Illinois General Assembly

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Full Text of HB3655  99th General Assembly

HB3655sam002 99TH GENERAL ASSEMBLY

Sen. Kwame Raoul

Filed: 5/18/2016

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 3655

2    AMENDMENT NO. ______. Amend House Bill 3655, AS AMENDED, by
3replacing everything after the enacting clause with the
4following:
 
5    "Section 1. Short title. This Act may be cited as the
6Fantasy Sports Contest Act.
 
7    Section 5. Legislative intent. This Act is designed to
8provide regulation of companies providing access to paid
9fantasy sports contests and protect Illinois consumers who play
10paid fantasy sports contests for prizes from unfair acts and
11practices that may arise in the gaming process. The regulation
12is also intended to protect the families of persons who play
13paid fantasy sports contests to the extent that they may be
14affected by unfair and deceptive practices that lead to
15unaffordable losses.
 

 

 

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1    Section 10. Definitions. In this Act:
2    "Beginner fantasy sports player" means an individual who is
3at least 21 years of age and who has entered fewer than 51
4fantasy sports contests offered by a single fantasy sports
5contest operator.
6    "Board" means the Illinois Gaming Board.
7    "Confidential information" means information related to
8the play of a fantasy sports contest by fantasy sports players
9obtained as a result of or by virtue of a person's employment
10with a fantasy sports contest operator.
11    "Entry fee" means the cash or cash equivalent paid by a
12fantasy sports player located in Illinois at the time of entry
13for participation in a fantasy sports contest.
14    "Fantasy sports contest" means any fantasy contest, in
15which:
16        (1) the value of all prizes and awards offered to
17    winning participants are established and made known to the
18    participants in advance of the contest and their value is
19    not determined by the number of participants or the amount
20    of any fees paid by those participants;
21        (2) all winning outcomes are determined predominantly
22    by accumulated statistical results of the performance of
23    individual athletes in real-world professional athletic
24    competitions; a professional athletic competition does not
25    include any amateur-level or collegiate-level sport; and
26        (3) no winning outcome is based on the score, point

 

 

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1    spread, or any performance or performances of any single
2    actual team or combination of such teams or solely on any
3    single performance of an individual athlete or player in
4    any single actual event.
5    A fantasy sports contest in a game or contest that involves
6individual athletes from real-world professional athletic
7teams, such as football, baseball, basketball, hockey, soccer,
8and other team sports: (i) shall consist of individual athletes
9from at least 3 different real-world professional athletic
10teams and (ii) shall not have more than 4 individual athletes
11from a single real-world professional athletic team. However,
12the prohibition contained in item (ii) of this paragraph does
13not apply to a season-long fantasy sports contest.
14    "Fantasy sports contest operator" means any individual,
15partnership, corporation, or limited liability company that
16engages in the business of offering, by means of the Internet,
17a smart phone application, or other similar electronic or
18digital media or communication technologies, multiple fantasy
19sports contests to persons.
20    "Fantasy sports contest platform" means any website, smart
21phone application, or other portal providing access to a
22fantasy sports contest.
23    "Fantasy sports contest revenues" means the amount of entry
24fees collected from fantasy sports players located in Illinois
25accepted by a fantasy sports contest operator that are not
26awarded as prizes to fantasy sports players.

 

 

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1    "Fantasy sports player" means an individual 21 years of age
2or over who enters into a fantasy sports contest with an entry
3fee offered by a fantasy sports contest operator.
4    "Highly experienced fantasy sports player" means an
5individual who is at least 21 years of age and has (1) entered
6more than 1,000 contests offered by a single fantasy sports
7contest operator or (2) has won more than 3 prizes valued at
8$1,000 or more. Once a fantasy sports player is classified as a
9highly experienced fantasy sports player, a player shall remain
10classified as such.
11    "Minor" means an individual under 21 years of age.
12    "Prize" means anything of value, including money, contest
13credits, merchandise, or admission to another contest.
14    "Scripts" means commands that a fantasy sports
15contest-related computer program can execute that are created
16by fantasy sports players (or by third parties for the use of
17fantasy sports players) to automate processes on a fantasy
18sports contest platform.
19    "Season-long fantasy sports contest" means a fantasy
20sports contest offered by a fantasy sports contest operator
21that is conducted over an entire sports season where the entry
22fee is paid prior to the start of the season.
 
23    Section 15. Applicability. This Act and all rules adopted
24under the authority of this Act shall only apply to fantasy
25sports contests when an entry fee is paid by a fantasy sports

 

 

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1player at the time of entry for participation in a fantasy
2sports contest.
 
3    Section 20. Authority of the Board.
4    (a) The Board shall have jurisdiction over and shall
5supervise all fantasy sports contests governed by this Act. The
6Board shall have all powers necessary and proper to fully and
7effectively execute the provisions of this Act, including, but
8not limited to, the following:
9        (1) To investigate applicants and determine the
10    eligibility of applicants for licenses that best serve the
11    interests of the citizens of Illinois.
12        (2) To adopt such rules as in its judgment may be
13    necessary to protect or enhance the credibility and
14    integrity of fantasy sports contests authorized by this Act
15    and the regulatory process under this Act.
16        (3) To provide for the establishment and collection of
17    all license and registration fees and taxes imposed by this
18    Act and the rules issued pursuant to this Act. All license
19    fees shall be deposited into the State Gaming Fund, and all
20    taxes collected shall be deposited into the Education
21    Assistance Fund.
22        (4) To suspend, revoke, or restrict licenses; to
23    require the removal of a fantasy sports contest operator or
24    an employee of a fantasy sports contest operator for a
25    violation of this Act or a Board rule or for engaging in a

 

 

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1    fraudulent practice; and to impose civil penalties of up to
2    $5,000 against individuals and up to $10,000 or an amount
3    equal to the daily fantasy sports contest revenues,
4    whichever is larger, against licensees for each violation
5    of any provision of the Act, any rules adopted by the
6    Board, any order of the Board, or any other action which,
7    in the Board's discretion, is a detriment or impediment to
8    fantasy sports contests.
9        (5) To provide for the levy and collection of penalties
10    and fines for the violation of provisions of this Act and
11    the rules adopted under this Act. All such fines and
12    penalties shall be deposited into the State Gaming Fund.
13    (b) The Board shall adopt emergency rules to administer
14this Act in accordance with Section 5-45 of the Illinois
15Administrative Procedure Act. For the purposes of the Illinois
16Administrative Procedure Act, the General Assembly finds that
17the adoption of rules to implement this Act is deemed an
18emergency and necessary to the public interest, safety, and
19welfare.
 
20    Section 25. Fantasy sports player accounts.
21    (a) A fantasy sports contest operator shall not allow a
22fantasy sports player to create more than one username or more
23than one account. A fantasy sports contest operator shall take
24commercially and technologically reasonable measures to verify
25a fantasy sports player's true identity and address. A fantasy

 

 

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1sports contest operator shall implement and prominently
2publish procedures to terminate all accounts of a fantasy
3sports player that establishes or seeks to establish more than
4one username or more than one account, whether directly or by
5use of another person as a proxy. The procedures may allow a
6fantasy sports player that establishes or seeks to establish
7more than one username or more than one account to retain one
8account provided that the fantasy sports contest operator
9investigates and makes a good faith determination that the
10fantasy sports player's conduct was not intended to obtain a
11competitive advantage.
12    (b) Fantasy sports contest operators shall not allow
13fantasy sports players to use a proxy server for the purpose of
14misrepresenting their location in order to engage in fantasy
15sports contests.
16    (c) Fantasy sports contest operators shall implement and
17prominently publish procedures to terminate all accounts of any
18fantasy sports player that establishes or seeks to establish
19more than one username or more than one account, whether
20directly or by use of another person as a proxy. If an account
21is terminated for establishing or seeking to establish more
22than one username or more than one account, the account holder
23is prohibited from establishing another account with that
24fantasy sports contest operator.
25    (d) Fantasy sports contest operators shall take
26commercially and technologically reasonable measures to

 

 

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1prevent one fantasy sports player from acting as a proxy for
2another. These measures shall include, without limitation, use
3of geolocation technologies to prevent simultaneous logins to a
4single account from geographically inconsistent locations.
 
5    Section 30. Protection of consumer funds on deposit and
6compliance with data security requirements.
7    (a) Fantasy sports contest operators shall comply with all
8applicable State and federal requirements for data security,
9including, but not limited to, age verification and location
10software.
11    (b) Funds in fantasy sports players' accounts shall be held
12in segregated accounts by the fantasy sports contest operators
13for the fantasy sports players that establish the accounts.
14Fantasy sports contest operators shall implement and
15prominently publish procedures that:
16        (1) prevent unauthorized withdrawals from fantasy
17    sports player accounts by fantasy sports contest operators
18    or others;
19        (2) prevent commingling of funds in a fantasy sports
20    player's account with other funds, including, without
21    limitation, funds of the fantasy sports contest operator;
22    fantasy sports player funds shall be segregated from
23    fantasy sports contest operators' operational funds and
24    any other funds held by the fantasy sports contest
25    operator; and

 

 

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1        (3) address reporting on complaints by fantasy sports
2    players that their accounts have been misallocated,
3    compromised, or otherwise mishandled.
4    (c) Fantasy sports contest operators shall implement and
5prominently publish procedures that allow any fantasy sports
6player to permanently close an account at any time and for any
7reason. The procedures shall allow for cancellation by any
8means, including, without limitation, by a fantasy sports
9player on any fantasy sports contest platform used by that
10fantasy sports player to make deposits into a fantasy sports
11player account. A copy of a fantasy sports contest operator's
12procedures shall be submitted to the Board and any changes
13shall be submitted within 30 days.
14    (d) When a fantasy sports player account is closed, the
15fantasy sports contest operator shall refund all funds in the
16account no later than 5 business days after submission of the
17request or 10 business days after submission of any tax
18reporting information required by law, whichever is later,
19unless the fantasy sports contest operator makes a good faith
20determination that the fantasy sports player engaged in
21fraudulent or other conduct that would constitute a violation
22of this Act, rules adopted pursuant to this Act, or the fantasy
23sports contest operator's policies, in which case, upon notice
24to the fantasy sports player of that determination, the
25withdrawal may be held pending a reasonable investigative
26period to resolve its investigation. For the purposes of this

 

 

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1subsection (d), a request for withdrawal shall be considered
2honored if it is processed by the fantasy sports contest
3operator, but delayed by a payment processor, a credit card
4issuer, or the custodian of the financial account.
5    (e) If a prize is awarded to a fantasy sports player with a
6closed account, that prize, to the extent it consists of funds,
7shall be distributed by the fantasy sports contest operator
8within 5 business days, or 10 business days of submission of
9any tax reporting information required by law, unless the
10fantasy sports contest operator makes a good faith
11determination that the fantasy sports player engaged in
12fraudulent or other conduct that would constitute a violation
13of this Act or rules adopted pursuant to this Act. If such
14determination is made, then the prize may be withheld, provided
15that it is then awarded to another fantasy sports player in the
16same contest who would have won the prize had the fantasy
17sports player with the closed account not participated.
18    (f) A fantasy sports contest operator shall close any
19fantasy player account that is inactive for 2 years and notify
20the account holder that the account has been closed by email
21and by mail to the account holder's last known address. When a
22fantasy sports player account is closed due to inactivity, the
23fantasy sports contest operator shall refund all funds in the
24fantasy sports player account within 30 days, subject to the
25receipt of any tax information required by law. In the event
26that funds in a closed fantasy sports player account exceed $5

 

 

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1and cannot be refunded and remain unclaimed, the fantasy sports
2contest operator shall provide notice of the existence of funds
3to the fantasy sports player no less often than annually for 3
4years. If the funds in a closed fantasy sports player account
5are for $5 or less, such notice shall be provided one time upon
6the closing of the account. Such notice shall be provided by
7email and by mail to the account holder's last known address
8and shall provide a process for claiming the funds. In the
9event that funds in a closed fantasy sports player account
10cannot be refunded and remain unclaimed by the fantasy sports
11player after 3 years, such funds shall be reported and
12delivered by the fantasy sports contest operator to the State
13Treasurer for deposit in the Unclaimed Property Trust Fund as
14reportable property under the Uniform Disposition of Unclaimed
15Property Act.
16    (g) A fantasy sports contest operator shall prominently
17publish all contractual terms and conditions and rules of
18general applicability that affect a fantasy sports player's
19account. Presentation of such terms, conditions, and rules at
20the time of onboarding a new fantasy sports player shall not
21suffice.
22    (h) Fantasy sports player's deposits shall be limited to no
23more than $3,000 per quarter. However, a fantasy sports contest
24operator may establish and prominently publish procedures for
25temporarily or permanently increasing a fantasy sports
26player's deposit limit, at the request of the fantasy sports

 

 

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1player, above $3,000 per quarter. Such procedures shall be
2submitted to the Board.
3    If established by a fantasy sports contest operator, such
4procedures shall include evaluation of information, including
5income or asset information, sufficient to establish that the
6fantasy sports player can afford losses that might result from
7gameplay at the deposit limit level requested.
8    When a temporary or permanent deposit level limit increase
9is approved, the fantasy sports contest operator's procedures
10shall provide for annual re-certification of a player's
11financial ability to afford losses.
 
12    Section 35. Restrictions on games offered by a fantasy
13sports contest operator.
14    (a) All fantasy sports contest operators, except fantasy
15sports contest operators who only offer season-long fantasy
16sports contests, shall develop games that are limited to
17beginner fantasy sports players and shall prohibit fantasy
18sports players who are not beginner fantasy sports players from
19participating in those games either directly or through another
20person as a proxy. A fantasy sports contest operator shall
21suspend the account of any fantasy sports player who is not a
22beginner fantasy sports player and attempts to enter a game
23limited to beginner fantasy sports players directly or through
24another person as a proxy and shall ban such individual from
25further play.

 

 

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1    (b) All fantasy sports contest operators, except fantasy
2sports contest operators who only offer season-long fantasy
3sports contests, shall develop games in which highly
4experienced fantasy sports players cannot participate either
5directly or through another person as a proxy. A fantasy sports
6contest operator shall suspend the account of any highly
7experienced fantasy sports player who attempts to enter a game
8that excludes highly experienced fantasy sports players
9directly or through another person as a proxy and shall ban
10such individual from further play. Fantasy sports contest
11operators shall identify highly experienced fantasy sports
12players by a symbol attached to their username, or by other
13easily visible means, on all fantasy sports contest platforms.
14    (c) Fantasy sports contest operators shall have
15prominently published rules that govern when each fantasy
16sports contest shall close or lock. Each fantasy sports contest
17operator shall also prominently disclose contest-specific
18information about the time that the contest closes or locks in
19connection with each contest offered. A fantasy sports contest
20operator shall strictly enforce all disclosed closing or lock
21times.
22    (d) Fantasy sports contest operators shall restrict the
23number of entries into fantasy sports contests in the following
24manner:
25        (1) Fantasy sports contest operators shall not allow
26    fantasy sports players to submit more than one entry in any

 

 

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1    fantasy sports contest involving 12 total entries or less.
2        (2) Fantasy sports contest operators shall not allow
3    fantasy sports players to submit more than 2 entries in any
4    fantasy sports contest involving 13 to 36 total entries.
5        (3) Fantasy sports contest operators shall not allow
6    fantasy sports players to submit more than 3 entries in any
7    fantasy sports contest involving 37 to 100 total entries.
8        (4) Fantasy sports contest operators shall not allow
9    fantasy sports players to submit more than 3% of all
10    entries in any contest involving more than 100 total
11    entries.
12        (5) For all advertised fantasy sports contests, the
13    fantasy sports contest operator shall prominently include
14    information about the maximum number of entries that may be
15    submitted for that contest.
16    (e) Fantasy sports contest operators shall allow
17individuals to restrict themselves from entering fantasy
18sports contests under this Act. These restrictions shall
19include, but not be limited to, (1) fantasy sports contest
20entry limits, (2) limiting play to fantasy sports contest with
21entry fees below an established limit, and (3) self-imposed
22deposit limits less than allowed under this Act. Fantasy sports
23contest operators shall implement and prominently publish
24procedures for fantasy sports players to implement the
25restrictions. Fantasy sports players shall have the option to
26adjust these limits to make them more restrictive of gameplay

 

 

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1as often as they like, but shall not have the option to make
2limits less restrictive of gameplay within 90 days after
3setting the limits.
 
4    Section 37. Fantasy sports contest disclosures. Fantasy
5sports contest operators, except fantasy sports contest
6operators who only offer season-long fantasy sports contests,
7must display for each fantasy sports contest the maximum
8percentage of the total entry fees to be retained by the
9fantasy sports contest operator. The maximum percentage
10retained shall be conspicuously displayed above, next to, or
11under the entry fee listed for each fantasy sports contest;
12however, a fantasy sports contest operator may satisfy this
13requirement by providing a hyperlink above, next to, or under
14the entry fee listed for each fantasy sports contest that will
15take the fantasy sports player directly to the maximum
16percentage of the total entry fees to be retained by the
17fantasy sports contest operator for that fantasy sports
18contest.
 
19    Section 40. Prohibited activities by a fantasy sports
20contest operator.
21    (a) No fantasy sports contest operator employee,
22principal, officer, director, or contractor shall play on any
23fantasy sports contest platform of any fantasy sports contest
24operator or play through another person as a proxy. For the

 

 

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1purposes of this subsection (a), a contractor is limited to a
2contractor who can access information of a fantasy sports
3contest operator related to the conduct of a fantasy sports
4contest that is not available to other fantasy sports players.
5Fantasy sports contest operators shall make these restrictions
6known to all affected individuals and corporate entities.
7    (b) No fantasy sports contest operator employee,
8principal, officer, director, or contractor shall disclose
9confidential information that may affect fantasy sports
10contest gameplay to any person permitted to engage in fantasy
11sports contest gameplay. Fantasy sports contest operators
12shall make these restrictions known to all affected individuals
13and corporate entities.
14    (c) No fantasy sports contest operator shall allow a
15professional athlete whose individual statistics or
16performance may be used to determine any part of the outcome of
17any fantasy sports contest to enter fantasy sports contests in
18the sports in which he or she participates. A fantasy sports
19contest operator shall take commercially reasonable efforts to
20prevent a sports agent, team employee, referee, or league
21official associated with any competition that is the subject of
22fantasy sports contests to enter fantasy sports contests in the
23sport in which he or she participates, nor shall such athlete,
24sports agent, team official, team representative, referee, or
25league official play through another person as a proxy.
26        (1) Fantasy sports contest operators shall take

 

 

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1    commercially reasonable efforts to obtain lists of persons
2    described in this subsection (c) for the purpose of
3    implementing this subsection (c).
4        (2) Fantasy sports contest operators, upon learning of
5    a violation of this subsection (c), shall bar the
6    individual committing the violation from playing in any
7    fantasy sports contest by suspending the individual's
8    account and banning the individual from further play, shall
9    terminate any existing promotional agreements with the
10    individual, and shall refuse to make any new promotional
11    agreements that compensate the individual.
12        (3) Fantasy sports contest operators shall make these
13    restrictions known to all affected individuals and
14    corporate entities.
15    (d) No fantasy sports contest operator shall allow minors
16to create a fantasy sports contest account. Fantasy sports
17contest operators shall include age verification measures when
18establishing a fantasy sports contest account.
19    (e) No fantasy sports contest operator may extend credit to
20a fantasy sports player.
21    (f) A fantasy sports contest operator shall not permit
22unauthorized scripts to be used on fantasy sports contest
23platforms and shall use commercially reasonable efforts to
24monitor for and to prevent use of such scripts.
25    (g) A fantasy sports contest operator shall bar any
26individual or corporation found to be using an unauthorized

 

 

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1script from playing in any fantasy sports contest by
2terminating the individual or corporate account and by banning
3that individual or corporation from further play.
4    (h) A fantasy sports contest operator shall not authorize
5scripts that provide a player with a competitive advantage over
6another player.
7    (i) For the purpose of subsections (f), (g), and (h) of
8this Section, a script shall be treated as offering a
9competitive advantage for reasons including, but not limited
10to, its potential use to:
11        (1) facilitate entry of multiple contests with a single
12    line-up;
13        (2) facilitate changes in many line-ups at one time;
14        (3) facilitate use of commercial products designed and
15    distributed by third parties to identify advantageous game
16    strategies; or
17        (4) gather information about the performance of others
18    for the purpose of identifying or entering contests against
19    fantasy sports players who are less likely to be
20    successful.
21    (j) A fantasy sports contest operator shall not offer a
22fantasy sports contest that involves an amateur-level or
23collegiate-level sport.
 
24    Section 45. Advertising.
25    (a) Advertisements of fantasy sports contest operators

 

 

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1shall not depict (i) minors (other than professional athletes
2who may be minors), (ii) students, (iii) schools, colleges, or
3universities, or (iv) school, college, or university settings.
4However, incidental depiction of non-featured minors or minors
5accompanying adults shall not be a violation of this subsection
6(a).
7    (b) Fantasy sports contest operators shall not advertise on
8school, college, or university campuses.
9    (c) Fantasy sports contest operators shall not advertise at
10amateur athletic competitions, except to the extent that those
11competitions are played in stadiums where professional
12competitions are held and where non-digital advertisements
13have been posted, erected, or otherwise displayed in a manner
14that would require substantial effort to remove.
 
15    Section 50. Withholding of delinquent child support.
16    (a) From individual winnings of $600 or more that are
17subject to reporting to the Internal Revenue Service on Form
181099, a fantasy sports contest operator shall withhold up to
19the full amount of winnings necessary to pay the winner's past
20due child support amount as certified by the Department of
21Healthcare and Family Services under Section 10-17.15 of the
22Illinois Public Aid Code. Amounts withheld shall be paid to the
23Department of Healthcare and Family Services by the fantasy
24sports contest operator, as applicable. This process shall be
25accomplished as provided in 89 Ill. Adm. Code 160.70(q).

 

 

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1    (b) For withholding of winnings, the fantasy sports contest
2operator shall be entitled to an administrative fee not to
3exceed the lesser of 4% of the total amount of cash winnings
4paid to the fantasy sports player or $150.
5    (c) In no event shall the total amount withheld from the
6cash payout exceed the total cash winnings claimed by the
7obligor. If the cash payout claimed is greater than the amount
8sufficient to satisfy the obligor's delinquent child support
9payments, the fantasy sports contest operator shall pay the
10obligor the remaining balance of the payout.
11    (d) Any fantasy sports player that knowingly claims
12winnings from a single fantasy sports contest in a manner to
13intentionally avoid reporting winnings to the Internal Revenue
14Service shall be guilty of a Class A misdemeanor. Fantasy
15sports contest operators shall take commercially and
16technologically reasonable measures to ensure fantasy sports
17players comply with all reporting requirements. If a fantasy
18sports contest operator reasonably believes that the fantasy
19sports player engaged in conduct that would constitute a
20violation of federal reporting requirements, the fantasy
21sports contest operator shall bar the individual committing the
22violation from playing in any fantasy sports contest by
23suspending the individual's account and banning such
24individual from further play until the individual provides the
25fantasy sports contest operator proof that the individual has
26resolved all compliance issues with the Internal Revenue

 

 

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1Service.
2    (e) A fantasy sports contest operator who in good faith
3complies with the requirements of this Section shall not be
4liable to the gaming winner or any other individual or entity.
5    (f) Upon request of a fantasy sports contest operator under
6this Act, an agent of the Board (such as a gaming special agent
7employed by the Board, a State police officer, or a revenue
8agent) shall be responsible for notifying the person identified
9as being delinquent in child support payments that the fantasy
10sports contest operator is required by law to withhold all or a
11portion of his or her winnings. If given, this notification
12must be provided at the time the winnings are withheld.
13    (g) The provisions of this Section shall be operative on
14and after the date that rules are adopted by the Department of
15Healthcare and Family Services pursuant to Section 10-17.15 of
16the Illinois Public Aid Code.
17    (h) The delinquent child support required to be withheld
18under this Section has priority over any secured or unsecured
19claim on cash winnings, except claims for federal or State
20taxes that are required to be withheld under federal or State
21law.
 
22    Section 55. Audits. All fantasy sports contest operators
23with annual fantasy sports contest revenue of $100,000 or more
24shall annually be subject to an audit of the financial
25transactions and condition of the fantasy sports contest

 

 

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1operator's total operations as they relate to the offering and
2operating of fantasy sports contests and to ensure compliance
3with all of the requirements in this Act. Fantasy sports
4contest operators with annual fantasy sports contest revenues
5less than $100,000 shall every 3 years be subject to an audit
6of the financial transactions and condition of the fantasy
7sports contest operator's total operations as they relate to
8the offering and operating of fantasy sports contests and to
9ensure compliance with all of the requirements in this Act. All
10audits and compliance engagements shall be conducted by
11certified public accountants or an independent testing
12laboratory approved by the Board. Each certified public
13accountant must be registered in the State of Illinois under
14the Illinois Public Accounting Act. The compensation for each
15certified public accountant or independent testing laboratory
16shall be paid directly by the fantasy sports contest operator
17to the certified public accountant or independent testing
18laboratory. The audit shall be conducted and submitted to the
19Board by January 31 of the year in which the audit is due.
 
20    Section 60. Annual reports. All fantasy sports contest
21operators licensed by the Board must annually submit a report
22to the Board no later than January 31 of each year. Information
23included in the report shall include:
24        (1) the number of fantasy sports player accounts with
25    the fantasy sports contest operator; this shall be broken

 

 

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1    down between beginner fantasy sports players and highly
2    experienced fantasy sports players;
3        (2) the number of new accounts established;
4        (3) the number of accounts closed;
5        (4) the total amount of entry fees received from
6    fantasy sports players located in Illinois;
7        (5) the total amount of prizes awarded to fantasy
8    sports players located in Illinois;
9        (6) the total amount of fantasy sports contest revenue;
10        (7) the number of fantasy sports players that are
11    located in Illinois that requested deposit limit
12    increases; and
13        (8) the number of deposit limit increases granted to
14    fantasy sports players located in Illinois by the fantasy
15    sports contest operator.
 
16    Section 65. Application for licensure; background
17investigation; fees.
18    (a) A qualified person may apply to the Board for a fantasy
19sports contest operator license to conduct fantasy sports
20contests as provided in this Act. The application shall be made
21on forms provided by the Board. The burden is upon each
22applicant to demonstrate suitability for licensure. Each
23fantasy sports contest operator shall be licensed by the Board.
24The Board may issue a license for a period of up to 2 years or,
25in the case of fantasy sports contest operators with annual

 

 

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1fantasy sports revenues less than $100,000, for up to 3 years.
2    (b) Each person seeking and possessing a license as a
3fantasy sports contest operator shall submit to a background
4investigation conducted by the Board with the assistance of the
5State Police or other law enforcement. To the extent that the
6corporate structure of the applicant allows, the background
7investigation shall include any or all of the following as the
8Board deems appropriate or as provided by rule: (i) each
9beneficiary of a trust, (ii) each partner of a partnership,
10(iii) each member of a limited liability company, (iv) each
11director and officer of a publicly or non-publicly held
12corporation, (v) each stockholder of a non-publicly held
13corporation, (vi) each stockholder of 5% or more of a publicly
14held corporation, or (vii) each stockholder of 5% or more in a
15parent or subsidiary corporation.
16    (c) Each person seeking and possessing a license as a
17fantasy sports contest operator shall disclose the identity of
18every person, association, trust, corporation, or limited
19liability company having a greater than 1% direct or indirect
20pecuniary interest in the fantasy sports contest operator for
21which the license is sought. If the disclosed entity is a
22trust, the application shall disclose the names and addresses
23of the beneficiaries; if a corporation, the names and addresses
24of all stockholders and directors; if a limited liability
25company, the names and addresses of all members; or if a
26partnership, the names and addresses of all partners, both

 

 

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1general and limited.
2    (d) All information, records, interviews, reports,
3statements, memoranda, or other data supplied to or used by the
4Board in the course of its review or investigation of an
5application for a license or a renewal under this Act shall be
6privileged and strictly confidential and shall be used only for
7the purpose of evaluating an applicant for a license or a
8renewal. The information, records, interviews, reports,
9statements, memoranda, or other data shall not be admissible as
10evidence nor discoverable in any action of any kind in any
11court or before any tribunal, board, agency, or person, except
12for any action deemed necessary by the Board.
13    (e) No person may be licensed as a fantasy sports contest
14operator if that person has been found by the Board to:
15        (1) have a background, including a criminal record,
16    reputation, habits, social or business associations, or
17    prior activities, that poses a threat to the public
18    interests of the State or to the security and integrity of
19    fantasy sports contests;
20        (2) create or enhance the dangers of unsuitable,
21    unfair, or illegal practices, methods, and activities in
22    the conduct of fantasy sports contests; or
23        (3) present questionable business practices and
24    financial arrangements incidental to the conduct of
25    fantasy sports contests.
26    (f) Any applicant for a license under this Act has the

 

 

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1burden of proving his or her qualifications to the satisfaction
2of the Board. The Board may adopt rules to establish additional
3qualifications and requirements to preserve the integrity and
4security of fantasy sports contests in this State.
5    (g) A fantasy sports contest operator that has been
6operating in Illinois for at least 6 months on December 23,
72015 or any other entity that holds a current owners license
8under the Riverboat Gambling Act from the Board may operate
9fantasy sports contests until a final decision is rendered on
10the application for a fantasy sports contest operator license.
11The operation of fantasy sports contests under this subsection
12(g): shall not be regulated under any provision of the
13Riverboat Gambling Act, or rule adopted thereunder; and shall
14not be the basis for, or have any impact on, any decision or
15action relating to an owners license under the Riverboat
16Gambling Act.
17    (h) A non-refundable application fee shall be paid at the
18time an application for a license is filed with the Board in
19the following amounts:
20    (1) Fantasy sports contest operator with annual
21        fantasy sports contest revenue greater
22        than $10,000,000..............................$25,000
23    (2) Fantasy sports contest operator with annual
24        fantasy sports contest revenue greater than
25        $5,000,000 but not more than $10,000,000......$12,500
26    (3) Fantasy sports contest operator with annual

 

 

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1        fantasy sports contest revenue greater than
2        $1,000,000 but not more than $5,000,000........$7,500
3    (4) Fantasy sports contest operator with annual
4        fantasy sports contest revenue of at least
5        $100,000 but not more than $1,000,000..........$5,000
6    (5) Fantasy sports contest operator with annual
7        fantasy sports contest revenue less
8        than $100,000....................................$500
9    (i) The Board shall establish a fee for each license not to
10exceed the following for the initial licensure period:
11    (1) Fantasy sports contest operator with annual
12        fantasy sports contest revenue greater
13        than $10,000,000..............................$50,000
14    (2) Fantasy sports contest operator with annual
15        fantasy sports contest revenue greater than
16        $5,000,000 but not more than $10,000,000......$25,000
17    (3) Fantasy sports contest operator with annual
18        fantasy sports contest revenue greater than
19        $1,000,000 but not more than $5,000,000.......$15,000
20    (4) Fantasy sports contest operator with annual
21        fantasy sports contest revenue of at least
22        $100,000 but not more than $1,000,000.........$10,000
23    (5) Fantasy sports contest operator with annual
24        fantasy sports contest revenue less
25        than $100,000..................................$1,500
26    (j) For subsequent licensure periods, the renewal fee shall

 

 

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1not exceed the following:
2    (1) Fantasy sports contest operator with annual
3        fantasy sports contest revenue greater
4        than $10,000,000..............................$37,500
5    (2) Fantasy sports contest operator with annual
6        fantasy sports contest revenue greater than
7        $5,000,000 but not more than $10,000,000......$18,750
8    (3) Fantasy sports contest operator with annual
9        fantasy sports contest revenue greater than
10        $1,000,000 but no more than $5,000,000........$11,250
11    (4) Fantasy sports contest operator with annual
12        fantasy sports contest revenue of at least
13        $100,000 but not more than $1,000,000..........$7,500
14    (5) Fantasy sports contest operator with annual
15        fantasy sports contest revenue less
16        than $100,000..................................$1,125
 
17    Section 70. Distribution of license fees.
18    (a) All fees collected under Section 65 of this Act shall
19be deposited into the State Gaming Fund.
20    (b) Fees collected under Section 65 of this Act shall be
21used for the administration of this Act.
22    (c) All licenses issued by the Board under this Act are
23renewable every 2 years for fantasy sports contest operators
24with annual fantasy sports contest revenues of $100,000 or more
25and every 3 years for fantasy sports contest operators with

 

 

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1annual fantasy sports contest revenues less than $100,000
2unless sooner cancelled or terminated. No license issued under
3this Act is transferable or assignable.
 
4    Section 75. Imposition and distribution of tax.
5    (a) A privilege tax is imposed on persons engaged in the
6business of operating fantasy sports contests based on the
7fantasy sports contest revenues received by a fantasy sports
8contest operator licensed under this Act at the following
9graduated tax rates:
10        (1) 5% of annual fantasy sports contest revenues up to
11    and including $1,000,000;
12        (2) 7.5% of annual fantasy sports contest revenues in
13    excess of $1,000,000 but not exceeding $3,000,000;
14        (3) 10% of annual fantasy sports contest revenues in
15    excess of $3,000,000 but not exceeding $8,000,000;
16        (4) 15% of annual fantasy sports contest revenues in
17    excess of $8,000,000 but not exceeding $15,000,000;
18        (5) 22.5% of annual fantasy sports contest revenues in
19    excess of $15,000,000 but not exceeding $25,000,000; and
20        (6) 30% of annual fantasy sports contest revenues in
21    excess of $25,000,000.
22     (b) The taxes imposed by this Section shall be paid by the
23fantasy sports contest operator to the Board not later than the
24fifteenth day of every month for the previous month's privilege
25taxes. All payments not remitted when due shall be paid

 

 

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1together with a penalty assessment on the unpaid balance at a
2rate of 1.5% per month.
3    (c) All of the tax collected under this Section shall be
4deposited into the Education Assistance Fund.
 
5    Section 80. Limitation on taxation of fantasy sports
6contest operators. Fantasy sports contest operators shall not
7be subjected to any excise tax, license tax, permit tax,
8privilege tax, or occupation tax that is imposed exclusively
9upon the licensee by the State or any political subdivision
10thereof, except as provided in this Act.
 
11    Section 900. The Regulatory Sunset Act is amended by
12changing Section 4.30 as follows:
 
13    (5 ILCS 80/4.30)
14    Sec. 4.30. Acts repealed on January 1, 2020. The following
15Acts are repealed on January 1, 2020:
16    The Auction License Act.
17    The Community Association Manager Licensing and
18Disciplinary Act.
19    The Illinois Architecture Practice Act of 1989.
20    The Illinois Landscape Architecture Act of 1989.
21    The Illinois Professional Land Surveyor Act of 1989.
22    The Land Sales Registration Act of 1999.
23    The Orthotics, Prosthetics, and Pedorthics Practice Act.

 

 

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1    The Perfusionist Practice Act.
2    The Professional Engineering Practice Act of 1989.
3    The Real Estate License Act of 2000.
4    The Structural Engineering Practice Act of 1989.
5    The Fantasy Sports Contest Act.
6(Source: P.A. 96-610, eff. 8-24-09; 96-626, eff. 8-24-09;
796-682, eff. 8-25-09; 96-726, eff. 7-1-10; 96-730, eff.
88-25-09; 96-855, eff. 12-31-09; 96-856, eff. 12-31-09;
996-1000, eff. 7-2-10.)
 
10    Section 905. The Illinois Public Aid Code is amended by
11changing Section 10-17.15 as follows:
 
12    (305 ILCS 5/10-17.15)
13    Sec. 10-17.15. Certification of information to State
14gaming licensees.
15    (a) For purposes of this Section, "State gaming licensee"
16means, as applicable, an organization licensee or advance
17deposit wagering licensee licensed under the Illinois Horse
18Racing Act of 1975, an owners licensee licensed under the
19Riverboat Gambling Act, or a licensee that operates, under any
20law of this State, one or more facilities or gaming locations
21at which lawful gambling is authorized and licensed as provided
22in the Riverboat Gambling Act, or a fantasy sports contest
23operator licensed under the Fantasy Sports Contest Act.
24    (b) The Department may provide, by rule, for certification

 

 

09900HB3655sam002- 32 -LRB099 08956 JWD 48898 a

1to any State gaming licensee of past due child support owed by
2a responsible relative under a support order entered by a court
3or administrative body of this or any other State on behalf of
4a resident or non-resident receiving child support services
5under this Article in accordance with the requirements of Title
6IV-D, Part D, of the Social Security Act. The State gaming
7licensee shall have the ability to withhold from winnings
8required to be reported to the Internal Revenue Service on Form
9W-2G or, in the case of a fantasy sports contest operator, the
10ability to withhold from individual winnings of $600 or more
11that are subject to reporting to the Internal Revenue Service
12on Form 1099, up to the full amount of winnings necessary to
13pay the winner's past due child support. The rule shall provide
14for notice to and an opportunity to be heard by each
15responsible relative affected and any final administrative
16decision rendered by the Department shall be reviewed only
17under and in accordance with the Administrative Review Law.
18    (c) For withholding of winnings, the State gaming licensee
19shall be entitled to an administrative fee not to exceed the
20lesser of 4% of the total amount of cash winnings paid to the
21gambling winner or $150.
22    (d) In no event may the total amount withheld from the cash
23payout, including the administrative fee, exceed the total cash
24winnings claimed by the obligor. If the cash payout claimed is
25greater than the amount sufficient to satisfy the obligor's
26delinquent child support payments, the State gaming licensee

 

 

09900HB3655sam002- 33 -LRB099 08956 JWD 48898 a

1shall pay the obligor the remaining balance of the payout, less
2the administrative fee authorized by subsection (c) of this
3Section, at the time it is claimed.
4    (e) A State gaming licensee who in good faith complies with
5the requirements of this Section shall not be liable to the
6gaming winner or any other individual or entity.
7(Source: P.A. 98-318, eff. 8-12-13.)
 
8    Section 910. The Criminal Code of 2012 is amended by
9changing Section 28-1 as follows:
 
10    (720 ILCS 5/28-1)  (from Ch. 38, par. 28-1)
11    Sec. 28-1. Gambling.
12    (a) A person commits gambling when he or she:
13        (1) knowingly plays a game of chance or skill for money
14    or other thing of value, unless excepted in subsection (b)
15    of this Section;
16        (2) knowingly makes a wager upon the result of any
17    game, contest, or any political nomination, appointment or
18    election;
19        (3) knowingly operates, keeps, owns, uses, purchases,
20    exhibits, rents, sells, bargains for the sale or lease of,
21    manufactures or distributes any gambling device;
22        (4) contracts to have or give himself or herself or
23    another the option to buy or sell, or contracts to buy or
24    sell, at a future time, any grain or other commodity

 

 

09900HB3655sam002- 34 -LRB099 08956 JWD 48898 a

1    whatsoever, or any stock or security of any company, where
2    it is at the time of making such contract intended by both
3    parties thereto that the contract to buy or sell, or the
4    option, whenever exercised, or the contract resulting
5    therefrom, shall be settled, not by the receipt or delivery
6    of such property, but by the payment only of differences in
7    prices thereof; however, the issuance, purchase, sale,
8    exercise, endorsement or guarantee, by or through a person
9    registered with the Secretary of State pursuant to Section
10    8 of the Illinois Securities Law of 1953, or by or through
11    a person exempt from such registration under said Section
12    8, of a put, call, or other option to buy or sell
13    securities which have been registered with the Secretary of
14    State or which are exempt from such registration under
15    Section 3 of the Illinois Securities Law of 1953 is not
16    gambling within the meaning of this paragraph (4);
17        (5) knowingly owns or possesses any book, instrument or
18    apparatus by means of which bets or wagers have been, or
19    are, recorded or registered, or knowingly possesses any
20    money which he has received in the course of a bet or
21    wager;
22        (6) knowingly sells pools upon the result of any game
23    or contest of skill or chance, political nomination,
24    appointment or election;
25        (7) knowingly sets up or promotes any lottery or sells,
26    offers to sell or transfers any ticket or share for any

 

 

09900HB3655sam002- 35 -LRB099 08956 JWD 48898 a

1    lottery;
2        (8) knowingly sets up or promotes any policy game or
3    sells, offers to sell or knowingly possesses or transfers
4    any policy ticket, slip, record, document or other similar
5    device;
6        (9) knowingly drafts, prints or publishes any lottery
7    ticket or share, or any policy ticket, slip, record,
8    document or similar device, except for such activity
9    related to lotteries, bingo games and raffles authorized by
10    and conducted in accordance with the laws of Illinois or
11    any other state or foreign government;
12        (10) knowingly advertises any lottery or policy game,
13    except for such activity related to lotteries, bingo games
14    and raffles authorized by and conducted in accordance with
15    the laws of Illinois or any other state;
16        (11) knowingly transmits information as to wagers,
17    betting odds, or changes in betting odds by telephone,
18    telegraph, radio, semaphore or similar means; or knowingly
19    installs or maintains equipment for the transmission or
20    receipt of such information; except that nothing in this
21    subdivision (11) prohibits transmission or receipt of such
22    information for use in news reporting of sporting events or
23    contests; or
24        (12) knowingly establishes, maintains, or operates an
25    Internet site that permits a person to play a game of
26    chance or skill for money or other thing of value by means

 

 

09900HB3655sam002- 36 -LRB099 08956 JWD 48898 a

1    of the Internet or to make a wager upon the result of any
2    game, contest, political nomination, appointment, or
3    election by means of the Internet. This item (12) does not
4    apply to activities referenced in items (6) and (6.1) of
5    subsection (b) of this Section. This item (12) does not
6    apply to activities referenced in item (15) subsection (b)
7    of this Section.
8    (b) Participants in any of the following activities shall
9not be convicted of gambling:
10        (1) Agreements to compensate for loss caused by the
11    happening of chance including without limitation contracts
12    of indemnity or guaranty and life or health or accident
13    insurance.
14        (2) Offers of prizes, award or compensation to the
15    actual contestants in any bona fide contest for the
16    determination of skill, speed, strength or endurance or to
17    the owners of animals or vehicles entered in such contest.
18        (3) Pari-mutuel betting as authorized by the law of
19    this State.
20        (4) Manufacture of gambling devices, including the
21    acquisition of essential parts therefor and the assembly
22    thereof, for transportation in interstate or foreign
23    commerce to any place outside this State when such
24    transportation is not prohibited by any applicable Federal
25    law; or the manufacture, distribution, or possession of
26    video gaming terminals, as defined in the Video Gaming Act,

 

 

09900HB3655sam002- 37 -LRB099 08956 JWD 48898 a

1    by manufacturers, distributors, and terminal operators
2    licensed to do so under the Video Gaming Act.
3        (5) The game commonly known as "bingo", when conducted
4    in accordance with the Bingo License and Tax Act.
5        (6) Lotteries when conducted by the State of Illinois
6    in accordance with the Illinois Lottery Law. This exemption
7    includes any activity conducted by the Department of
8    Revenue to sell lottery tickets pursuant to the provisions
9    of the Illinois Lottery Law and its rules.
10        (6.1) The purchase of lottery tickets through the
11    Internet for a lottery conducted by the State of Illinois
12    under the program established in Section 7.12 of the
13    Illinois Lottery Law.
14        (7) Possession of an antique slot machine that is
15    neither used nor intended to be used in the operation or
16    promotion of any unlawful gambling activity or enterprise.
17    For the purpose of this subparagraph (b)(7), an antique
18    slot machine is one manufactured 25 years ago or earlier.
19        (8) Raffles and poker runs when conducted in accordance
20    with the Raffles and Poker Runs Act.
21        (9) Charitable games when conducted in accordance with
22    the Charitable Games Act.
23        (10) Pull tabs and jar games when conducted under the
24    Illinois Pull Tabs and Jar Games Act.
25        (11) Gambling games conducted on riverboats when
26    authorized by the Riverboat Gambling Act.

 

 

09900HB3655sam002- 38 -LRB099 08956 JWD 48898 a

1        (12) Video gaming terminal games at a licensed
2    establishment, licensed truck stop establishment, licensed
3    fraternal establishment, or licensed veterans
4    establishment when conducted in accordance with the Video
5    Gaming Act.
6        (13) Games of skill or chance where money or other
7    things of value can be won but no payment or purchase is
8    required to participate.
9        (14) Savings promotion raffles authorized under
10    Section 5g of the Illinois Banking Act, Section 7008 of the
11    Savings Bank Act, Section 42.7 of the Illinois Credit Union
12    Act, Section 5136B of the National Bank Act (12 U.S.C.
13    25a), or Section 4 of the Home Owners' Loan Act (12 U.S.C.
14    1463).
15        (15) Fantasy sports contests and participation in
16    fantasy sports contests as defined and offered under the
17    Fantasy Sports Contest Act.
18    (c) Sentence.
19    Gambling is a Class A misdemeanor. A second or subsequent
20conviction under subsections (a)(3) through (a)(12), is a Class
214 felony.
22    (d) Circumstantial evidence.
23    In prosecutions under this Section circumstantial evidence
24shall have the same validity and weight as in any criminal
25prosecution.
26(Source: P.A. 98-644, eff. 6-10-14; 99-149, eff. 1-1-16.)
 

 

 

09900HB3655sam002- 39 -LRB099 08956 JWD 48898 a

1    Section 999. Effective date. This Act takes effect upon
2becoming law.".