State of Illinois
2021 and 2022


Introduced 2/26/2021, by Sen. Cristina Castro


New Act
5 ILCS 100/5-45.8 new

    Creates the Internet Gaming Act. Authorizes a casino or racetrack to offer Internet gaming or contract with a platform to offer Internet gaming, as regulated by the Illinois Gaming Board. Provides the requirements for Internet gaming platforms, Internet wagering accounts, and licenses issued under the Act. Includes provisions for age verification, location of wagering, responsible gaming, diversity goals in procurement and spending by Internet gaming licensees, the applicability of the Illinois Gambling Act and the Uniform Penalty and Interest Act, acceptance of out-of-state wagers, and limitations on home rule units. Provides that a 12% privilege tax is imposed on Internet gaming to be deposited into the State Gaming Fund. Provides that certain tax revenue from Internet gaming shall be paid to the Department of Human Services for the administration of programs to treat problem gambling, the Pension Stabilization, and the Education Assistance Fund. Authorizes the adoption of emergency rules to implement the Act and makes conforming changes in the Illinois Administrative Procedure Act. Effective immediately.

LRB102 13426 SMS 18770 b






SB2069LRB102 13426 SMS 18770 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 1. Short title. This Act may be cited as the
5Internet Gaming Act.
6    Section 5. Definitions. Unless otherwise provided in this
7Act, the terms used in this Act have the same meaning as the
8terms defined in Section 4 of the Illinois Gambling Act.
9Further, as used in this Act:
10    "Adjusted gross gaming revenue" means the total of all
11sums actually received by an Internet gaming licensee from
12Internet gaming operations, excluding free play and
13promotional credits, less the total of all sums actually paid
14out as winnings to patrons, which includes the cash equivalent
15of any merchandise or thing of value awarded as a prize.
16Adjusted gross gaming revenue does not include the dollar
17amount of noncashable vouchers, coupons, or promotions
18redeemed by participants on an Internet gaming platform.
19    "Board" means the Illinois Gaming Board.
20    "Internet game" means an Internet-based version or
21substantial equivalent of a gambling game, slot machine,
22poker, or table game, including, but not limited to,
23simulcasted live-dealer versions of casino games in which an



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1individual wagers money or something of monetary value for the
2opportunity to win money or something of monetary value, and
3which is accessed by an Internet-connected computer or mobile
4device. An Internet game includes gaming tournaments conducted
5via the Internet in which players compete against one another
6or in one or more of the games authorized in this Act. An
7Internet game does not include sports wagering conducted
8pursuant to the Sports Wagering Act or fantasy contests in
9which one or more players compete against each other and
10winning outcomes reflect the relative knowledge and skill of
11the players and are determined predominately by accumulated
12statistical results of the performance of individuals,
13including athletes in the case of sporting events.
14    "Internet gaming" means conducting Internet games.
15    "Internet gaming licensee" means the owners licensee or
16organization licensee that holds an Internet gaming license
17under this Act.
18    "Internet gaming operator" means an Internet gaming
19licensee that operates an Internet gaming platform or, if an
20Internet management services provider operates the Internet
21gaming platform, the Internet management services provider.
22    "Internet gaming platform" means the combination of
23hardware and software or other technology designed and used to
24manage, conduct, and record Internet gaming and the wagers
25associated with Internet gaming.
26    "Internet gaming skin" means a distinctly branded Internet



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1gaming platform operated by an Internet gaming operator that
2may encompass a website, mobile application, or other portal
3to the Internet gaming platform. The brand may be that of the
4Internet gaming licensee or its affiliate, the Internet
5management service provider, or another brand as agreed upon
6by the Internet gaming licensee and its Internet management
7service provider.
8    "Internet management service provider" means a licensed
9business entity that operates an Internet gaming platform
10pursuant to an agreement with an Internet gaming licensee.
11    "Internet wagering" means the placing of wagers with an
12Internet gaming operator by persons who are either physically
13present in Illinois or in another permissible jurisdiction
14whereby the Board has entered a compact when placing a wager or
15otherwise permitted to place a wager by law.
16    "Internet wagering account" means a financial record
17established and accessible through an Internet gaming platform
18for an individual participant in which the participant may
19deposit and withdraw funds for Internet gaming and other
20authorized purchases and to which the Internet gaming operator
21may credit winnings or other amounts due to that participant
22or authorized by that participant.
23    "Organization licensee" has the meaning given to that term
24in the Illinois Horse Racing Act of 1975.
25    "Owners licensee" means the holder of an owners license
26issued under the Illinois Gambling Act.



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1    "Permissible jurisdiction" means another jurisdiction from
2which wagers may be accepted pursuant to Section 60.
3    Section 10. Board powers and responsibilities. The Board
4shall have the same powers and responsibilities with respect
5to the offering of Internet gaming as it has with respect to
6non-Internet gaming pursuant to Section 5 of the Illinois
7Gambling Act, except where the exercise of such powers or
8responsibilities is incompatible with the offering of gambling
9games over the Internet or with this Act.
10    Section 15. Rulemaking.
11    (a) The Board shall adopt emergency rules within 90 days
12after the effective date of this Act to administer this Act in
13accordance with Section 5-45 of the Illinois Administrative
14Procedure Act. For the purposes of the Illinois Administrative
15Procedure Act, the General Assembly finds that the adoption of
16rules to implement this Act is deemed an emergency and
17necessary to the public interest, safety, and welfare.
18    (b) In adopting rules and regulating the conduct of
19Internet gaming, the Board shall, to the greatest extent
20possible, utilize existing rules adopted under the Illinois
21Gambling Act and amend existing rules or adopt new rules or
22standards only as reasonably necessary to implement Internet
23gaming under this Act. The Board shall look to the Internet
24gaming rules of other regulated jurisdictions in the United



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1States and shall implement consistent rules to the greatest
2extent practicable.
3    Section 20. Internet gaming authorized.
4    (a) Notwithstanding any provision of law to the contrary,
5Internet gaming is only lawful when conducted by an Internet
6gaming operator in accordance with the provisions of this Act
7and the rules of the Board.
8    (b) Internet gaming may only be offered by an Internet
9gaming licensee or an Internet management services provider
10that has contracted with an Internet gaming licensee. An
11Internet gaming licensee may offer no more than 3 individually
12branded Internet gaming skins. The Internet gaming licensee
13may operate the platforms and contract with up to 3 Internet
14management service providers to conduct Internet gaming in
15accordance with the rules of the Board and the provisions of
16this Act.
17    (c) The primary servers necessary to the placement or
18resolution of wagers on an Internet gaming platform shall be
19located within a facility that is secure and inaccessible to
20the public. The primary servers may be located anywhere in the
21United States that is in compliance with federal law. All
22wagers that originate in this State are deemed to be placed in
23this State. The intermediate routing of electronic data in
24connection with Internet gaming, including across State lines,
25shall not determine the location or locations in which a wager



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1is initiated, received, or otherwise made.
2    Section 25. Requirements of Internet gaming platform.
3    (a) An Internet gaming operator may accept wagers on an
4Internet gaming platform only as follows: (1) the wager is
5placed directly with the Internet gaming operator through an
6Internet wagering account; and (2) the Internet gaming
7operator has verified that the person placing the wager is the
8holder of the Internet wagering account and is physically
9located within this State or a permissible jurisdiction using
10technological requirements in compliance with this Section.
11    (b) An Internet gaming platform shall include age and
12location verification mechanisms and requirements that are
13designed to preclude knowingly accepting wagers from
14individuals under 21 years of age, persons not physically
15within the State or a permissible jurisdiction, and persons
16otherwise excluded from Internet gaming from establishing
17Internet wagering accounts or from engaging in Internet gaming
18under this Act. The Internet gaming platform's age, location,
19and eligibility detection mechanisms shall monitor attempts to
20access the system and shall use commercially reasonable
21attempts to block unauthorized attempts to access the system.
22    (c) An Internet gaming operator shall implement
23appropriate data security standards to prevent unauthorized
24access by any person whose identity has not been verified or
25cannot be verified, in accordance with rules adopted by the



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1Board. The Internet gaming platform's identity verification
2mechanisms shall monitor attempts to access the system and
3shall use commercially reasonable attempts to block
4unauthorized attempts to access the system by persons who are
5not the wagering account holder.
6    (d) An Internet gaming operator shall implement
7appropriate standards to protect the privacy and security of
8participants to a reasonable degree of certainty. Internet
9gaming operators shall establish and offer participants the
10option to protect their accounts with multi-factor
11authentication or authentication features such as personal
12identification numbers or biometric data.
13    (e) The Internet gaming operator shall establish internal
14and accounting controls applicable to Internet gaming and
15shall ensure that the security and integrity of all financial
16transactions in connection with Internet gaming shall comply
17with this Act and any rules adopted by the Board.
18    (f) An Internet gaming operator shall collect, report, and
19pay all applicable taxes and fees and shall maintain all
20books, records, and documents pertaining to the provider's
21gaming operations in a manner and location within this State
22as approved by the Board.
23    (g) All books, records, and documents concerning Internet
24gaming shall be available for inspection upon commercially
25reasonable notice by the Board during ordinary business hours
26in accordance with the Board's rules and shall be maintained



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1in a manner and during periods of time as the Board shall
3    (h) Each Internet gaming operator shall maintain a file
4containing samples of the types and forms of advertising and
5promotional materials that it has used for Internet gaming in
6connection with this State. Such advertising samples shall be
7made available or produced for inspection upon the Board's
9    Section 30. Internet wagering accounts.
10    (a) Eligible persons must establish Internet wagering
11accounts in person at a casino or racetrack during the first 6
12months of operation. After the first 6 months of operation, an
13account may be established over the Internet without appearing
14in person. An Internet gaming operator shall adopt reasonable
15procedures to ensure that individuals have no more than one
16Internet wagering account with the Internet gaming operator.
17However, nothing in this Act prohibits the combination of a
18sports wagering account under the Sports Wagering Act and the
19Internet wagering account set forth under this Act.
20    (b) Participants may deposit and withdraw funds from their
21Internet wagering accounts in person at a casino or racetrack
22or over the Internet through electronic means to the extent
23allowed by federal law, including debit and credit cards;
24automated clearing house transfers; wire transfers; deposits
25and withdrawals of cash or gaming chips at cashiering



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1locations approved by the Board; reliable prepaid cards; cash
2complimentary, promotional credits, or bonus credits;
3winnings; or other means as approved by the Board.
4    (c) Internet gaming operators shall include, as part of
5their internal controls, mechanisms and procedures for
6reasonably detecting unauthorized access to Internet wagering
7accounts, unauthorized attempts to access Internet wagering
8accounts, and suspicious Internet wagering activity
9constituting cheating, theft, embezzlement, collusion, money
10laundering, and other illegal activity.
11    (d) As permitted by federal law, nothing in this Act
12prohibits Internet gaming operators from linking or otherwise
13commingling Internet wagering accounts with an eligible
14person's Internet wagering account in another jurisdiction.
15However, an Internet gaming operator must retain records of
16all deposits, withdraws, wagers, and wager results that take
17place within this State and pursuant to this Act and ensure all
18taxes and fees due under this Act are properly documented and
20    Section 35. License requirements.
21    (a) No person may offer Internet games in this State
22unless all necessary licenses have been obtained in accordance
23with this Act and the rules of the Board. The Board may issue
24the following licenses to persons, firms, partnerships, or
25corporations that apply for licensure upon a determination by



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1the Board that the applicant is eligible for the license under
2this Act and rules adopted by the Board:
3        (1) Internet gaming license;
4        (2) Internet management service provider license;
5        (3) supplier license; and
6        (4) occupational license.
7    (b) The Board shall issue an Internet gaming license upon
8request to any owners licensee or organization licensee. The
9fee for a license shall be $500,000. An Internet gaming
10license shall be valid for the same period of time as the
11requester's owners license or organization license and shall
12be renewed as a matter of course upon renewal of the owners
13license or organization license and for the same period of
14time as the owners license or organization license. The fee
15for renewal of an Internet gaming license is $250,000.
16    (c) An entity may apply for an Internet management service
17provider license in the form as may be required by the Board
18consistent with the requirements of this Act. The Board shall
19provide an abbreviated application for entities that hold or
20have a pending application for a management services provider
21license under the Sports Wagering Act or other types of gaming
22under Illinois law. Before issuance of an Internet management
23service provider license under this Act, the applicant shall
24pay to the Board a licensing fee of $100,000 or, for applicants
25holding a management service provider license issued under
26other Illinois law, a licensing fee of $50,000. An Internet



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1management service provider license issued under this Act
2shall be valid for 4 years, subject to renewal upon payment of
3a fee of $50,000.
4    (d) An applicant for a supplier license shall apply in the
5form as may be required by the Board consistent with the
6requirements of this Act. The Board shall provide an
7abbreviated application for entities which hold or have a
8pending application for a supplier license under the Sports
9Wagering Act or other types of gaming under Illinois law.
10Before issuance of a supplier license under this Act, the
11applicant shall pay to the Board a licensing fee of $75,000 or,
12for applicants holding a supplier license issued under other
13Illinois law, a licensing fee of $50,000. A supplier license
14issued under this Act shall be valid for 4 years, subject to
15renewal upon payment of a fee of $50,000.
16    (e) An applicant for an occupation license shall apply in
17the form as may be required by the Board consistent with the
18requirements of this Act for individuals who can directly
19change critical components of Internet game system hardware or
20software and meet 2 of the following requirements: (1) have
21access to wagering account holders' personally identifying
22information; (2) have the ability to make adjustments to
23Internet wagering accounts; or (3) have direct interaction
24with wagering account holders. Before issuance of an
25occupational license under this Act, the applicant shall pay
26to the Board a licensing fee of $1,000 or, for applicants



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1holding an occupational license issued under other Illinois
2law, a licensing fee of $500. An occupational license issued
3under this Act shall be valid for 4 years, subject to renewal
4upon payment of a fee of $500.
5    (f) The Board shall issue any license under this Act upon
6payment of the license fee and a showing that the applicant
7holds an equivalent license under the Sports Wagering Act or,
8otherwise, has an equivalent license to conduct Internet
9gaming in another U.S. jurisdiction with licensing standards
10similar to those established under this Act and accompanying
12    (g) The Board shall issue any license under this Act on a
13temporary basis within 30 days after receiving an application
14to any applicant that holds an equivalent license or temporary
15license under the Sports Wagering Act or, otherwise, has
16equivalent licenses in connection with Internet gaming in
17another U.S. jurisdictions. The Board shall issue the
18temporary license under this subsection within 30 days after
19receiving a completed application unless it is aware of
20credible information that may prevent the issuance of a
21license or require certain conditions on a license to ensure
22compliance with Illinois gaming law. The temporary license
23shall be valid for a period of one year. The Board may revoke a
24temporary license at any time if it becomes aware of credible
25information that may prevent the issuance of a license or
26require certain conditions on a license to ensure compliance



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1with Illinois gaming law. A temporary license shall otherwise
2be deemed to be the equivalent of a full license for all
4    (h) The Board may require background investigations for
5any officer, director, or shareholder with 10% or more equity
6interests of an applicant for an Internet management service
7provider license. The Board may recover the actual costs of an
8investigation conducted under this subsection from any license
9applicant. The Board may accept a background investigation
10conducted by another state with licensing standards similar to
11those established under this Act and accompanying rules.
12    Section 40. Age verification; location; responsible
14    (a) An Internet gaming platform's internal controls shall
15include one or more mechanism to reasonably verify that a
16participant is 21 years of age or older, that wagering on
17Internet games is limited to transactions that are initiated
18and received within the State of Illinois or a permissible
19jurisdiction, and that the participant is physically located
20within the State of Illinois or a permissible jurisdiction.
21    (b) The Board shall develop responsible Internet gaming
22measures, including a statewide responsible gaming database
23identifying individuals who shall be prohibited from
24establishing an Internet wagering account or participating in
25Internet gaming offered by an Internet gaming operator. The



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1Board shall adopt rules for the establishment and maintenance
2of the responsible gaming database, which shall include
3allowances for individuals to self-exclude from Internet
4wagering, including making self-exclusion elections through an
5Internet gaming operator on an Internet gaming platform or
6in-person at casinos or racetracks. The Board shall maintain
7the responsible gaming database in a confidential manner and
8Internet gaming operators shall not knowingly accept wagers
9from anyone listed on the gaming database. Notwithstanding any
10law to the contrary, a self-exclusion election and the
11responsible gaming database are not public records subject to
12copying and disclosure under the Freedom of Information Act.
13    (c) Each Internet gaming platform shall display the words
14"If you or someone you know has a gambling problem, help is
15available. Call (toll-free telephone number)" or some
16comparable language approved by the Board, which language
17shall include the words "gambling problem" and "call
181-800-GAMBLER" to be displayed on the home page accessible to
19any person visiting or initially logging into the Internet
20gaming platform. Similar information shall be accessible to
21account holders when logged onto the Internet gaming platform.
22    (d) Each Internet gaming platform shall include mechanisms
23for temporary and permanent self-exclusion through the Board's
24statewide responsible gaming database from Internet gaming,
25including termination of his or her Internet wagering account;
26a deposit limit offered on a daily, weekly, and monthly basis



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1that allows participants to specify the maximum amount of
2money they can deposit into the Internet wagering account
3during the particular time period; and a spend limit offered
4on a daily, weekly, and monthly basis that allows participants
5to specify the maximum amount of the deposits that they may put
6at risk during the particular time period. Self-imposed
7wagering or deposit limits shall take effect immediately but
8increases to a previously imposed limit shall not take effect
9until the expiration of the limit per the terms of the
10participant's original election. A licensee under this Act
11shall not knowingly mail or otherwise forward any
12gaming-related promotional materials or electronic mail to a
13participant during any period in which the participant has
14elected to temporarily or permanently suspend or terminate
15Internet gaming through the account.
16    (e) A participant shall continue to have access to the
17Internet wagering account and the ability to withdraw funds,
18notwithstanding any temporary or permanent suspension or
19limits placed upon the account pursuant to this Section.
20    Section 45. Tax.
21    (a) A privilege tax is imposed on an Internet gaming
22operator based on the adjusted gross gaming revenue wagered on
23Internet gaming platforms authorized under this Act at a rate
24of 12% of adjusted gross gaming revenue. This privilege tax is
25the exclusive tax in relation to Internet gaming. No local



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1government of this State, including home rule municipalities,
2may impose or levy taxes on adjusted gross gaming revenue.
3    (b) All moneys collected under this Act by the Board shall
4be deposited into the State Gaming Fund. The taxes imposed by
5this Section shall be paid by the Internet gaming operator on
6the day following the end of the month in which the wagers were
8    (c) If the taxpayer's adjusted gross gaming revenue for a
9month is a negative number, the taxpayer may carry over the
10negative amount to a return filed for the subsequent month and
11deduct the negative amount from its tax liability for that
12month, provided that the amount is not be carried over and
13deducted against tax liability in any month that is more than
1412 months later than the month in which the amount was accrued.
15    (d) $10,000,000 from the tax revenue deposited in the
16State Gaming Fund under this Act shall be paid annually to the
17Department of Human Services for the administration of
18programs to treat problem gambling.
19    (e) After the amount specified in subsection (d) has been
20paid or transferred, all remaining tax revenue deposited into
21the State Gaming Fund in accordance with this Act shall be
22transferred in equal parts to the Pension Stabilization Fund
23and the Education Assistance Fund.
24    Section 50. Diversity programs.
25    (a) As used in this Section only, "licensee" means an



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1Internet gaming licensee under this Act.
2    (b) The public policy of this State is to collaboratively
3work with companies that serve Illinois residents to improve
4their supplier diversity in a non-antagonistic manner.
5    (c) The Board shall require all licensees under this Act
6to submit an annual report by April 15, 2022 and every April 15
7thereafter, in a searchable Adobe PDF format, on all
8procurement goals and actual spending for businesses owned by
9women, minorities, veterans, and persons with disabilities and
10small business enterprises in the previous calendar year.
11These goals shall be expressed as a percentage of the total
12work performed by the entity submitting the report, and the
13actual spending for all businesses owned by women, minorities,
14veterans, and persons with disabilities and small business
15enterprises shall also be expressed as a percentage of the
16total work performed by the entity submitting the report.
17    (d) Each licensee in its annual report shall include the
18following information: (1) an explanation of the plan for the
19next year to increase participation; (2) an explanation of the
20plan to increase the goals; (3) the areas of procurement each
21licensee shall be actively seeking more participation in the
22next year; (4) an outline of the plan to alert and encourage
23potential vendors in that area to seek business from the
24licensee; (5) an explanation of the challenges faced in
25finding quality vendors and offer any suggestions for what the
26Board could do to be helpful to identify those vendors; (6) a



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1list of the certifications the licensee recognizes; (7) the
2point of contact for any potential vendor who wishes to do
3business with the licensee and explain the process for a
4vendor to enroll with the licensee as a businesses owned by
5women, minorities, veterans, or persons with disabilities; and
6(8) any particular success stories to encourage other
7licensees to emulate best practices.
8    (e) Each annual report shall include as much
9State-specific data as possible. If the submitting entity does
10not submit State-specific data, then the licensee shall
11include any national data it does have and explain why it could
12not submit State-specific data and how it intends to do so in
13future reports, if possible.
14    (f) Each annual report shall include the rules,
15regulations, and definitions used for the procurement goals in
16the licensee's annual report.
17    (g) The Board and all licensees shall hold an annual
18workshop and job fair open to the public in 2022 and every year
19thereafter on the state of supplier diversity to
20collaboratively seek solutions to structural impediments to
21achieving stated goals, including testimony from each licensee
22as well as subject matter experts and advocates. The Board
23shall publish a database on its website of the point of contact
24for licensees it regulates under this Act for supplier
25diversity, along with a list of certifications each licensee
26recognizes from the information submitted in each annual



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1report. The Board shall publish each annual report on its
2website and shall maintain each annual report for at least 5
4    (h) A licensee under this Act that is also subject to the
5diversity program requirements of Section 7.6 of the Illinois
6Gambling Act shall include its Internet gaming activities
7within the supplier diversity goals and accompanying reports.
8Compliance with Section 7.6 of the Illinois Gambling Act shall
9be in lieu of compliance with the reporting requirements under
10this Act.
11    Section 55. Applicability of the Illinois Gambling Act and
12the Uniform Penalty and Interest Act. The provisions of the
13Illinois Gambling Act, and all rules adopted thereunder, shall
14apply to this Act, except where there is a conflict between the
152 acts, including the incompatibility of any provision to the
16conduct of gaming remotely, without a brick-and-mortar
17facility, or over the Internet. All provisions of the Uniform
18Penalty and Interest Act shall apply, as far as practicable,
19to the subject matter of this Act to the same extent as if such
20provisions were included in this Act.
21    Section 60. Acceptance of out-of-state wagers.
22Notwithstanding any other provision of law to the contrary,
23wagers may be accepted under this Act from persons who are not
24physically present in this State if the Board has determined



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1that out-of-state wagering is not inconsistent with federal
2law or the law of the jurisdiction in which the person is
3located or if out-of-state wagering is conducted pursuant to a
4reciprocal agreement to which this State is a party that is not
5inconsistent with federal law. The Board may enter into
6agreements with other jurisdictions to facilitate, administer,
7and regulate multijurisdictional approved Internet games,
8including, but not limited to, poker.
9    Section 65. Home rule. The licensure and conduct of
10Internet gaming conducted by a person or entity pursuant to
11this Act are exclusive powers and functions of the State. A
12home rule unit may not regulate or license Internet gaming.
13This Section is a denial and limitation of home rule powers and
14functions under subsection (h) of Section 6 of Article VII of
15the Illinois Constitution.
16    Section 100. The Illinois Administrative Procedure Act is
17amended by adding Section 5-45.8 as follows:
18    (5 ILCS 100/5-45.8 new)
19    Sec. 5-45.8. Emergency rulemaking; Internet Gaming Act. To
20provide for the expeditious and timely implementation of the
21Internet Gaming Act, emergency rules implementing the Internet
22Gaming Act may be adopted in accordance with Section 5-45 by
23the Illinois Gaming Board. The adoption of emergency rules



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1authorized by Section 5-45 and this Section is deemed to be
2necessary for the public interest, safety, and welfare.
3    This Section is repealed on January 1, 2027.
4    Section 999. Effective date. This Act takes effect upon
5becoming law.