SB3432 100TH GENERAL ASSEMBLY

LRB100 19706 SMS 34980 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB3432

Introduced 2/16/2018, by Sen. Napoleon Harris, III

SYNOPSIS AS INTRODUCED:

New Act
230 ILCS 10/24
720 ILCS 5/28-1	from Ch. 38, par. 28-1

Creates the Sports Wagering Act. Provides that sports wagering may not be offered in the State until the Illinois Gaming Board determines that federal statutes prohibiting sports wagering have been repealed or the United States Supreme Court finds those federal statutes unconstitutional. Authorizes sports wagering at a gaming facility that is authorized to conduct gambling operations under the Riverboat Gambling Act. Provides that a sports wagering operator may offer sports wagering in-person at the licensed facility and over the Internet through an interactive sports wagering platform. Provides for licensure of interactive sports wagering platforms. Requires a sports wagering operator to verify that a person placing a wager is of the legal minimum age. Requires a sports wagering operator to allow an individual to restrict himself or herself from placing wagers with the operator. Requires the Board to adopt rules concerning standards for a sports wagering operator's advertisements for sports wagering. Provides integrity requirements for a sports wagering operator. Requires a sports wagering operator to maintain all records of bets and wagers placed. Requires a sports wagering operator to submit a report to the Board annually with the number of accounts established, winnings awarded, gross wagering revenue received, and other information. Requires a sports wagering operator to pay a 12.5% tax of its gross sports wagering revenue. Provides civil penalties for a person or entity that knowingly violates provisions under the Act. Provides that all moneys collected under the Act shall be deposited into the State Gaming Fund. Makes conforming changes in the Riverboat Gambling Act and the Criminal Code of 2012.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning gaming.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Sports Wagering Act.

Section 5. Reconciliation with federal law.

(a) Sports wagering may not be offered in this State under this Act until the Board determines that:

(1) the federal statutes prohibiting sports wagering and the State regulation of sports wagering in this State and similarly situated states have been repealed or amended to allow this State to permit and regulate sports wagering; or

(2) the United States Supreme Court has ruled that a federal statute described in paragraph (1) of this subsection is unconstitutional and may not be applied to prohibit this State from permitting and regulating sports wagering.

(b) The Board shall announce any determinations made under subsection (a) on the Board's Internet website within 90 days after a change in federal law or issuance of a relevant United States Supreme Court ruling.

Section 10. Definitions. As used in this Act, unless the context requires otherwise:

"Board" means the Illinois Gaming Board.

"Gaming facility" means a facility in this State that is authorized to conduct gambling operations under the Riverboat Gambling Act.

"Gross sports wagering revenue" means the total of cash or cash equivalents an operator receives from sports wagering, less:

(1) cash or cash equivalents paid to customers as winnings from sports wagering;

(2) cash or cash equivalents paid to purchase annuities to fund prizes payable to players over a period of time as a result of sports wagering;

(3) the actual cost paid by the sports wagering operator for any personal property or services distributed to customers as a prize result of sports wagering; and

(4) integrity fees remitted to sports governing bodies.

"Interactive sports wagering platform" or "platform" means a person or entity that offers sports wagering over the Internet, including on websites and mobile devices, on behalf of a gaming facility.

"Sporting event" means a professional, amateur, or collegiate sports or athletic event, a motor race event, a contest of relative skill involving electronic media, or a series of sporting events. "Sporting event" does not include youth events.

"Sports governing body" means the organization that prescribes final rules and enforces codes of conduct with respect to a sporting event and participants of a sporting event.

"Sports wagering" means wagering on sporting events or portions of sporting events, or on the individual performance statistics of athletes in a sporting event or combination of sporting events, by any system or method of wagering, including, but not limited to, in-person or over the Internet through websites and on mobile devices. "Sports wagering" includes, but is not limited to, single-game bets, teaser bets, parlays, over-under, money line, pools, exchange wagering, in-game wagering, in-play bets, proposition bets, and straight bets. "Sports wagering" does not include:

(1) fantasy sports and daily fantasy sports; or

(2) gaming that is authorized in this State under the Illinois Horse Racing Act of 1975, the Riverboat Gambling Act, and the Video Gaming Act.

"Sports wagering operator" or "operator" means a gaming facility that offers sports wagering or an interactive sports wagering platform that offers sports wagering on behalf of a gaming facility.

"Wager" or "bet" means the staking or risking by a person of something of value upon an agreement or understanding that the person or another person will receive something of value in the event of a certain outcome. "Wager" or "bet" does not include:

(1) any activity governed by the securities laws of the United States or this State;

(2) any contract of indemnity or guarantee;

(3) any contract for insurance; or

(4) participation in any game or contest in which the participants do not stake or risk anything of value other than personal efforts of the participants in playing the game or contest or obtaining access to the Internet or points or credits that the sponsor of the game or contest provides to participants free of charge and that can be used or redeemed only for participation in games or contests offered by the sponsor.

"Youth event" means a sporting event in which the participants are amateurs and primarily under the age of 18 years.

Section 15. Sports wagering by gaming facilities.

(a) Sports wagering may not be offered in this State except by a gaming facility pursuant to this Act.

(b) Gaming facilities may offer sports wagering:

(1) in-person at the licensed gaming facility; and

(2) over the Internet through an interactive sports wagering platform to persons physically located in this State or a jurisdiction that has entered into a reciprocal agreement with this State to allow sports wagering.

(c) A gaming facility may contract with an interactive sports wagering platform to administer sports wagering over the Internet on its behalf.

(d) Nothing in this Section shall limit the number of sports wagering websites or applications offered by a gaming facility, even if the websites share common data, hosting, and like services.

Section 20. Licensing of interactive sports wagering platforms.

(a) An interactive sports wagering platform may offer sports wagering on behalf of a gaming facility only if it holds an interactive sports wagering platform license issued by the Board.

(b) An applicant for an interactive sports wagering platform license shall:

(1) submit an application to the Board in the manner prescribed by the Board to verify the interactive sports wagering platform's eligibility under this Act; and

(2) pay an initial fee of $10,000.

(c) Each year on or before the anniversary date of the payment of the initial fee made under paragraph (2) of subsection (b), if the interactive sports wagering platform license has been issued, an interactive sports wagering platform shall pay to the Board an annual license renewal fee of $5,000.

(d) An interactive sports wagering platform that allows its license to lapse without requesting an extension of time may be required to resubmit an initial license application and initial fee. An extension not to exceed 60 days may be granted by the Board upon receipt of the interactive sports wagering platform's written request.

(e) Notwithstanding any other provision of law, an interactive sports wagering platform license application and all documents, reports, and data submitted by an interactive sports wagering platform to the Board containing proprietary information, trade secrets, financial information, or personal information about any person shall be treated by the Board as closed records and shall not to be disclosed to the public unless required by a court order or this Act.

(f) An interactive sports wagering platform may enter into agreements to offer sports wagering on behalf of one or more gaming facilities without limitation. Such agreements are not prerequisites to obtaining an interactive sports wagering platform license.

Section 25. Sports wagering operators; consumer protections.

(a) Sports wagering operators shall verify that a person placing a wager is of the legal minimum age for placing the wager.

(b) Sports wagering operators shall allow individuals to restrict themselves from placing wagers with the operator, including wager limits, and take reasonable steps to prevent those individuals from placing such wagers, including, upon request of the individual, to share the request with the Board for the sole purpose of disseminating the request to other sports wagering operators.

(c) The Board shall adopt rules to ensure that an operator's advertisements for sports wagering:

(1) do not target minors or other persons who are ineligible to place wagers, problem gamblers, or other vulnerable persons;

(2) disclose the identity of the sports wagering operator;

(3) provide information about or links to resources relating to gambling addiction; and

(4) are not otherwise false, misleading, or deceptive to a reasonable consumer.

Section 30. Integrity requirements.

(a) Sports wagering operators shall conduct background checks on newly hired employees and annual background checks on all existing employees. Background checks shall search for criminal history and any charges or convictions involving corruption or manipulation of sporting events and association with organized crime.

(b) Sports wagering operators shall employ commercially reasonable methods to:

(1) prohibit the operator, directors, officers, and employees of the operator, and any relative living in the same household as those persons, from placing bets with the operator;

(2) use publicly available information and any lists of employees and affiliates provided to the sports wagering operator or the Board by a sports governing body, prohibit wagering by an athlete, coach, referee, team owner, employee of a sports governing member or one of its member teams, and player and referee union personnel;

(3) prohibit wagering by persons who are under the minimum legal age for placing wagers;

(4) prohibit an individual with access to non-public confidential information held by the operator from placing wagers with the operator;

(5) prohibit persons from placing wagers as agents or proxies for others; and

(6) maintain the security of wagering data, customer data, and other confidential information from unauthorized access and dissemination; however, nothing in this Act shall preclude the use of Internet or cloud-based hosting of that data and information or disclosure as required by a court order, other law, or this Act.

(c) A sports governing body may, at its election, notify the Board that it desires to restrict or limit wagering on its sporting events to ensure the integrity of its contests by providing notice in the form and manner as the Board may require, including restrictions on the sources of data and associated video upon which an operator may rely in offering and paying wagers and the bet types that may be offered. Upon receiving the notice, the Board shall publish any such wagering restrictions and limitations. Offering or taking wagers contrary to such restrictions is a violation of this Act.

(d) The Board and sports wagering operators shall cooperate with investigations conducted by a sports governing body or law enforcement agencies, including, but not limited to, providing or facilitating the provision of betting information and audio or video files relating to persons placing wagers.

(e) Sports wagering operators shall immediately report to the Board any information relating to:

(1) criminal or disciplinary proceedings commenced against the sports wagering operator in connection with its operations;

(2) abnormal betting activity or patterns that may indicate a concern with the integrity of a sporting event or events;

(3) a potential breach of the internal rules and codes of conduct of the sports governing body pertaining to sports wagering;

(4) any other conduct that corrupts a betting outcome of a sporting event or events for purposes of financial gain; or

(5) suspicious or illegal wagering activities, including use of funds derived from illegal activity, wagers to conceal or launder funds derived from illegal activity, using agents to place wagers, and using false identification.

Sports wagering operators shall also immediately report information relating to conduct described in paragraph (3), (4), or (5) to the relevant sports governing body.

(f) Sports wagering operators shall maintain the confidentiality of information provided by a sports governing body to the sports wagering operator, unless disclosure is required by this Act, the Board, other law, or a court order.

Section 35. Recordkeeping; information sharing.

(a) Sports wagering operators shall maintain records of all bets and wagers placed, including personally identifiable information of the bettor, amount and type of bet, time the bet was placed, location of the bet, including the Internet protocol address if applicable, the outcome of the bet, records of abnormal betting activity, and video camera recordings in the case of in-person wagers for at least 3 years after the sporting event occurs and make the data available for inspection upon request of the Board or as required by a court order.

(b) If a sports governing body has notified the Board that real-time information sharing for wagers placed on its sporting events is necessary and desirable, sports wagering operators shall share in real time the information required to be retained pursuant to this Section (other than video files) with the sports governing body or its designee respecting wagers on its sporting events.

(c) A sports wagering operator shall remit to a sports governing body that it has provided notice to the Board pursuant to subsection (b) an integrity fee of 1% of the amount wagered on its sporting events. The sports wagering operator shall remit integrity fees to the sports governing body at least once per calendar quarter.

(d) The Board shall cooperate with a sports governing body and operators to ensure the timely, efficient, and accurate sharing of information and the remittance of proceedings of the integrity fee to the sports governing body.

Section 40. Annual report.

(a) Each licensed sports wagering operator shall annually submit a report to the Board no later than June 30 of each year that shall include the following information as it shall apply to accounts held by customers located in this State:

(1) the total number of new accounts established in the preceding year, as well as the total number of accounts permanently closed in the preceding year;

(2) the total amount of bets received from customers;

(3) the total amount of winnings awarded to customers;

(4) the total amount on hold on each type of bet;

(5) the total amount of gross wagering revenue received by the licensed sports wagering operator; and

(6) the total number of persons that requested to exclude themselves from or otherwise limit their participation in sports wagering.

(b) Upon the submission of the annual report, to such extent the Board deems it to be in the public interest, the Board shall be authorized to conduct a financial audit of any sports wagering operator to ensure compliance with this Act.

(c) The Board shall annually publish a report based on the aggregate information provided by all licensed sports wagering operators, which shall be published on the Board's website no later than 180 days after the deadline for the submission of individual reports as specified in this Act.

Section 45. Taxation; reporting of customer tax information.

(a) For the privilege of offering sports wagering in this State, sports wagering operators shall pay a tax equivalent to 12.5% of their gross sports wagering revenue generated within this State, which shall be paid to the Board not less than once per calendar year.

(b) The Board shall deposit into the State Gaming Fund all taxes imposed by this Act; any interest and penalties imposed by the Board relating to those taxes; all penalties levied and collected by the Board; and the appropriate funds, cash, or prizes forfeited from sports wagering.

(c) Sports wagering operators shall collect and report information to the Board to reasonably ensure that State taxes on prizes from winning wagers are collected from or reported by the person placing the bet or wager, as required by law, at the time of any payment of the proceeds of the bet or wager.

Section 50. Imputation. The performance of any act required, or the forbearance of any act prohibited, by this Act by an interactive sports wagering platform shall be imputed to the gaming facility on behalf of which it is operating, and vice versa.

Section 55. Civil penalty. A person, firm, corporation, association, agent, or employee who knowingly violates a provision of this Act shall be liable for a civil penalty of not more than $5,000 for each violation, not to exceed $50,000 for violations arising out of the same transaction or occurrence that may be recovered in a civil action brought by the Board.

Section 60. Moneys collected. All moneys collected by the Board under this Act shall be deposited into the State Gaming Fund and used for the administration of this Act.

Section 65. Reconciliation with other State law; no liability for information sharing.

(a) The provisions of the Riverboat Gambling Act, and all rules adopted thereunder, shall apply to this Act, except where there is a conflict between the 2 Acts.

(b) A sports wagering operator shall not be liable under the laws of this State to any party, including customers, for disclosing information as required under this Act and shall not be liable for refusing to disclose information unless required under this Act.

Section 905. The Riverboat Gambling Act is amended by changing Section 24 as follows:

(230 ILCS 10/24)

Sec. 24. Applicability of this Illinois Riverboat Gambling Act.

(a) The provisions of this the Illinois Riverboat Gambling Act, and all rules adopted promulgated thereunder, shall apply to the Video Gaming Act, except where there is a conflict between the 2 Acts.

(b) The provisions of this Act, and all rules adopted thereunder, shall apply to the Sports Wagering Act, except where there is a conflict between the 2 Acts.

(Source: P.A. 96-37, eff. 7-13-09.)

Section 910. The Criminal Code of 2012 is amended by changing Section 28-1 as follows:

(720 ILCS 5/28-1) (from Ch. 38, par. 28-1)

Sec. 28-1. Gambling.

(a) A person commits gambling when he or she:

(1) knowingly plays a game of chance or skill for money or other thing of value, unless excepted in subsection (b) of this Section;

(2) knowingly makes a wager upon the result of any game, contest, or any political nomination, appointment or election;

(3) knowingly operates, keeps, owns, uses, purchases, exhibits, rents, sells, bargains for the sale or lease of, manufactures or distributes any gambling device;

(4) contracts to have or give himself or herself or another the option to buy or sell, or contracts to buy or sell, at a future time, any grain or other commodity whatsoever, or any stock or security of any company, where it is at the time of making such contract intended by both parties thereto that the contract to buy or sell, or the option, whenever exercised, or the contract resulting therefrom, shall be settled, not by the receipt or delivery of such property, but by the payment only of differences in prices thereof; however, the issuance, purchase, sale, exercise, endorsement or guarantee, by or through a person registered with the Secretary of State pursuant to Section 8 of the Illinois Securities Law of 1953, or by or through a person exempt from such registration under said Section 8, of a put, call, or other option to buy or sell securities which have been registered with the Secretary of State or which are exempt from such registration under Section 3 of the Illinois Securities Law of 1953 is not gambling within the meaning of this paragraph (4);

(5) knowingly owns or possesses any book, instrument or apparatus by means of which bets or wagers have been, or are, recorded or registered, or knowingly possesses any money which he has received in the course of a bet or wager;

(6) knowingly sells pools upon the result of any game or contest of skill or chance, political nomination, appointment or election;

(7) knowingly sets up or promotes any lottery or sells, offers to sell or transfers any ticket or share for any lottery;

(8) knowingly sets up or promotes any policy game or sells, offers to sell or knowingly possesses or transfers any policy ticket, slip, record, document or other similar device;

(9) knowingly drafts, prints or publishes any lottery ticket or share, or any policy ticket, slip, record, document or similar device, except for such activity related to lotteries, bingo games and raffles authorized by and conducted in accordance with the laws of Illinois or any other state or foreign government;

(10) knowingly advertises any lottery or policy game, except for such activity related to lotteries, bingo games and raffles authorized by and conducted in accordance with the laws of Illinois or any other state;

(11) knowingly transmits information as to wagers, betting odds, or changes in betting odds by telephone, telegraph, radio, semaphore or similar means; or knowingly installs or maintains equipment for the transmission or receipt of such information; except that nothing in this subdivision (11) prohibits transmission or receipt of such information for use in news reporting of sporting events or contests; or

(12) knowingly establishes, maintains, or operates an Internet site that permits a person to play a game of chance or skill for money or other thing of value by means of the Internet or to make a wager upon the result of any game, contest, political nomination, appointment, or election by means of the Internet. This item (12) does not apply to activities referenced in items (6) and (6.1) of subsection (b) of this Section.

(b) Participants in any of the following activities shall not be convicted of gambling:

(1) Agreements to compensate for loss caused by the happening of chance including without limitation contracts of indemnity or guaranty and life or health or accident insurance.

(2) Offers of prizes, award or compensation to the actual contestants in any bona fide contest for the determination of skill, speed, strength or endurance or to the owners of animals or vehicles entered in such contest.

(3) Pari-mutuel betting as authorized by the law of this State.

(4) Manufacture of gambling devices, including the acquisition of essential parts therefor and the assembly thereof, for transportation in interstate or foreign commerce to any place outside this State when such transportation is not prohibited by any applicable Federal law; or the manufacture, distribution, or possession of video gaming terminals, as defined in the Video Gaming Act, by manufacturers, distributors, and terminal operators licensed to do so under the Video Gaming Act.

(5) The game commonly known as "bingo", when conducted in accordance with the Bingo License and Tax Act.

(6) Lotteries when conducted by the State of Illinois in accordance with the Illinois Lottery Law. This exemption includes any activity conducted by the Department of Revenue to sell lottery tickets pursuant to the provisions of the Illinois Lottery Law and its rules.

(6.1) The purchase of lottery tickets through the Internet for a lottery conducted by the State of Illinois under the program established in Section 7.12 of the Illinois Lottery Law.

(7) Possession of an antique slot machine that is neither used nor intended to be used in the operation or promotion of any unlawful gambling activity or enterprise. For the purpose of this subparagraph (b)(7), an antique slot machine is one manufactured 25 years ago or earlier.

(8) Raffles and poker runs when conducted in accordance with the Raffles and Poker Runs Act.

(9) Charitable games when conducted in accordance with the Charitable Games Act.

(10) Pull tabs and jar games when conducted under the Illinois Pull Tabs and Jar Games Act.

(11) Gambling games conducted on riverboats when authorized by the Riverboat Gambling Act.

(12) Video gaming terminal games at a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment when conducted in accordance with the Video Gaming Act.

(13) Games of skill or chance where money or other things of value can be won but no payment or purchase is required to participate.

(14) Savings promotion raffles authorized under Section 5g of the Illinois Banking Act, Section 7008 of the Savings Bank Act, Section 42.7 of the Illinois Credit Union Act, Section 5136B of the National Bank Act (12 U.S.C. 25a), or Section 4 of the Home Owners' Loan Act (12 U.S.C. 1463).

(15) Sports wagering when conducted in accordance with the Sports Wagering Act.

(c) Sentence.

Gambling is a Class A misdemeanor. A second or subsequent conviction under subsections (a)(3) through (a)(12), is a Class 4 felony.

(d) Circumstantial evidence.

In prosecutions under this Section circumstantial evidence shall have the same validity and weight as in any criminal prosecution.

(Source: P.A. 98-644, eff. 6-10-14; 99-149, eff. 1-1-16.)