100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB4171

 

Introduced , by Rep. Sheri Jesiel

 

SYNOPSIS AS INTRODUCED:
 
230 ILCS 40/25
230 ILCS 40/28 new
230 ILCS 40/60
230 ILCS 40/65

    Amends the Video Gaming Act. Provides that the corporate authorities of a municipality may pass an ordinance prohibiting gaming cafes within the corporate limits of the municipality. Provides that a county board may, for the unincorporated area of the county, pass an ordinance prohibiting gaming cafes within the unincorporated area of the county. Provides that a representative of a municipality or county may enter a licensed establishment, licensed veterans establishment, licensed truck stop establishment, or licensed fraternal establishment for the purpose of enforcing an ordinance prohibiting gaming cafes. Provides that a violation of an ordinance prohibiting gaming cafes is a business offense for which a court may impose injunctive relief, the fine specified in the ordinance, or both. Makes changes concerning fees a non-home rule unit that has adopted an ordinance prohibiting gaming cafes may impose. Defines "gaming cafe". Provides that a terminal operator and a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment may enter into an agreement under which the licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment receives more than 50% of the after-tax profits from a video gaming terminal and the terminal operator receives the remaining after-tax profits. Makes changes concerning the distribution of the net terminal income tax from video gaming terminals located in non-home rule units of local government.


LRB100 14825 MJP 29646 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB4171LRB100 14825 MJP 29646 b

1    AN ACT concerning gaming.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Video Gaming Act is amended by changing
5Sections 25, 60, and 65 and by adding Section 28 as follows:
 
6    (230 ILCS 40/25)
7    Sec. 25. Restriction of licensees.
8    (a) Manufacturer. A person may not be licensed as a
9manufacturer of a video gaming terminal in Illinois unless the
10person has a valid manufacturer's license issued under this
11Act. A manufacturer may only sell video gaming terminals for
12use in Illinois to persons having a valid distributor's
13license.
14    (b) Distributor. A person may not sell, distribute, or
15lease or market a video gaming terminal in Illinois unless the
16person has a valid distributor's license issued under this Act.
17A distributor may only sell video gaming terminals for use in
18Illinois to persons having a valid distributor's or terminal
19operator's license.
20    (c) Terminal operator. A person may not own, maintain, or
21place a video gaming terminal unless he has a valid terminal
22operator's license issued under this Act. A terminal operator
23may only place video gaming terminals for use in Illinois in

 

 

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1licensed establishments, licensed truck stop establishments,
2licensed fraternal establishments, and licensed veterans
3establishments. No terminal operator may give anything of
4value, including but not limited to a loan or financing
5arrangement, to a licensed establishment, licensed truck stop
6establishment, licensed fraternal establishment, or licensed
7veterans establishment as any incentive or inducement to locate
8video terminals in that establishment. Of the after-tax profits
9from a video gaming terminal, 50% shall be paid to the terminal
10operator and 50% shall be paid to the licensed establishment,
11licensed truck stop establishment, licensed fraternal
12establishment, or licensed veterans establishment,
13notwithstanding any agreement to the contrary, except as
14otherwise provided in this subsection. A terminal operator and
15a licensed establishment, licensed truck stop establishment,
16licensed fraternal establishment, or licensed veterans
17establishment may enter into an agreement under which the
18licensed establishment, licensed truck stop establishment,
19licensed fraternal establishment, or licensed veterans
20establishment receives more than 50% of the after-tax profits
21from a video gaming terminal and the terminal operator receives
22the remaining after-tax profits. A video terminal operator that
23violates one or more requirements of this subsection is guilty
24of a Class 4 felony and is subject to termination of his or her
25license by the Board.
26    (d) Licensed technician. A person may not service,

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1eff. 7-15-13; 98-112, eff. 7-26-13; 98-756, eff. 7-16-14.)
 
2    (230 ILCS 40/28 new)
3    Sec. 28. Prohibition of gaming cafes.
4    (a) As used in this Section, "gaming cafe" means a licensed
5establishment, licensed veterans establishment, licensed truck
6stop establishment, or licensed fraternal establishment that
7meets all of the following criteria: (1) the establishment is
8substantially oriented towards the availability of video
9gaming to the public; (2) a majority of the staff is assigned
10to monitor and operate video gaming activity; (3) the
11establishment has no kitchen to prepare food for serving; (4)
12video gaming is the establishment's largest source of revenue;
13and (5) the establishment is marketed toward customers as a
14place to engage in video gaming.
15    (b) The corporate authorities of a municipality may pass an
16ordinance prohibiting gaming cafes within the corporate limits
17of the municipality. A county board may, for the unincorporated
18area of the county, pass an ordinance prohibiting gaming cafes
19within the unincorporated area of the county.
20    (c) A representative of a municipality or county exercising
21its rights under this Section may enter a licensed
22establishment, licensed veterans establishment, licensed truck
23stop establishment, or licensed fraternal establishment for
24the purpose of enforcing an ordinance enacted under subsection
25(b) of this Section.

 

 

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1    (d) A violation of an ordinance enacted under subsection
2(b) of this Section is a business offense for which a court may
3impose injunctive relief, the fine specified in the ordinance,
4or both.
 
5    (230 ILCS 40/60)
6    Sec. 60. Imposition and distribution of tax.
7    (a) A tax of 30% is imposed on net terminal income and
8shall be collected by the Board.
9    (b) Of the tax collected under this Section from a video
10gaming terminal located in a home rule unit of local
11government, five-sixths shall be deposited into the Capital
12Projects Fund and one-sixth shall be deposited into the Local
13Government Video Gaming Distributive Fund. Of the tax collected
14under this Section from a video gaming terminal located in a
15non-home rule unit of local government, two-thirds shall be
16deposited into the Capital Projects Fund and one-third shall be
17paid to the non-home rule unit of local government.
18    (c) Revenues generated from the play of video gaming
19terminals shall be deposited by the terminal operator, who is
20responsible for tax payments, in a specially created, separate
21bank account maintained by the video gaming terminal operator
22to allow for electronic fund transfers of moneys for tax
23payment.
24    (d) Each licensed establishment, licensed truck stop
25establishment, licensed fraternal establishment, and licensed

 

 

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1veterans establishment shall maintain an adequate video gaming
2fund, with the amount to be determined by the Board.
3    (e) The State's percentage of net terminal income shall be
4reported and remitted to the Board within 15 days after the
515th day of each month and within 15 days after the end of each
6month by the video terminal operator. A video terminal operator
7who falsely reports or fails to report the amount due required
8by this Section is guilty of a Class 4 felony and is subject to
9termination of his or her license by the Board. Each video
10terminal operator shall keep a record of net terminal income in
11such form as the Board may require. All payments not remitted
12when due shall be paid together with a penalty assessment on
13the unpaid balance at a rate of 1.5% per month.
14(Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09.)
 
15    (230 ILCS 40/65)
16    Sec. 65. Fees. Except where a non-home rule unit has
17adopted an ordinance under subsection (b) of Section 28, a A
18non-home rule unit of government may not impose any fee for the
19operation of a video gaming terminal in excess of $25 per year.
20(Source: P.A. 96-34, eff. 7-13-09.)