Executive Committee

Filed: 10/29/2009

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 744

2     AMENDMENT NO. ______. Amend Senate Bill 744 by replacing
3 everything after the enacting clause with the following:
 
4     "Section 5. The Video Gaming Act is amended by changing
5 Sections 5, 15, 20, 25, 30, 45, 55, 57, and 78 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
10 purchased by a player.
11     "Distributor" means an individual, partnership, or
12 corporation, or limited liability company licensed under this
13 Act to buy, sell, lease, or distribute video gaming terminals
14 or major components or parts of video gaming terminals to or
15 from terminal operators.
16     "Terminal operator" means an individual, partnership, or

 

 

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1 corporation, or limited liability company that is licensed
2 under this Act and that owns, services, and maintains video
3 gaming terminals for placement in licensed establishments,
4 licensed truck stop establishments, licensed fraternal
5 establishments, or licensed veterans establishments.
6     "Licensed technician" means an individual who is licensed
7 under this Act to repair, service, and maintain video gaming
8 terminals.
9     "Licensed terminal handler" means a person, including but
10 not limited to an employee or independent contractor working
11 for a manufacturer, distributor, supplier, technician, or
12 terminal operator, who is licensed under this Act to possess or
13 control a video gaming terminal or to have access to the inner
14 workings of a video gaming terminal. A licensed terminal
15 handler does not include an individual, partnership, or
16 corporation, or limited liability company defined as a
17 manufacturer, distributor, supplier, technician, or terminal
18 operator under this Act.
19     "Manufacturer" means an individual, partnership, or
20 corporation, or limited liability company that is licensed
21 under this Act and that manufactures or assembles video gaming
22 terminals.
23     "Supplier" means an individual, partnership, or
24 corporation, or limited liability company that is licensed
25 under this Act to supply major components or parts to video
26 gaming terminals to licensed terminal operators.

 

 

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1     "Net terminal income" means money put into a video gaming
2 terminal minus credits paid out to players.
3     "Video gaming terminal" means any electronic video game
4 machine that, upon insertion of cash, is available to play or
5 simulate the play of a video game, including but not limited to
6 video poker, line up, and blackjack, as authorized by the Board
7 utilizing a video display and microprocessors in which the
8 player may receive free games or credits that can be redeemed
9 for cash. The term does not include a machine that directly
10 dispenses coins, cash, or tokens or is for amusement purposes
11 only.
12     "Licensed establishment" means any licensed retail
13 establishment where alcoholic liquor is drawn, poured, mixed,
14 or otherwise served for consumption on the premises. "Licensed
15 establishment" does not include a facility operated by an
16 organization licensee, an intertrack wagering licensee, or an
17 intertrack wagering location licensee licensed under the
18 Illinois Horse Racing Act of 1975 or a riverboat licensed under
19 the Riverboat Gambling Act.
20     "Licensed fraternal establishment" means the location
21 where a qualified fraternal organization that derives its
22 charter from a national fraternal organization regularly
23 meets.
24     "Licensed veterans establishment" means the location where
25 a qualified veterans organization that derives its charter from
26 a national veterans organization regularly meets.

 

 

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1     "Licensed truck stop establishment" means a facility that
2 is at least a 3-acre facility with a convenience store and with
3 separate diesel islands for fueling commercial motor vehicles
4 and parking spaces for commercial motor vehicles as defined in
5 Section 18b-101 of the Illinois Vehicle Code.
6 (Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09.)
 
7     (230 ILCS 40/15)
8     Sec. 15. Minimum requirements for licensing and
9 registration. Every video gaming terminal offered for play
10 shall first be tested and approved pursuant to the rules of the
11 Board, and each video gaming terminal offered in this State for
12 play shall conform to an approved model. The Board may utilize
13 the services of an independent outside testing laboratory for
14 the examination of video gaming machines and associated
15 equipment as required by this Section. Every video gaming
16 terminal offered in this State for play must meet minimum
17 standards set by an independent outside testing laboratory
18 approved by the Board. Each approved model shall, at a minimum,
19 meet the following criteria:
20         (1) It must conform to all requirements of federal law
21     and regulations, including FCC Class A Emissions
22     Standards.
23         (2) It must theoretically pay out a mathematically
24     demonstrable percentage during the expected lifetime of
25     the machine of all amounts played, which must not be less

 

 

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1     than 80%. Video gaming terminals that may be affected by
2     skill must meet this standard when using a method of play
3     that will provide the greatest return to the player over a
4     period of continuous play.
5         (3) It must use a random selection process to determine
6     the outcome of each play of a game. The random selection
7     process must meet 99% confidence limits using a standard
8     chi-squared test for (randomness) goodness of fit.
9         (4) It must display an accurate representation of the
10     game outcome.
11         (5) It must not automatically alter pay tables or any
12     function of the video gaming terminal based on internal
13     computation of hold percentage or have any means of
14     manipulation that affects the random selection process or
15     probabilities of winning a game.
16         (6) It must not be adversely affected by static
17     discharge or other electromagnetic interference.
18         (7) It must be capable of detecting and displaying the
19     following conditions during idle states or on demand: power
20     reset; door open; and door just closed.
21         (8) It must have the capacity to display complete play
22     history (outcome, intermediate play steps, credits
23     available, bets placed, credits paid, and credits cashed
24     out) for the most recent game played and 10 games prior
25     thereto.
26         (9) The theoretical payback percentage of a video

 

 

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1     gaming terminal must not be capable of being changed
2     without making a hardware or software change in the video
3     gaming terminal, either on site or via the central
4     communications system.
5         (10) Video gaming terminals must be designed so that
6     replacement of parts or modules required for normal
7     maintenance does not necessitate replacement of the
8     electromechanical meters.
9         (11) It must have nonresettable meters housed in a
10     locked area of the terminal that keep a permanent record of
11     all cash inserted into the machine, all winnings made by
12     the terminal printer, credits played in for video gaming
13     terminals, and credits won by video gaming players. The
14     video gaming terminal must provide the means for on-demand
15     display of stored information as determined by the Board.
16         (12) Electronically stored meter information required
17     by this Section must be preserved for a minimum of 180 days
18     after a power loss to the service.
19         (13) It must have one or more mechanisms that accept
20     cash in the form of bills. The mechanisms shall be designed
21     to prevent obtaining credits without paying by stringing,
22     slamming, drilling, or other means. If such attempts at
23     physical tampering are made, the video gaming terminal
24     shall suspend itself from operating until reset.
25         (14) It shall have accounting software that keeps an
26     electronic record which includes, but is not limited to,

 

 

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1     the following: total cash inserted into the video gaming
2     terminal; the value of winning tickets claimed by players;
3     the total credits played; the total credits awarded by a
4     video gaming terminal; and pay back percentage credited to
5     players of each video game.
6         (15) It shall be linked by a central communications
7     system to provide auditing program information as approved
8     by the Board. The central communications system shall use a
9     standard industry protocol, as defined by the Gaming
10     Standards Association, and shall have the functionality to
11     enable the Board or its designee to activate or deactivate
12     individual gaming devices from the central communications
13     system. In no event may the communications system approved
14     by the Board limit participation to only one manufacturer
15     of video gaming terminals by either the cost in
16     implementing the necessary program modifications to
17     communicate or the inability to communicate with the
18     central communications system.
19         (16) The Board, in its discretion, may require video
20     gaming terminals to display Amber Alert messages if the
21     Board makes a finding that it would be economically and
22     technically feasible and pose no risk to the integrity and
23     security of the central communications system and video
24     gaming terminals.
25     The Board may adopt rules to establish additional criteria
26 to preserve the integrity and security of video gaming in this

 

 

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1 State. The central communications system vendor may not hold
2 any license issued by the Board under this Act.
3 (Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09.)
 
4     (230 ILCS 40/20)
5     Sec. 20. Direct dispensing of receipt tickets only. A video
6 gaming terminal may not directly dispense coins, cash, tokens,
7 or any other article of exchange or value except for receipt
8 tickets. Tickets shall be dispensed by pressing the ticket
9 dispensing button on the video gaming terminal at the end of
10 one's turn or play. The ticket shall indicate the total amount
11 of credits and the cash award, the time of day in a 24-hour
12 format showing hours and minutes, the date, the terminal serial
13 number, the sequential number of the ticket, and an encrypted
14 validation number from which the validity of the prize may be
15 determined. The player shall turn in this ticket to the
16 appropriate person at the licensed establishment, licensed
17 truck stop establishment, licensed fraternal establishment, or
18 licensed veterans establishment to receive the cash award. The
19 cost of the credit shall be one cent, 5 cents, 10 cents, or 25
20 cents, and the maximum wager played per hand shall not exceed
21 $2. No cash award for the maximum wager on any individual hand
22 shall exceed $500.
23 (Source: P.A. 96-34, eff. 7-13-09.)
 
24     (230 ILCS 40/25)

 

 

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1     Sec. 25. Restriction of licensees.
2     (a) Manufacturer. A person may not be licensed as a
3 manufacturer of a video gaming terminal in Illinois unless the
4 person has a valid manufacturer's license issued under this
5 Act. A manufacturer may only sell video gaming terminals for
6 use in Illinois to persons having a valid distributor's
7 license.
8     (b) Distributor. A person may not sell, distribute, or
9 lease or market a video gaming terminal in Illinois unless the
10 person has a valid distributor's license issued under this Act.
11 A distributor may only sell video gaming terminals for use in
12 Illinois to persons having a valid distributor's or terminal
13 operator's license.
14     (c) Terminal operator. A person may not own, maintain, or
15 place a video gaming terminal unless he has a valid terminal
16 operator's license issued under this Act. A terminal operator
17 may only place video gaming terminals for use in Illinois in
18 licensed establishments, licensed truck stop establishments,
19 licensed fraternal establishments, and licensed veterans
20 establishments. No terminal operator may give anything of
21 value, including but not limited to a loan or financing
22 arrangement, to a licensed establishment, licensed truck stop
23 establishment, licensed fraternal establishment, or licensed
24 veterans establishment as any incentive or inducement to locate
25 video terminals in that establishment. Of the after-tax profits
26 from a video gaming terminal, 50% shall be paid to the terminal

 

 

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1 operator and 50% shall be paid to the licensed establishment,
2 licensed truck stop establishment, licensed fraternal
3 establishment, or licensed veterans establishment,
4 notwithstanding nothwithstanding any agreement to the
5 contrary. No terminal operator may own or have a substantial
6 interest in more than 5% of the video gaming terminals licensed
7 in this State. A video terminal operator that violates one or
8 more requirements of this subsection is guilty of a Class 4
9 felony and is subject to termination of his or her license by
10 the Board.
11     (d) Licensed technician. A person may not service,
12 maintain, or repair a video gaming terminal in this State
13 unless he or she (1) has a valid technician's license issued
14 under this Act, (2) is a terminal operator, or (3) is employed
15 by a terminal operator, distributor, or manufacturer.
16     (d-5) Licensed terminal handler. No person, including, but
17 not limited to, an employee or independent contractor working
18 for a manufacturer, distributor, supplier, technician, or
19 terminal operator licensed pursuant to this Act, shall have
20 possession or control of a video gaming terminal, or access to
21 the inner workings of a video gaming terminal, unless that
22 person possesses a valid terminal handler's license issued
23 under this Act.
24     (e) Licensed establishment. No video gaming terminal may be
25 placed in any licensed establishment, licensed veterans
26 establishment, licensed truck stop establishment, or licensed

 

 

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1 fraternal establishment unless the owner or agent of the owner
2 of the licensed establishment, licensed veterans
3 establishment, licensed truck stop establishment, or licensed
4 fraternal establishment has entered into a written use
5 agreement with the terminal operator for placement of the
6 terminals. A copy of the use agreement shall be on file in the
7 terminal operator's place of business and available for
8 inspection by individuals authorized by the Board. A licensed
9 establishment, licensed truck stop establishment, licensed
10 veterans establishment, or licensed fraternal establishment
11 may operate up to 5 video gaming terminals on its premises at
12 any time.
13     (f) (Blank).
14     (g) Financial interest restrictions. As used in this Act,
15 "substantial interest" in a partnership, a corporation, an
16 organization, an association, or a business, or a limited
17 liability company means:
18         (A) When, with respect to a sole proprietorship, an
19     individual or his or her spouse owns, operates, manages, or
20     conducts, directly or indirectly, the organization,
21     association, or business, or any part thereof; or
22         (B) When, with respect to a partnership, the individual
23     or his or her spouse shares in any of the profits, or
24     potential profits, of the partnership activities; or
25         (C) When, with respect to a corporation, an individual
26     or his or her spouse is an officer or director, or the

 

 

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1     individual or his or her spouse is a holder, directly or
2     beneficially, of 5% or more of any class of stock of the
3     corporation; or
4         (D) When, with respect to an organization not covered
5     in (A), (B) or (C) above, an individual or his or her
6     spouse is an officer or manages the business affairs, or
7     the individual or his or her spouse is the owner of or
8     otherwise controls 10% or more of the assets of the
9     organization; or
10         (E) When an individual or his or her spouse furnishes
11     5% or more of the capital, whether in cash, goods, or
12     services, for the operation of any business, association,
13     or organization during any calendar year; or .
14         (F) When, with respect to a limited liability company,
15     an individual or his or her spouse is a member, or the
16     individual or his or her spouse is a holder, directly or
17     beneficially, of 5% or more of the membership interest of
18     the limited liability company.
19     For purposes of this subsection (g), "individual" includes
20 all individuals or their spouses whose combined interest would
21 qualify as a substantial interest under this subsection (g) and
22 whose activities with respect to an organization, association,
23 or business are so closely aligned or coordinated as to
24 constitute the activities of a single entity.
25     (h) Location restriction. A licensed establishment,
26 licensed truck stop establishment, licensed fraternal

 

 

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1 establishment, or licensed veterans establishment that is (i)
2 located within 1,000 feet of a facility operated by an
3 organization organizational licensee, an inter-track
4 intertrack wagering licensee, or an inter-track intertrack
5 wagering location licensee licensed under the Illinois Horse
6 Racing Act of 1975 or the home dock of a riverboat licensed
7 under the Riverboat Gambling Act or (ii) located within with a
8 100 feet of a school or a place of worship under the Religious
9 Corporation Act, is ineligible to operate a video gaming
10 terminal.
11     (i) Undue economic concentration. In addition to
12 considering all other requirements under this Act, in deciding
13 whether to approve the operation of video gaming terminals by a
14 terminal operator in a location, the Board shall consider the
15 impact of any economic concentration of such operation of video
16 gaming terminals. The Board shall not allow a terminal operator
17 to operate video gaming terminals if the Board determines such
18 operation will result in undue economic concentration.
19     For purposes of this Section, "undue economic
20 concentration" means that a terminal operator would have such
21 actual or potential influence over video gaming terminals in
22 Illinois as to:
23         (1) substantially impede or suppress competition among
24     terminal operators;
25         (2) adversely impact the economic stability of the
26     video gaming industry in Illinois; or

 

 

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1         (3) negatively impact the purposes of the Video Gaming
2     Act.
3     The Board shall adopt rules concerning undue economic
4 concentration with respect to the operation of video gaming
5 terminals in Illinois. The rules shall include, but not be
6 limited to, (i) limitations on the number of video gaming
7 terminals operated by any terminal operator within a defined
8 geographic radius and (ii) guidelines on the discontinuation of
9 operation of any such video gaming terminals the Board
10 determines will cause undue economic concentration.
11     (j) (i) The provisions of the Illinois Antitrust Act are
12 fully and equally applicable to the activities of any licensee
13 under this Act.
14 (Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09; 96-38,
15 eff. 7-13-09; revised 8-17-09.)
 
16     (230 ILCS 40/30)
17     Sec. 30. Multiple types of licenses prohibited. A video
18 gaming terminal manufacturer may not be licensed as a video
19 gaming terminal operator or own, manage, or control a licensed
20 establishment, licensed truck stop establishment, licensed
21 fraternal establishment, or licensed veterans establishment,
22 and shall be licensed to sell only to persons having a valid
23 distributor's license or, if the manufacturer also holds a
24 valid distributor's license, to sell, distribute, lease, or
25 market to persons having a valid terminal operator's license

 

 

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1 only to sell to distributors. A video gaming terminal
2 distributor may not be licensed as a video gaming terminal
3 operator or own, manage, or control a licensed establishment,
4 licensed truck stop establishment, licensed fraternal
5 establishment, or licensed veterans establishment, and shall
6 only contract with a licensed terminal operator. A video gaming
7 terminal operator may not be licensed as a video gaming
8 terminal manufacturer or distributor or own, manage, or control
9 a licensed establishment, licensed truck stop establishment,
10 licensed fraternal establishment, or licensed veterans
11 establishment, and shall be licensed only to contract with
12 licensed distributors and licensed establishments, licensed
13 truck stop establishments, licensed fraternal establishments,
14 and licensed veterans establishments. An owner or manager of a
15 licensed establishment, licensed truck stop establishment,
16 licensed fraternal establishment, or licensed veterans
17 establishment may not be licensed as a video gaming terminal
18 manufacturer, distributor, or operator, and shall only
19 contract with a licensed operator to place and service this
20 equipment.
21 (Source: P.A. 96-34, eff. 7-13-09.)
 
22     (230 ILCS 40/45)
23     Sec. 45. Issuance of license.
24     (a) The burden is upon each applicant to demonstrate his
25 suitability for licensure. Each video gaming terminal

 

 

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1 manufacturer, distributor, supplier, operator, handler,
2 licensed establishment, licensed truck stop establishment,
3 licensed fraternal establishment, and licensed veterans
4 establishment shall be licensed by the Board. The Board may
5 issue or deny a license under this Act to any person pursuant
6 to the same criteria set forth in Section 9 of the Riverboat
7 Gambling Act.
8     (b) Each person seeking and possessing a license as a video
9 gaming terminal manufacturer, distributor, supplier, operator,
10 handler, licensed establishment, licensed truck stop
11 establishment, licensed fraternal establishment, or licensed
12 veterans establishment shall submit to a background
13 investigation conducted by the Board with the assistance of the
14 State Police or other law enforcement. The background
15 investigation shall include each beneficiary of a trust, each
16 partner of a partnership, and each director and officer and all
17 stockholders of 5% or more in a parent or subsidiary
18 corporation of a video gaming terminal manufacturer,
19 distributor, supplier, operator, or licensed establishment,
20 licensed truck stop establishment, licensed fraternal
21 establishment, or licensed veterans establishment.
22     (c) Each person seeking and possessing a license as a video
23 gaming terminal manufacturer, distributor, supplier, operator,
24 handler, licensed establishment, licensed truck stop
25 establishment, licensed fraternal establishment, or licensed
26 veterans establishment shall disclose the identity of every

 

 

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

 

 

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1     (e) Any applicant for any license under this Act has the
2 burden of proving his or her qualifications to the satisfaction
3 of the Board. The Board may adopt rules to establish additional
4 qualifications and requirements to preserve the integrity and
5 security of video gaming in this State.
6     (f) A non-refundable application fee shall be paid at the
7 time an application for a license is filed with the Board in
8 the 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..............................$50
15     (g) The Board shall establish an annual fee for each
16 license not to exceed the following:
17         (1) Manufacturer.........................$10,000
18         (2) Distributor..........................$10,000
19         (3) Terminal operator.....................$5,000
20         (4) Supplier..............................$2,000
21         (5) Technician..............................$100
22         (6) Licensed establishment, licensed truck stop
23     establishment, licensed fraternal establishment,
24     or licensed veterans establishment..............$100
25         (7) Video gaming terminal...................$100
26         (8) Terminal Handler..............................$50

 

 

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1 (Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09; 96-38,
2 eff. 7-13-09; revised 8-17-09.)
 
3     (230 ILCS 40/55)
4     Sec. 55. Precondition for licensed location establishment.
5 In all cases of application for a licensed location
6 establishment, to operate a video gaming terminal, each
7 licensed establishment licensed truck stop establishment,
8 licensed fraternal establishment, or licensed veterans
9 establishment shall possess a valid liquor license issued by
10 the Illinois Liquor Control Commission in effect at the time of
11 application and at all times thereafter during which a video
12 gaming terminal is made available to the public for play at
13 that location. Video gaming terminals in a licensed location
14 shall be operated only during the same hours of operation
15 generally permitted to holders of a license under the Liquor
16 Control Act of 1934 within the unit of local government in
17 which they are located. A licensed truck stop establishment
18 that does not hold a liquor license may operate video gaming
19 terminals on a continuous basis.
20 (Source: P.A. 96-34, eff. 7-13-09.)
 
21     (230 ILCS 40/57)
22     Sec. 57. Insurance. Each terminal operator licensed
23 establishment, licensed truck stop establishment, licensed
24 fraternal establishment, and licensed veterans establishment

 

 

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1 shall maintain liability insurance on any gaming device that it
2 places in a licensed video gaming location on its premises in
3 an amount set by the Board.
4 (Source: P.A. 96-34, eff. 7-13-09.)
 
5     (230 ILCS 40/78)
6     Sec. 78. Authority of the Illinois Gaming Board.
7     (a) The Board shall have jurisdiction over and shall
8 supervise all gaming operations governed by this Act. The Board
9 shall have all powers necessary and proper to fully and
10 effectively execute the provisions of this Act, including, but
11 not limited to, the following:
12         (1) To investigate applicants and determine the
13     eligibility of applicants for licenses and to select among
14     competing applicants the applicants which best serve the
15     interests of the citizens of Illinois.
16         (2) To have jurisdiction and supervision over all video
17     gaming operations in this State and all persons in
18     establishments where video gaming operations are
19     conducted.
20         (3) To adopt rules for the purpose of administering the
21     provisions of this Act and to prescribe rules, regulations,
22     and conditions under which all video gaming in the State
23     shall be conducted. Such rules and regulations are to
24     provide for the prevention of practices detrimental to the
25     public interest and for the best interests of video gaming,

 

 

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1     including rules and regulations regarding the inspection
2     of such establishments and the review of any permits or
3     licenses necessary to operate an establishment under any
4     laws or regulations applicable to establishments and to
5     impose penalties for violations of this Act and its rules.
6     (b) The Within 60 days after the effective date of this
7 amendatory Act of the 96th General Assembly, the Board shall
8 adopt emergency rules to administer this Act in accordance with
9 Section 5-45 of the Illinois Administrative Procedure Act. For
10 the purposes of the Illinois Administrative Procedure Act, the
11 General Assembly finds that the adoption of rules to implement
12 this Act is deemed an emergency and necessary to the public
13 interest, safety, and welfare.
14 (Source: P.A. 96-38, eff. 7-13-09.)
 
15     Section 97. Severability. The provisions of this Act are
16 severable under Section 1.31 of the Statute on Statutes.
 
17     Section 99. Effective date. This Act takes effect upon
18 becoming law.".