HB0479sam001 100TH GENERAL ASSEMBLY

Sen. Kwame Raoul

Filed: 5/31/2017

10000HB0479sam001 LRB100 06768 AMC 27359 a

AMENDMENT TO HOUSE BILL 479

AMENDMENT NO. ______. Amend House Bill 479 by replacing everything after the enacting clause with the following:

"Article 1. Fantasy Sports Contest Act

Section 1-1. Short title. This Article may be cited as the Fantasy Sports Contest Act. References in this Article to "this Act" mean this Article.

Section 1-5. Legislative intent.

(a) The General Assembly hereby finds and declares that:

(1) Interactive fantasy sports contests are contests of skill in which fantasy or simulation teams are selected based upon the skill and knowledge of the participants and not based solely on the membership of an actual team.

(2) Interactive fantasy sports contests are not wagers on future contingent events not under the contestants' control or influence because contestants have control over which players they choose and the outcome of each contest is not dependent upon the performance of any one player or any one actual team. The outcome of any interactive fantasy sports contest does not correspond to the outcome of any one real-life competitive event. Instead, the outcome depends on how the performances of participants' fantasy roster choices compared to the performance of others' roster choices.

(b) Based on the findings in this Section, the General Assembly declares that interactive fantasy sports contests do not constitute gambling as defined in Section 28-1 of the Criminal Code of 2012.

(c) The General Assembly further finds that as the Internet has become an integral part of society, and interactive fantasy sports contests a major form of entertainment for many consumers, any interactive fantasy sports enforcement and regulatory structure must begin from the bedrock premise that participation in a lawful and licensed interactive fantasy sports industry is a privilege and not a right, and that regulatory oversight is intended to safeguard the integrity of the games and participants and to ensure accountability and the public trust.

Section 1-10. Definitions. As used in this Act:

"Authorized player" means an individual located in this State that participates in an interactive fantasy sports contest offered by an interactive fantasy sports operator.

"Beginner fantasy sports player" means an individual who is at least 21 years of age and who has entered fewer than 51 interactive fantasy sports contests offered by a single interactive fantasy sports operator.

"Board" means the Illinois Gaming Board.

"Collegiate sport or athletic event" means a sport or athletic event offered or sponsored by or played in connection with a public or private institution that offers education services beyond the secondary level.

"Entry fee" means cash or cash equivalent that is paid by an authorized player to an interactive fantasy sports operator to participate in an interactive fantasy sports contest offered by that interactive fantasy sports operator.

"High school sport or athletic event" means a sport or athletic event offered or sponsored by or played in connection with a public or private institution that offers education services at the secondary level.

"Highly experienced player" means an authorized player who has:

(1) entered more than 1,000 interactive fantasy sports contests offered by a single interactive fantasy sports operator; or

(2) won more than 3 prizes valued at $1,000 each or more from a single interactive fantasy sports operator.

"Interactive fantasy sports contest" means a fantasy contest, in which:

(1) the value of all prizes and awards offered to winning participants are established and made known to the participants in advance of the contest and their value is not determined by the number of participants or the amount of any fees paid by those participants;

(2) all winning outcomes are determined predominantly by accumulated statistical results of the performance of individual athletes in real-world professional athletic competitions; a professional athletic competition does not include any amateur or collegiate level sport; and

(3) no winning outcome is based on the score, point spread, or any performance or performances of any single actual team or combination of such teams or solely on any single performance of an individual athlete or player in any single actual event.

"Interactive fantasy sports gross revenue" means the amount equal to the total of all entry fees that an interactive fantasy sports operator collects from all players, multiplied by the location percentage for the State.

"Interactive fantasy sports operator" means a person or entity that engages in the business of offering, by means of the Internet, a smart phone application, or other similar electronic or digital media or communication technologies, multiple interactive fantasy sports contests to persons.

"Interactive fantasy sports platform" means any website, smart phone application, or other portal providing access to an interactive fantasy sports contest.

"Location percentage" means, for each interactive fantasy sports contest, the percentage, rounded to the nearest tenth of a percent, of the total entry fees collected by an interactive fantasy sports operator from players located in this State, divided by the total entry fees collected by an interactive fantasy sports operator from all players in interactive fantasy sports contests.

"Minor" means a person under the age of 21 years.

"Permitted sports event" means a professional sport or athletic event or other competitive event. "Permitted sports event" does not include a prohibited sports event.

"Prohibited sports event" means an amateur sport or athletic event, a collegiate sport or athletic event, or a high school sport or athletic event.

Section 1-15. Applicability. This Act and all rules adopted under the authority of this Act shall apply only to interactive fantasy sports contests for which an authorized player pays an entry fee.

Section 1-20. Licensing.

(a) No interactive fantasy sports operator shall administer, manage, or otherwise make available an interactive fantasy sports platform to persons located in the State unless licensed by the Board under this Act.

(b) A qualified person may apply to the Board for an interactive fantasy sports operator license to conduct interactive fantasy sports contests as provided in this Act. The application shall be made on forms provided by the Board. The burden is upon each applicant to demonstrate suitability for licensure. Each interactive fantasy sports operator shall be licensed by the Board. The Board may issue a license for a period of up to 2 years or, in the case of interactive fantasy sports operators with annual interactive fantasy sports gross revenues less than $100,000, for up to 3 years.

(c) Each person seeking and possessing a license as an interactive fantasy sports operator shall submit to a background investigation conducted by the Board with the assistance of the State Police or other law enforcement. To the extent that the corporate structure of the applicant allows, the background investigation shall include any or all of the following as the Board deems appropriate or as provided by rule: (i) each beneficiary of a trust, (ii) each partner of a partnership, (iii) each member of a limited liability company, (iv) each director and officer of a publicly or non-publicly held corporation, (v) each stockholder of a non-publicly held corporation, (vi) each stockholder of 5% or more of a publicly held corporation, or (vii) each stockholder of 5% or more in a parent or subsidiary corporation.

(d) Each person seeking and possessing a license as an interactive fantasy sports operator shall disclose the identity of every person, association, trust, corporation, or limited liability company having a greater than 1% direct or indirect pecuniary interest in the interactive fantasy sports operator for which the license is sought. If the disclosed entity is a trust, the application shall disclose the names and addresses of the beneficiaries; if a corporation, the names and addresses of all stockholders and directors; if a limited liability company, the names and addresses of all members; or if a partnership, the names and addresses of all partners, both general and limited.

(e) All information, records, interviews, reports, statements, memoranda, or other data supplied to or used by the Board in the course of its review or investigation of an application for a license or a renewal under this Act shall be privileged and strictly confidential and shall be used only for the purpose of evaluating an applicant for a license or a renewal. The information, records, interviews, reports, statements, memoranda, or other data shall not be admissible as evidence nor discoverable in any action of any kind in any court or before any tribunal, board, agency, or person, except for any action deemed necessary by the Board.

(f) No person may be licensed as an interactive fantasy sports operator if that person has been found by the Board to:

(1) have a background, including a criminal record, reputation, habits, social or business associations, or prior activities, that poses a threat to the public interests of the State or to the security and integrity of interactive fantasy sports contests;

(2) create or enhance the dangers of unsuitable, unfair, or illegal practices, methods, and activities in the conduct of interactive fantasy sports contests; or

(3) present questionable business practices and financial arrangements incidental to the conduct of interactive fantasy sports contests.

(g) Any applicant for a license under this Act has the burden of proving his or her qualifications to the satisfaction of the Board. The Board may adopt rules to establish additional qualifications and requirements to preserve the integrity and security of interactive fantasy sports contests in this State.

(h) An interactive fantasy sports operator that has been operating in Illinois for at least 6 months on December 23, 2015 may operate in Illinois until a final decision is rendered on the application for an interactive fantasy sports operator license.

(i) The Board, by rule, shall establish a process for license renewal.

(j) The Board shall publish a list of all interactive fantasy sports operators licensed in this State under this Section on the Board's website for public use.

Section 1-25. Operators; required safeguards; minimum standards.

(a) As a condition of licensure in this State, each interactive fantasy sports operator shall implement and maintain commercially reasonable measures to:

(1) limit each authorized player to one username and one account and verify a fantasy sports player's true identity;

(2) prohibit minors from participating in an interactive fantasy sports contest, including:

(A) if the interactive fantasy sports operator becomes or is made aware that a minor has participated in one of its interactive fantasy sports contests, promptly refund any deposit received from the minor, whether or not the minor has engaged in or attempted to engage in an interactive fantasy sports contest; however, any refund may be offset by any prizes already awarded;

(B) publishing and facilitating parental control procedures to allow parents or guardians to exclude minors from access to any interactive fantasy sports contest or interactive fantasy sports platform; and

(C) taking appropriate steps to confirm that an individual opening an account is not a minor;

(3) when referencing the likelihood of winning in advertisements or upon interactive fantasy sports contest entry, make clear and conspicuous statements that are not inaccurate or misleading concerning the likelihood of winning and the number of winners;

(4) enable authorized players to restrict themselves from interactive fantasy sports contests and take reasonable steps to prevent these players from entering an interactive fantasy sports contest from which they have excluded themselves; these restrictions shall include, but not be limited to: (A) interactive fantasy sports contest entry limits, (B) limiting play to interactive fantasy sports contest with entry fees below an established limit, and (C) self-imposed deposit limits less than allowed under this Act; interactive fantasy sports operators shall implement and prominently publish procedures for fantasy sports players to implement the restrictions; fantasy sports players shall have the option to adjust these limits to make them more restrictive of gameplay as often as they like, but shall not have the option to make limits less restrictive of gameplay within 90 days after setting the limits;

(5) offer introductory procedures for authorized players, that shall be prominently displayed on the interactive fantasy sports operator's interactive fantasy sports platform, that explain interactive fantasy sports contest play and how to identify a highly experienced player;

(6) identify all highly experienced players in an interactive fantasy sports contest by a symbol attached to the players' user names, or by other easily visible means, on all interactive fantasy sports platforms supported by an interactive fantasy sports operator;

(7) disclose the number of entries a single authorized player may submit to each interactive fantasy sports contest;

(8) disclose the maximum number of total entries allowed for each interactive fantasy sports contest;

(9) implement measures to comply with all applicable State and federal requirements for data security, including, but not limited to, age verification and location software;

(10) offer all authorized players access to his or her account history and account details;

(11) ensure funds in fantasy sports players' accounts are held in segregated accounts by the interactive fantasy sports operators for the fantasy sports players that establish the accounts; interactive fantasy sports operators shall implement and prominently publish procedures that:

(A) prevent unauthorized withdrawals from fantasy sports player accounts by interactive fantasy sports operators or others;

(B) prevent commingling of funds in a fantasy sports player's account with other funds, including, without limitation, funds of the interactive fantasy sports operator; fantasy sports player funds shall be segregated from interactive fantasy sports operators' operational funds and any other funds held by the interactive fantasy sports operator; and

(C) address reporting on complaints by fantasy sports players that their accounts have been misallocated, compromised, or otherwise mishandled;

(12) provide on the interactive fantasy sports platform, in a prominent place, information concerning assistance for compulsive play;

(13) prohibit the extension of credit from an interactive fantasy sports operator to an authorized player;

(14) develop policies to prevent the use of proxy servers for the purpose of misrepresenting a player's location in order to engage in interactive fantasy sports contests; and

(15) prevent one fantasy sports player from acting as a proxy for another.

(b) No interactive fantasy sports operator employee, principal, officer, director, or contractor shall play any interactive fantasy sports contest offered to the general public or play in such contest through another person as a proxy. For the purposes of this subsection (b), a contractor is limited to a contractor who can access information of an interactive fantasy sports operator related to the conduct of an interactive fantasy sports contest that is not available to other fantasy sports players. Interactive fantasy sports operators shall make these restrictions known to all affected individuals and corporate entities.

(c) No interactive fantasy sports operator employee, principal, officer, director, or contractor shall disclose confidential information that may affect interactive fantasy sports contest gameplay to any person permitted to engage in interactive fantasy sports contest gameplay. Interactive fantasy sports operators shall make these restrictions known to all affected individuals and corporate entities.

(d) No interactive fantasy sports operator shall allow a professional athlete whose individual statistics or performance may be used to determine any part of the outcome of any interactive fantasy sports contest to enter interactive fantasy sports contests in the sports in which he or she participates. An interactive fantasy sports operator shall take commercially reasonable efforts to prevent a sports agent, team employee, referee, or league official associated with any competition that is the subject of interactive fantasy sports contests to enter interactive fantasy sports contests in the sport in which he or she participates, nor shall such athlete, sports agent, team official, team representative, referee, or league official play through another person as a proxy.

(1) Interactive fantasy sports operators shall take commercially reasonable efforts to obtain lists of persons described in this subsection (d) for the purpose of implementing this subsection (d).

(2) Interactive fantasy sports operators, upon learning of a violation of this subsection (d), shall bar the individual committing the violation from playing in any interactive fantasy sports contest by suspending the individual's account and banning the individual from further play, shall terminate any existing promotional agreements with the individual, and shall refuse to make any new promotional agreements that compensate the individual.

(3) Interactive fantasy sports operators shall make these restrictions known to all affected individuals and corporate entities.

(e) Each interactive fantasy sports operator shall:

(1) ensure the value of any prizes and awards offered to authorized players are established and made known to the players in advance of the interactive fantasy sports contest;

(2) ensure all winning outcomes reflect the relative knowledge and skill of the authorized players and are determined predominantly by accumulated statistical results of the performance of individuals in permitted sports events;

(3) ensure no winning outcome is based on the score, point spread, or performance of a single sports team, or a combination of sports teams;

(4) ensure no winning outcome is based solely on a single performance of an individual athlete in a single sport or athletic event; and

(5) ensure no interactive fantasy sports contest is based on a prohibited sports event.

(f) Interactive fantasy sports operators shall implement and prominently publish procedures that allow any fantasy sports player to permanently close an account at any time and for any reason. The procedures shall allow for cancellation by any means, including, without limitation, by a fantasy sports player on any interactive fantasy sports contest used by that fantasy sports player to make deposits into a fantasy sports player account. A copy of an interactive fantasy sports operator's procedures shall be submitted to the Board and any changes shall be submitted within 30 days.

(g) When a fantasy sports player account is closed, the interactive fantasy sports operator shall refund all funds in the account no later than 5 business days after submission of the request or 10 business days after submission of any tax reporting information required by law, whichever is later, unless the interactive fantasy sports operator makes a good faith determination that the fantasy sports player engaged in fraudulent or other conduct that would constitute a violation of this Act, rules adopted pursuant to this Act, or the interactive fantasy sports operator's policies, in which case, upon notice to the fantasy sports player of that determination, the withdrawal may be held pending a reasonable investigative period to resolve its investigation. For the purposes of this subsection (g), a request for withdrawal shall be considered honored if it is processed by the interactive fantasy sports operator, but delayed by a payment processor, a credit card issuer, or the custodian of the financial account.

(h) If a prize is awarded to a fantasy sports player with a closed account, that prize, to the extent it consists of funds, shall be distributed by the interactive fantasy sports operator within 5 business days, or 10 business days of submission of any tax reporting information required by law, unless the interactive fantasy sports operator makes a good faith determination that the fantasy sports player engaged in fraudulent or other conduct that would constitute a violation of this Act or rules adopted pursuant to this Act. If such determination is made, then the prize may be withheld, provided that it is then awarded to another fantasy sports player in the same interactive fantasy sports contest who would have won the prize had the fantasy sports player with the closed account not participated.

(i) An interactive fantasy sports operator shall prominently publish all contractual terms and conditions and rules of general applicability that affect a fantasy sports player's account. Presentation of such terms, conditions, and rules at the time of on boarding a new fantasy sports player shall not suffice.

(j) Interactive fantasy sports operators shall have prominently published rules that govern when each interactive fantasy sports contest shall close or lock. Each interactive fantasy sports contest operator shall also prominently disclose contest-specific information about the time that the interactive fantasy sports contest closes or locks in connection with each interactive fantasy sports contest offered. An interactive fantasy sports operator shall strictly enforce all disclosed closing or lock times.

(k) Fantasy sports player's deposits shall be limited to no more than $1,000 per month. However, an interactive fantasy sports operator may establish and prominently publish procedures for temporarily or permanently increasing a fantasy sports player's deposit limit, at the request of the fantasy sports player, above $1,000 per month. Such procedures shall be submitted to the Board.

If established by an interactive fantasy sports operator, such procedures shall include evaluation of information, including income or asset information, sufficient to establish that the fantasy sports player can afford losses that might result from gameplay at the deposit limit level requested.

When a temporary or permanent deposit level limit increase is approved, the interactive fantasy sports operator's procedures shall provide for annual re-certification of a player's financial ability to afford losses.

(l) The following entry limits apply:

(1) interactive fantasy sports operators shall not allow players to submit more than one entry in an interactive fantasy sports contest involving 12 entries or fewer;

(2) interactive fantasy sports operators shall not allow players to submit more than 2 entries in an interactive fantasy sports contest involving more than 13 entries but fewer than 36 entries;

(3) interactive fantasy sports operators shall not allow players to submit more than 3 entries in an interactive fantasy sports contest involving 36 or more entries but fewer than 101 entries; and

(4) interactive fantasy sports operators shall not allow fantasy sports players to submit more than 3% of all entries in an interactive fantasy sports contest involving 101 or more entries.

An interactive fantasy sports operator may establish interactive fantasy sports contests, representing less than 2% of the total number of interactive fantasy sports contests that the interactive fantasy sports operator offers, in which there is no restriction on the number of entries, provided that (i) the interactive fantasy sports operator clearly discloses that there are no limits on the number of entries by each player in the interactive fantasy sports contest and (ii) that the cost of participating in the interactive fantasy sports contest is $50 or more per entry.

(m) Interactive fantasy sports operators shall not offer an interactive fantasy sports contest based on a prohibited sports event.

(n) An interactive fantasy sports operator shall not participate in an interactive fantasy sports contest offered by the interactive fantasy sports operator.

(o) An interactive fantasy sports operator shall not permit unauthorized scripts to be used on interactive fantasy sports platforms and shall use commercially reasonable efforts to monitor for and to prevent use of such scripts.

(p) Interactive fantasy sports operators shall develop and prominently display procedures on the interactive fantasy sports operator's interactive fantasy sports platform for the filing of a complaint by the authorized player against the interactive fantasy sports operator. The interactive fantasy sports operator shall give an initial response to the player within 48 hours after the player files the complaint. The interactive fantasy sports operator shall give a complete response to the player filing the complaint within 10 business days after the initial response is issued. An authorized player may file a complaint alleging a violation of the provisions of this Act with the Board.

(q) An interactive fantasy sports operator shall close any fantasy player account that is inactive for 2 years and notify the account holder that the account has been closed by email to the account holder's last known email address. When a fantasy sports player account is closed due to inactivity, the interactive fantasy sports operator shall take commercially reasonable steps to refund all funds in the fantasy sports player account within 30 days, subject to the receipt of any tax information required by law. In the event that funds in a closed fantasy sports player account exceed $5 and cannot be refunded and remain unclaimed, the interactive fantasy sports operator shall provide notice of the existence of funds to the fantasy sports player. Such notice shall be provided by email to the account holder's last known email address. In the event that funds in a closed fantasy sports player account cannot be refunded and remain unclaimed by the fantasy sports player after 3 years, such funds shall be paid by the interactive fantasy sports operator to the Unclaimed Property Trust Fund in the Office of the State Treasurer. The interactive fantasy sports operator shall provide notice to the fantasy sports player's email address at least 60 days prior to paying the funds to the Unclaimed Property Trust Fund.

(r) Interactive fantasy sports operators shall develop games that are limited to beginner fantasy sports players and shall prohibit individuals who are not beginner fantasy sports players from participating in those games either directly or through another person as a proxy. An interactive fantasy sports operator shall suspend the account of an individual who is not a beginner fantasy sports player and who enters a game limited to beginner fantasy sports players and shall ban the player from future play.

(s) All interactive fantasy sports operators shall develop games in which highly experienced fantasy sports players cannot participate either directly or through another person as a proxy. An interactive fantasy sports operator shall suspend the account of a highly experienced fantasy sports player who enters a game that excludes highly experienced fantasy sports players directly or through another person as a proxy and shall ban the individual from future play.

Section 1-30. Multiple interactive fantasy sports platforms; interactive fantasy sports contests. A licensee may use multiple interactive fantasy sports platforms and offer multiple types of interactive fantasy sports contests.

Section 1-35. Advertising.

(a) Advertisements of interactive fantasy sports operators shall not feature: (1) minors (other than professional athletes who may be minors), (2) students, (3) schools, colleges, or universities, or (4) school, college, or university settings. However, incidental depiction of non-featured minors or minors accompanying adults shall not be a violation of this subsection (a).

(b) Interactive fantasy sports operators shall not advertise on school, college, or university campuses.

(c) Interactive fantasy sports operators shall not advertise at amateur athletic competitions, except to the extent that those competitions are played in stadiums where professional competitions are held and where non-digital advertisements have been posted, erected, or otherwise displayed in a manner that would require substantial effort to remove.

Section 1-40. Powers and duties of the Board.

(a) The Board has jurisdiction over and shall supervise all interactive fantasy sports contests governed by this Act. The Board has all powers and duties necessary and proper to fully and exclusively execute the provisions of the Act, including, but not limited to, the following:

(1) To investigate applicants and determine the eligibility of applicants that best serve the interests of the citizens of Illinois.

(2) To provide for the establishment and collection of all fees, fines, and taxes imposed by this Act and the rules adopted under this Act.

(3) To suspend, revoke, or restrict licenses; to require the removal of an interactive fantasy sports operator or an employee of an interactive fantasy sports operator for a violation of this Act; and to impose civil penalties of an amount up to $5,000 against individuals and $10,000 against licensees for each violation of the provisions of this Act.

(4) To approve and deny applications for licensure to conduct interactive fantasy sports contests in this State, and to suspend, refuse or renew, or revoke a license issued under this Act.

(5) To accept and investigate complaints of any kind from an authorized player and attempt to mediate the complaints where appropriate.

(6) To investigate alleged violations of this Act.

(7) To initiate proper enforcement proceedings where such action is deemed by the Board to be necessary or appropriate.

(8) To exercise all powers and duties assigned by this Act.

(b) The Board shall adopt rules to implement the provisions of and effectuate the policy and objectives of this Act as the Board may deem necessary or advisable, including, but not limited to, the development of the initial form of the application for licensure. These rules shall include, but not be limited to, responsible protections with regard to compulsive play and safeguards for fair play. The Board shall not adopt rules limiting or regulating:

(1) the rules or the administration of an individual interactive fantasy sports contest;

(2) the statistical makeup of an interactive fantasy sports contest; or

(3) the digital interactive fantasy sports platform of an interactive fantasy sports operator.

(c) The Board shall adopt emergency rules to administer this Act in accordance with Section 5-45 of the Illinois Administrative Procedure Act. For the purposes of the Illinois Administrative Procedure Act, the General Assembly finds that the adoption of rules to implement this Act is deemed an emergency and necessary for the public interest, safety, and welfare.

Section 1-45. Annual report.

(a) Each licensee shall annually submit a report to the Board by no later than June 30 of each year that shall include the following information as it applies to accounts held by authorized players located in this State:

(1) the number of accounts held by authorized players on all interactive fantasy sports platforms offered by the interactive fantasy sports operator and the number of accounts held by highly experienced players on all interactive fantasy sports platforms offered by the interactive fantasy sports operator;

(2) the total number of new accounts established in the preceding year as well as the total number of accounts permanently closed in the preceding year;

(3) the total amount of entry fees received from authorized players;

(4) the total amount of prizes awarded to authorized players;

(5) the total amount of interactive fantasy sports gross revenue received by the licensee; and

(6) the total number of authorized players that requested to exclude themselves from interactive fantasy sports contests.

(b) The Board shall annually publish a report based on the aggregate information provided by all interactive fantasy sports operators in accordance with this Section, that shall be published on the Board's website no later than 180 days after the deadline for the submission of individual reports as specified in this Section.

Section 1-50. State tax.

(a) A privilege tax is imposed on persons engaged in the business of operating an interactive fantasy sports contest in this State. For the privilege of conducting interactive fantasy sports contests in the State, interactive fantasy sports operators shall pay a tax at the following graduated rates:

(1) 5% of annual interactive fantasy sports gross revenue up to and including $1,000,000;

(2) 7.5% of annual interactive fantasy sports gross revenue in excess of $1,000,000 but not exceeding $3,000,000;

(3) 10% of annual interactive fantasy sports gross revenue in excess of $3,000,000 but not exceeding $8,000,000;

(4) 15% of annual interactive fantasy sports gross revenue in excess of $8,000,000.

(b) The tax imposed by this Section shall be paid by the interactive fantasy sports operator to the Board not later than the 15th day of every month for the previous month's privilege taxes.

Section 1-55. Disposition of taxes. The Board shall pay into the Education Assistance Fund all taxes imposed by this Act, any interest and penalties imposed by the Board relating to those taxes, all penalties levied and collected by the Board, and the appropriate funds, cash, or prizes forfeited from interactive fantasy sports contests.

Section 1-60. Audits. All interactive fantasy sports operators with annual interactive fantasy sports contest gross revenue of $100,000 or more shall annually be subject to an audit of the financial transactions and condition of the interactive fantasy sports operator's total operations as they relate to the offering and operating of interactive fantasy sports contests and to ensure compliance with all of the requirements in this Act. Interactive fantasy sports operators with annual interactive fantasy sports contest gross revenues less than $100,000 shall every 3 years be subject to an audit of the financial transactions and condition of the interactive fantasy sports operator's total operations as they relate to the offering and operating of interactive fantasy sports contests and to ensure compliance with all of the requirements in this Act. All audits and compliance engagements shall be conducted by certified public accountants or an independent testing laboratory approved by the Board. The compensation for each certified public accountant or independent testing laboratory shall be paid directly by the interactive fantasy sports operator to the certified public accountant or independent testing laboratory. The audit shall be conducted and submitted to the Board by June 30 of each year.

Section 1-65. Limitation on the taxation of interactive fantasy sports operators. Interactive fantasy sports operators shall not be subjected to an excise tax, license tax, permit tax, privilege tax, amusement tax, or occupation tax that is imposed upon the licensee by the State or any political subdivision thereof, except as provided in this Act.

Section 1-70. Application fees; license fees.

(a) A non-refundable application fee shall be paid at the time an application for licensure is filed with the Board in the following amounts:

(1) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue greater than $10,000,000 ......................................... $25,000

(2) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue greater than $5,000,000 but not more than $10,000,000 ............ $12,500

(3) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue greater than $1,000,000 but not more than $5,000,000 .............. $7,500

(4) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue of at least $100,000 but not more than $1,000,000 ................ $5,000

(5) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue less than $100,000 ............................................... $500

(b) The Board shall establish a fee for each license not to exceed the following for the initial licensure period:

(1) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue greater than $10,000,000 ......................................... $50,000

(2) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue greater than $5,000,000 but not more than $10,000,000 ............ $25,000

(3) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue greater than $1,000,000 but not more than $5,000,000 ..............$15,000

(4) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue of at least $100,000 but not more than $1,000,000 ............... $10,000

(5) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue less than $100,000 ............................................. $1,500

(c) For subsequent licensure periods, the renewal fee shall not exceed the following:

(1) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue greater than $10,000,000 ......................................... $37,500

(2) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue greater than $5,000,000 but not more than $10,000,000 ............ $18,750

(3) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue greater than $1,000,000 but not more than $5,000,000 ............. $11,250

(4) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue of at least $100,000 but not more than $1,000,000 .................$7,500

(5) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue less than $100,000 ............................................. $1,125

(d) All fees collected under this Section shall be deposited into the State Gaming Fund.

(e) All fees collected under this Section shall be used for the administration of this Act.

Section 1-75. Interactive fantasy sports contests authorized. Interactive fantasy sports contests conducted in accordance with the provisions of this Act are hereby authorized.

Section 1-80. Interactive fantasy sports contests prohibited. The conduct of interactive fantasy sports contests by unlicensed operators is prohibited.

Section 1-85. Interactive fantasy sports contests; Criminal Code of 2012. Interactive fantasy sports contests offered in accordance with the provisions of this Act shall not constitute gambling as defined in Section 28-1 of the Criminal Code of 2012.

Section 1-900. Repeal. This Act is repealed on January 1, 2021.

Article 5. Internet Gaming Act

Section 5-1. Short title. This Article may be cited as the Internet Gaming Act. References in this Article to "this Act" mean this Article.

Section 5-5. Legislative findings and intent. The General Assembly finds that the Internet has become an integral part of everyday life for a significant number of Illinois residents, not only in regard to their professional life, but also in regard to personal business and communication. Internet wagering on games of chance and games of skill is a core form of entertainment for millions of individuals worldwide. In multiple jurisdictions across the world, Internet gaming is legal, regulated, and taxed, generating millions of dollars in revenue for governments.

The General Assembly further finds that Illinois residents participate in illegal online gambling on unregulated Internet websites operated by offshore operators who are not subject to regulation or taxation in the United States. Neither federal nor Illinois laws provide sufficient consumer protections for Illinois residents who play games of chance or skill on these illegal websites, nor does the State realize any benefits from the revenues generated nor jobs created by illegal online gaming.

In an opinion dated September 20, 2011, the United States Department of Justice reversed its previous interpretation of the federal Wire Act, 18 U.S.C. 1084, allowing states, subject to certain restrictions, to legalize and regulate Internet gaming and capture the revenue for the benefit of state governments. The Department of Justice's opinion was prompted in part by a request made by the Department of Revenue pursuant to Public Act 96-34. In order to protect Illinois residents who wager on games of chance and skill through the Internet and to capture revenues and create jobs generated from Internet gaming, it is in the best interest of the State and its citizens to regulate this activity by authorizing and establishing a secure, responsible, fair, and legal system of Internet gaming that complies with the United States Department of Justice's September 2011 opinion concerning the federal Wire Act.

The General Assembly additionally finds that pursuant to the federal Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), 31 U.S.C. 5361, the provisions of this Act are consistent and comply with the UIGEA and specifically authorize use of the Internet to place, receive, or otherwise knowingly transmit a bet or wager where Internet wagering complies with this Act and rules adopted pursuant to this Act.

Section 5-10. Definitions. As used in this Act:

"Authorized participant" means a person who has a valid Internet wagering account with an Internet gaming licensee and is at least 21 years of age.

"Board" means the Illinois Gaming Board.

"Division" means the Division of Internet Gaming within the Illinois Gaming Board.

"Fee-based game" means a game determined by the Division to be a fee-based game, where the Internet gaming licensee charges a fee, rake, or commission for operating the game.

"Gross fee-based gaming revenue" means the fee, rake, or commission charged by the Internet gaming licensee for operation of fee-based games.

"Gross gaming revenue" is the aggregate of gross fee-based gaming revenue and gross non-fee-based gaming revenue.

"Gross non-fee-based gaming revenue" means the aggregate of the amount of net wins received on all non-fee-based games.

"Internet" means the international computer network of interoperable packet-switched data networks, inclusive of such additional technological platforms as mobile, satellite, and other electronic distribution channels approved by the Board.

"Internet game" means a fee-based or non-fee-based game of skill or chance that is offered by an Internet gaming licensee, as authorized by the Board. "Internet game" includes gaming tournaments conducted via the Internet in which players compete against one another in one or more of the games authorized in this definition or by the Division or in approved variations or composites as authorized by the Division. "Internet game" does not include an interactive fantasy sports contest under the Fantasy Sports Contest Act.

"Internet gaming licensee" means a person, corporation, partnership, or other entity receiving an Internet gaming license from the Board to conduct Internet wagering.

"Internet gaming platform" means the combination of hardware and software or other technology designed and used to manage, conduct, and record Internet gaming and the wagers associated with internet gaming, as approved by the Board. "Internet gaming platform" includes an emerging or new technology deployed to advance the conduct and operation of Internet gaming, as approved through rulemaking by the Board.

"Internet gaming skin" means the brand used by the Internet gaming licensee as presented through a portal, Internet website, or computer or mobile application or app through which authorized Internet gaming is made available to authorized participants by an Internet gaming licensee.

"Internet gaming vendor" means a person, corporation, partnership, or other entity that is certified by the Division to provide or offer to provide goods, software, or services to an Internet gaming licensee related to or supporting: (i) the acceptance, testing, auditing, management, operation, support, administration, or control of Internet wagers, Internet games, Internet wagering accounts, or Internet gaming platforms or (ii) the management, operation, administration, or control of payment processing systems. Notwithstanding this definition, the licensing of trademarks, names, likenesses, graphics, or other images, without more, shall not render a licensor of such intellectual property an Internet gaming vendor.

"Internet wagering" means the placing of wagers with an Internet gaming licensee by persons who are either physically present in Illinois when placing a wager or otherwise permitted to place a wager by law. The intermediate routing of electronic data in connection with Internet wagering, including across state lines, shall not determine the location or locations in which a wager is initiated, received, or otherwise made.

"Internet wagering account" means an electronic ledger wherein the following types of transactions relative to the Internet gaming platform are recorded: (i) deposits; (ii) withdrawals; (iii) amounts wagered; (iv) amounts paid on winning wagers; (v) service or other transaction-related charges authorized by the patron, if any; (vi) adjustments to the account; and (vii) any other information required by the Division.

"Net wins" means the amount of Internet wagers received by the Internet gaming licensee on non-fee based games less the amount paid by the Internet gaming licensee as winnings on that non-fee based game.

"Non-fee-based game" means a game determined by the Board to be a non-fee-based game, where (i) the player plays against the Internet gaming licensee and (ii) the Internet gaming licensee is banking the game and its bottom line is affected by players' wins and losses.

Section 5-15. Authorization. Internet wagering, as defined in this Act, is hereby authorized to the extent that it is carried out in accordance with the provisions of this Act.

Section 5-20. Division of Internet Gaming. The Division of Internet Gaming is established within the Illinois Gaming Board and shall have all of the powers and duties specified in this Act and all other powers necessary and proper to enable it to fully and effectively execute the provisions of this Act for the purpose of administering, regulating, and enforcing the system of Internet gaming established by this Act. The Division of Internet Gaming's jurisdiction shall extend under this Act to every person, corporation, partnership, or other entity involved in Internet gaming operations. To the extent consistent with the provisions of this Act, the Division shall be subject to and governed by the laws and rules applicable to the Board. The Division of Internet Gaming is also authorized to enter into agreements with other gaming entities within the United States, including any State or United States territory or possession, for the purpose of facilitating, administering, and regulating Internet gaming to the extent consistent with federal laws and the laws of any State or United States territory or possession that is a party to the multijurisdictional agreement. The Division shall not authorize, administer, or otherwise maintain a system for offering wagering on any amateur or professional sporting event or contest. Notwithstanding any other provision of this Act, wagers may be accepted from persons who are in the United States but not physically present in this State if the Division determines that such wagering is not inconsistent with federal law and the law of the United States jurisdiction in which any such person is located or such wagering is conducted in accordance with a multijurisdictional agreement that is not inconsistent with federal law to which this State is a party. The Division shall be funded with moneys appropriated to the Illinois Gaming Board.

Section 5-25. Application and eligibility for licensure. The Division of Internet Gaming is authorized to issue Internet gaming licenses to persons, firms, partnerships, or corporations that apply for such licensure upon a determination by the Division that the applicant is eligible for an Internet gaming license under this Act and rules adopted by the Division. An Internet gaming license issued under this Act shall be valid for a period of 5 years after the date of issuance and shall be renewable thereafter for an additional 5 years based on a determination by the Division that the licensee continues to meet all the requirements of this Act and the Division's rules. Notwithstanding any other law to the contrary, any assignment or transfer of an interest in an Internet gaming license, or a greater than 10% interest, direct or indirect, in any entity holding such a license, is subject to the written approval by the Division. Approved transferees are subject to a $250,000 non-refundable application fee. Eligibility for application for an Internet gaming license shall be limited to any person or entity that holds a valid and unrevoked: (1) owners license issued pursuant to the Riverboat Gambling Act, or any affiliate thereof as defined by the Board in its administrative rules implementing such Act, or any person or entity who as of January 1, 2017 was designated by the Illinois Gaming Board as a key person of an owners licensee or is controlled by one or more key persons of an owners licensee; (2) organization license issued pursuant to the Illinois Horse Racing Act of 1975, but only if the organization licensee conducted more than 30 days of live racing in calendar year 2016, except that 2 additional internet gaming licenses may be issued to entities awarded organization licenses after 2016 that exclusively conduct standardbred racing; or (3) advance deposit wagering license issued pursuant to the Illinois Horse Racing Act of 1975, but only if the advance deposit wagering licensee conducted advance deposit wagering in Illinois and handled in excess of $1,000,000 in calendar year 2016.

A qualified applicant may apply to the Division for an Internet gaming license to offer wagering on Internet games as provided in this Act. The application shall be made on forms provided by the Division and shall contain such information as the Division prescribes, including, but not limited to, detailed information regarding the ownership and management of the applicant, detailed personal information regarding the applicant, financial information regarding the applicant, and the gaming history and experience of the applicant in the United States and other jurisdictions. Each application shall be accompanied by a non-refundable application fee of $250,000. An incomplete application shall be cause for denial of a license by the Division.

All information, records, interviews, reports, statements, memoranda, or other data supplied to or used by the Division in the course of its review or investigation of an application for an Internet gaming license or a renewal under this Act is subject to Section 5.1 and Section (d) of Section 6 of the Riverboat Gambling Act.

Any person, association, corporation, partnership, or entity who (i) knowingly makes materially false statements in order to obtain an Internet gaming license; (ii) knowingly advertises within the State of Illinois any game, product, or feature that is not authorized by his or her license; or (iii) violates any other provision of this Act or any rule adopted under this Act is guilty of a Class B misdemeanor for the first violation and is guilty of a Class A misdemeanor for a second or subsequent violation. In the case of an association, corporation, partnership, or entity, imprisonment may be imposed upon its officers who knowingly participated in the violation.

An application shall be filed and considered in accordance with the rules of the Division. The Division shall adopt rules to effectuate the provisions of this Section within 30 days after the effective date of this Act.

A license fee of $10,000,000 shall be paid to the Division by an Internet gaming licensee at the time of issuance of the license. All application and license fees shall be deposited into the State Gaming Fund. The license fee imposed by this Section shall constitute an advance payment of Internet wagering taxes owed by the Internet gaming licensee under Section 5-55 of this Act.

Section 5-26. Initial license and renewal requirements for Internet gaming licenses obtained by an organization licensee.

(a) No internet gaming license may be awarded to or renewed for any entity that is eligible for an Internet gaming license because of an organization license awarded by the Illinois Racing Board, unless they meet the following criteria:

(1) The entity must hold a valid organization license awarded by the Illinois Racing Board for the term of the license.

(2) The entity must hold an inter-track wagering license awarded by the Illinois Racing Board for the term of the license.

(3) The entity, for the term of the license, must have a signed contract with the horsemen association representing the largest number of owners, trainers, jockeys, or standardbred drivers who race horses at that organization licensee's racing meeting, the right to execute or decline such contract being without condition, and that stipulates:

(A) the number of races to be conducted at the racing meeting and penalties for failure to conduct those races;

(B) the amounts to be distributed to purse accounts and penalties for failure to timely make such distributions; and

(C) the reduction and ultimate elimination of money payable from purses to organization licensees under paragraph (13) of subsection (g) of Section 26 of the Illinois Horse Racing Act of 1975, with such reduction and elimination achieved as agreed either through reimbursement or non-acceptance.

(4) The entity may not receive any proceeds from gross gaming revenue during any period that gross gaming revenues are not being deposited into the purse accounts as provided in the signed contract with the applicable horsemen association.

(b) The Illinois Gaming Board shall study the viability and benefit of providing an Internet gaming license to the horsemen association representing the largest number of owners, training jockeys, or standardbred drivers who race horses at an organization licensee's racing meetings, and shall prepare a report for the Illinois General Assembly and the Governor no later than 12 months after the effective date of this Act.

Section 5-27. Initial license and renewal requirements for Internet gaming licenses obtained by an advance deposit wagering licensee.

(a) No Internet gaming license may be awarded to or renewed for any entity that is eligible for an Internet gaming license because of an advance deposit wagering license awarded by the Illinois Racing Board, unless it meets the following criteria:

(1) The entity must hold a valid advance deposit wagering license awarded by the Illinois Racing Board for the term of the Internet gaming license.

(2) The entity must have a signed contract with both the organization licensee and the horsemen association representing the largest number of owners, trainers, jockeys, or standardbred drivers who race horses at that organization licensee's racing meeting, the right to execute or decline such contract being without condition, and that stipulates:

(A) the number of races to be conducted at the racing meeting and penalties for failure to conduct those races;

(B) the amounts to be distributed to purse accounts and penalties for failure to timely make such distributions; and

(C) the reduction and ultimate elimination of money payable from purses to organization licensees under paragraph (13) of subsection (g) of Section 26 of the Illinois Horse Racing Act of 1975, with such reduction and elimination achieved as agreed either through reimbursement or non-acceptance.

(3) The entity may not receive any proceeds from gross gaming revenue during any period that gross gaming revenues are not being deposited into the purse accounts as provided in the signed contract with the applicable horsemen association.

Section 5-30. Certification of Internet gaming vendors. The Division is authorized to certify Internet gaming vendors to provide goods, software, or services to Internet gaming licensees. Certification by the Division of an Internet gaming vendor shall be for a period of 5 years and shall be renewable thereafter for an additional 5 years based on a determination by the Division that the Internet gaming vendor continues to meet all the requirements of this Act and the Division's rules. The Division shall have the sole and exclusive jurisdiction to determine what persons, corporations, partnerships, or other entities require certification under this Act and the rules adopted under this Act.

A person, corporation, partnership, or other entity may apply to the Division to become an Internet gaming vendor as provided in this Act and the rules of the Division. The application shall be made on forms provided by the Division and shall contain such information as the Division prescribes, including, but not limited to, detailed information regarding the ownership and management of the applicant, detailed personal information regarding the applicant, financial information regarding the applicant, and the gaming history and experience of the applicant in the United States and other jurisdictions. Each application shall be accompanied by a non-refundable application fee, the amount of which shall be determined by the Division, but shall not exceed $250,000. An incomplete application shall be cause for denial of certification. No certification shall be granted to an Internet gaming vendor who has accepted wagers via the Internet in contravention of this Act or in contravention of any law of the United States.

All information, records, interviews, reports, statements, memoranda, or other data supplied to or used by the Division in the course of its review or investigation of an application for certification as an Internet gaming vendor is strictly confidential and shall only be used for the purpose of evaluating an applicant for a certification. Notwithstanding any law to the contrary, such information is subject to Section 5.1 and subsection (d) of Section 6 of the Riverboat Gambling Act.

Any person, association, corporation, partnership, or entity who (i) knowingly makes materially false statements in order to obtain certification as an Internet gaming vendor or (ii) violates any other provision of this Act or any rule adopted under this Act is guilty of a Class B misdemeanor for a first offense and is guilty of a Class A misdemeanor for a second or subsequent offense. In the case of an association, corporation, partnership, or entity, imprisonment may be imposed upon its officers who knowingly participate in the violation.

The Board shall adopt rules to ensure that all licensees are treated and all licensees act in a non-discriminatory manner and develop processes and penalties to enforce those rules.

Section 5-35. Authority of the Division.

(a) The Division shall have all the powers necessary or desirable to effectuate the provisions of this Act, including, but not limited to, the following powers:

(1) To develop qualifications, standards, and procedures for approval and licensure of Internet gaming licensees and certification of Internet gaming vendors.

(2) To decide promptly and in reasonable order all license applications and to approve, deny, suspend, revoke, restrict, or refuse to renew Internet gaming licenses and Internet gaming vendor certifications. Any party aggrieved by an action of the Division denying, suspending, revoking, restricting, or refusing to renew a license may request a hearing before the Division. A request for hearing must be made to the Division in writing within 5 days after service of notice of the action by the Division. Notice of action by the Division shall be served either by personal delivery or by certified mail, postage prepaid, to the aggrieved party. Notice served by certified mail shall be deemed complete on the business day following the date of such mailing. The Division shall conduct all requested hearings promptly and in reasonable order.

(3) To conduct all hearings pertaining to civil violations of this Act or rules adopted under this Act. Such hearings shall be governed by Section 5 of the Riverboat Gambling Act. The Division shall further adopt hearing rules and procedures for conducting hearings under this Act. In such hearings, reproduced copies of any of the Division's records relating to an Internet gaming licensee or Internet gaming vendor, including (i) any notices prepared in the Division's ordinary course of business and (ii) any books, records, or other documents offered in the name of the Division under certificate of the Executive Director, or any officer or employee of the Division designated in writing by the Executive Director, shall, without further proof, be admitted into evidence in any hearing before the hearing officers or any legal proceeding and shall be prima facie proof of the information contained therein. The Office of the Attorney General shall prosecute all criminal violations of this Act or rules adopted under this Act.

(4) To provide for the establishment and collection of all license and certification fees and taxes imposed by this Act and the rules adopted under this Act. All such fees and taxes shall be deposited into the State Gaming Fund.

(5) To develop and enforce testing, audit, and certification requirements and schedules for Internet gaming platforms, Internet gaming skins, Internet wagering, and Internet wagering accounts, including, without limitation, age and identification verification software, geolocation software, Internet games, and gaming hub software.

(6) To develop and enforce requirements for responsible gaming and player protection, including privacy and confidentiality standards and duties.

(7) To develop and enforce requirements for accepting Internet wagers, Internet wagering accounts, and authorized participants and minimum insurance requirements.

(8) To develop and promote standards governing contracts between Internet gaming licensees and the payments industry.

(9) To develop and enforce standards and requirements regarding anti-fraud, anti-money laundering, and anti-collusion methods.

(10) To develop protocols related to the security of and disputes arising over Internet wagers and Internet wagering accounts.

(11) To be present through its inspectors and agents upon the premises of any location where Internet gaming operations are conducted by an Internet gaming licensee or where components of an Internet gaming licensee's Internet gaming platform are located, housed, or otherwise maintained.

(12) To adopt by rule a code of conduct governing Division employees that ensures, to the maximum extent possible, that persons subject to this Act avoid situations, relationships, or associations that may represent or lead to an actual or perceived conflict of interest.

(13) To develop and administer civil penalties for Internet gaming licensees and Internet gaming vendors who violate this Act or the rules adopted under this Act.

(14) To audit and inspect, on reasonable notice, books and records relevant to Internet gaming operations, Internet wagers, Internet wagering accounts, Internet gaming skins, Internet games, or Internet gaming platforms, including, without limitation, those books and records regarding financing or accounting, marketing or operational materials, or any other such materials held by or in the custody of any Internet gaming licensee or Internet gaming vendor. The Division may assert such authority by administrative subpoena, which may further set forth relevant document requests and interrogatories and which shall be enforceable in the Circuit Court of Cook County in the State of Illinois.

(15) To determine whether an Internet game is a fee-based game or non-fee-based game.

(16) To acquire or lease real property and make improvements thereon and acquire by lease or by purchase personal property, including, but not limited to:

(A) computer hardware;

(B) mechanical, electronic, and online equipment and terminals; and

(C) intangible property, including, but not limited to, computer programs, software, and systems.

(17) To adopt rules for the purpose of administering the provisions of this Act and to prescribe rules and conditions under which all Internet gaming in the State shall be conducted. Such rules are to provide for the prevention of practices detrimental to the public interest and for the best interests of Internet gaming, including rules (i) regarding the inspection of licensees and the review of any permits or licenses necessary to operate under any applicable laws or rules, (ii) to impose penalties for violations of this Act and its rules, and (iii) establishing standards for advertising of Internet gaming.

(b) The Division shall adopt and enforce such rules governing the administration and conduct of Internet gaming as it deems necessary to carry out the purpose of this Act. These rules shall be subject to the provisions of the Illinois Administrative Procedure Act and may include, but shall not be limited to:

(1) the types of Internet games to be offered;

(2) price points for Internet games;

(3) player fees and percentage of rake commission or other fee for Internet games;

(4) forms of payment accepted for Internet games;

(5) the number, type, and amount of prizes for Internet games;

(6) the method of selecting winners and validating winnings;

(7) the frequency of Internet games;

(8) responsible gaming;

(9) technical and financial standards for Internet wagering, Internet wagering accounts, and Internet gaming platforms, systems, and software or other electronic components for Internet gaming; and

(10) such other matters necessary or desirable for the efficient and economical operation and administration of Internet gaming and for the convenience of authorized Internet gaming participants and Internet gaming licensees and certified Internet gaming vendors.

(c) Notwithstanding any law to the contrary, the Board shall hire an Executive Director of the Division for a 5-year term who shall be responsible to the Board and shall serve subject only to removal by the Board for incompetence, neglect of duty, or malfeasance in office. The Executive Director shall be responsible for the supervision and direction of the Division staff and for the necessary administrative activities of the Division, subject only to the direction and approval of the Board notwithstanding any law to the contrary.

Notwithstanding any law to the contrary, the Executive Director shall hire and employ employees as may be necessary to carry out the provisions of this Act or to perform the duties and exercise the powers conferred by law upon the Division. All employees of the Division shall receive the compensation fixed by the Executive Director, and approved by the Board. The Board, Executive Director, and Division employees shall be reimbursed for all actual and necessary traveling and other expenses and disbursements necessarily incurred or made by them in the discharge of their official duties. The Board and Executive Director may also incur necessary expenses for office space, furniture, stationery, printing, operations, and other incidental expenses.

The Executive Director shall report monthly to the Gaming Board a full and complete statement of Internet gaming revenues, other expenses for each month, and the amounts to be transferred to the State Gaming Fund in accordance with this Act. The Executive Director shall also make an annual report, which shall include a full and complete statement of Internet gaming revenues and other expenses, that shall be publicly disclosed on the Board's Internet website. All reports required by this subsection shall be public, and copies of all such reports shall be sent to the Speaker of the House of Representatives, the President of the Senate, the Minority Leader of the House of Representatives, and the Minority Leader of the Senate.

The Executive Director shall apprise himself or herself of: (i) the operation and the administration of similar Internet gaming laws that may be in effect in other states or countries; (ii) any relevant literature on Internet gaming that from time to time may be published or available; (iii) any federal laws and regulations that may affect the operation of Internet gaming; and (iv) the reaction of Illinois citizens to existing and potential features of Internet gaming with a view to recommending or effecting changes that will tend to serve the purposes of this Act.

Section 5-40. Internet gaming skins. Each internet gaming licensee shall be limited to not more than 2 Internet gaming skins, each of which must reflect a brand owned by the licensee or any affiliate of the licensee in the United States.

As used in this Section, "affiliate" means a person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with a licensee.

Section 5-45. Place of public accommodation.

(a) No organization or commercial enterprise shall operate a place of public accommodation, club, including a club or association limited to dues-paying members or similar restricted groups, or similar establishment in which computer terminals or similar access devices are advertised or made available to be used principally for the purpose of accessing Internet games. No holder of (i) an owners license issued under the Riverboat Gambling Act or (ii) an organization license or advance deposit wagering license under the Illinois Horse Racing Act of 1975 shall offer or make available computer terminals or similar access devices to be used principally for the purpose of accessing Internet games within the premises of such license holder.

(b) Nothing in this Section shall be construed:

(1) to require the owner or operator of a hotel or motel or other public place of general use in this State to prohibit or block guests from playing Internet games; or

(2) to require an Internet gaming license holder to prohibit authorized participants within the premises of the license holder from playing Internet games.

Section 5-50. Age verification and responsible gaming.

(a) An Internet gaming licensee's Internet gaming platform shall provide one or more mechanisms to reasonably verify that a participant is 21 years of age or older and that wagering on Internet games is limited to transactions that are initiated and received or otherwise made exclusively within the State of Illinois. A participant must satisfy the verification requirements before he or she may establish an Internet gaming account and wager on Internet games offered by Internet gaming licensees. All servers on which any Internet games are operated and conducted, and all underlying material technology, shall be located in the State of Illinois, unless the Division has otherwise authorized another location, which the Division may so authorize in its discretion if it maintains the ability to access or obtain all relevant data from such servers in such manner as it may specify. At such a time that a legally compliant mechanism is established to permit wagering on Internet games by individuals physically located outside of the State, the Division may adopt rules and procedures to allow and govern wagering by those individuals and shall have the authority to enter into multijurisdictional agreements and related and ancillary agreements in order to effectuate such wagering. An Internet gaming licensee's Internet gaming platform shall also provide mechanisms designed to detect and prevent the unauthorized use of Internet wagering accounts and to detect and prevent fraud, money laundering, and collusion. If a participant in Internet gaming violates any provision of this Act or rule adopted by the Division, then the participant's winnings shall be forfeited. Forfeited winnings shall be deposited into the State Gaming Fund.

The following persons shall not be authorized to establish Internet gaming accounts or wager on Internet games offered by Internet gaming licensees, except where required and authorized by the Division for testing purposes or to otherwise fulfill the purposes set forth in this Act: (i) a minor under 21 years of age; (ii) a current member of the Lottery Control Board; (iii) a current officer or other person employed by the Department of the Lottery, the Division of Internet Gaming, the Illinois Racing Board, or the Illinois Gaming Board; (iv) a spouse, civil union partner, child, brother, sister, or parent residing as a member of the same household in the principal place of abode of any persons identified in (ii) or (iii); and (iv) an individual whose name appears in the Division's responsible gaming database.

(b) The Division shall develop responsible gaming measures, including a statewide responsible gaming database identifying individuals who shall be prohibited from establishing an Internet wagering account or participating in Internet gaming offered by an Internet gaming licensee. The Executive Director may place a person on the responsible gaming database if that person (i) has been convicted in any jurisdiction of a felony or a crime involving gaming; (ii) has violated this Act, the Illinois Horse Racing Act of 1975, the Riverboat Gambling Act, the Raffles and Poker Runs Act, the Illinois Pull Tabs and Jar Games Act, the Bingo License and Tax Act, the Charitable Games Act, or the Video Gaming Act; (iii) has performed any act or had a notorious or unsavory reputation that would adversely affect public confidence and trust in gaming; or (iv) has his or her name on any valid and current exclusion list from another jurisdiction in the United States or foreign jurisdiction. By rule, the Division shall adopt procedures for the establishment and maintenance of the responsible gaming database. The Illinois Gaming Board and the Illinois Racing Board, in a format specified by the Division, provide the Division with names of individuals to be included in the responsible gaming database. The Division may impose reasonable fees on persons authorized to access and use the responsible gaming database.

An Internet gaming licensee's Internet gaming platform shall offer in a clear, conspicuous, and accessible manner, responsible gambling services and technical controls to participants, including both temporary and permanent self-exclusion for all games offered; the ability for participants to establish their own periodic deposit and wagering limits and maximum playing times; referrals to crisis counseling and referral services for individuals and families experiencing difficulty as a result of problem or compulsive gambling; and other services as the Division reasonably may determine are necessary or appropriate to reduce and prevent problem gambling. Any authorized participant who is allowed to participate in Internet gaming may voluntarily prohibit themselves from establishing an Internet gaming account. The Division shall incorporate the voluntary self-exclusion list into the responsible gaming database and maintain both the self-exclusion list and the responsible gaming database in a confidential manner. Notwithstanding any law to the contrary, the self-exclusion list and responsible gaming database are not public records subject to copying and disclosure under the Freedom of Information Act.

(c) There is created the Responsible Internet Gaming Advisory Board to make recommendations to the Executive Director regarding the development of rules and procedures to reduce and prevent problem or compulsive gambling and youth gambling and to ensure the conduct of safe, fair, and responsible Internet gaming. The Advisory Board shall consist of the following members:

(1) the Chairman of the Illinois Gaming Board, who shall be an ex officio member and shall serve as Chairperson;

(2) the Executive Director of the Division of Internet Gaming, who shall be an ex officio member;

(3) one representative from a national organization dedicated to the study and prevention of problem gambling, appointed by the Board;

(4) one member who is an academic professional engaged in the study of problem gambling at a university or other institution of higher learning, appointed by the Board;

(5) one member who has professional experience and expertise in the field of technical and systemic controls for responsible Internet gaming, appointed by the Board; and

(6) one member who is an Illinois citizen and a member of the public, appointed by the Board.

Each Advisory Board member shall serve for a term of 4 years and until his or her successor is appointed and qualified. However, in making initial appointments, 2 shall be appointed to serve for 2 years and 2 shall be appointed to serve for 4 years. Appointments to fill vacancies shall be made in the same manner as original appointments for the unexpired portion of the vacated term. Initial terms shall begin on the effective date of this Act. Each member of the Advisory Board shall be eligible for reappointment at the discretion of the Board. A member of the Advisory Board may be removed from office for just cause. Advisory Board members shall receive no compensation, but shall be reimbursed for expenses incurred in connection with their duties as Advisory Board members.

Four members shall constitute a quorum. A majority vote of the Advisory Board is required for an Advisory Board decision. The Advisory Board shall meet no less often than once every 6 months and shall meet as often as the Chairperson deems necessary. Advisory Board members shall not be liable for any of their acts, omissions, decisions, or any other conduct in connection with their duties on the Advisory Board, except those involving willful, wanton, or intentional misconduct.

The Advisory Board may have such powers as may be granted by the Executive Director to carry out the provisions of this Act regarding responsible Internet gaming.

Section 5-55. Tax rate and distribution.

(a) Except as otherwise provided in this subsection (a), a tax is hereby imposed on Internet gaming licensees, based on the gross gaming revenue received by an Internet gaming licensee from Internet games authorized under this Act, at the rate of 15% of annual gross gaming revenue for all fee-based games and all non-fee-based games.

The taxes imposed by this Section shall be paid by the Internet gaming licensee to the Division no later than 5:00 p.m. on the day after the day when the wagers were made.

In recognition of the advance tax revenue paid by the Internet gaming licensee in its license fee, an Internet gaming licensee shall be taxed at the following rates during the initial 5-year license term:

(1) for all non-fee-based games, the tax shall be 10% of annual gross non-fee-based gaming revenue up to and including $100,000,000 of gross gaming revenue and 15% of annual gross non-fee-based gaming revenue in excess $100,000,000 of gross gaming revenue; and

(2) for all fee-based games, the tax shall be 10% of annual gross fee-based gaming revenue up to and $100,000,000 of gross gaming revenue and 15% of annual gross fee-based gaming revenue in excess $100,000,000 of gross gaming revenue.

(b) $10,000,000 from the tax revenue deposited in the State Gaming Fund under this Act shall be paid annually to the Department of Human Services for the administration of programs to treat problem gambling.

(c) From the tax revenue deposited into the State Gaming Fund under this Act, 5% shall be transferred into the Depressed Communities Economic Development Fund annually.

(d) After the amounts specified in subsections (b) and (c) have been paid or transferred, all remaining tax revenue deposited in the State Gaming Fund in accordance with this Act shall be transferred in equal parts to the Pension Stabilization Fund and Education Assistance Fund.

Section 5-57. Horse racing Internet purse distributions.

(a) Each Internet gaming licensee holding an Internet gaming license because of an organization license or advance deposit wagering license awarded by the Illinois Racing Board shall timely make purse distributions in the total amount stipulated in the contract signed by the applicable horsemen association. That total amount shall be divided as follows:

(1) 31% of the moneys to organization licensees conducting standardbred racing, distributed pro rata based on racing days awarded by the Illinois Racing Board.

(2) 69% of the moneys to organization licensees conducting thoroughbred racing, distributed pro rata based on racing days awarded by the Illinois Racing Board.

(b) The purse distributions are not tax proceeds nor property of the State.

Section 5-60. Applicability of the Riverboat Gambling Act and the Uniform Penalty and Interest Act. The provisions of the Riverboat Gambling Act, and all rules adopted thereunder, shall apply to the Internet Gaming Act, except where there is a conflict between the 2 Acts. All provisions of the Uniform Penalty and Interest Act shall apply, as far as practicable, to the subject matter of this Act to the same extent as if such provisions were included herein.

Section 5-65. Rulemaking. The Board shall adopt emergency rules to administer this Act in accordance with Section 5-45 of the Illinois Administrative Procedure Act. For the purposes of the Illinois Administrative Procedure Act, the General Assembly finds that the adoption of rules to implement this Act is deemed an emergency and necessary to the public interest, safety, and welfare.

Article 90. Amendatory Provisions

Section 90-5. The State Finance Act is amended by adding Section 5.878 as follows:

(30 ILCS 105/5.878 new)

Sec. 5.878. The Depressed Communities Economic Development Fund.

Section 90-10. The Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois is amended by adding Section 605-530 as follows:

(20 ILCS 605/605-530 new)

Sec. 605-530. The Depressed Communities Economic Development Board.

(a) The Depressed Communities Economic Development Board is created as an advisory board within the Department of Commerce and Economic Opportunity. The Board shall consist of the following members:

(1) 2 members appointed by the Governor, one of whom shall be appointed to serve an initial term of one year and 2 of whom shall be appointed to serve an initial term of 2 years;

(2) 2 members appointed by the Speaker of the House of Representatives, one of whom shall be appointed to serve an initial term of one year and one of whom shall be appointed to serve an initial term of 2 years;

(3) 2 members appointed by the President of the Senate, one of whom shall be appointed to serve an initial term of one year and one of whom shall be appointed to serve an initial term of 2 years;

(4) 2 members appointed by the Minority Leader of the House of Representatives, one of whom shall be appointed to serve an initial term of one year and one of whom shall be appointed to serve an initial term of 2 years; and

(5) 2 members appointed by the Minority Leader of the Senate, one of whom shall be appointed to serve an initial term of one year and one of whom shall be appointed to serve an initial term of 2 years.

The members of the Board shall elect a member to serve as chair of the Board. The members of the Board shall reflect the composition of the Illinois population with regard to ethnic and racial composition.

After the initial terms, each member shall be appointed to serve a term of 2 years and until his or her successor has been appointed and assumes office. If a vacancy occurs in the Board membership, then the vacancy shall be filled in the same manner as the initial appointment. No member of the Board shall, at the time of his or her appointment or within 2 years before the appointment, hold elected office or be appointed to a State board, commission, or agency. All Board members are subject to the State Officials and Employees Ethics Act.

(b) Board members shall serve without compensation, but may be reimbursed for their reasonable travel expenses from funds available for that purpose. The Department of Commerce and Economic Opportunity shall provide staff and administrative support services to the Board.

(c) The Board must make recommendations, which must be approved by a majority of the Board, to the Department of Commerce and Economic Opportunity concerning the award of grants from amounts appropriated to the Department from the Depressed Communities Economic Development Fund, a special fund created in the State treasury. The Department must make grants to public or private entities submitting proposals to the Board to revitalize an Illinois depressed community. Grants may be used by these entities only for those purposes conditioned with the grant. For the purposes of this subsection (c), plans for revitalizing an Illinois depressed community include plans intended to curb high levels of poverty, unemployment, job and population loss, and general distress. An Illinois depressed community is an area where the poverty rate, as determined by using the most recent data released by the United States Census Bureau, is at least 3% greater than the State poverty rate as determined by using the most recent data released by the United States Census Bureau.

Section 90-15. The Criminal Code of 2012 is amended by changing Sections 28-1, 28-1.1, 28-3, and 28-5 as follows:

(720 ILCS 5/28-1) (from Ch. 38, par. 28-1)

Sec. 28-1. Gambling.

(a) A person commits gambling when he or she:

(1) knowingly plays a game of chance or skill for money or other thing of value, unless excepted in subsection (b) of this Section;

(2) knowingly makes a wager upon the result of any game, contest, or any political nomination, appointment or election;

(3) knowingly operates, keeps, owns, uses, purchases, exhibits, rents, sells, bargains for the sale or lease of, manufactures or distributes any gambling device;

(4) contracts to have or give himself or herself or another the option to buy or sell, or contracts to buy or sell, at a future time, any grain or other commodity whatsoever, or any stock or security of any company, where it is at the time of making such contract intended by both parties thereto that the contract to buy or sell, or the option, whenever exercised, or the contract resulting therefrom, shall be settled, not by the receipt or delivery of such property, but by the payment only of differences in prices thereof; however, the issuance, purchase, sale, exercise, endorsement or guarantee, by or through a person registered with the Secretary of State pursuant to Section 8 of the Illinois Securities Law of 1953, or by or through a person exempt from such registration under said Section 8, of a put, call, or other option to buy or sell securities which have been registered with the Secretary of State or which are exempt from such registration under Section 3 of the Illinois Securities Law of 1953 is not gambling within the meaning of this paragraph (4);

(5) knowingly owns or possesses any book, instrument or apparatus by means of which bets or wagers have been, or are, recorded or registered, or knowingly possesses any money which he has received in the course of a bet or wager;

(6) knowingly sells pools upon the result of any game or contest of skill or chance, political nomination, appointment or election;

(7) knowingly sets up or promotes any lottery or sells, offers to sell or transfers any ticket or share for any lottery;

(8) knowingly sets up or promotes any policy game or sells, offers to sell or knowingly possesses or transfers any policy ticket, slip, record, document or other similar device;

(9) knowingly drafts, prints or publishes any lottery ticket or share, or any policy ticket, slip, record, document or similar device, except for such activity related to lotteries, bingo games and raffles authorized by and conducted in accordance with the laws of Illinois or any other state or foreign government;

(10) knowingly advertises any lottery or policy game, except for such activity related to lotteries, bingo games and raffles authorized by and conducted in accordance with the laws of Illinois or any other state;

(11) knowingly transmits information as to wagers, betting odds, or changes in betting odds by telephone, telegraph, radio, semaphore or similar means; or knowingly installs or maintains equipment for the transmission or receipt of such information; except that nothing in this subdivision (11) prohibits transmission or receipt of such information for use in news reporting of sporting events or contests; or

(12) knowingly establishes, maintains, or operates an Internet site that permits a person to play a game of chance or skill for money or other thing of value by means of the Internet or to make a wager upon the result of any game, contest, political nomination, appointment, or election by means of the Internet. This item (12) does not apply to activities referenced in items (6), and (6.1) , (15), or (16) of subsection (b) of this Section.

(b) Participants in any of the following activities shall not be convicted of gambling:

(1) Agreements to compensate for loss caused by the happening of chance including without limitation contracts of indemnity or guaranty and life or health or accident insurance.

(2) Offers of prizes, award or compensation to the actual contestants in any bona fide contest for the determination of skill, speed, strength or endurance or to the owners of animals or vehicles entered in such contest.

(3) Pari-mutuel betting as authorized by the law of this State.

(4) Manufacture of gambling devices, including the acquisition of essential parts therefor and the assembly thereof, for transportation in interstate or foreign commerce to any place outside this State when such transportation is not prohibited by any applicable Federal law; or the manufacture, distribution, or possession of video gaming terminals, as defined in the Video Gaming Act, by manufacturers, distributors, and terminal operators licensed to do so under the Video Gaming Act.

(5) The game commonly known as "bingo", when conducted in accordance with the Bingo License and Tax Act.

(6) Lotteries when conducted by the State of Illinois in accordance with the Illinois Lottery Law. This exemption includes any activity conducted by the Department of Revenue to sell lottery tickets pursuant to the provisions of the Illinois Lottery Law and its rules.

(6.1) The purchase of lottery tickets through the Internet for a lottery conducted by the State of Illinois under the program established in Section 7.12 of the Illinois Lottery Law.

(7) Possession of an antique slot machine that is neither used nor intended to be used in the operation or promotion of any unlawful gambling activity or enterprise. For the purpose of this subparagraph (b)(7), an antique slot machine is one manufactured 25 years ago or earlier.

(8) Raffles and poker runs when conducted in accordance with the Raffles and Poker Runs Act.

(9) Charitable games when conducted in accordance with the Charitable Games Act.

(10) Pull tabs and jar games when conducted under the Illinois Pull Tabs and Jar Games Act.

(11) Gambling games conducted on riverboats when authorized by the Riverboat Gambling Act.

(12) Video gaming terminal games at a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment when conducted in accordance with the Video Gaming Act.

(13) Games of skill or chance where money or other things of value can be won but no payment or purchase is required to participate.

(14) Savings promotion raffles authorized under Section 5g of the Illinois Banking Act, Section 7008 of the Savings Bank Act, Section 42.7 of the Illinois Credit Union Act, Section 5136B of the National Bank Act (12 U.S.C. 25a), or Section 4 of the Home Owners' Loan Act (12 U.S.C. 1463).

(15) Interactive fantasy sports contests and participation in interactive fantasy sports contests authorized under the Fantasy Sports Contest Act.

(16) Internet wagering when conducted in accordance with the Internet Gaming Act.

(c) Sentence.

Gambling is a Class A misdemeanor. A second or subsequent conviction under subsections (a)(3) through (a)(12), is a Class 4 felony.

(d) Circumstantial evidence.

In prosecutions under this Section circumstantial evidence shall have the same validity and weight as in any criminal prosecution.

(Source: P.A. 98-644, eff. 6-10-14; 99-149, eff. 1-1-16.)

(720 ILCS 5/28-1.1) (from Ch. 38, par. 28-1.1)

Sec. 28-1.1. Syndicated gambling.

(a) Declaration of Purpose. Recognizing the close relationship between professional gambling and other organized crime, it is declared to be the policy of the legislature to restrain persons from engaging in the business of gambling for profit in this State. This Section shall be liberally construed and administered with a view to carrying out this policy.

(b) A person commits syndicated gambling when he or she operates a "policy game" or engages in the business of bookmaking.

(c) A person "operates a policy game" when he or she knowingly uses any premises or property for the purpose of receiving or knowingly does receive from what is commonly called "policy":

(1) money from a person other than the bettor or player whose bets or plays are represented by the money; or

(2) written "policy game" records, made or used over any period of time, from a person other than the bettor or player whose bets or plays are represented by the written record.

(d) A person engages in bookmaking when he or she knowingly receives or accepts more than five bets or wagers upon the result of any trials or contests of skill, speed or power of endurance or upon any lot, chance, casualty, unknown or contingent event whatsoever, which bets or wagers shall be of such size that the total of the amounts of money paid or promised to be paid to the bookmaker on account thereof shall exceed $2,000. Bookmaking is the receiving or accepting of bets or wagers regardless of the form or manner in which the bookmaker records them.

(e) Participants in any of the following activities shall not be convicted of syndicated gambling:

(1) Agreements to compensate for loss caused by the happening of chance including without limitation contracts of indemnity or guaranty and life or health or accident insurance;

(2) Offers of prizes, award or compensation to the actual contestants in any bona fide contest for the determination of skill, speed, strength or endurance or to the owners of animals or vehicles entered in the contest;

(3) Pari-mutuel betting as authorized by law of this State;

(4) Manufacture of gambling devices, including the acquisition of essential parts therefor and the assembly thereof, for transportation in interstate or foreign commerce to any place outside this State when the transportation is not prohibited by any applicable Federal law;

(5) Raffles and poker runs when conducted in accordance with the Raffles and Poker Runs Act;

(6) Gambling games conducted on riverboats when authorized by the Riverboat Gambling Act;

(7) Video gaming terminal games at a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment when conducted in accordance with the Video Gaming Act; and

(8) Savings promotion raffles authorized under Section 5g of the Illinois Banking Act, Section 7008 of the Savings Bank Act, Section 42.7 of the Illinois Credit Union Act, Section 5136B of the National Bank Act (12 U.S.C. 25a), or Section 4 of the Home Owners' Loan Act (12 U.S.C. 1463); and .

(9) Internet wagering when conducted in accordance with the Internet Gaming Act.

(f) Sentence. Syndicated gambling is a Class 3 felony.

(Source: P.A. 98-644, eff. 6-10-14; 99-149, eff. 1-1-16.)

(720 ILCS 5/28-3) (from Ch. 38, par. 28-3)

Sec. 28-3. Keeping a Gambling Place. A "gambling place" is any real estate, vehicle, boat or any other property whatsoever used for the purposes of gambling other than gambling conducted in the manner authorized by the Riverboat Gambling Act, Internet Gaming Act, or the Video Gaming Act. Any person who knowingly permits any premises or property owned or occupied by him or under his control to be used as a gambling place commits a Class A misdemeanor. Each subsequent offense is a Class 4 felony. When any premises is determined by the circuit court to be a gambling place:

(a) Such premises is a public nuisance and may be proceeded against as such, and

(b) All licenses, permits or certificates issued by the State of Illinois or any subdivision or public agency thereof authorizing the serving of food or liquor on such premises shall be void; and no license, permit or certificate so cancelled shall be reissued for such premises for a period of 60 days thereafter; nor shall any person convicted of keeping a gambling place be reissued such license for one year from his conviction and, after a second conviction of keeping a gambling place, any such person shall not be reissued such license, and

(c) Such premises of any person who knowingly permits thereon a violation of any Section of this Article shall be held liable for, and may be sold to pay any unsatisfied judgment that may be recovered and any unsatisfied fine that may be levied under any Section of this Article.

(Source: P.A. 96-34, eff. 7-13-09.)

(720 ILCS 5/28-5) (from Ch. 38, par. 28-5)

Sec. 28-5. Seizure of gambling devices and gambling funds.

(a) Every device designed for gambling which is incapable of lawful use or every device used unlawfully for gambling shall be considered a "gambling device", and shall be subject to seizure, confiscation and destruction by the Department of State Police or by any municipal, or other local authority, within whose jurisdiction the same may be found. As used in this Section, a "gambling device" includes any slot machine, and includes any machine or device constructed for the reception of money or other thing of value and so constructed as to return, or to cause someone to return, on chance to the player thereof money, property or a right to receive money or property. With the exception of any device designed for gambling which is incapable of lawful use, no gambling device shall be forfeited or destroyed unless an individual with a property interest in said device knows of the unlawful use of the device.

(b) Every gambling device shall be seized and forfeited to the county wherein such seizure occurs. Any money or other thing of value integrally related to acts of gambling shall be seized and forfeited to the county wherein such seizure occurs.

(c) If, within 60 days after any seizure pursuant to subparagraph (b) of this Section, a person having any property interest in the seized property is charged with an offense, the court which renders judgment upon such charge shall, within 30 days after such judgment, conduct a forfeiture hearing to determine whether such property was a gambling device at the time of seizure. Such hearing shall be commenced by a written petition by the State, including material allegations of fact, the name and address of every person determined by the State to have any property interest in the seized property, a representation that written notice of the date, time and place of such hearing has been mailed to every such person by certified mail at least 10 days before such date, and a request for forfeiture. Every such person may appear as a party and present evidence at such hearing. The quantum of proof required shall be a preponderance of the evidence, and the burden of proof shall be on the State. If the court determines that the seized property was a gambling device at the time of seizure, an order of forfeiture and disposition of the seized property shall be entered: a gambling device shall be received by the State's Attorney, who shall effect its destruction, except that valuable parts thereof may be liquidated and the resultant money shall be deposited in the general fund of the county wherein such seizure occurred; money and other things of value shall be received by the State's Attorney and, upon liquidation, shall be deposited in the general fund of the county wherein such seizure occurred. However, in the event that a defendant raises the defense that the seized slot machine is an antique slot machine described in subparagraph (b) (7) of Section 28-1 of this Code and therefore he is exempt from the charge of a gambling activity participant, the seized antique slot machine shall not be destroyed or otherwise altered until a final determination is made by the Court as to whether it is such an antique slot machine. Upon a final determination by the Court of this question in favor of the defendant, such slot machine shall be immediately returned to the defendant. Such order of forfeiture and disposition shall, for the purposes of appeal, be a final order and judgment in a civil proceeding.

(d) If a seizure pursuant to subparagraph (b) of this Section is not followed by a charge pursuant to subparagraph (c) of this Section, or if the prosecution of such charge is permanently terminated or indefinitely discontinued without any judgment of conviction or acquittal (1) the State's Attorney shall commence an in rem proceeding for the forfeiture and destruction of a gambling device, or for the forfeiture and deposit in the general fund of the county of any seized money or other things of value, or both, in the circuit court and (2) any person having any property interest in such seized gambling device, money or other thing of value may commence separate civil proceedings in the manner provided by law.

(e) Any gambling device displayed for sale to a riverboat gambling operation or Internet gaming operation or used to train occupational licensees of a riverboat gambling operation or Internet gaming operation as authorized under the Riverboat Gambling Act or Internet Gaming Act is exempt from seizure under this Section.

(f) Any gambling equipment, devices and supplies provided by a licensed supplier or licensed Internet gaming vendor in accordance with the Riverboat Gambling Act or Internet Gaming Act which are removed from a the riverboat or Internet gaming facility for repair are exempt from seizure under this Section.

(g) The following video gaming terminals are exempt from seizure under this Section:

(1) Video gaming terminals for sale to a licensed distributor or operator under the Video Gaming Act.

(2) Video gaming terminals used to train licensed technicians or licensed terminal handlers.

(3) Video gaming terminals that are removed from a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment for repair.

(Source: P.A. 98-31, eff. 6-24-13.)".