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB4087

 

Introduced , by Rep. Jonathan Carroll

 

SYNOPSIS AS INTRODUCED:
 
230 ILCS 40/35
230 ILCS 45/25-70

    Amends the Video Gaming Act. Provides that an applicant or licensee under the Act is not in violation of the Act or its rules and shall not be subject to disciplinary action for operating a game device if operation of the game device is in compliance with and not considered gambling under the Criminal Code of 2012. Amends the Sports Wagering Act. In provisions concerning the lottery sports wagering pilot program, provides that all lottery games, including sports wagering games and programs, are a part of the Department of the Lottery's private management agreement and competitive bidding process under the Illinois Lottery Law (rather than the Department issuing a central system provider license pursuant to an open and competitive bidding process). Requires the Department to implement and administer the program no later than June 30, 2021 and that sports lottery terminals be available for play within 90 days after the effective date of the amendatory Act. Makes changes in provisions concerning the placement of sports lottery terminals, wagers accepted, distribution of proceeds, and the Department's powers. Provides that the Department shall be responsible for facilitating the purchase or lease of all sports lottery terminals. Changes the repeal date of the pilot program to January 1, 2029 (rather than January 1, 2024). Makes other changes. Effective immediately.


LRB102 18479 SMS 26618 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB4087LRB102 18479 SMS 26618 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
5Section 35 as follows:
 
6    (230 ILCS 40/35)
7    Sec. 35. Display of license; confiscation; violation as
8felony.
9    (a) Each video gaming terminal shall be licensed by the
10Board before placement or operation on the premises of a
11licensed establishment, licensed truck stop establishment,
12licensed large truck stop establishment, licensed fraternal
13establishment, or licensed veterans establishment. The license
14of each video gaming terminal shall be maintained at the
15location where the video gaming terminal is operated. Failure
16to do so is a petty offense with a fine not to exceed $100. Any
17licensed establishment, licensed truck stop establishment,
18licensed large truck stop establishment, licensed fraternal
19establishment, or licensed veterans establishment used for the
20conduct of gambling games in violation of this Act shall be
21considered a gambling place in violation of Section 28-3 of
22the Criminal Code of 2012. Every gambling device found in a
23licensed establishment, licensed truck stop establishment,

 

 

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1licensed large truck stop establishment, licensed fraternal
2establishment, or licensed veterans establishment operating
3gambling games in violation of this Act shall be subject to
4seizure, confiscation, and destruction as provided in Section
528-5 of the Criminal Code of 2012. Any license issued under the
6Liquor Control Act of 1934 to any owner or operator of a
7licensed establishment, licensed truck stop establishment,
8licensed large truck stop establishment, licensed fraternal
9establishment, or licensed veterans establishment that
10operates or permits the operation of a video gaming terminal
11within its establishment in violation of this Act shall be
12immediately revoked. No person may own, operate, have in his
13or her possession or custody or under his or her control, or
14permit to be kept in any place under his or her possession or
15control, any device that awards credits and contains a
16circuit, meter, or switch capable of removing and recording
17the removal of credits when the award of credits is dependent
18upon chance.
19    Nothing in this Section shall be deemed to prohibit the
20use of a game device only if the game device is used in an
21activity that is not gambling under subsection (b) of Section
2228-1 of the Criminal Code of 2012. An applicant or licensee
23under this Act is not in violation of this Act or its rules and
24shall not be subject to disciplinary action for operating a
25game device if operation of the game device is in compliance
26with and not considered gambling under subsection (b) of

 

 

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1Section 28-1 of the Criminal Code of 2012.
2    A violation of this Section is a Class 4 felony. All
3devices that are owned, operated, or possessed in violation of
4this Section are hereby declared to be public nuisances and
5shall be subject to seizure, confiscation, and destruction as
6provided in Section 28-5 of the Criminal Code of 2012.
7    The provisions of this Section do not apply to devices or
8electronic video game terminals licensed pursuant to this Act.
9A video gaming terminal operated for amusement only and
10bearing a valid amusement tax sticker shall not be subject to
11this Section until 30 days after the Board establishes that
12the central communications system is functional.
13    (b) (1) The odds of winning each video game shall be posted
14on or near each video gaming terminal. The manner in which the
15odds are calculated and how they are posted shall be
16determined by the Board by rule.
17    (2) No video gaming terminal licensed under this Act may
18be played except during the legal hours of operation allowed
19for the consumption of alcoholic beverages at the licensed
20establishment, licensed fraternal establishment, or licensed
21veterans establishment. A licensed establishment, licensed
22fraternal establishment, or licensed veterans establishment
23that violates this subsection is subject to termination of its
24license by the Board.
25(Source: P.A. 101-31, eff. 6-28-19.)
 

 

 

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1    Section 10. The Sports Wagering Act is amended by changing
2Section 25-70 as follows:
 
3    (230 ILCS 45/25-70)
4    (Section scheduled to be repealed on January 1, 2024)
5    Sec. 25-70. Lottery sports wagering pilot program.
6    (a) As used in this Section:
7    "Central lottery system" means the hardware, software,
8peripherals, platform, and network components provided by the
9Department's central system provider that link and support all
10required lottery games, programs, and terminals, including,
11but not limited to, sports wagering games and programs through
12sports lottery terminals and the central site and that are
13unique and separate from the lottery central system for draw
14and instant games.
15    "Central lottery system provider" means an individual,
16partnership, corporation, or limited liability company that
17provides the hardware, software, peripherals, platform, risk
18management, operations, support services, and network
19components that link and support all required lottery games
20and lottery terminals, including, but not limited to, sports
21wagering games and programs through has been licensed for the
22purpose of providing and maintaining a central system and the
23related management facilities specifically for the management
24of sports lottery terminals.
25    "Electronic card" means a card purchased from a lottery

 

 

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1retailer.
2    "Lottery game" means any game provided for sale or
3distribution by the Illinois Lottery, including, but not
4limited to, sports wagering games and programs through sports
5lottery terminals.
6    "Lottery retailer" means a location licensed by the
7Department, or otherwise eligible for a license, to sell
8lottery tickets or shares, including a licensed retail
9establishment where alcoholic liquor is drawn, poured, mixed,
10or otherwise served for consumption on premises, regardless of
11whether the establishment operates on a nonprofit or
12for-profit basis, any location or establishment that is
13licensed to operate video gaming terminals, and any other
14retail food establishment.
15    "Sports lottery systems" means systems provided by the
16central lottery system provider consisting of sports wagering
17products, risk management, operations, and support services.
18    "Sports lottery terminal" means a terminal linked to the
19central lottery system in which bills or coins are deposited
20or an electronic card is inserted in order to place wagers on a
21sports event and lottery offerings and includes sports
22wagering conducted over the Internet or through mobile
23applications or other digital platforms.
24    (b) Lottery games are a part of the private management
25agreement and competitive bidding process provided in Section
269.1 of the Illinois Lottery Law. The central lottery system

 

 

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1provider shall pay $10,000,000, payable in equal installments
2over the course of its contract, to the Department upon being
3issued the central lottery system provider license authorizing
4sports wagering games and programs under this Section. The
5fee, however, shall be deducted from the central lottery
6system provider's operational costs related to the sports
7lottery infrastructure up to the pro rata amount paid each
8year. The Department shall issue one central system provider
9license pursuant to an open and competitive bidding process
10that uses the following procedures:
11        (1) The Department shall make applications for the
12    central system provider license available to the public
13    and allow a reasonable time for applicants to submit
14    applications to the Department.
15        (2) During the filing period for central system
16    provider license applications, the Department may retain
17    professional services to assist the Department in
18    conducting the open and competitive bidding process.
19        (3) After receiving all of the bid proposals, the
20    Department shall open all of the proposals in a public
21    forum and disclose the prospective central system provider
22    names and venture partners, if any.
23        (4) The Department shall summarize the terms of the
24    bid proposals and may make this summary available to the
25    public.
26        (5) The Department shall evaluate the bid proposals

 

 

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1    within a reasonable time and select no more than 3 final
2    applicants to make presentations of their bid proposals to
3    the Department.
4        (6) The final applicants shall make their
5    presentations to the Department on the same day during an
6    open session of the Department.
7        (7) As soon as practicable after the public
8    presentations by the final applicants, the Department, in
9    its discretion, may conduct further negotiations among the
10    3 final applicants. At the conclusion of such
11    negotiations, the Department shall select the winning bid.
12        (8) Upon selection of the winning bid, the Department
13    shall evaluate the winning bid within a reasonable period
14    of time for licensee suitability in accordance with all
15    applicable statutory and regulatory criteria.
16        (9) If the winning bidder is unable or otherwise fails
17    to consummate the transaction, (including if the
18    Department determines that the winning bidder does not
19    satisfy the suitability requirements), the Department may,
20    on the same criteria, select from the remaining bidders.
21        (10) The winning bidder shall pay $20,000,000 to the
22    Department upon being issued the central system provider
23    license.
24    (c) Every sports lottery terminal offered in this State
25for play shall first be tested and approved pursuant to the
26rules of the Department, and each sports lottery terminal

 

 

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1offered in this State for play shall conform to an approved
2model. Sports lottery terminals shall be available for play
3within 90 days after the effective date of this amendatory Act
4of the 102nd General Assembly and any system testing dates
5designated by the Department. For the examination of sports
6lottery terminals and associated equipment as required by this
7Section, the central lottery system provider may utilize the
8services of one or more independent outside testing
9laboratories that have been accredited by a national
10accreditation body and that, in the judgment of the
11Department, are qualified to perform such examinations. Every
12sports lottery terminal offered in this State for play must
13meet minimum standards set by an independent outside testing
14laboratory approved by the Department.
15    (d) Sports During the first 360 days after the effective
16date of this Act, sport lottery terminals may be placed in any
17no more than 2,500 Lottery retail location locations in the
18State. Sports lottery terminals may be placed in an additional
192,500 Lottery retail locations during the second year after
20the effective date of this Act.
21    (e) A sports lottery terminal may not directly dispense
22coins, cash, tokens, or any other article of exchange or value
23except for receipt tickets. Tickets shall be dispensed by
24pressing the ticket dispensing button on the sports lottery
25terminal at the end of the placement of one's wager or wagers.
26The ticket shall indicate the total amount wagered, odds for

 

 

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1each wager placed, and the cash award for each bet placed, the
2time of day in a 24-hour format showing hours and minutes, the
3date, the terminal serial number, the sequential number of the
4ticket, and an encrypted validation number from which the
5validity of the prize may be determined. The player shall turn
6in this ticket to the appropriate person at a lottery retailer
7to receive the cash award.
8    (f) No lottery retailer may cause or permit any person
9under the age of 21 years to use a sports lottery terminal or
10sports wagering application. A lottery retailer who knowingly
11causes or permits a person under the age of 21 years to use a
12sports lottery terminal or sports wagering application is
13guilty of a business offense and shall be fined an amount not
14to exceed $5,000.
15    (g) A sports lottery terminal shall only accept any wagers
16as determined by rule by the Department. parlay wagers and
17fixed odds parlay wagers. The Department shall, by rule,
18establish the total amount, as a percentage, of all wagers
19placed that a lottery retailer may retain.
20    (g-5) The payouts for the lottery sports wagering pilot
21program shall be as follows:
22        (1) 80% or less of gross dollars played to be
23    distributed as prizes and awards; this amount shall be
24    calculated as an average based on a 2-year anniversary
25    date to be determined by the Department and guaranteed by
26    the central lottery system provider; and

 

 

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1        (2) 20% gross gaming revenue remaining (gross dollars
2    played minus prizes paid) to be distributed as follows:
3            (A) 8% to the central lottery system provider; and
4            (B) except as provided in subparagraphs (i) and
5        (ii), 11.5% to the State of Illinois, of which the
6        local municipality shall receive .5%. if the State is
7        responsible for the retailer commissions and payment
8        of the sports lottery terminal;
9                (i) if a terminal operator under the Video
10            Gaming Act purchases and distributes the sports
11            lottery terminal, then 4% to the State, 3% to the
12            lottery retailer, 4.5% to the terminal operator,
13            and .5% to the local municipality; and
14                (ii) if a Lottery retail location purchases
15            the sports lottery terminal, then 7.5% goes to the
16            Lottery retail location and 4% to the State, of
17            which the local municipality shall receive .5%.
18    (h) The Department shall have jurisdiction over and shall
19supervise all lottery sports wagering operations governed by
20this Section. The Department shall implement and administer
21the lottery sports wagering pilot program no later than June
2230, 2021. The Department shall have all powers necessary and
23proper to fully and effectively execute the provisions of this
24Section, including, but not limited to, the following:
25        (1) To investigate applicants and determine the
26    eligibility of applicants for licenses with a goal of

 

 

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1    advancing minority business opportunities, including
2    lottery retailer ownership of sports lottery terminals and
3    to select among competing applicants the applicants which
4    best serve the interests of the citizens of Illinois.
5        (2) To have jurisdiction and supervision over all
6    lottery sports wagering operations in this State.
7        (3) To adopt rules for the purpose of administering
8    the provisions of this Section and to adopt rules and
9    conditions under which all lottery sports wagering in the
10    State shall be conducted. Such rules are to provide for
11    the prevention of practices detrimental to the public
12    interest and for the best interests of lottery sports
13    wagering, including rules (i) regarding the inspection of
14    such licensees necessary to operate a lottery retailer
15    under any laws or rules applicable to licensees, (ii) to
16    impose penalties for violations of the Act and its rules,
17    and (iii) establishing standards for advertising lottery
18    sports wagering, (iv) to effectuate policies that advance
19    minority business ownership and participation in the
20    sports lottery program, and (v) regarding apportionment of
21    the total revenues accruing from the lottery sports
22    wagering pilot program for the purchase or lease of the
23    hardware.
24    (i) The Department shall adopt emergency rules to
25administer this Section in accordance with Section 5-45 of the
26Illinois Administrative Procedure Act. For the purposes of the

 

 

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1Illinois Administrative Procedure Act, the General Assembly
2finds that the adoption of rules to implement this Section is
3deemed an emergency and necessary to the public interest,
4safety, and welfare.
5    (j) For the privilege of operating lottery sports wagering
6under this Section, all proceeds minus net of proceeds
7returned to players shall be electronically transferred daily
8or weekly, at the discretion of the Director of the Lottery,
9into the State Lottery Fund. After amounts owed to the central
10system provider and licensed agents, as determined by the
11Department, are paid from the moneys deposited into the State
12Lottery Fund under this subsection, the remainder shall be
13transferred on the 15th of each month to the Capital Projects
14Fund.
15    (j-5) The Department shall be responsible for facilitating
16either the purchase or lease of all sports lottery terminals,
17including providing opportunities for minority business
18lottery retailers to obtain suitable financing. The Department
19shall allow for any terminal operator under the Video Gaming
20Act and Lottery retail location to purchase or lease the
21sports lottery terminals.
22    (k) This Section is repealed on January 1, 2029 2024.
23(Source: P.A. 101-31, eff. 6-28-19.)
 
24    Section 99. Effective date. This Act takes effect upon
25becoming law.