SB0007sam003 100TH GENERAL ASSEMBLY

Sen. Terry Link

Filed: 2/28/2017

10000SB0007sam003 LRB100 06307 AMC 22549 a

AMENDMENT TO SENATE BILL 7

AMENDMENT NO. ______. Amend Senate Bill 7, on page 2, line 10, after "water-based facility", by inserting "and airport gaming locations pursuant to Section 1-67 of this Act"; and

by replacing line 21 on page 20 through line 22 on page 23 with the following:

"Section 1-45. Casino management contracts.

(a) The Casino Board shall enter into a casino management contract with a casino operator subject to a background investigation and approval by the Gaming Board and payment by the proposed casino operator of a fee of $50,000,000, which shall be deposited into the Gaming Facilities Fee Revenue Fund. The Gaming Board shall complete its background investigation and approval of the casino operator within 6 months after the date that the proposed casino operator submits its application to the Gaming Board. If the Gaming Board does not complete its background investigation and approval within the 6-month period, then the Gaming Board shall give a written explanation to the proposed casino operator and the chief legal officer of the Authority as to why it has not reached a final determination and when it reasonably expects to make a final determination. Validity of the casino management contract is contingent upon the issuance of a casino operator license. If the Gaming Board grants a casino operator license, the Casino Board shall transmit a copy of the executed casino management contract to the Gaming Board.

(b) After (1) the Authority has been issued an owners license, (2) the Gaming Board has issued a casino operator license, and (3) the Gaming Board has approved the members of the Casino Board, the Authority may conduct gaming operations at a temporary facility, subject to the adopted rules of the Gaming Board, for no longer than 24 months after gaming operations begin. The Gaming Board may, after holding a public hearing, grant an extension so long as a permanent facility is not operational and the Authority is working in good faith to complete the permanent facility. The Gaming Board may grant additional extensions following further public hearings. Each extension may be for a period of no longer than 6 months."; and

on page 27, immediately below line 19, by inserting the following:

"Section 1-67. Limitations on gaming at Chicago airports. The Authority may conduct gaming operations in an airport under the administration or control of the Chicago Department of Aviation. Gaming operations may be conducted pursuant to this Section so long as (i) gaming operations are conducted in a secured area that is beyond the Transportation Security Administration security checkpoints and only available to airline passengers at least 21 years of age who are members of a private club, and not to the general public, (ii) gaming operations are limited to slot machines, as defined in Section 4 of the Illinois Gambling Act, and (iii) the combined number of gaming positions operating in the City at the airports and at the temporary and permanent casino facility does not exceed the maximum number of gaming positions authorized pursuant to subsection (h) of Section 7 of the Illinois Gambling Act. Gaming operations at an airport are subject to all applicable laws and rules that apply to any other gaming facility under this Act or the Illinois Gambling Act."; and

on page 50, line 2, by replacing "Sections 5-45 and 20-10" with "Section 5-45"; and

by deleting line 21 on page 55 through line 12 on page 61; and

on page 96, by replacing lines 1 through 12 with the following:

"(b) The revenues in the Fund shall be used, subject to appropriation, by the Comptroller for the purpose of providing appropriations to the Illinois Gaming Board for the administration and enforcement of the Illinois Gambling Act and the applicable provisions of the Chicago Casino Development Authority Act, with any remaining amounts being transferred to the General Revenue Fund."; and

on page 96, line 14, by replacing "(e)" with "(a)"; and

on page 96, line 16, by replacing "(e-25)" with "(h)"; and

by replacing line 22 on page 214 through line 6 on page 215 with the following:

"(e-1) In awarding standardbred racing dates for calendar year 2018, the Board shall award at least 160 racing dates, and each organization licensee shall average at least 10 races for each racing date awarded. In awarding standardbred racing dates for calendar year 2019, the Board shall award at least 200 racing dates, and each organization licensee shall average at least 11 races for each racing date awarded. In awarding standardbred racing dates for calendar year 2020 and thereafter, the Board shall award at least 260 racing dates, and each organization licensee shall average at least 11 races for each racing date awarded unless a lesser schedule of live racing is a result of an agreement with the organization representing the largest number of standardbred owners, breeders, trainers, drivers, caretakers in the State. Standardbred racing conducted in Sangamon County shall not be considered races under this subsection (e-1)."; and

on page 217, by replacing lines 16 through 26 with the following:

"(e-4) Notwithstanding the provisions of Section 7.7 of the Illinois Gambling Act or any provision of this Act other than subsections (e-3) and (e-4.5), for each calendar year for which an electronic gaming licensee requests thoroughbred racing dates which results in a number of live races under its organization license that is less than the total number of live races which it conducted in 2016 at its race track facility, the electronic gaming licensee may not conduct electronic gaming for the calendar year of such requested live races.

(e-4.1) Notwithstanding the provisions of Section 7.7 of the Illinois Gambling Act or any provision of this Act other than subsections (e-3) and (e-4.5), for each calendar year for which an organization licensee requests racing dates for standardbred racing which results in a number of live races that is less than the total number of live races required in subsection (e-1), the electronic gaming licensee may not conduct electronic gaming for the calendar year of such requested live races."; and

on page 253, line 3, by replacing "or (iii)" with "or (iii) at a track awarded standardbred racing dates in 2018 and thereafter; or (iv)"; and

on page 253, line 26, after the period, by inserting "An eligible race track conducting standardbred racing may have up to 9 inter-track wagering locations."; and

on page 309, by deleting lines 7 through 15; and

on page 315, by replacing lines 21 through 25 with the following:

"(b) If the organization licensee is operating electronic gaming, then, for the 5-year period beginning on the January 1 of the calendar year immediately following the calendar year during which an organization licensee begins conducting electronic gaming operations pursuant to an electronic gaming license issued under the Illinois Gambling Act, the organization licensee shall make capital expenditures, in an amount equal to no less than 50% of the tax credit under this Section, to the improvement and maintenance of the backstretch, including, but not limited to, backstretch barns, dormitories, and services for backstretch workers. Those capital expenditures must be in addition to, and not in lieu of, the capital expenditures made for backstretch improvements in calendar year 2015, as reported to the Board in the organization licensee's application for racing dates and as certified by the Board. The organization licensee is required to annually submit the list and amounts of these capital expenditures to the Board by January 30th of the year following the expenditure.

(c) If the organization licensee is operating electronic gaming in accordance with paragraph (b), then, after the 5-year period beginning on January 1 of the calendar year immediately following the calendar year during which an organization licensee begins conducting electronic gaming operations pursuant to an electronic gaming license issued under the Illinois Gambling Act, the organization license is ineligible to receive a tax credit under this Section."; and

on page 322, lines 20 and 21, by replacing "controlled by the licensee's race track" with "of which the electronic gaming licensee has operating control"; and

on page 326, line 23, by replacing "and 7.13" with "7.13, and 25"; and

on page 333, immediately below line 18, by inserting the following:

""Wide area progressive system" means a method of linking progressive slot machines or electronic gaming machines across telecommunication lines as part of a network connecting participating facilities. Wide area progressive systems offer a common progressive jackpot at all participating locations and the award of the jackpot is at random."; and

on page 367, line 2, after the period, by inserting "In order to expedite the application process, the Board may establish rules allowing applicants to acquire criminal background checks and financial integrity reviews as part of the initial application process from a list of vendors approved by the Board."; and

on page 370, line 15, after "casino", by inserting "or in an airport"; and

on page 374, line 24, by replacing "6 months" with "120 days"; and

on page 379, line 8, by replacing "paragraphs (2) through (5)" with "subsection (e) or paragraph (2), (3), (4), or (5)"; and

on page 379, line 20, after the period, by inserting "The fees under this subsection (h) shall be deposited into the Gaming Facilities Fee Revenue Fund."; and

on page 380, lines 14 and 16, by replacing "per gaming position" each time it appears with "per additional gaming position"; and

on page 382, by replacing lines 5 through 7 with "2,000 positions total."; and

on page 385, by replacing lines 15 through 19 with the following: "7.4, or (iii) it will issue an owners license pursuant to an open and competitive bidding process, as set forth in Section 7.12, the open and competitive"; and

on page 391, by replacing lines 22 and 23 with "required under subsection (k), (v) conduct live racing in accordance with subsections (e-1), (e-2), and (e-3) of Section 20 of the Illinois Horse Racing Act of 1975 or for a licensee that is only"; and

on page 392, lines 5 and 6, by deleting "that had an open backstretch in 2009"; and

on page 392, by replacing lines 14 through 18 with "of this Act that apply to owners licensees."; and

on page 394, lines 4 through 6, by deleting "whose electronic gaming license originates with an organization licensee that conducted live racing in calendar year 2016"; and

on page 394, lines 8 through 10, by deleting "whose electronic gaming license originates with an organization licensee that conducted live racing in calendar year 2016"; and

on page 397, immediately below line 16, by inserting the following:

"(i-5) Under no circumstances shall an electronic gaming licensee conduct electronic gaming at any State or county fair."; and

on page 429, immediately below line 6, by inserting the following:

"(a-4.5) Beginning on the first day of the calendar month immediately following 24 months after the effective date of this amendatory Act of the 100th General Assembly and ending on the date gambling operations, commence at a permanent facility with respect to the owners license authorized under paragraph (1) of subsection (e-5) of Section 7 of this Act, a privilege tax is imposed on persons engaged in the business of conducting riverboat or casino gambling or electronic gaming operations, other than licensed managers conducting riverboat gambling operations on behalf of the State, based on the adjusted gross receipts received by such licensee from the gambling games authorized under this Act. The privilege tax shall be the average of the privilege tax, in terms of dollar amounts, calculated pursuant to subsection (a-4) and subsection (a-6)."; and

on page 429, by replacing lines 7 through 10 with the following:

"(a-5) Beginning on January 1 following the opening of the permanent casino at which gambling operations are conducted pursuant to the Chicago Casino Development Authority Act, a privilege tax is imposed on persons engaged in"; and

on page 431, immediately below line 26, by inserting the following:

"(a-7) Beginning in the initial adjustment year and through the final adjustment year, if the total obligation imposed pursuant to either subsection (a-5) or (a-6) will result in an owners licensee receiving less after-tax adjusted gross receipts than it received in calendar year 2016, then the total amount of privilege taxes that the owners licensee is required to pay for that calendar year shall be reduced to the extent necessary so that the after-tax adjusted gross receipts in that calendar year equals the after-tax adjusted gross receipts in calendar year 2016, but the privilege tax reduction shall not exceed the annual adjustment cap. If pursuant to this subsection (a-7), the total obligation imposed pursuant to either subsection (a-5) or (a-6) shall be reduced, then the owners licensee shall not receive a refund from the State at the end of the subject calendar year but instead shall be able to apply that amount as a credit against any payments it owes to the State in the following calendar year to satisfy its total obligation under either subsection (a-5) or (a-6). The credit for the final adjustment year shall occur in the calendar year following the final adjustment year.

If an owners licensee that conducted gambling operations prior to January 1, 2017 expands its riverboat or casino, including, but not limited to, with respect to its gaming floor, additional non-gaming amenities such as restaurants, bars, and hotels and other additional facilities, and incurs construction and other costs related to such expansion from the effective date of this amendatory Act of the 100th General Assembly until the 5th anniversary of the effective date of this amendatory Act of the 100th General Assembly, then for each $15,000,000 spent for any such construction or other costs related to expansion paid by the owners licensee, the final adjustment year shall be extended by one year and the annual adjustment cap shall increase by 0.2% of adjusted gross receipts during each calendar year until and including the final adjustment year. No further modifications to the final adjustment year or annual adjustment cap shall be made after $75,000,000 is incurred in construction or other costs related to expansion so that the final adjustment year shall not extend beyond the 9th calendar year after the initial adjustment year, not including the initial adjustment year, and the annual adjustment cap shall not exceed 4% of adjusted gross receipts in a particular calendar year. Construction and other costs related to expansion shall include all project related costs, including, but not limited to, all hard and soft costs, financing costs, on or off-site ground, road or utility work, cost of gaming equipment and all other personal property, initial fees assessed for each incremental gaming position, and the cost of incremental land acquired for such expansion. Soft costs shall include, but not be limited to, legal fees, architect, engineering and design costs, other consultant costs, insurance cost, permitting costs, and pre-opening costs related to the expansion, including, but not limited to, any of the following: marketing, real estate taxes, personnel, training, travel and out-of-pocket expenses, supply, inventory, and other costs, and any other project related soft costs.

Notwithstanding any other provision of this subsection (a-7), this subsection (a-7) does not apply to an owners licensee unless such owners licensee spends at least $15,000,000 on construction and other costs related to its expansion, excluding the initial fees assessed for each incremental gaming position.

This subsection (a-7) does not apply to owners licensees authorized pursuant to subsection (e-5) of Section 7 of this Act. For purposes of this subsection (a-7):

"Initial adjustment year" means the year commencing on January 1 of the calendar year immediately following the earlier of the following:

(1) the commencement of gambling operations, either in a temporary or permanent facility, with respect to the owners license authorized under paragraph (1) of subsection (e-5) of Section 7 of this Act; or

(2) 36 months after the effective date of this amendatory Act of the 100th General Assembly, provided the initial adjustment year shall not commence earlier than 24 months after the effective date of this amendatory Act of the 100th General Assembly.

"Final adjustment year" means the 4th calendar year after the initial adjustment year, not including the initial adjustment year, and as may be extended further as described in this subsection (a-7).

"After-tax adjusted gross receipts" means, for calendar year 2016, the adjusted gross receipts less privilege taxes paid to the State and for subsequent calendar years, the adjusted gross receipts less privilege taxes paid to the State, then divided by the owners licensee's average number of gaming positions operating in that calendar year and then multiplied by the owners licensee's average number of gaming positions operating in calendar year 2016.

"Annual adjustment cap" means 3% of adjusted gross receipts in a particular calendar year, and as may be increased further as otherwise described in this subsection (a-7)."; and

on page 453, immediately below line 2, by inserting the following:

"(230 ILCS 10/25 new)

Sec. 25. Wide area progressive systems. The operation of a wide area progressive system is permitted in gambling operations authorized under this Act subject to the following conditions:

(1) The method of communication over the wide area progressive system must consist of dedicated on-line communication lines or the equivalent, as determined by the Administrator, or wireless communication, which may be subject to certain restrictions imposed by the Administrator.

(2) All communication between each facility location and the central system site must be encrypted.

(3) The central system site must be located within the State of Illinois and be equipped with a non-interruptible power supply and the central computer must be capable of on-line data redundancy should hard disk peripherals fail during operation. The office containing the central computer shall be equipped with a surveillance system that has been approved by the Administrator. The wide area progressive system provider shall be required to keep and maintain an entry and exit log for the office containing the central computer. The wide area progressive system provider shall provide access to the office containing the central computer to the Administrator and shall make available to the Administrator all books, records, and information required by the Administrator in fulfilling his or her regulatory purpose.

(4) A wide area progressive system provider must suspend play on the wide area progressive system if a communication failure of the system cannot be corrected within 24 consecutive hours.

(5) Approval by the Board of any wide area progressive system shall occur only after the Administrator has reviewed the wide area progressive system software and hardware and is satisfied that the operation of the system meets accepted industry standards for wide area progressive system products, as well as any other requirements that the Administrator may impose to ensure the integrity, security, and legal operation of the wide area progressive system.

(6) A meter that shows the amount of the common progressive jackpot must be conspicuously displayed at or near the machines to which the jackpot applies. The common progressive jackpot meter need not precisely show the actual moneys in the common progressive jackpot award at each instant. Nothing shall prohibit the use of an odometer or other paced updating progressive display to show updates to the jackpot. When a paced updating display is used and the remote site is communicating to the central computer, the common progressive jackpot meter must display the winning value after the jackpot broadcast is received from the central system. If a common progressive jackpot is recognized in the middle of a systemwide poll cycle, the common progressive jackpot display may contain a value less than the aggregated amount calculated by the central system. The fund values from the remaining portion of the poll cycle shall be received by the central system, but not the local site, in which case the common progressive jackpot amount paid shall always be the higher of the 2 reporting amounts.

(7) When a common progressive jackpot is won, the wide area progressive system provider shall have the opportunity to inspect the machine, storage media, the error events received by the central system, and any other data which could reasonably be used to ascertain the validity of the jackpot.

(A) The central system shall produce reports that clearly demonstrate the method of arriving at the payoff amount. This shall include the funds contributed beginning with the polling cycle immediately following the previous jackpot and all funds contributed up to and including the polling cycle that includes the jackpot signal. Funds contributed to and registered by the system before the jackpot message is received shall be deemed to have been contributed to the progressive amount prior to the current jackpot. Funds contributed to the system subsequent to the jackpot message's being received, as well as funds contributed to the system before the jackpot message is received by the system but registered after the jackpot message is received at the system, shall be deemed to have been contributed to the progressive amount of the next jackpot.

(B) The common progressive jackpot may be disbursed in periodic payments as long as each machine clearly displays the fact that the jackpot shall be paid in such periodic payments. In addition, the number of periodic payments and time between payments must be clearly displayed on the slot machine in a non-misleading manner.

(C) A wide area progressive system provider must, upon request, supply to the Board reports that support and verify the economic activity of the system.

(8) In calculating adjusted gross revenue, a facility may deduct its pro rata share of the present value of any common progressive jackpots awarded. The deduction shall be listed on the detailed accounting records provided by the wide area progressive system provider. A facility's pro rata share is based on the number of funds in from that facility's machines on the wide area progressive system, compared to the total amount of funds in on the whole system for the time period between jackpots awarded.

(9) In the event a facility ceases operations and a progressive jackpot is awarded subsequent to the last day of the final month of operation, the facility may not file an amended wagering tax submission or make a claim for a wagering tax refund based on its contributions to that particular progressive prize pool.

(10) A facility, or an entity that is licensed as a manufacturer or distributor, shall provide the wide area progressive system in accordance with a written agreement that shall be reviewed and approved by the Board prior to offering the jackpots.

(11) The payment of any common progressive jackpot offered on a wide area progressive system shall be administered by the wide area progressive system provider, and the provider shall have primary liability for payment of any common progressive jackpot the person administers.

(12) A wide area progressive system provider shall comply with the following:

(A) A reserve shall be established and maintained by the provider of the wide area progressive system in an amount of not less than the sum of the following amounts:

(i) the present value of the aggregate remaining balances owed on all jackpots previously won by patrons on the wide area progressive system;

(ii) the present value of the amount currently reflected on the jackpot meters of the wide area progressive system; and

(iii) the present value of one additional reset of the wide area progressive system.

(B) The reserve shall continue to be maintained until all payments owed to winners of the common progressive jackpots have been made.

(C) For common progressive jackpots disbursed in periodic payments, any qualified investment shall be purchased within 90 days following notice of the win of the common progressive jackpot, and a copy of such qualified investment shall be provided to the Board within 30 days of purchase. Any qualified investment shall have a surrender value at maturity and shall have a maturity date prior to the date the periodic jackpot payment is required to be made.

(D) The person authorized to provide the wide area progressive system shall not be permitted to sell, trade, or otherwise dispose of any qualified investments prior to their maturity unless approval to do so is first obtained from the Board.

(E) Upon becoming aware of an event of noncompliance with the terms of the reserve requirement mandated by subparagraph (A) in this paragraph (12), the wide area progressive system provider must immediately notify the Board of such event. An event of noncompliance includes a non-payment of a jackpot periodic payment or a circumstance which may cause the wide area progressive system provider to be unable to fulfill, or which may otherwise impair the person's ability to satisfy, the person's jackpot payment obligations.

(F) On a quarterly basis, the wide area progressive system provider must deliver to the Board a calculation of system reserves required under subparagraph (A) in this paragraph (12). The calculation shall come with a certification of financial compliance signed by a duly authorized financial officer of the wide area progressive system provider, on a form prescribed by the Board, validating the calculation.

(13) For common progressive jackpots disbursed in periodic payments, subsequent to the date of the win, a winner may be offered the option to receive, in lieu of periodic payments, a discounted single cash payment in the form of a qualified prize option, as that term is defined in Section 451(h) of the Internal Revenue Code of 1986. The wide area progressive system provider shall calculate the single cash payment based on the discount rate. Until the new discount rate becomes effective, the discount rate selected by the wide area progressive system provider shall be used to calculate the single cash payment for all qualified prizes that occur subsequent to the date of the selected discount rate."; and

on page 453, line 4, after "5,", by inserting "20,"; and

on page 453, line 4, after "80", by inserting "and by adding Section 90"; and

on page 457, immediately below line 5, by inserting the following:

"(230 ILCS 40/20)

Sec. 20. Direct dispensing of receipt tickets only. A video gaming 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 video gaming terminal at the end of one's turn or play. The ticket shall indicate the total amount of credits and the cash award, 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 the licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment to receive the cash award. The cost of the credit shall be one cent, 5 cents, 10 cents, or 25 cents, and the maximum wager played per hand shall not exceed $4 $2. No cash award for the maximum wager on any individual hand shall exceed $1,199, except in the case of a wide area progressive system, as defined in the Illinois Gambling Act, which shall have no limits for cash awards $500.

(Source: P.A. 96-34, eff. 7-13-09; 96-1410, eff. 7-30-10.)"; and

on page 468, immediately below line 25, by inserting the following:

"(230 ILCS 40/90 new)

Sec. 90. Wide area progressive systems. The operation of a wide area progressive system, as defined in the Illinois Gambling Act, is permitted, subject to the provisions of the Illinois Gambling Act, and the following conditions:

(1) Licensed terminal operators and manufacturer or supplier licensees may operate one or more wide area progressive systems in licensed establishments, licensed truck stop establishments, licensed veterans establishments, and licensed fraternal establishments. A designated portion of a player's wager may be allocated to the jackpot. The jackpot may be awarded to a player on any of the video gaming terminals that are linked to the wide area progressive system.

(2) A wide area progressive system shall at all times be installed and operated in accordance with relevant requirements of this Act and technical standards of wide area progressive systems.

(3) A wide area progressive system shall be operated and administered by participating licensees in accordance with the terms and conditions of a written approved policy, which must be submitted in writing and approved by the Board prior to implementation and must comply with this Act and technical standards of wide area progressive systems.

(4) Approved policies must address:

(A) responsibility for the funding and payment of all jackpots, fees, and taxes associated with the operation of the wide area progressive system;

(B) control and operation of the computer monitoring room required under paragraph (5); and

(C) other requirements in the technical standards on wide area progressive systems.

(5) A wide area progressive system shall be controlled and operated from a computer monitoring room. The computer monitoring room must:

(A) be under the sole possession and control of, and maintained and operated by, employees of the licensee designated in the approved policy for that system; the employees of the licensee may be required to obtain a terminal handler license if the Board determines, after a review of the work being performed, the employees require a license or permit for the protection of the integrity of gaming;

(B) have its monitoring equipment subjected to surveillance coverage either by the surveillance system of a licensee or by a dedicated surveillance system maintained by the terminal operator;

(C) be accessible through a locked door; the door must be alarmed in a manner that audibly signals the surveillance monitoring room for the surveillance system elected under subparagraph (B) of this paragraph (5); and

(D) have a computer monitoring room entry log.

This Section shall not be construed to impact the maximum wager as set forth in this Act.".