Bill Text: IL HB4087 | 2021-2022 | 102nd General Assembly | Introduced

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Bill Title: Amends the Video Gaming Act. Provides that an applicant or licensee under the Act is not in violation of the Act or its rules and shall not be subject to disciplinary action for operating a game device if operation of the game device is in compliance with and not considered gambling under the Criminal Code of 2012. Amends the Sports Wagering Act. In provisions concerning the lottery sports wagering pilot program, provides that all lottery games, including sports wagering games and programs, are a part of the Department of the Lottery's private management agreement and competitive bidding process under the Illinois Lottery Law (rather than the Department issuing a central system provider license pursuant to an open and competitive bidding process). Requires the Department to implement and administer the program no later than June 30, 2021 and that sports lottery terminals be available for play within 90 days after the effective date of the amendatory Act. Makes changes in provisions concerning the placement of sports lottery terminals, wagers accepted, distribution of proceeds, and the Department's powers. Provides that the Department shall be responsible for facilitating the purchase or lease of all sports lottery terminals. Changes the repeal date of the pilot program to January 1, 2029 (rather than January 1, 2024). Makes other changes. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2021-05-25 - Referred to Rules Committee [HB4087 Detail]

Download: Illinois-2021-HB4087-Introduced.html

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102ND GENERAL ASSEMBLY State of Illinois 2021 and 2022 HB4087 Introduced , by Rep. Jonathan Carroll SYNOPSIS AS INTRODUCED:
230 ILCS 40/35
230 ILCS 45/25-70
Amends the Video Gaming Act. Provides that an applicant or licensee under the Act is not in violation of the Act or its rules and shall not be subject to disciplinary action for operating a game device if operation of the game device is in compliance with and not considered gambling under the Criminal Code of 2012. Amends the Sports Wagering Act. In provisions concerning the lottery sports wagering pilot program, provides that all lottery games, including sports wagering games and programs, are a part of the Department of the Lottery's private management agreement and competitive bidding process under the Illinois Lottery Law (rather than the Department issuing a central system provider license pursuant to an open and competitive bidding process). Requires the Department to implement and administer the program no later than June 30, 2021 and that sports lottery terminals be available for play within 90 days after the effective date of the amendatory Act. Makes changes in provisions concerning the placement of sports lottery terminals, wagers accepted, distribution of proceeds, and the Department's powers. Provides that the Department shall be responsible for facilitating the purchase or lease of all sports lottery terminals. Changes the repeal date of the pilot program to January 1, 2029 (rather than January 1, 2024). Makes other changes. Effective immediately.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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AN ACT concerning gaming.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Video Gaming Act is amended by changing
Section 35 as follows:
(230 ILCS 40/35)
Sec. 35. Display of license; confiscation; violation as
felony.
(a) Each video gaming terminal shall be licensed by the
Board before placement or operation on the premises of a
licensed establishment, licensed truck stop establishment,
licensed large truck stop establishment, licensed fraternal
establishment, or licensed veterans establishment. The license
of each video gaming terminal shall be maintained at the
location where the video gaming terminal is operated. Failure
to do so is a petty offense with a fine not to exceed $100. Any
licensed establishment, licensed truck stop establishment,
licensed large truck stop establishment, licensed fraternal
establishment, or licensed veterans establishment used for the
conduct of gambling games in violation of this Act shall be
considered a gambling place in violation of Section 28-3 of
the Criminal Code of 2012. Every gambling device found in a
licensed establishment, licensed truck stop establishment,

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licensed large truck stop establishment, licensed fraternal
establishment, or licensed veterans establishment operating
gambling games in violation of this Act shall be subject to
seizure, confiscation, and destruction as provided in Section
28-5 of the Criminal Code of 2012. Any license issued under the
Liquor Control Act of 1934 to any owner or operator of a
licensed establishment, licensed truck stop establishment,
licensed large truck stop establishment, licensed fraternal
establishment, or licensed veterans establishment that
operates or permits the operation of a video gaming terminal
within its establishment in violation of this Act shall be
immediately revoked. No person may own, operate, have in his
or her possession or custody or under his or her control, or
permit to be kept in any place under his or her possession or
control, any device that awards credits and contains a
circuit, meter, or switch capable of removing and recording
the removal of credits when the award of credits is dependent
upon chance.
Nothing in this Section shall be deemed to prohibit the
use of a game device only if the game device is used in an
activity that is not gambling under subsection (b) of Section
28-1 of the Criminal Code of 2012. An applicant or licensee
under this Act is not in violation of this Act or its rules and
shall not be subject to disciplinary action for operating a
game device if operation of the game device is in compliance
with and not considered gambling under subsection (b) of

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Section 28-1 of the Criminal Code of 2012.
A violation of this Section is a Class 4 felony. All
devices that are owned, operated, or possessed in violation of
this Section are hereby declared to be public nuisances and
shall be subject to seizure, confiscation, and destruction as
provided in Section 28-5 of the Criminal Code of 2012.
The provisions of this Section do not apply to devices or
electronic video game terminals licensed pursuant to this Act.
A video gaming terminal operated for amusement only and
bearing a valid amusement tax sticker shall not be subject to
this Section until 30 days after the Board establishes that
the central communications system is functional.
(b) (1) The odds of winning each video game shall be posted
on or near each video gaming terminal. The manner in which the
odds are calculated and how they are posted shall be
determined by the Board by rule.
(2) No video gaming terminal licensed under this Act may
be played except during the legal hours of operation allowed
for the consumption of alcoholic beverages at the licensed
establishment, licensed fraternal establishment, or licensed
veterans establishment. A licensed establishment, licensed
fraternal establishment, or licensed veterans establishment
that violates this subsection is subject to termination of its
license by the Board.
(Source: P.A. 101-31, eff. 6-28-19.)

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Section 10. The Sports Wagering Act is amended by changing
Section 25-70 as follows:
(230 ILCS 45/25-70)
(Section scheduled to be repealed on January 1, 2024)
Sec. 25-70. Lottery sports wagering pilot program.
(a) As used in this Section:
"Central lottery system" means the hardware, software,
peripherals, platform, and network components provided by the
Department's central system provider that link and support all
required lottery games, programs, and terminals, including,
but not limited to, sports wagering games and programs through
sports lottery terminals and the central site and that are
unique and separate from the lottery central system for draw
and instant games.
"Central lottery system provider" means an individual,
partnership, corporation, or limited liability company that
provides the hardware, software, peripherals, platform, risk
management, operations, support services, and network
components that link and support all required lottery games
and lottery terminals, including, but not limited to, sports
wagering games and programs through has been licensed for the
purpose of providing and maintaining a central system and the
related management facilities specifically for the management
of sports lottery terminals.
"Electronic card" means a card purchased from a lottery

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retailer.
"Lottery game" means any game provided for sale or
distribution by the Illinois Lottery, including, but not
limited to, sports wagering games and programs through sports
lottery terminals.
"Lottery retailer" means a location licensed by the
Department, or otherwise eligible for a license, to sell
lottery tickets or shares, including a licensed retail
establishment where alcoholic liquor is drawn, poured, mixed,
or otherwise served for consumption on premises, regardless of
whether the establishment operates on a nonprofit or
for-profit basis, any location or establishment that is
licensed to operate video gaming terminals, and any other
retail food establishment.
"Sports lottery systems" means systems provided by the
central lottery system provider consisting of sports wagering
products, risk management, operations, and support services.
"Sports lottery terminal" means a terminal linked to the
central lottery system in which bills or coins are deposited
or an electronic card is inserted in order to place wagers on a
sports event and lottery offerings and includes sports
wagering conducted over the Internet or through mobile
applications or other digital platforms.
(b) Lottery games are a part of the private management
agreement and competitive bidding process provided in Section
9.1 of the Illinois Lottery Law. The central lottery system

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provider shall pay $10,000,000, payable in equal installments
over the course of its contract, to the Department upon being
issued the central lottery system provider license authorizing
sports wagering games and programs under this Section. The
fee, however, shall be deducted from the central lottery
system provider's operational costs related to the sports
lottery infrastructure up to the pro rata amount paid each
year. The Department shall issue one central system provider
license pursuant to an open and competitive bidding process
that uses the following procedures:
(1) The Department shall make applications for the
central system provider license available to the public
and allow a reasonable time for applicants to submit
applications to the Department.
(2) During the filing period for central system
provider license applications, the Department may retain
professional services to assist the Department in
conducting the open and competitive bidding process.
(3) After receiving all of the bid proposals, the
Department shall open all of the proposals in a public
forum and disclose the prospective central system provider
names and venture partners, if any.
(4) The Department shall summarize the terms of the
bid proposals and may make this summary available to the
public.
(5) The Department shall evaluate the bid proposals

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within a reasonable time and select no more than 3 final
applicants to make presentations of their bid proposals to
the Department.
(6) The final applicants shall make their
presentations to the Department on the same day during an
open session of the Department.
(7) As soon as practicable after the public
presentations by the final applicants, the Department, in
its discretion, may conduct further negotiations among the
3 final applicants. At the conclusion of such
negotiations, the Department shall select the winning bid.
(8) Upon selection of the winning bid, the Department
shall evaluate the winning bid within a reasonable period
of time for licensee suitability in accordance with all
applicable statutory and regulatory criteria.
(9) If the winning bidder is unable or otherwise fails
to consummate the transaction, (including if the
Department determines that the winning bidder does not
satisfy the suitability requirements), the Department may,
on the same criteria, select from the remaining bidders.
(10) The winning bidder shall pay $20,000,000 to the
Department upon being issued the central system provider
license.
(c) Every sports lottery terminal offered in this State
for play shall first be tested and approved pursuant to the
rules of the Department, and each sports lottery terminal

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offered in this State for play shall conform to an approved
model. Sports lottery terminals shall be available for play
within 90 days after the effective date of this amendatory Act
of the 102nd General Assembly and any system testing dates
designated by the Department. For the examination of sports
lottery terminals and associated equipment as required by this
Section, the central lottery system provider may utilize the
services of one or more independent outside testing
laboratories that have been accredited by a national
accreditation body and that, in the judgment of the
Department, are qualified to perform such examinations. Every
sports lottery terminal offered in this State for play must
meet minimum standards set by an independent outside testing
laboratory approved by the Department.
(d) Sports During the first 360 days after the effective
date of this Act, sport lottery terminals may be placed in any
no more than 2,500 Lottery retail location locations in the
State. Sports lottery terminals may be placed in an additional
2,500 Lottery retail locations during the second year after
the effective date of this Act.
(e) A sports lottery terminal may not directly dispense
coins, cash, tokens, or any other article of exchange or value
except for receipt tickets. Tickets shall be dispensed by
pressing the ticket dispensing button on the sports lottery
terminal at the end of the placement of one's wager or wagers.
The ticket shall indicate the total amount wagered, odds for

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each wager placed, and the cash award for each bet placed, the
time of day in a 24-hour format showing hours and minutes, the
date, the terminal serial number, the sequential number of the
ticket, and an encrypted validation number from which the
validity of the prize may be determined. The player shall turn
in this ticket to the appropriate person at a lottery retailer
to receive the cash award.
(f) No lottery retailer may cause or permit any person
under the age of 21 years to use a sports lottery terminal or
sports wagering application. A lottery retailer who knowingly
causes or permits a person under the age of 21 years to use a
sports lottery terminal or sports wagering application is
guilty of a business offense and shall be fined an amount not
to exceed $5,000.
(g) A sports lottery terminal shall only accept any wagers
as determined by rule by the Department. parlay wagers and
fixed odds parlay wagers. The Department shall, by rule,
establish the total amount, as a percentage, of all wagers
placed that a lottery retailer may retain.
(g-5) The payouts for the lottery sports wagering pilot
program shall be as follows:
(1) 80% or less of gross dollars played to be
distributed as prizes and awards; this amount shall be
calculated as an average based on a 2-year anniversary
date to be determined by the Department and guaranteed by
the central lottery system provider; and

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(2) 20% gross gaming revenue remaining (gross dollars
played minus prizes paid) to be distributed as follows:
(A) 8% to the central lottery system provider; and
(B) except as provided in subparagraphs (i) and
(ii), 11.5% to the State of Illinois, of which the
local municipality shall receive .5%. if the State is
responsible for the retailer commissions and payment
of the sports lottery terminal;
(i) if a terminal operator under the Video
Gaming Act purchases and distributes the sports
lottery terminal, then 4% to the State, 3% to the
lottery retailer, 4.5% to the terminal operator,
and .5% to the local municipality; and
(ii) if a Lottery retail location purchases
the sports lottery terminal, then 7.5% goes to the
Lottery retail location and 4% to the State, of
which the local municipality shall receive .5%.
(h) The Department shall have jurisdiction over and shall
supervise all lottery sports wagering operations governed by
this Section. The Department shall implement and administer
the lottery sports wagering pilot program no later than June
30, 2021. The Department shall have all powers necessary and
proper to fully and effectively execute the provisions of this
Section, including, but not limited to, the following:
(1) To investigate applicants and determine the
eligibility of applicants for licenses with a goal of

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advancing minority business opportunities, including
lottery retailer ownership of sports lottery terminals and
to select among competing applicants the applicants which
best serve the interests of the citizens of Illinois.
(2) To have jurisdiction and supervision over all
lottery sports wagering operations in this State.
(3) To adopt rules for the purpose of administering
the provisions of this Section and to adopt rules and
conditions under which all lottery sports wagering 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 lottery sports
wagering, including rules (i) regarding the inspection of
such licensees necessary to operate a lottery retailer
under any laws or rules applicable to licensees, (ii) to
impose penalties for violations of the Act and its rules,
and (iii) establishing standards for advertising lottery
sports wagering, (iv) to effectuate policies that advance
minority business ownership and participation in the
sports lottery program, and (v) regarding apportionment of
the total revenues accruing from the lottery sports
wagering pilot program for the purchase or lease of the
hardware.
(i) The Department shall adopt emergency rules to
administer this Section in accordance with Section 5-45 of the
Illinois Administrative Procedure Act. For the purposes of the

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Illinois Administrative Procedure Act, the General Assembly
finds that the adoption of rules to implement this Section is
deemed an emergency and necessary to the public interest,
safety, and welfare.
(j) For the privilege of operating lottery sports wagering
under this Section, all proceeds minus net of proceeds
returned to players shall be electronically transferred daily
or weekly, at the discretion of the Director of the Lottery,
into the State Lottery Fund. After amounts owed to the central
system provider and licensed agents, as determined by the
Department, are paid from the moneys deposited into the State
Lottery Fund under this subsection, the remainder shall be
transferred on the 15th of each month to the Capital Projects
Fund.
(j-5) The Department shall be responsible for facilitating
either the purchase or lease of all sports lottery terminals,
including providing opportunities for minority business
lottery retailers to obtain suitable financing. The Department
shall allow for any terminal operator under the Video Gaming
Act and Lottery retail location to purchase or lease the
sports lottery terminals.
(k) This Section is repealed on January 1, 2029 2024.
(Source: P.A. 101-31, eff. 6-28-19.)
Section 99. Effective date. This Act takes effect upon
becoming law.