Illinois General Assembly - Full Text of SB1804
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Full Text of SB1804  100th General Assembly


Rep. Chad Hays

Filed: 5/22/2017





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2    AMENDMENT NO. ______. Amend Senate Bill 1804 by replacing
3everything after the enacting clause with the following:
4    "Section 5. The Video Gaming Act is amended by changing
5Sections 25, 27, 45, and 80 and by adding Section 78.5 as
7    (230 ILCS 40/25)
8    Sec. 25. Restriction of licensees.
9    (a) Manufacturer. A person may not be licensed as a
10manufacturer of a video gaming terminal in Illinois unless the
11person has a valid manufacturer's license issued under this
12Act. A manufacturer may only sell video gaming terminals for
13use in Illinois to persons having a valid distributor's
15    (b) Distributor. A person may not sell, distribute, or
16lease or market a video gaming terminal in Illinois unless the



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1person has a valid distributor's license issued under this Act.
2A distributor may only sell video gaming terminals for use in
3Illinois to persons having a valid distributor's or terminal
4operator's license.
5    (c) Terminal operator. A person may not own, maintain, or
6place a video gaming terminal unless he has a valid terminal
7operator's license issued under this Act. A terminal operator
8may only place video gaming terminals for use in Illinois in
9licensed establishments, licensed truck stop establishments,
10licensed fraternal establishments, and licensed veterans
11establishments. No terminal operator may give anything of
12value, including but not limited to a loan or financing
13arrangement, to a licensed establishment, licensed truck stop
14establishment, licensed fraternal establishment, or licensed
15veterans establishment as any incentive or inducement to locate
16video terminals in that establishment. Of the after-tax profits
17from a video gaming terminal, 50% shall be paid to the terminal
18operator and 50% shall be paid to the licensed establishment,
19licensed truck stop establishment, licensed fraternal
20establishment, or licensed veterans establishment,
21notwithstanding any agreement to the contrary. A video terminal
22operator that violates one or more requirements of this
23subsection is guilty of a Class 4 felony and is subject to
24termination of his or her license by the Board.
25    (d) Licensed technician. A person may not service,
26maintain, or repair a video gaming terminal in this State



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1unless he or she (1) has a valid technician's license issued
2under this Act, (2) is a terminal operator, or (3) is employed
3by a terminal operator, distributor, or manufacturer.
4    (d-5) Licensed terminal handler. No person, including, but
5not limited to, an employee or independent contractor working
6for a manufacturer, distributor, supplier, technician, or
7terminal operator licensed pursuant to this Act, shall have
8possession or control of a video gaming terminal, or access to
9the inner workings of a video gaming terminal, unless that
10person possesses a valid terminal handler's license issued
11under this Act.
12    (e) Licensed establishment. No video gaming terminal may be
13placed in any licensed establishment, licensed veterans
14establishment, licensed truck stop establishment, or licensed
15fraternal establishment unless the owner or agent of the owner
16of the licensed establishment, licensed veterans
17establishment, licensed truck stop establishment, or licensed
18fraternal establishment has entered into a written use
19agreement with the terminal operator for placement of the
20terminals. A copy of the use agreement shall be on file in the
21terminal operator's place of business and available for
22inspection by individuals authorized by the Board. A licensed
23establishment, licensed truck stop establishment, licensed
24veterans establishment, or licensed fraternal establishment
25may operate up to 5 video gaming terminals on its premises at
26any time.



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1    (f) (Blank).
2    (g) Financial interest restrictions. As used in this Act,
3"substantial interest" in a partnership, a corporation, an
4organization, an association, a business, or a limited
5liability company means:
6        (A) When, with respect to a sole proprietorship, an
7    individual or his or her spouse owns, operates, manages, or
8    conducts, directly or indirectly, the organization,
9    association, or business, or any part thereof; or
10        (B) When, with respect to a partnership, the individual
11    or his or her spouse shares in any of the profits, or
12    potential profits, of the partnership activities; or
13        (C) When, with respect to a corporation, an individual
14    or his or her spouse is an officer or director, or the
15    individual or his or her spouse is a holder, directly or
16    beneficially, of 5% or more of any class of stock of the
17    corporation; or
18        (D) When, with respect to an organization not covered
19    in (A), (B) or (C) above, an individual or his or her
20    spouse is an officer or manages the business affairs, or
21    the individual or his or her spouse is the owner of or
22    otherwise controls 10% or more of the assets of the
23    organization; or
24        (E) When an individual or his or her spouse furnishes
25    5% or more of the capital, whether in cash, goods, or
26    services, for the operation of any business, association,



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1    or organization during any calendar year; or
2        (F) When, with respect to a limited liability company,
3    an individual or his or her spouse is a member, or the
4    individual or his or her spouse is a holder, directly or
5    beneficially, of 5% or more of the membership interest of
6    the limited liability company.
7    For purposes of this subsection (g), "individual" includes
8all individuals or their spouses whose combined interest would
9qualify as a substantial interest under this subsection (g) and
10whose activities with respect to an organization, association,
11or business are so closely aligned or coordinated as to
12constitute the activities of a single entity.
13    (h) Location restriction. A licensed establishment,
14licensed truck stop establishment, licensed fraternal
15establishment, or licensed veterans establishment that is (i)
16located within 1,000 feet of a facility operated by an
17organization licensee licensed under the Illinois Horse Racing
18Act of 1975 or the home dock of a riverboat licensed under the
19Riverboat Gambling Act or (ii) located within 100 feet of a
20school or a place of worship under the Religious Corporation
21Act, is ineligible to operate a video gaming terminal. The
22location restrictions in this subsection (h) do not apply if
23(A) a facility operated by an organization licensee, a school,
24or a place of worship moves to or is established within the
25restricted area after a licensed establishment, licensed truck
26stop establishment, licensed fraternal establishment, or



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1licensed veterans establishment becomes licensed under this
2Act or (B) a school or place of worship moves to or is
3established within the restricted area after a licensed
4establishment, licensed truck stop establishment, licensed
5fraternal establishment, or licensed veterans establishment
6obtains its original liquor license. For the purpose of this
7subsection, "school" means an elementary or secondary public
8school, or an elementary or secondary private school registered
9with or recognized by the State Board of Education.
10    Notwithstanding the provisions of this subsection (h), the
11Board may waive the requirement that a licensed establishment,
12licensed truck stop establishment, licensed fraternal
13establishment, or licensed veterans establishment not be
14located within 1,000 feet from a facility operated by an
15organization licensee licensed under the Illinois Horse Racing
16Act of 1975 or the home dock of a riverboat licensed under the
17Riverboat Gambling Act. The Board shall not grant such waiver
18if there is any common ownership or control, shared business
19activity, or contractual arrangement of any type between the
20establishment and the organization licensee or owners licensee
21of a riverboat. The Board shall adopt rules to implement the
22provisions of this paragraph.
23    (h-5) Restrictions on licenses in malls. The Board shall
24not grant an application to become a licensed video gaming
25location if the Board determines that granting the application
26would more likely than not cause a terminal operator,



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1individually or in combination with other terminal operators,
2licensed video gaming location, or other person or entity, to
3operate the video gaming terminals in 2 or more licensed video
4gaming locations as a single video gaming operation.
5        (1) In making determinations under this subsection
6    (h-5), factors to be considered by the Board shall include,
7    but not be limited to, the following:
8            (A) the physical aspects of the location;
9            (B) the ownership, control, or management of the
10        location;
11            (C) any arrangements, understandings, or
12        agreements, written or otherwise, among or involving
13        any persons or entities that involve the conducting of
14        any video gaming business or the sharing of costs or
15        revenues; and
16            (D) the manner in which any terminal operator or
17        other related entity markets, advertises, or otherwise
18        describes any location or locations to any other person
19        or entity or to the public.
20        (2) The Board shall presume, subject to rebuttal, that
21    the granting of an application to become a licensed video
22    gaming location within a mall will cause a terminal
23    operator, individually or in combination with other
24    persons or entities, to operate the video gaming terminals
25    in 2 or more licensed video gaming locations as a single
26    video gaming operation if the Board determines that



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1    granting the license would create a local concentration of
2    licensed video gaming locations.
3    For the purposes of this subsection (h-5):
4    "Mall" means a building, or adjoining or connected
5buildings, containing 4 or more separate locations.
6    "Video gaming operation" means the conducting of video
7gaming and all related activities.
8    "Location" means a space within a mall containing a
9separate business, a place for a separate business, or a place
10subject to a separate leasing arrangement by the mall owner.
11    "Licensed video gaming location" means a licensed
12establishment, licensed fraternal establishment, licensed
13veterans establishment, or licensed truck stop.
14    "Local concentration of licensed video gaming locations"
15means that the combined number of licensed video gaming
16locations within a mall exceed half of the separate locations
17within the mall.
18    (i) Undue economic concentration. In addition to
19considering all other requirements under this Act, in deciding
20whether to approve the operation of video gaming terminals by a
21terminal operator in a location, the Board shall consider the
22impact of any economic concentration of such operation of video
23gaming terminals. The Board shall not allow a terminal operator
24to operate video gaming terminals if the Board determines such
25operation will result in undue economic concentration. For
26purposes of this Section, "undue economic concentration" means



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1that a terminal operator would have such actual or potential
2influence over video gaming terminals in Illinois as to:
3        (1) substantially impede or suppress competition among
4    terminal operators;
5        (2) adversely impact the economic stability of the
6    video gaming industry in Illinois; or
7        (3) negatively impact the purposes of the Video Gaming
8    Act.
9    The Board shall adopt rules concerning undue economic
10concentration with respect to the operation of video gaming
11terminals in Illinois. The rules shall include, but not be
12limited to, (i) limitations on the number of video gaming
13terminals operated by any terminal operator within a defined
14geographic radius and (ii) guidelines on the discontinuation of
15operation of any such video gaming terminals the Board
16determines will cause undue economic concentration.
17    (j) The provisions of the Illinois Antitrust Act are fully
18and equally applicable to the activities of any licensee under
19this Act.
20(Source: P.A. 97-333, eff. 8-12-11; 98-31, eff. 6-24-13; 98-77,
21eff. 7-15-13; 98-112, eff. 7-26-13; 98-756, eff. 7-16-14.)
22    (230 ILCS 40/27)
23    Sec. 27. Prohibition or limitation of video gaming by
24political subdivision.
25    (a) A municipality may pass an ordinance prohibiting video



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1gaming within the corporate limits of the municipality. A
2county board may, for the unincorporated area of the county,
3pass an ordinance prohibiting video gaming within the
4unincorporated area of the county.
5    (b) A home rule municipality, or a home rule county with
6respect to unincorporated portions of the county, may impose
7separate requirements on video gaming that provide sources of
8municipal or county revenue or impose limitations on video
9gaming more restrictive than those provided under this Act.
10These requirements may include the following:
11        (1) license fees;
12        (2) occupation taxes;
13        (3) licensing requirements;
14        (4) limitations on hours of video gaming terminal play
15    more restrictive than those provided under the liquor
16    license of a licensed establishment, licensed veterans
17    organization, or licensed fraternal organization;
18        (5) limitations on the numbers of video gaming
19    terminals within a licensed establishment, licensed
20    veterans organization, licensed fraternal organization, or
21    licensed truck stop;
22        (6) limitations on the total number of licensed
23    establishments, licensed veterans organizations, licensed
24    fraternal organizations, or licensed truck stops allowed
25    within the municipality or county, or a specific portion of
26    the municipality or county;



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1        (7) limitations on hours of video gaming play;
2        (8) zoning to limit the areas within a municipality or
3    county where video gaming is permitted; or
4        (9) other requirements intended to promote safety,
5    morals, health, or welfare within the municipality or
6    county.
7(Source: P.A. 96-34, eff. 7-13-09.)
8    (230 ILCS 40/45)
9    Sec. 45. Issuance of license.
10    (a) The burden is upon each applicant to demonstrate his
11suitability for licensure. Each video gaming terminal
12manufacturer, distributor, supplier, operator, handler,
13licensed establishment, licensed truck stop establishment,
14licensed fraternal establishment, and licensed veterans
15establishment shall be licensed by the Board. The Board may
16issue or deny a license under this Act to any person pursuant
17to the same criteria set forth in Section 9 of the Riverboat
18Gambling Act.
19    (a-5) The Board shall not grant a license to a person who
20has facilitated, enabled, or participated in the use of
21coin-operated devices for gambling purposes or who is under the
22significant influence or control of such a person. For the
23purposes of this Act, "facilitated, enabled, or participated in
24the use of coin-operated amusement devices for gambling
25purposes" means that the person has been convicted of any



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1violation of Article 28 of the Criminal Code of 1961 or the
2Criminal Code of 2012. If there is pending legal action against
3a person for any such violation, then the Board shall delay the
4licensure of that person until the legal action is resolved.
5    (b) Each person seeking and possessing a license as a video
6gaming terminal manufacturer, distributor, supplier, operator,
7handler, licensed establishment, licensed truck stop
8establishment, licensed fraternal establishment, or licensed
9veterans establishment shall submit to a background
10investigation conducted by the Board with the assistance of the
11State Police or other law enforcement. To the extent that the
12corporate structure of the applicant allows, the background
13investigation shall include any or all of the following as the
14Board deems appropriate or as provided by rule for each
15category of licensure: (i) each beneficiary of a trust, (ii)
16each partner of a partnership, (iii) each member of a limited
17liability company, (iv) each director and officer of a publicly
18or non-publicly held corporation, (v) each stockholder of a
19non-publicly held corporation, (vi) each stockholder of 5% or
20more of a publicly held corporation, or (vii) each stockholder
21of 5% or more in a parent or subsidiary corporation.
22    (c) Each person seeking and possessing a license as a video
23gaming terminal manufacturer, distributor, supplier, operator,
24handler, licensed establishment, licensed truck stop
25establishment, licensed fraternal establishment, or licensed
26veterans establishment shall disclose the identity of every



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



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1burden of proving his or her qualifications to the satisfaction
2of the Board. The Board may adopt rules to establish additional
3qualifications and requirements to preserve the integrity and
4security of video gaming in this State.
5    (f) A non-refundable application fee shall be paid at the
6time an application for a license is filed with the Board in
7the following amounts:
8        (1) Manufacturer..........................$5,000
9        (2) Distributor...........................$5,000
10        (3) Terminal operator.....................$5,000
11        (4) Supplier..............................$2,500
12        (5) Technician..............................$100
13        (6) Terminal Handler.....................$100 $50
14        (7) Licensed establishment, licensed truck stop
15    establishment, licensed fraternal establishment,
16    or licensed veterans establishment...................$100
17    (g) The Board shall establish an annual fee for each
18license not to exceed the following:
19        (1) Manufacturer.........................$10,000
20        (2) Distributor..........................$10,000
21        (3) Terminal operator.....................$5,000
22        (4) Supplier..............................$2,000
23        (5) Technician..............................$100
24        (6) Licensed establishment, licensed truck stop
25    establishment, licensed fraternal establishment,
26    or licensed veterans establishment..............$100



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1        (7) Video gaming terminal...................$100
2        (8) Terminal Handler.........................$100 $50
3    (h) A terminal operator and a licensed establishment,
4licensed truck stop establishment, licensed fraternal
5establishment, or licensed veterans establishment shall
6equally split the fees specified in item (7) of subsection (g).
7(Source: P.A. 97-1150, eff. 1-25-13; 98-31, eff. 6-24-13;
898-587, eff. 8-27-13; 98-756, eff. 7-16-14.)
9    (230 ILCS 40/78.5 new)
10    Sec. 78.5. Civil penalties. Notwithstanding paragraph (15)
11of subsection (c) of Section 5 of the Riverboat Gambling Act,
12monetary civil penalties under this Act shall not exceed
13$25,000 for individuals and $50,000 for licensees per
15    (230 ILCS 40/80)
16    Sec. 80. Applicability of Illinois Riverboat Gambling Act.
17The provisions of the Illinois Riverboat Gambling Act, and all
18rules promulgated thereunder, shall apply to the Video Gaming
19Act, except where there is a conflict between the 2 Acts. All
20current supplier licensees under the Riverboat Gambling Act
21shall be entitled to licensure under the Video Gaming Act as
22manufacturers, distributors, or suppliers without additional
23Board investigation or approval, except by vote of the Board;
24however, they are required to pay application and annual fees



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1under this Act. All provisions of the Uniform Penalty and
2Interest Act shall apply, as far as practicable, to the subject
3matter of this Act to the same extent as if such provisions
4were included herein.
5(Source: P.A. 96-37, eff. 7-13-09.)".