SB1531ham001 100TH GENERAL ASSEMBLY

Rep. Michael J. Zalewski

Filed: 5/31/2017

 

 


 

 


 
10000SB1531ham001LRB100 05772 AMC 27430 a

1
AMENDMENT TO SENATE BILL 1531

2    AMENDMENT NO. ______. Amend Senate Bill 1531 by replacing
3everything after the enacting clause with the following:
 
4    "Section 1. Short title. This Act may be cited as the
5Fantasy Sports Contest Act.
 
6    Section 5. Legislative intent.
7    (a) The General Assembly hereby finds and declares that:
8        (1) Interactive fantasy sports contests are contests
9    of skill in which fantasy or simulation teams are selected
10    based upon the skill and knowledge of the participants and
11    not based solely on the membership of an actual team.
12        (2) Interactive fantasy sports contests are not wagers
13    on future contingent events not under the contestants'
14    control or influence because contestants have control over
15    which players they choose and the outcome of each contest
16    is not dependent upon the performance of any one player or

 

 

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1    any one actual team. The outcome of any interactive fantasy
2    sports contest does not correspond to the outcome of any
3    one real-life competitive event. Instead, the outcome
4    depends on how the performances of participants' fantasy
5    roster choices compared to the performance of others'
6    roster choices.
7    (b) Based on the findings in this Section, the General
8Assembly declares that interactive fantasy sports contests do
9not constitute gambling as defined in Section 28-1 of the
10Criminal Code of 2012.
11    (c) The General Assembly further finds that as the Internet
12has become an integral part of society, and interactive fantasy
13sports contests a major form of entertainment for many
14consumers, any interactive fantasy sports enforcement and
15regulatory structure must begin from the bedrock premise that
16participation in a lawful and licensed interactive fantasy
17sports industry is a privilege and not a right, and that
18regulatory oversight is intended to safeguard the integrity of
19the games and participants and to ensure accountability and the
20public trust.
 
21    Section 10. Definitions. As used in this Act:
22    "Authorized player" means an individual located in this
23State that participates in an interactive fantasy sports
24contest offered by an interactive fantasy sports operator.
25    "Beginner fantasy sports player" means an individual who is

 

 

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1at least 21 years of age and who has entered fewer than 51
2interactive fantasy sports contests offered by a single
3interactive fantasy sports operator.
4    "Board" means the Illinois Gaming Board.
5    "Collegiate sport or athletic event" means a sport or
6athletic event offered or sponsored by or played in connection
7with a public or private institution that offers education
8services beyond the secondary level.
9    "Entry fee" means cash or cash equivalent that is paid by
10an authorized player to an interactive fantasy sports operator
11to participate in an interactive fantasy sports contest offered
12by that interactive fantasy sports operator.
13    "High school sport or athletic event" means a sport or
14athletic event offered or sponsored by or played in connection
15with a public or private institution that offers education
16services at the secondary level.
17    "Highly experienced player" means an authorized player who
18has:
19        (1) entered more than 1,000 interactive fantasy sports
20    contests offered by a single interactive fantasy sports
21    operator; or
22        (2) won more than 3 prizes valued at $1,000 each or
23    more from a single interactive fantasy sports operator.
24    "Interactive fantasy sports contest" means a fantasy
25contest, in which:
26        (1) the value of all prizes and awards offered to

 

 

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1    winning participants are established and made known to the
2    participants in advance of the contest and their value is
3    not determined by the number of participants or the amount
4    of any fees paid by those participants;
5        (2) all winning outcomes are determined predominantly
6    by accumulated statistical results of the performance of
7    individual athletes in real-world professional athletic
8    competitions; a professional athletic competition does not
9    include any amateur or collegiate level sport; and
10        (3) no winning outcome is based on the score, point
11    spread, or any performance or performances of any single
12    actual team or combination of such teams or solely on any
13    single performance of an individual athlete or player in
14    any single actual event.
15    "Interactive fantasy sports gross revenue" means the
16amount equal to the total of all entry fees that an interactive
17fantasy sports operator collects from all players, multiplied
18by the location percentage for the State.
19    "Interactive fantasy sports operator" means a person or
20entity that engages in the business of offering, by means of
21the Internet, a smart phone application, or other similar
22electronic or digital media or communication technologies,
23multiple interactive fantasy sports contests to persons.
24    "Interactive fantasy sports platform" means any website,
25smart phone application, or other portal providing access to an
26interactive fantasy sports contest.

 

 

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1    "Location percentage" means, for each interactive fantasy
2sports contest, the percentage, rounded to the nearest tenth of
3a percent, of the total entry fees collected by an interactive
4fantasy sports operator from players located in this State,
5divided by the total entry fees collected by an interactive
6fantasy sports operator from all players in interactive fantasy
7sports contests.
8    "Minor" means a person under the age of 21 years.
9    "Permitted sports event" means a professional sport or
10athletic event or other competitive event. "Permitted sports
11event" does not include a prohibited sports event.
12    "Prohibited sports event" means an amateur sport or
13athletic event, a collegiate sport or athletic event, or a high
14school sport or athletic event.
 
15    Section 15. Applicability. This Act and all rules adopted
16under the authority of this Act shall apply only to interactive
17fantasy sports contests for which an authorized player pays an
18entry fee.
 
19    Section 20. Licensing.
20    (a) No interactive fantasy sports operator shall
21administer, manage, or otherwise make available an interactive
22fantasy sports platform to persons located in the State unless
23licensed by the Board under this Act.
24    (b) A qualified person may apply to the Board for an

 

 

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1interactive fantasy sports operator license to conduct
2interactive fantasy sports contests as provided in this Act.
3The application shall be made on forms provided by the Board.
4The burden is upon each applicant to demonstrate suitability
5for licensure. Each interactive fantasy sports operator shall
6be licensed by the Board. The Board may issue a license for a
7period of up to 2 years or, in the case of interactive fantasy
8sports operators with annual interactive fantasy sports gross
9revenues less than $100,000, for up to 3 years.
10    (c) Each person seeking and possessing a license as an
11interactive fantasy sports operator shall submit to a
12background investigation conducted by the Board with the
13assistance of the State Police or other law enforcement. To the
14extent that the corporate structure of the applicant allows,
15the background investigation shall include any or all of the
16following as the Board deems appropriate or as provided by
17rule: (i) each beneficiary of a trust, (ii) each partner of a
18partnership, (iii) each member of a limited liability company,
19(iv) each director and officer of a publicly or non-publicly
20held corporation, (v) each stockholder of a non-publicly held
21corporation, (vi) each stockholder of 5% or more of a publicly
22held corporation, or (vii) each stockholder of 5% or more in a
23parent or subsidiary corporation.
24    (d) Each person seeking and possessing a license as an
25interactive fantasy sports operator shall disclose the
26identity of every person, association, trust, corporation, or

 

 

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1limited liability company having a greater than 1% direct or
2indirect pecuniary interest in the interactive fantasy sports
3operator for which the license is sought. If the disclosed
4entity is a trust, the application shall disclose the names and
5addresses of the beneficiaries; if a corporation, the names and
6addresses of all stockholders and directors; if a limited
7liability company, the names and addresses of all members; or
8if a partnership, the names and addresses of all partners, both
9general and limited.
10    (e) All information, records, interviews, reports,
11statements, memoranda, or other data supplied to or used by the
12Board in the course of its review or investigation of an
13application for a license or a renewal under this Act shall be
14privileged and strictly confidential and shall be used only for
15the purpose of evaluating an applicant for a license or a
16renewal. The information, records, interviews, reports,
17statements, memoranda, or other data shall not be admissible as
18evidence nor discoverable in any action of any kind in any
19court or before any tribunal, board, agency, or person, except
20for any action deemed necessary by the Board.
21    (f) No person may be licensed as an interactive fantasy
22sports operator if that person has been found by the Board to:
23        (1) have a background, including a criminal record,
24    reputation, habits, social or business associations, or
25    prior activities, that poses a threat to the public
26    interests of the State or to the security and integrity of

 

 

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1    interactive fantasy sports contests;
2        (2) create or enhance the dangers of unsuitable,
3    unfair, or illegal practices, methods, and activities in
4    the conduct of interactive fantasy sports contests; or
5        (3) present questionable business practices and
6    financial arrangements incidental to the conduct of
7    interactive fantasy sports contests.
8    (g) Any applicant for a license under this Act has the
9burden of proving his or her qualifications to the satisfaction
10of the Board. The Board may adopt rules to establish additional
11qualifications and requirements to preserve the integrity and
12security of interactive fantasy sports contests in this State.
13    (h) An interactive fantasy sports operator that has been
14operating in Illinois for at least 6 months on December 23,
152015 may operate in Illinois until a final decision is rendered
16on the application for an interactive fantasy sports operator
17license.
18    (i) The Board, by rule, shall establish a process for
19license renewal.
20    (j) The Board shall publish a list of all interactive
21fantasy sports operators licensed in this State under this
22Section on the Board's website for public use.
 
23    Section 25. Operators; required safeguards; minimum
24standards.
25    (a) As a condition of licensure in this State, each

 

 

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1interactive fantasy sports operator shall implement and
2maintain commercially reasonable measures to:
3        (1) limit each authorized player to one username and
4    one account and verify a fantasy sports player's true
5    identity;
6        (2) prohibit minors from participating in an
7    interactive fantasy sports contest, including:
8            (A) if the interactive fantasy sports operator
9        becomes or is made aware that a minor has participated
10        in one of its interactive fantasy sports contests,
11        promptly refund any deposit received from the minor,
12        whether or not the minor has engaged in or attempted to
13        engage in an interactive fantasy sports contest;
14        however, any refund may be offset by any prizes already
15        awarded;
16            (B) publishing and facilitating parental control
17        procedures to allow parents or guardians to exclude
18        minors from access to any interactive fantasy sports
19        contest or interactive fantasy sports platform; and
20            (C) taking appropriate steps to confirm that an
21        individual opening an account is not a minor;
22        (3) when referencing the likelihood of winning in
23    advertisements or upon interactive fantasy sports contest
24    entry, make clear and conspicuous statements that are not
25    inaccurate or misleading concerning the likelihood of
26    winning and the number of winners;

 

 

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1        (4) enable authorized players to restrict themselves
2    from interactive fantasy sports contests and take
3    reasonable steps to prevent these players from entering an
4    interactive fantasy sports contest from which they have
5    excluded themselves; these restrictions shall include, but
6    not be limited to: (A) interactive fantasy sports contest
7    entry limits, (B) limiting play to interactive fantasy
8    sports contest with entry fees below an established limit,
9    and (C) self-imposed deposit limits less than allowed under
10    this Act; interactive fantasy sports operators shall
11    implement and prominently publish procedures for fantasy
12    sports players to implement the restrictions; fantasy
13    sports players shall have the option to adjust these limits
14    to make them more restrictive of gameplay as often as they
15    like, but shall not have the option to make limits less
16    restrictive of gameplay within 90 days after setting the
17    limits;
18        (5) offer introductory procedures for authorized
19    players, that shall be prominently displayed on the
20    interactive fantasy sports operator's interactive fantasy
21    sports platform, that explain interactive fantasy sports
22    contest play and how to identify a highly experienced
23    player;
24        (6) identify all highly experienced players in an
25    interactive fantasy sports contest by a symbol attached to
26    the players' user names, or by other easily visible means,

 

 

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1    on all interactive fantasy sports platforms supported by an
2    interactive fantasy sports operator;
3        (7) disclose the number of entries a single authorized
4    player may submit to each interactive fantasy sports
5    contest;
6        (8) disclose the maximum number of total entries
7    allowed for each interactive fantasy sports contest;
8        (9) implement measures to comply with all applicable
9    State and federal requirements for data security,
10    including, but not limited to, age verification and
11    location software;
12        (10) offer all authorized players access to his or her
13    account history and account details;
14        (11) ensure funds in fantasy sports players' accounts
15    are held in segregated accounts by the interactive fantasy
16    sports operators for the fantasy sports players that
17    establish the accounts; interactive fantasy sports
18    operators shall implement and prominently publish
19    procedures that:
20            (A) prevent unauthorized withdrawals from fantasy
21        sports player accounts by interactive fantasy sports
22        operators or others;
23            (B) prevent commingling of funds in a fantasy
24        sports player's account with other funds, including,
25        without limitation, funds of the interactive fantasy
26        sports operator; fantasy sports player funds shall be

 

 

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1        segregated from interactive fantasy sports operators'
2        operational funds and any other funds held by the
3        interactive fantasy sports operator; and
4            (C) address reporting on complaints by fantasy
5        sports players that their accounts have been
6        misallocated, compromised, or otherwise mishandled;
7        (12) provide on the interactive fantasy sports
8    platform, in a prominent place, information concerning
9    assistance for compulsive play;
10        (13) prohibit the extension of credit from an
11    interactive fantasy sports operator to an authorized
12    player;
13        (14) develop policies to prevent the use of proxy
14    servers for the purpose of misrepresenting a player's
15    location in order to engage in interactive fantasy sports
16    contests; and
17        (15) prevent one fantasy sports player from acting as a
18    proxy for another.
19    (b) No interactive fantasy sports operator employee,
20principal, officer, director, or contractor shall play any
21interactive fantasy sports contest offered to the general
22public or play in such contest through another person as a
23proxy. For the purposes of this subsection (b), a contractor is
24limited to a contractor who can access information of an
25interactive fantasy sports operator related to the conduct of
26an interactive fantasy sports contest that is not available to

 

 

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1other fantasy sports players. Interactive fantasy sports
2operators shall make these restrictions known to all affected
3individuals and corporate entities.
4    (c) No interactive fantasy sports operator employee,
5principal, officer, director, or contractor shall disclose
6confidential information that may affect interactive fantasy
7sports contest gameplay to any person permitted to engage in
8interactive fantasy sports contest gameplay. Interactive
9fantasy sports operators shall make these restrictions known to
10all affected individuals and corporate entities.
11    (d) No interactive fantasy sports operator shall allow a
12professional athlete whose individual statistics or
13performance may be used to determine any part of the outcome of
14any interactive fantasy sports contest to enter interactive
15fantasy sports contests in the sports in which he or she
16participates. An interactive fantasy sports operator shall
17take commercially reasonable efforts to prevent a sports agent,
18team employee, referee, or league official associated with any
19competition that is the subject of interactive fantasy sports
20contests to enter interactive fantasy sports contests in the
21sport in which he or she participates, nor shall such athlete,
22sports agent, team official, team representative, referee, or
23league official play through another person as a proxy.
24        (1) Interactive fantasy sports operators shall take
25    commercially reasonable efforts to obtain lists of persons
26    described in this subsection (d) for the purpose of

 

 

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1    implementing this subsection (d).
2        (2) Interactive fantasy sports operators, upon
3    learning of a violation of this subsection (d), shall bar
4    the individual committing the violation from playing in any
5    interactive fantasy sports contest by suspending the
6    individual's account and banning the individual from
7    further play, shall terminate any existing promotional
8    agreements with the individual, and shall refuse to make
9    any new promotional agreements that compensate the
10    individual.
11        (3) Interactive fantasy sports operators shall make
12    these restrictions known to all affected individuals and
13    corporate entities.
14    (e) Each interactive fantasy sports operator shall:
15        (1) ensure the value of any prizes and awards offered
16    to authorized players are established and made known to the
17    players in advance of the interactive fantasy sports
18    contest;
19        (2) ensure all winning outcomes reflect the relative
20    knowledge and skill of the authorized players and are
21    determined predominantly by accumulated statistical
22    results of the performance of individuals in permitted
23    sports events;
24        (3) ensure no winning outcome is based on the score,
25    point spread, or performance of a single sports team, or a
26    combination of sports teams;

 

 

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1        (4) ensure no winning outcome is based solely on a
2    single performance of an individual athlete in a single
3    sport or athletic event; and
4        (5) ensure no interactive fantasy sports contest is
5    based on a prohibited sports event.
6    (f) Interactive fantasy sports operators shall implement
7and prominently publish procedures that allow any fantasy
8sports player to permanently close an account at any time and
9for any reason. The procedures shall allow for cancellation by
10any means, including, without limitation, by a fantasy sports
11player on any interactive fantasy sports contest used by that
12fantasy sports player to make deposits into a fantasy sports
13player account. A copy of an interactive fantasy sports
14operator's procedures shall be submitted to the Board and any
15changes shall be submitted within 30 days.
16    (g) When a fantasy sports player account is closed, the
17interactive fantasy sports operator shall refund all funds in
18the account no later than 5 business days after submission of
19the request or 10 business days after submission of any tax
20reporting information required by law, whichever is later,
21unless the interactive fantasy sports operator makes a good
22faith determination that the fantasy sports player engaged in
23fraudulent or other conduct that would constitute a violation
24of this Act, rules adopted pursuant to this Act, or the
25interactive fantasy sports operator's policies, in which case,
26upon notice to the fantasy sports player of that determination,

 

 

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1the withdrawal may be held pending a reasonable investigative
2period to resolve its investigation. For the purposes of this
3subsection (g), a request for withdrawal shall be considered
4honored if it is processed by the interactive fantasy sports
5operator, but delayed by a payment processor, a credit card
6issuer, or the custodian of the financial account.
7    (h) If a prize is awarded to a fantasy sports player with a
8closed account, that prize, to the extent it consists of funds,
9shall be distributed by the interactive fantasy sports operator
10within 5 business days, or 10 business days of submission of
11any tax reporting information required by law, unless the
12interactive fantasy sports operator makes a good faith
13determination that the fantasy sports player engaged in
14fraudulent or other conduct that would constitute a violation
15of this Act or rules adopted pursuant to this Act. If such
16determination is made, then the prize may be withheld, provided
17that it is then awarded to another fantasy sports player in the
18same interactive fantasy sports contest who would have won the
19prize had the fantasy sports player with the closed account not
20participated.
21    (i) An interactive fantasy sports operator shall
22prominently publish all contractual terms and conditions and
23rules of general applicability that affect a fantasy sports
24player's account. Presentation of such terms, conditions, and
25rules at the time of on boarding a new fantasy sports player
26shall not suffice.

 

 

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1    (j) Interactive fantasy sports operators shall have
2prominently published rules that govern when each interactive
3fantasy sports contest shall close or lock. Each interactive
4fantasy sports contest operator shall also prominently
5disclose contest-specific information about the time that the
6interactive fantasy sports contest closes or locks in
7connection with each interactive fantasy sports contest
8offered. An interactive fantasy sports operator shall strictly
9enforce all disclosed closing or lock times.
10    (k) Fantasy sports player's deposits shall be limited to no
11more than $1,000 per month. However, an interactive fantasy
12sports operator may establish and prominently publish
13procedures for temporarily or permanently increasing a fantasy
14sports player's deposit limit, at the request of the fantasy
15sports player, above $1,000 per month. Such procedures shall be
16submitted to the Board.
17    If established by an interactive fantasy sports operator,
18such procedures shall include evaluation of information,
19including income or asset information, sufficient to establish
20that the fantasy sports player can afford losses that might
21result from gameplay at the deposit limit level requested.
22    When a temporary or permanent deposit level limit increase
23is approved, the interactive fantasy sports operator's
24procedures shall provide for annual re-certification of a
25player's financial ability to afford losses.
26    (l) The following entry limits apply:

 

 

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1        (1) interactive fantasy sports operators shall not
2    allow players to submit more than one entry in an
3    interactive fantasy sports contest involving 12 entries or
4    fewer;
5        (2) interactive fantasy sports operators shall not
6    allow players to submit more than 2 entries in an
7    interactive fantasy sports contest involving more than 13
8    entries but fewer than 36 entries;
9        (3) interactive fantasy sports operators shall not
10    allow players to submit more than 3 entries in an
11    interactive fantasy sports contest involving 36 or more
12    entries but fewer than 101 entries; and
13        (4) interactive fantasy sports operators shall not
14    allow fantasy sports players to submit more than 3% of all
15    entries in an interactive fantasy sports contest involving
16    101 or more entries.
17        An interactive fantasy sports operator may establish
18    interactive fantasy sports contests, representing less
19    than 2% of the total number of interactive fantasy sports
20    contests that the interactive fantasy sports operator
21    offers, in which there is no restriction on the number of
22    entries, provided that (i) the interactive fantasy sports
23    operator clearly discloses that there are no limits on the
24    number of entries by each player in the interactive fantasy
25    sports contest and (ii) that the cost of participating in
26    the interactive fantasy sports contest is $50 or more per

 

 

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1    entry.
2    (m) Interactive fantasy sports operators shall not offer an
3interactive fantasy sports contest based on a prohibited sports
4event.
5    (n) An interactive fantasy sports operator shall not
6participate in an interactive fantasy sports contest offered by
7the interactive fantasy sports operator.
8    (o) An interactive fantasy sports operator shall not permit
9unauthorized scripts to be used on interactive fantasy sports
10platforms and shall use commercially reasonable efforts to
11monitor for and to prevent use of such scripts.
12    (p) Interactive fantasy sports operators shall develop and
13prominently display procedures on the interactive fantasy
14sports operator's interactive fantasy sports platform for the
15filing of a complaint by the authorized player against the
16interactive fantasy sports operator. The interactive fantasy
17sports operator shall give an initial response to the player
18within 48 hours after the player files the complaint. The
19interactive fantasy sports operator shall give a complete
20response to the player filing the complaint within 10 business
21days after the initial response is issued. An authorized player
22may file a complaint alleging a violation of the provisions of
23this Act with the Board.
24    (q) An interactive fantasy sports operator shall close any
25fantasy player account that is inactive for 2 years and notify
26the account holder that the account has been closed by email to

 

 

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1the account holder's last known email address. When a fantasy
2sports player account is closed due to inactivity, the
3interactive fantasy sports operator shall take commercially
4reasonable steps to refund all funds in the fantasy sports
5player account within 30 days, subject to the receipt of any
6tax information required by law. In the event that funds in a
7closed fantasy sports player account exceed $5 and cannot be
8refunded and remain unclaimed, the interactive fantasy sports
9operator shall provide notice of the existence of funds to the
10fantasy sports player. Such notice shall be provided by email
11to the account holder's last known email address. In the event
12that funds in a closed fantasy sports player account cannot be
13refunded and remain unclaimed by the fantasy sports player
14after 3 years, such funds shall be paid by the interactive
15fantasy sports operator to the Unclaimed Property Trust Fund in
16the Office of the State Treasurer. The interactive fantasy
17sports operator shall provide notice to the fantasy sports
18player's email address at least 60 days prior to paying the
19funds to the Unclaimed Property Trust Fund.
20    (r) Interactive fantasy sports operators shall develop
21games that are limited to beginner fantasy sports players and
22shall prohibit individuals who are not beginner fantasy sports
23players from participating in those games either directly or
24through another person as a proxy. An interactive fantasy
25sports operator shall suspend the account of an individual who
26is not a beginner fantasy sports player and who enters a game

 

 

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1limited to beginner fantasy sports players and shall ban the
2player from future play.
3    (s) All interactive fantasy sports operators shall develop
4games in which highly experienced fantasy sports players cannot
5participate either directly or through another person as a
6proxy. An interactive fantasy sports operator shall suspend the
7account of a highly experienced fantasy sports player who
8enters a game that excludes highly experienced fantasy sports
9players directly or through another person as a proxy and shall
10ban the individual from future play.
 
11    Section 30. Multiple interactive fantasy sports platforms;
12interactive fantasy sports contests. A licensee may use
13multiple interactive fantasy sports platforms and offer
14multiple types of interactive fantasy sports contests.
 
15    Section 35. Advertising.
16    (a) Advertisements of interactive fantasy sports operators
17shall not feature: (1) minors (other than professional athletes
18who may be minors), (2) students, (3) schools, colleges, or
19universities, or (4) school, college, or university settings.
20However, incidental depiction of non-featured minors or minors
21accompanying adults shall not be a violation of this subsection
22(a).
23    (b) Interactive fantasy sports operators shall not
24advertise on school, college, or university campuses.

 

 

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1    (c) Interactive fantasy sports operators shall not
2advertise at amateur athletic competitions, except to the
3extent that those competitions are played in stadiums where
4professional competitions are held and where non-digital
5advertisements have been posted, erected, or otherwise
6displayed in a manner that would require substantial effort to
7remove.
 
8    Section 40. Powers and duties of the Board.
9    (a) The Board has jurisdiction over and shall supervise all
10interactive fantasy sports contests governed by this Act. The
11Board has all powers and duties necessary and proper to fully
12and exclusively execute the provisions of the Act, including,
13but not limited to, the following:
14        (1) To investigate applicants and determine the
15    eligibility of applicants that best serve the interests of
16    the citizens of Illinois.
17        (2) To provide for the establishment and collection of
18    all fees, fines, and taxes imposed by this Act and the
19    rules adopted under this Act.
20        (3) To suspend, revoke, or restrict licenses; to
21    require the removal of an interactive fantasy sports
22    operator or an employee of an interactive fantasy sports
23    operator for a violation of this Act; and to impose civil
24    penalties of an amount up to $5,000 against individuals and
25    $10,000 against licensees for each violation of the

 

 

10000SB1531ham001- 23 -LRB100 05772 AMC 27430 a

1    provisions of this Act.
2        (4) To approve and deny applications for licensure to
3    conduct interactive fantasy sports contests in this State,
4    and to suspend, refuse or renew, or revoke a license issued
5    under this Act.
6        (5) To accept and investigate complaints of any kind
7    from an authorized player and attempt to mediate the
8    complaints where appropriate.
9        (6) To investigate alleged violations of this Act.
10        (7) To initiate proper enforcement proceedings where
11    such action is deemed by the Board to be necessary or
12    appropriate.
13        (8) To exercise all powers and duties assigned by this
14    Act.
15    (b) The Board shall adopt rules to implement the provisions
16of and effectuate the policy and objectives of this Act as the
17Board may deem necessary or advisable, including, but not
18limited to, the development of the initial form of the
19application for licensure. These rules shall include, but not
20be limited to, responsible protections with regard to
21compulsive play and safeguards for fair play. The Board shall
22not adopt rules limiting or regulating:
23        (1) the rules or the administration of an individual
24    interactive fantasy sports contest;
25        (2) the statistical makeup of an interactive fantasy
26    sports contest; or

 

 

10000SB1531ham001- 24 -LRB100 05772 AMC 27430 a

1        (3) the digital interactive fantasy sports platform of
2    an interactive fantasy sports operator.
3    (c) The Board shall adopt emergency rules to administer
4this Act in accordance with Section 5-45 of the Illinois
5Administrative Procedure Act. For the purposes of the Illinois
6Administrative Procedure Act, the General Assembly finds that
7the adoption of rules to implement this Act is deemed an
8emergency and necessary for the public interest, safety, and
9welfare.
 
10    Section 45. Annual report.
11    (a) Each licensee shall annually submit a report to the
12Board by no later than June 30 of each year that shall include
13the following information as it applies to accounts held by
14authorized players located in this State:
15        (1) the number of accounts held by authorized players
16    on all interactive fantasy sports platforms offered by the
17    interactive fantasy sports operator and the number of
18    accounts held by highly experienced players on all
19    interactive fantasy sports platforms offered by the
20    interactive fantasy sports operator;
21        (2) the total number of new accounts established in the
22    preceding year as well as the total number of accounts
23    permanently closed in the preceding year;
24        (3) the total amount of entry fees received from
25    authorized players;

 

 

10000SB1531ham001- 25 -LRB100 05772 AMC 27430 a

1        (4) the total amount of prizes awarded to authorized
2    players;
3        (5) the total amount of interactive fantasy sports
4    gross revenue received by the licensee; and
5        (6) the total number of authorized players that
6    requested to exclude themselves from interactive fantasy
7    sports contests.
8    (b) The Board shall annually publish a report based on the
9aggregate information provided by all interactive fantasy
10sports operators in accordance with this Section, that shall be
11published on the Board's website no later than 180 days after
12the deadline for the submission of individual reports as
13specified in this Section.
 
14    Section 50. State tax.
15    (a) A privilege tax is imposed on persons engaged in the
16business of operating an interactive fantasy sports contest in
17this State. For the privilege of conducting interactive fantasy
18sports contests in the State, interactive fantasy sports
19operators shall pay a tax at the following graduated rates:
20        (1) 5% of annual interactive fantasy sports gross
21    revenue up to and including $1,000,000;
22        (2) 7.5% of annual interactive fantasy sports gross
23    revenue in excess of $1,000,000 but not exceeding
24    $3,000,000;
25        (3) 10% of annual interactive fantasy sports gross

 

 

10000SB1531ham001- 26 -LRB100 05772 AMC 27430 a

1    revenue in excess of $3,000,000 but not exceeding
2    $8,000,000;
3        (4) 15% of annual interactive fantasy sports gross
4    revenue in excess of $8,000,000.
5    (b) The tax imposed by this Section shall be paid by the
6interactive fantasy sports operator to the Board not later than
7the 15th day of every month for the previous month's privilege
8taxes.
 
9    Section 55. Disposition of taxes. The Board shall deposit
10all taxes imposed by this Act, any interest and penalties
11imposed by the Board relating to those taxes, all penalties
12levied and collected by the Board, and the appropriate funds,
13cash, or prizes forfeited from interactive fantasy sports
14contests into the Mental Health Services Fund.
 
15    Section 60. Audits. All interactive fantasy sports
16operators with annual interactive fantasy sports contest gross
17revenue of $100,000 or more shall annually be subject to an
18audit of the financial transactions and condition of the
19interactive fantasy sports operator's total operations as they
20relate to the offering and operating of interactive fantasy
21sports contests and to ensure compliance with all of the
22requirements in this Act. Interactive fantasy sports operators
23with annual interactive fantasy sports contest gross revenues
24less than $100,000 shall every 3 years be subject to an audit

 

 

10000SB1531ham001- 27 -LRB100 05772 AMC 27430 a

1of the financial transactions and condition of the interactive
2fantasy sports operator's total operations as they relate to
3the offering and operating of interactive fantasy sports
4contests and to ensure compliance with all of the requirements
5in this Act. All audits and compliance engagements shall be
6conducted by certified public accountants or an independent
7testing laboratory approved by the Board. The compensation for
8each certified public accountant or independent testing
9laboratory shall be paid directly by the interactive fantasy
10sports operator to the certified public accountant or
11independent testing laboratory. The audit shall be conducted
12and submitted to the Board by June 30 of each year.
 
13    Section 65. Limitation on the taxation of interactive
14fantasy sports operators. Interactive fantasy sports operators
15shall not be subjected to an excise tax, license tax, permit
16tax, privilege tax, amusement tax, or occupation tax that is
17imposed upon the licensee by the State or any political
18subdivision thereof, except as provided in this Act.
 
19    Section 70. Application fees; license fees.
20    (a) A non-refundable application fee shall be paid at the
21time an application for licensure is filed with the Board in
22the following amounts:
23        (1) Interactive fantasy sports operators with annual
24    interactive fantasy sports gross revenue greater than

 

 

10000SB1531ham001- 28 -LRB100 05772 AMC 27430 a

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

 

 

10000SB1531ham001- 29 -LRB100 05772 AMC 27430 a

1    $100,000 but not more than $1,000,000 ............... $10,000
2        (5) Interactive fantasy sports operators with annual
3    interactive fantasy sports gross revenue less than
4    $100,000 ............................................. $1,500
5    (c) For subsequent licensure periods, the renewal fee shall
6not exceed the following:
7        (1) Interactive fantasy sports operators with annual
8    interactive fantasy sports gross revenue greater than
9    $10,000,000 ......................................... $37,500
10        (2) Interactive fantasy sports operators with annual
11    interactive fantasy sports gross revenue greater than
12    $5,000,000 but not more than $10,000,000 ............ $18,750
13        (3) Interactive fantasy sports operators with annual
14    interactive fantasy sports gross revenue greater than
15    $1,000,000 but not more than $5,000,000 ............. $11,250
16        (4) Interactive fantasy sports operators with annual
17    interactive fantasy sports gross revenue of at least
18    $100,000 but not more than $1,000,000 .................$7,500
19        (5) Interactive fantasy sports operators with annual
20    interactive fantasy sports gross revenue less than
21    $100,000 ............................................. $1,125
22    (d) All fees collected under this Section shall be
23deposited into the State Gaming Fund.
24    (e) All fees collected under this Section shall be used for
25the administration of this Act.
 

 

 

10000SB1531ham001- 30 -LRB100 05772 AMC 27430 a

1    Section 75. Interactive fantasy sports contests
2authorized. Interactive fantasy sports contests conducted in
3accordance with the provisions of this Act are hereby
4authorized.
 
5    Section 80. Interactive fantasy sports contests
6prohibited. The conduct of interactive fantasy sports contests
7by unlicensed operators is prohibited.
 
8    Section 85. Interactive fantasy sports contests; Criminal
9Code of 2012. Interactive fantasy sports contests offered in
10accordance with the provisions of this Act shall not constitute
11gambling as defined in Section 28-1 of the Criminal Code of
122012.
 
13    Section 900. Repeal. This Act is repealed on January 1,
142021.
 
15    Section 905. The Department of Healthcare and Family
16Services Law of the Civil Administrative Code of Illinois is
17amended by adding Section 2205-17 as follows:
 
18    (20 ILCS 2205/2205-17 new)
19    Sec. 2205-17. The Mental Health Services Fund. The Mental
20Health Services Fund is created as a special fund in the State
21treasury. From appropriations to the Department of Healthcare

 

 

10000SB1531ham001- 31 -LRB100 05772 AMC 27430 a

1and Family Services from the Fund, the Department of Healthcare
2and Family Services shall make grants to support mental health
3and addiction services in the State. Any federal Medicaid
4matching funds received by the Department of Healthcare and
5Family Services for the grants made under this Section shall be
6deposited into the Fund.
 
7    Section 910. The State Finance Act is amended by adding
8Section 5.878 as follows:
 
9    (30 ILCS 105/5.878 new)
10    Sec. 5.878. The Mental Health Services Fund.
 
11    Section 950. The Criminal Code of 2012 is amended by
12changing Section 28-1 as follows:
 
13    (720 ILCS 5/28-1)  (from Ch. 38, par. 28-1)
14    Sec. 28-1. Gambling.
15    (a) A person commits gambling when he or she:
16        (1) knowingly plays a game of chance or skill for money
17    or other thing of value, unless excepted in subsection (b)
18    of this Section;
19        (2) knowingly makes a wager upon the result of any
20    game, contest, or any political nomination, appointment or
21    election;
22        (3) knowingly operates, keeps, owns, uses, purchases,

 

 

10000SB1531ham001- 32 -LRB100 05772 AMC 27430 a

1    exhibits, rents, sells, bargains for the sale or lease of,
2    manufactures or distributes any gambling device;
3        (4) contracts to have or give himself or herself or
4    another the option to buy or sell, or contracts to buy or
5    sell, at a future time, any grain or other commodity
6    whatsoever, or any stock or security of any company, where
7    it is at the time of making such contract intended by both
8    parties thereto that the contract to buy or sell, or the
9    option, whenever exercised, or the contract resulting
10    therefrom, shall be settled, not by the receipt or delivery
11    of such property, but by the payment only of differences in
12    prices thereof; however, the issuance, purchase, sale,
13    exercise, endorsement or guarantee, by or through a person
14    registered with the Secretary of State pursuant to Section
15    8 of the Illinois Securities Law of 1953, or by or through
16    a person exempt from such registration under said Section
17    8, of a put, call, or other option to buy or sell
18    securities which have been registered with the Secretary of
19    State or which are exempt from such registration under
20    Section 3 of the Illinois Securities Law of 1953 is not
21    gambling within the meaning of this paragraph (4);
22        (5) knowingly owns or possesses any book, instrument or
23    apparatus by means of which bets or wagers have been, or
24    are, recorded or registered, or knowingly possesses any
25    money which he has received in the course of a bet or
26    wager;

 

 

10000SB1531ham001- 33 -LRB100 05772 AMC 27430 a

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

 

 

10000SB1531ham001- 34 -LRB100 05772 AMC 27430 a

1    information for use in news reporting of sporting events or
2    contests; or
3        (12) knowingly establishes, maintains, or operates an
4    Internet site that permits a person to play a game of
5    chance or skill for money or other thing of value by means
6    of the Internet or to make a wager upon the result of any
7    game, contest, political nomination, appointment, or
8    election by means of the Internet. This item (12) does not
9    apply to activities referenced in items (6), and (6.1), or
10    (15) of subsection (b) of this Section.
11    (b) Participants in any of the following activities shall
12not be convicted of gambling:
13        (1) Agreements to compensate for loss caused by the
14    happening of chance including without limitation contracts
15    of indemnity or guaranty and life or health or accident
16    insurance.
17        (2) Offers of prizes, award or compensation to the
18    actual contestants in any bona fide contest for the
19    determination of skill, speed, strength or endurance or to
20    the owners of animals or vehicles entered in such contest.
21        (3) Pari-mutuel betting as authorized by the law of
22    this State.
23        (4) Manufacture of gambling devices, including the
24    acquisition of essential parts therefor and the assembly
25    thereof, for transportation in interstate or foreign
26    commerce to any place outside this State when such

 

 

10000SB1531ham001- 35 -LRB100 05772 AMC 27430 a

1    transportation is not prohibited by any applicable Federal
2    law; or the manufacture, distribution, or possession of
3    video gaming terminals, as defined in the Video Gaming Act,
4    by manufacturers, distributors, and terminal operators
5    licensed to do so under the Video Gaming Act.
6        (5) The game commonly known as "bingo", when conducted
7    in accordance with the Bingo License and Tax Act.
8        (6) Lotteries when conducted by the State of Illinois
9    in accordance with the Illinois Lottery Law. This exemption
10    includes any activity conducted by the Department of
11    Revenue to sell lottery tickets pursuant to the provisions
12    of the Illinois Lottery Law and its rules.
13        (6.1) The purchase of lottery tickets through the
14    Internet for a lottery conducted by the State of Illinois
15    under the program established in Section 7.12 of the
16    Illinois Lottery Law.
17        (7) Possession of an antique slot machine that is
18    neither used nor intended to be used in the operation or
19    promotion of any unlawful gambling activity or enterprise.
20    For the purpose of this subparagraph (b)(7), an antique
21    slot machine is one manufactured 25 years ago or earlier.
22        (8) Raffles and poker runs when conducted in accordance
23    with the Raffles and Poker Runs Act.
24        (9) Charitable games when conducted in accordance with
25    the Charitable Games Act.
26        (10) Pull tabs and jar games when conducted under the

 

 

10000SB1531ham001- 36 -LRB100 05772 AMC 27430 a

1    Illinois Pull Tabs and Jar Games Act.
2        (11) Gambling games conducted on riverboats when
3    authorized by the Riverboat Gambling Act.
4        (12) Video gaming terminal games at a licensed
5    establishment, licensed truck stop establishment, licensed
6    fraternal establishment, or licensed veterans
7    establishment when conducted in accordance with the Video
8    Gaming Act.
9        (13) Games of skill or chance where money or other
10    things of value can be won but no payment or purchase is
11    required to participate.
12        (14) Savings promotion raffles authorized under
13    Section 5g of the Illinois Banking Act, Section 7008 of the
14    Savings Bank Act, Section 42.7 of the Illinois Credit Union
15    Act, Section 5136B of the National Bank Act (12 U.S.C.
16    25a), or Section 4 of the Home Owners' Loan Act (12 U.S.C.
17    1463).
18        (15) Interactive fantasy sports contests and
19    participation in interactive fantasy sports contests
20    authorized under the Fantasy Sports Contest Act.
21    (c) Sentence.
22    Gambling is a Class A misdemeanor. A second or subsequent
23conviction under subsections (a)(3) through (a)(12), is a Class
244 felony.
25    (d) Circumstantial evidence.
26    In prosecutions under this Section circumstantial evidence

 

 

10000SB1531ham001- 37 -LRB100 05772 AMC 27430 a

1shall have the same validity and weight as in any criminal
2prosecution.
3(Source: P.A. 98-644, eff. 6-10-14; 99-149, eff. 1-1-16.)".