Illinois General Assembly - Full Text of HB3564
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Full Text of HB3564  101st General Assembly


Rep. William Davis

Filed: 3/27/2019





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2    AMENDMENT NO. ______. Amend House Bill 3564 by replacing
3everything after the enacting clause with the following:
4    "Section 5. The Riverboat Gambling Act is amended by
5changing Section 5 as follows:
6    (230 ILCS 10/5)  (from Ch. 120, par. 2405)
7    Sec. 5. Gaming Board.
8    (a) (1) There is hereby established the Illinois Gaming
9Board, which shall have the powers and duties specified in this
10Act, and all other powers necessary and proper to fully and
11effectively execute this Act for the purpose of administering,
12regulating, and enforcing the system of riverboat gambling
13established by this Act. Its jurisdiction shall extend under
14this Act to every person, association, corporation,
15partnership and trust involved in riverboat gambling
16operations in the State of Illinois.



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1    (2) The Board shall consist of 5 members to be appointed by
2the Governor with the advice and consent of the Senate, one of
3whom shall be designated by the Governor to be chairman. Each
4member shall have a reasonable knowledge of the practice,
5procedure and principles of gambling operations. Each member
6shall either be a resident of Illinois or shall certify that he
7will become a resident of Illinois before taking office. At
8least one member shall be experienced in law enforcement and
9criminal investigation, at least one member shall be a
10certified public accountant experienced in accounting and
11auditing, and at least one member shall be a lawyer licensed to
12practice law in Illinois.
13    (3) The terms of office of the Board members shall be 3
14years, except that the terms of office of the initial Board
15members appointed pursuant to this Act will commence from the
16effective date of this Act and run as follows: one for a term
17ending July 1, 1991, 2 for a term ending July 1, 1992, and 2 for
18a term ending July 1, 1993. Upon the expiration of the
19foregoing terms, the successors of such members shall serve a
20term for 3 years and until their successors are appointed and
21qualified for like terms. Vacancies in the Board shall be
22filled for the unexpired term in like manner as original
23appointments. Each member of the Board shall be eligible for
24reappointment at the discretion of the Governor with the advice
25and consent of the Senate.
26    (4) Each member of the Board shall receive $300 for each



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1day the Board meets and for each day the member conducts any
2hearing pursuant to this Act. Each member of the Board shall
3also be reimbursed for all actual and necessary expenses and
4disbursements incurred in the execution of official duties.
5    (5) No person shall be appointed a member of the Board or
6continue to be a member of the Board who is, or whose spouse,
7child or parent is, a member of the board of directors of, or a
8person financially interested in, any gambling operation
9subject to the jurisdiction of this Board, or any race track,
10race meeting, racing association or the operations thereof
11subject to the jurisdiction of the Illinois Racing Board. No
12Board member shall hold any other public office. No person
13shall be a member of the Board who is not of good moral
14character or who has been convicted of, or is under indictment
15for, a felony under the laws of Illinois or any other state, or
16the United States.
17    (5.5) No member of the Board shall engage in any political
18activity. For the purposes of this Section, "political" means
19any activity in support of or in connection with any campaign
20for federal, State, or local elective office or any political
21organization, but does not include activities (i) relating to
22the support or opposition of any executive, legislative, or
23administrative action (as those terms are defined in Section 2
24of the Lobbyist Registration Act), (ii) relating to collective
25bargaining, or (iii) that are otherwise in furtherance of the
26person's official State duties or governmental and public



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1service functions.
2    (6) Any member of the Board may be removed by the Governor
3for neglect of duty, misfeasance, malfeasance, or nonfeasance
4in office or for engaging in any political activity.
5    (7) Before entering upon the discharge of the duties of his
6office, each member of the Board shall take an oath that he
7will faithfully execute the duties of his office according to
8the laws of the State and the rules and regulations adopted
9therewith and shall give bond to the State of Illinois,
10approved by the Governor, in the sum of $25,000. Every such
11bond, when duly executed and approved, shall be recorded in the
12office of the Secretary of State. Whenever the Governor
13determines that the bond of any member of the Board has become
14or is likely to become invalid or insufficient, he shall
15require such member forthwith to renew his bond, which is to be
16approved by the Governor. Any member of the Board who fails to
17take oath and give bond within 30 days from the date of his
18appointment, or who fails to renew his bond within 30 days
19after it is demanded by the Governor, shall be guilty of
20neglect of duty and may be removed by the Governor. The cost of
21any bond given by any member of the Board under this Section
22shall be taken to be a part of the necessary expenses of the
24    (7.5) For the examination of all mechanical,
25electromechanical, or electronic table games, slot machines,
26slot accounting systems, sports betting systems, and other



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1electronic gaming equipment, and the field inspection of such
2systems, games, and machines, for compliance with this Act, the
3Board shall may utilize the services of one or more independent
4outside testing laboratories that have been accredited in
5accordance with ISO/IEC 17025 by an accreditation body that is
6a signatory to the International Laboratory Accreditation
7Cooperation Mutual Recognition Agreement signifying they are
8qualified to by a national accreditation body and that, in the
9judgment of the Board, are qualified to perform such
10examinations. Notwithstanding any law to the contrary, the
11Board shall consider the licensing of independent outside
12testing laboratory applicants in accordance with procedures
13established by the Board by rule. The Board shall not withhold
14its approval of an independent outside testing laboratory
15license applicant that has been accredited as required under
16this paragraph (7.5) and is licensed in gaming jurisdictions
17comparable to Illinois. Upon the finalization of required
18rules, the Board shall license independent testing
19laboratories and accept the test reports of any licensed
20testing laboratory of the system's, game's, or machine
21manufacturer's choice, notwithstanding the existence of
22contracts between the Board and any independent testing
24    (8) The Board shall employ such personnel as may be
25necessary to carry out its functions and shall determine the
26salaries of all personnel, except those personnel whose



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1salaries are determined under the terms of a collective
2bargaining agreement. No person shall be employed to serve the
3Board who is, or whose spouse, parent or child is, an official
4of, or has a financial interest in or financial relation with,
5any operator engaged in gambling operations within this State
6or any organization engaged in conducting horse racing within
7this State. Any employee violating these prohibitions shall be
8subject to termination of employment.
9    (9) An Administrator shall perform any and all duties that
10the Board shall assign him. The salary of the Administrator
11shall be determined by the Board and, in addition, he shall be
12reimbursed for all actual and necessary expenses incurred by
13him in discharge of his official duties. The Administrator
14shall keep records of all proceedings of the Board and shall
15preserve all records, books, documents and other papers
16belonging to the Board or entrusted to its care. The
17Administrator shall devote his full time to the duties of the
18office and shall not hold any other office or employment.
19    (b) The Board shall have general responsibility for the
20implementation of this Act. Its duties include, without
21limitation, the following:
22        (1) To decide promptly and in reasonable order all
23    license applications. Any party aggrieved by an action of
24    the Board denying, suspending, revoking, restricting or
25    refusing to renew a license may request a hearing before
26    the Board. A request for a hearing must be made to the



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1    Board in writing within 5 days after service of notice of
2    the action of the Board. Notice of the action of the Board
3    shall be served either by personal delivery or by certified
4    mail, postage prepaid, to the aggrieved party. Notice
5    served by certified mail shall be deemed complete on the
6    business day following the date of such mailing. The Board
7    shall conduct all requested hearings promptly and in
8    reasonable order;
9        (2) To conduct all hearings pertaining to civil
10    violations of this Act or rules and regulations promulgated
11    hereunder;
12        (3) To promulgate such rules and regulations as in its
13    judgment may be necessary to protect or enhance the
14    credibility and integrity of gambling operations
15    authorized by this Act and the regulatory process
16    hereunder;
17        (4) To provide for the establishment and collection of
18    all license and registration fees and taxes imposed by this
19    Act and the rules and regulations issued pursuant hereto.
20    All such fees and taxes shall be deposited into the State
21    Gaming Fund;
22        (5) To provide for the levy and collection of penalties
23    and fines for the violation of provisions of this Act and
24    the rules and regulations promulgated hereunder. All such
25    fines and penalties shall be deposited into the Education
26    Assistance Fund, created by Public Act 86-0018, of the



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1    State of Illinois;
2        (6) To be present through its inspectors and agents any
3    time gambling operations are conducted on any riverboat for
4    the purpose of certifying the revenue thereof, receiving
5    complaints from the public, and conducting such other
6    investigations into the conduct of the gambling games and
7    the maintenance of the equipment as from time to time the
8    Board may deem necessary and proper;
9        (7) To review and rule upon any complaint by a licensee
10    regarding any investigative procedures of the State which
11    are unnecessarily disruptive of gambling operations. The
12    need to inspect and investigate shall be presumed at all
13    times. The disruption of a licensee's operations shall be
14    proved by clear and convincing evidence, and establish
15    that: (A) the procedures had no reasonable law enforcement
16    purposes, and (B) the procedures were so disruptive as to
17    unreasonably inhibit gambling operations;
18        (8) To hold at least one meeting each quarter of the
19    fiscal year. In addition, special meetings may be called by
20    the Chairman or any 2 Board members upon 72 hours written
21    notice to each member. All Board meetings shall be subject
22    to the Open Meetings Act. Three members of the Board shall
23    constitute a quorum, and 3 votes shall be required for any
24    final determination by the Board. The Board shall keep a
25    complete and accurate record of all its meetings. A
26    majority of the members of the Board shall constitute a



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1    quorum for the transaction of any business, for the
2    performance of any duty, or for the exercise of any power
3    which this Act requires the Board members to transact,
4    perform or exercise en banc, except that, upon order of the
5    Board, one of the Board members or an administrative law
6    judge designated by the Board may conduct any hearing
7    provided for under this Act or by Board rule and may
8    recommend findings and decisions to the Board. The Board
9    member or administrative law judge conducting such hearing
10    shall have all powers and rights granted to the Board in
11    this Act. The record made at the time of the hearing shall
12    be reviewed by the Board, or a majority thereof, and the
13    findings and decision of the majority of the Board shall
14    constitute the order of the Board in such case;
15        (9) To maintain records which are separate and distinct
16    from the records of any other State board or commission.
17    Such records shall be available for public inspection and
18    shall accurately reflect all Board proceedings;
19        (10) To file a written annual report with the Governor
20    on or before July 1 each year and such additional reports
21    as the Governor may request. The annual report shall
22    include a statement of receipts and disbursements by the
23    Board, actions taken by the Board, and any additional
24    information and recommendations which the Board may deem
25    valuable or which the Governor may request;
26        (11) (Blank);



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1        (12) (Blank);
2        (13) To assume responsibility for administration and
3    enforcement of the Video Gaming Act; and
4        (14) To adopt, by rule, a code of conduct governing
5    Board members and employees that ensure, to the maximum
6    extent possible, that persons subject to this Code avoid
7    situations, relationships, or associations that may
8    represent or lead to a conflict of interest.
9    (c) The Board shall have jurisdiction over and shall
10supervise all gambling operations governed by this Act. The
11Board shall have all powers necessary and proper to fully and
12effectively execute the provisions of this Act, including, but
13not limited to, the following:
14        (1) To investigate applicants and determine the
15    eligibility of applicants for licenses and to select among
16    competing applicants the applicants which best serve the
17    interests of the citizens of Illinois.
18        (2) To have jurisdiction and supervision over all
19    riverboat gambling operations in this State and all persons
20    on riverboats where gambling operations are conducted.
21        (3) To promulgate rules and regulations for the purpose
22    of administering the provisions of this Act and to
23    prescribe rules, regulations and conditions under which
24    all riverboat gambling in the State shall be conducted.
25    Such rules and regulations are to provide for the
26    prevention of practices detrimental to the public interest



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1    and for the best interests of riverboat gambling, including
2    rules and regulations regarding the inspection of such
3    riverboats and the review of any permits or licenses
4    necessary to operate a riverboat under any laws or
5    regulations applicable to riverboats, and to impose
6    penalties for violations thereof.
7        (4) To enter the office, riverboats, facilities, or
8    other places of business of a licensee, where evidence of
9    the compliance or noncompliance with the provisions of this
10    Act is likely to be found.
11        (5) To investigate alleged violations of this Act or
12    the rules of the Board and to take appropriate disciplinary
13    action against a licensee or a holder of an occupational
14    license for a violation, or institute appropriate legal
15    action for enforcement, or both.
16        (6) To adopt standards for the licensing of all persons
17    under this Act, as well as for electronic or mechanical
18    gambling games, and to establish fees for such licenses.
19        (7) To adopt appropriate standards for all riverboats
20    and facilities.
21        (8) To require that the records, including financial or
22    other statements of any licensee under this Act, shall be
23    kept in such manner as prescribed by the Board and that any
24    such licensee involved in the ownership or management of
25    gambling operations submit to the Board an annual balance
26    sheet and profit and loss statement, list of the



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1    stockholders or other persons having a 1% or greater
2    beneficial interest in the gambling activities of each
3    licensee, and any other information the Board deems
4    necessary in order to effectively administer this Act and
5    all rules, regulations, orders and final decisions
6    promulgated under this Act.
7        (9) To conduct hearings, issue subpoenas for the
8    attendance of witnesses and subpoenas duces tecum for the
9    production of books, records and other pertinent documents
10    in accordance with the Illinois Administrative Procedure
11    Act, and to administer oaths and affirmations to the
12    witnesses, when, in the judgment of the Board, it is
13    necessary to administer or enforce this Act or the Board
14    rules.
15        (10) To prescribe a form to be used by any licensee
16    involved in the ownership or management of gambling
17    operations as an application for employment for their
18    employees.
19        (11) To revoke or suspend licenses, as the Board may
20    see fit and in compliance with applicable laws of the State
21    regarding administrative procedures, and to review
22    applications for the renewal of licenses. The Board may
23    suspend an owners license, without notice or hearing upon a
24    determination that the safety or health of patrons or
25    employees is jeopardized by continuing a riverboat's
26    operation. The suspension may remain in effect until the



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1    Board determines that the cause for suspension has been
2    abated. The Board may revoke the owners license upon a
3    determination that the owner has not made satisfactory
4    progress toward abating the hazard.
5        (12) To eject or exclude or authorize the ejection or
6    exclusion of, any person from riverboat gambling
7    facilities where such person is in violation of this Act,
8    rules and regulations thereunder, or final orders of the
9    Board, or where such person's conduct or reputation is such
10    that his presence within the riverboat gambling facilities
11    may, in the opinion of the Board, call into question the
12    honesty and integrity of the gambling operations or
13    interfere with orderly conduct thereof; provided that the
14    propriety of such ejection or exclusion is subject to
15    subsequent hearing by the Board.
16        (13) To require all licensees of gambling operations to
17    utilize a cashless wagering system whereby all players'
18    money is converted to tokens, electronic cards, or chips
19    which shall be used only for wagering in the gambling
20    establishment.
21        (14) (Blank).
22        (15) To suspend, revoke or restrict licenses, to
23    require the removal of a licensee or an employee of a
24    licensee for a violation of this Act or a Board rule or for
25    engaging in a fraudulent practice, and to impose civil
26    penalties of up to $5,000 against individuals and up to



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1    $10,000 or an amount equal to the daily gross receipts,
2    whichever is larger, against licensees for each violation
3    of any provision of the Act, any rules adopted by the
4    Board, any order of the Board or any other action which, in
5    the Board's discretion, is a detriment or impediment to
6    riverboat gambling operations.
7        (16) To hire employees to gather information, conduct
8    investigations and carry out any other tasks contemplated
9    under this Act.
10        (17) To establish minimum levels of insurance to be
11    maintained by licensees.
12        (18) To authorize a licensee to sell or serve alcoholic
13    liquors, wine or beer as defined in the Liquor Control Act
14    of 1934 on board a riverboat and to have exclusive
15    authority to establish the hours for sale and consumption
16    of alcoholic liquor on board a riverboat, notwithstanding
17    any provision of the Liquor Control Act of 1934 or any
18    local ordinance, and regardless of whether the riverboat
19    makes excursions. The establishment of the hours for sale
20    and consumption of alcoholic liquor on board a riverboat is
21    an exclusive power and function of the State. A home rule
22    unit may not establish the hours for sale and consumption
23    of alcoholic liquor on board a riverboat. This amendatory
24    Act of 1991 is a denial and limitation of home rule powers
25    and functions under subsection (h) of Section 6 of Article
26    VII of the Illinois Constitution.



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1        (19) After consultation with the U.S. Army Corps of
2    Engineers, to establish binding emergency orders upon the
3    concurrence of a majority of the members of the Board
4    regarding the navigability of water, relative to
5    excursions, in the event of extreme weather conditions,
6    acts of God or other extreme circumstances.
7        (20) To delegate the execution of any of its powers
8    under this Act for the purpose of administering and
9    enforcing this Act and its rules and regulations hereunder.
10        (20.5) To approve any contract entered into on its
11    behalf.
12        (20.6) To appoint investigators to conduct
13    investigations, searches, seizures, arrests, and other
14    duties imposed under this Act, as deemed necessary by the
15    Board. These investigators have and may exercise all of the
16    rights and powers of peace officers, provided that these
17    powers shall be limited to offenses or violations occurring
18    or committed on a riverboat or dock, as defined in
19    subsections (d) and (f) of Section 4, or as otherwise
20    provided by this Act or any other law.
21        (20.7) To contract with the Department of State Police
22    for the use of trained and qualified State police officers
23    and with the Department of Revenue for the use of trained
24    and qualified Department of Revenue investigators to
25    conduct investigations, searches, seizures, arrests, and
26    other duties imposed under this Act and to exercise all of



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1    the rights and powers of peace officers, provided that the
2    powers of Department of Revenue investigators under this
3    subdivision (20.7) shall be limited to offenses or
4    violations occurring or committed on a riverboat or dock,
5    as defined in subsections (d) and (f) of Section 4, or as
6    otherwise provided by this Act or any other law. In the
7    event the Department of State Police or the Department of
8    Revenue is unable to fill contracted police or
9    investigative positions, the Board may appoint
10    investigators to fill those positions pursuant to
11    subdivision (20.6).
12        (21) To take any other action as may be reasonable or
13    appropriate to enforce this Act and rules and regulations
14    hereunder.
15    (d) The Board may seek and shall receive the cooperation of
16the Department of State Police in conducting background
17investigations of applicants and in fulfilling its
18responsibilities under this Section. Costs incurred by the
19Department of State Police as a result of such cooperation
20shall be paid by the Board in conformance with the requirements
21of Section 2605-400 of the Department of State Police Law (20
22ILCS 2605/2605-400).
23    (e) The Board must authorize to each investigator and to
24any other employee of the Board exercising the powers of a
25peace officer a distinct badge that, on its face, (i) clearly
26states that the badge is authorized by the Board and (ii)



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1contains a unique identifying number. No other badge shall be
2authorized by the Board.
3(Source: P.A. 100-1152, eff. 12-14-18.)
4    Section 10. The Video Gaming Act is amended by changing
5Section 15 as follows:
6    (230 ILCS 40/15)
7    Sec. 15. Minimum requirements for licensing and
8registration. Every video gaming terminal offered for play
9shall first be tested and approved pursuant to the rules of the
10Board, and each video gaming terminal offered in this State for
11play shall conform to an approved model. For the examination of
12video gaming machines and associated equipment as required by
13this Section, the Board shall may utilize the services of one
14or more independent outside testing laboratories that have been
15accredited in accordance with ISO/IEC 17025 by an accreditation
16body that is a signatory to the International Laboratory
17Accreditation Cooperation Mutual Recognition Agreement
18signifying they are qualified to by a national accreditation
19body and that, in the judgment of the Board, are qualified to
20perform such examinations. Notwithstanding any law to the
21contrary, the Board shall consider the licensing of independent
22outside testing laboratory applicants in accordance with
23procedures established by the Board by rule. The Board shall
24not withhold its approval of an independent outside testing



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1laboratory license applicant that has been accredited as
2required by this Section and is licensed in gaming
3jurisdictions comparable to Illinois. Upon the finalization of
4required rules, the Board shall license independent testing
5laboratories and accept the test reports of any licensed
6testing laboratory of the video gaming machine's or associated
7equipment manufacturer's choice, notwithstanding the existence
8of contracts between the Board and any independent testing
9laboratory. Every video gaming terminal offered in this State
10for play must meet minimum standards set by an independent
11outside testing laboratory approved by the Board. Each approved
12model shall, at a minimum, meet the following criteria:
13        (1) It must conform to all requirements of federal law
14    and regulations, including FCC Class A Emissions
15    Standards.
16        (2) It must theoretically pay out a mathematically
17    demonstrable percentage during the expected lifetime of
18    the machine of all amounts played, which must not be less
19    than 80%. The Board shall establish a maximum payout
20    percentage for approved models by rule. Video gaming
21    terminals that may be affected by skill must meet this
22    standard when using a method of play that will provide the
23    greatest return to the player over a period of continuous
24    play.
25        (3) It must use a random selection process to determine
26    the outcome of each play of a game. The random selection



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1    process must meet 99% confidence limits using a standard
2    chi-squared test for (randomness) goodness of fit.
3        (4) It must display an accurate representation of the
4    game outcome.
5        (5) It must not automatically alter pay tables or any
6    function of the video gaming terminal based on internal
7    computation of hold percentage or have any means of
8    manipulation that affects the random selection process or
9    probabilities of winning a game.
10        (6) It must not be adversely affected by static
11    discharge or other electromagnetic interference.
12        (7) It must be capable of detecting and displaying the
13    following conditions during idle states or on demand: power
14    reset; door open; and door just closed.
15        (8) It must have the capacity to display complete play
16    history (outcome, intermediate play steps, credits
17    available, bets placed, credits paid, and credits cashed
18    out) for the most recent game played and 10 games prior
19    thereto.
20        (9) The theoretical payback percentage of a video
21    gaming terminal must not be capable of being changed
22    without making a hardware or software change in the video
23    gaming terminal, either on site or via the central
24    communications system.
25        (10) Video gaming terminals must be designed so that
26    replacement of parts or modules required for normal



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



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1    system to provide auditing program information as approved
2    by the Board. The central communications system shall use a
3    standard industry protocol, as defined by the Gaming
4    Standards Association, and shall have the functionality to
5    enable the Board or its designee to activate or deactivate
6    individual gaming devices from the central communications
7    system. In no event may the communications system approved
8    by the Board limit participation to only one manufacturer
9    of video gaming terminals by either the cost in
10    implementing the necessary program modifications to
11    communicate or the inability to communicate with the
12    central communications system.
13        (16) The Board, in its discretion, may require video
14    gaming terminals to display Amber Alert messages if the
15    Board makes a finding that it would be economically and
16    technically feasible and pose no risk to the integrity and
17    security of the central communications system and video
18    gaming terminals.
19    The Board may adopt rules to establish additional criteria
20to preserve the integrity and security of video gaming in this
21State. The central communications system vendor may be licensed
22as a video gaming terminal manufacturer or a video gaming
23terminal distributor, or both, but in no event shall the
24central communications system vendor be licensed as a video
25gaming terminal operator.
26    The Board shall not permit the development of information



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1or the use by any licensee of gaming device or individual game
2performance data. Nothing in this Act shall inhibit or prohibit
3the Board from the use of gaming device or individual game
4performance data in its regulatory duties. The Board shall
5adopt rules to ensure that all licensees are treated and all
6licensees act in a non-discriminatory manner and develop
7processes and penalties to enforce those rules.
8(Source: P.A. 98-31, eff. 6-24-13; 98-377, eff. 1-1-14; 98-582,
9eff. 8-27-13; 98-756, eff. 7-16-14.)".