Rep. Sara Feigenholtz

Filed: 5/24/2016





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2    AMENDMENT NO. ______. Amend Senate Bill 513, AS AMENDED, by
3replacing everything after the enacting clause with the
5    "Section 5. The Illinois Lottery Law is amended by changing
6Section 7.12 as follows:
7    (20 ILCS 1605/7.12)
8    Sec. 7.12. Internet pilot program.
9    (a) The General Assembly finds that:
10        (1) the consumer market in Illinois has changed since
11    the creation of the Illinois State Lottery in 1974;
12        (2) the Internet has become an integral part of
13    everyday life for a significant number of Illinois
14    residents not only in regards to their professional life,
15    but also in regards to personal business and communication;
16    and



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1        (3) the current practices of selling lottery tickets
2    does not appeal to the new form of market participants who
3    prefer to make purchases on the Internet at their own
4    convenience.
5    It is the intent of the General Assembly to create an
6Internet pilot program for the sale of lottery tickets to
7capture this new form of market participant.
8    (b) The Department shall create a pilot program that allows
9an individual 18 years of age or older to purchase lottery
10tickets or shares on the Internet without using a Lottery
11retailer with on-line status, as those terms are defined by
12rule. The Department shall restrict the sale of lottery tickets
13on the Internet to transactions initiated and received or
14otherwise made exclusively within the State of Illinois. The
15Department shall adopt rules necessary for the administration
16of this program. These rules shall include, among other things,
17requirements for marketing of the Lottery to infrequent
18players, as well as limitations on the purchases that may be
19made through any one individual's lottery account. The
20provisions of this Act and the rules adopted under this Act
21shall apply to the sale of lottery tickets or shares under this
23    The Department may offer Lotto, Lucky Day Lotto, Mega
24Millions, Powerball, Pick 3, Pick 4, and other draw games that
25are offered at retail locations, as well as interactive instant
26win games, through the Internet program. The private manager



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1shall obtain the Director's approval before providing any draw
2games or interactive instant win games and must submit the
3following information with the Director: the rationale for
4introducing the draw games or interactive instant win games,
5the consumer research on the target market, and the amount of
6net profit that is expected. Any games that are approved for
7sale by Lottery retail licensees are automatically approved for
8sale on the Internet.
9    Before beginning the pilot program, the Department of the
10Lottery must submit a request to the United States Department
11of Justice for review of the State's plan to implement a pilot
12program for the sale of lottery tickets on the Internet and its
13propriety under federal law. The Department shall implement the
14Internet pilot program only if the Department of Justice does
15not object to the implementation of the program within a
16reasonable period of time after its review.
17    The Department is obligated to implement the pilot program
18set forth in this Section and Sections 7.15 and 7.16 only at
19such time, and to such extent, that the Department of Justice
20does not object to the implementation of the program within a
21reasonable period of time after its review. While the Illinois
22Lottery may only offer Lotto, Mega Millions, and Powerball
23games through the pilot program, the Department shall request
24review from the federal Department of Justice for the Illinois
25Lottery to sell lottery tickets on the Internet on behalf of
26the State of Illinois that are not limited to just these games.



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1    The Department shall authorize the private manager to
2implement and administer the program pursuant to the management
3agreement entered into under Section 9.1 and in a manner
4consistent with the provisions of this Section. If a private
5manager has not been selected pursuant to Section 9.1 at the
6time the Department is obligated to implement the pilot program
7or has been terminated pursuant to Section 9.1, then the
8Department shall not proceed with offering Lucky Day Lotto,
9Pick 3, Pick 4, other draw games, or interactive instant win
10games under the pilot program until after the selection of a
11the private manager, at which time the Department shall
12authorize the private manager to implement and administer the
13program pursuant to the management agreement entered into under
14Section 9.1 and in a manner consistent with the provisions of
15this Section. The Department may continue offering Lotto, Mega
16Millions, and Powerball prior to the selection of a private
18    The pilot program shall last for not less than 36 months,
19but not more than 48 months from the date of its initial
21    Nothing in this Section shall be construed as prohibiting
22the Department from implementing and operating a website portal
23whereby individuals who are 18 years of age or older with an
24Illinois mailing address may apply to purchase lottery tickets
25via subscription. Nothing in this Section shall also be
26construed as prohibiting the sale of Lotto, Mega Millions, and



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1Powerball, Lucky Day Lotto, Pick 3, or Pick 4 games by a
2lottery licensee pursuant to the Department's rules.
3    (c) (Blank). There is created the Internet Lottery Study
4Committee as an advisory body within the Department. The
5Department shall conduct a study to determine the impact of the
6Internet pilot program on lottery licensees. The Department
7shall also determine the feasibility of the sale of stored
8value cards by lottery licensees as a non-exclusive option for
9use by individuals 18 years of age or older who purchase
10tickets for authorized lottery games in the Internet pilot
11program. For the purposes of this study, it is anticipated that
12the stored value cards will have, but need not be limited to,
13the following characteristics: (1) the cards will be available
14only to individuals 18 years of age and older; (2) the cards
15will be rechargeable, closed-loop cards that can only be loaded
16with cash; (3) the cards will have unique identifying numbers
17to be used for on-line play; (4) the cards will have on-line
18play subtracted from the card's value; (5) the cards may have
19on-line winnings added to them; (6) the cards will be used at
20Lottery retailers to cash out winnings of up to $600; and (7)
21the cards will meet all technological, programming, and
22security requirements mandated by the Department and the
23governing bodies of both Mega Millions and Powerball.
24    To the fullest extent possible, but subject to available
25resources, the Department shall ensure that the study evaluates
26and analyzes at least the following issues:



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1        (1) economic benefits to the State from Internet
2    Lottery sales from stored value cards and from resulting
3    sales taxes;
4        (2) economic benefits to local governments from sales
5    taxes generated from Internet Lottery sales through stored
6    value cards;
7        (3) economic benefits to Lottery retailers from
8    Internet Lottery sales and from ancillary retail product
9    sales in connection with the same;
10        (4) enhanced player age verification from face-to-face
11    interaction;
12        (5) enhanced control of gambling addiction from
13    face-to-face interaction;
14        (6) elimination of credit card overspending through
15    the use of stored value cards and resulting reduced debt
16    issues;
17        (7) the feasibility of the utilization of existing
18    Lottery machines to dispense stored value cards;
19        (8) the technological, programming, and security
20    requirements to make stored value cards an appropriate
21    sales alternative; and
22        (9) the cost and project time estimates for
23    implementation, including adaptation of existing Lottery
24    machines, programming, and technology enhancements and
25    impact to operations.
26    The Study Committee shall consist of the Director or his or



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1her designee; the chief executive officer of the Lottery's
2private manager or his or her designee; a representative
3appointed by the Governor's Office; 2 representatives of the
4lottery licensee community appointed by the Director; one
5representative of a statewide association representing food
6retailers appointed by the Director; and one representative of
7a statewide association representing retail merchants
8appointed by the Director.
9    Members of the Study Committee shall be appointed within 30
10days after the effective date of this amendatory Act of the
1197th General Assembly. No later than 6 months after the
12effective date of this amendatory Act of the 97th General
13Assembly, the Department shall provide to the members of the
14Study Committee the proposed findings and recommendations of
15the study in order to solicit input from the Study Committee.
16Within 30 calendar days thereafter, the Study Committee shall
17convene a meeting of the members to discuss the proposed
18findings and recommendations of the study. No later than 15
19calendar days after meeting, the Study Committee shall submit
20to the Department any written changes, additions, or
21corrections the Study Committee wishes the Department to make
22to the study. The Department shall consider the propriety of
23and respond to each change, addition, or correction offered by
24the Study Committee in the study. The Department shall also set
25forth any such change, addition, or correction offered by
26members of the Study Committee and the Department's responses



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1thereto in the appendix to the study. No later than 15 calendar
2days after receiving the changes, additions, or corrections
3offered by the Study Committee, the Department shall deliver
4copies of the final study and appendices, if any, to the
5Governor, President of the Senate, Minority Leader of the
6Senate, Speaker of the House of Representatives, Minority
7Leader of the House of Representatives, and each of the members
8of the Study Committee.
9    (d) The private manager or an entity affiliated with the
10private manager may directly provide either, but not both, of
11the following: (i) lottery retailer terminals and services or
12(ii) internet lottery games, including related system
13infrastructure and management services. The private manager is
14authorized to enter into agreements with any person or entity
15to provide either of these functions, subject to the approval
16of the Department. The Department and the private manager shall
17provide the necessary interface access to any person or entity
18that is selected to offer for purchase lottery tickets or
19shares on the Internet.
20    (e) Notwithstanding any provision of law to the contrary,
21this amendatory Act of the 99th General Assembly does not
22authorize the Department to offer a draw game or interactive
23instant win game that is substantially similar to any game that
24is contained in the Illinois Gaming Board Administrator's list
25of approved games pursuant to 86 Ill. Adm. Code 3000.605 on the
26effective date of this amendatory Act of the 99th General



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2    (f) No later than December 31 of each year, the private
3manager shall prepare and submit an annual report, covering the
4previous fiscal year, to the General Assembly regarding the
5performance of the Internet program and the Department. This
6report shall include, but is not limited to, the following:
7        (1) the total number of Internet sales and profits;
8        (2) the total number of subscribers, along with
9    information concerning the age, gender, and ethnicity of
10    subscribers;
11        (3) the average spend per Internet session;
12        (4) the effectiveness of age and geographic controls;
13        (5) the impact of the Internet program on illegal
14    gambling and an evaluation of Internet sales on problem
15    gambling;
16        (6) the total number of transfers in and out of State
17    funds; and
18        (7) the total number of vendors, employees, and other
19    personnel utilized by the Department and private manager.
20(Source: P.A. 97-464, eff. 10-15-11; 97-1121, eff. 8-27-12;
2198-499, eff. 8-16-13.)
22    Section 99. Effective date. This Act takes effect upon
23becoming law.".