101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB2641

 

Introduced , by Rep. Jaime M. Andrade, Jr.

 

SYNOPSIS AS INTRODUCED:
 
New Act
720 ILCS 5/28-1  from Ch. 38, par. 28-1

    Creates the Gaming and Amusement Licensing, Cybersecurity, and Data Collection and Remittance Act. Authorizes fringe gambling to be conducted in locations authorized to conduct video gaming under the Video Gaming Act. Provides restrictions on fringe gambling and fringe gambling machines, including prohibiting a person under the age of 21 from using a fringe gambling machine. Provides minimum requirements for the licensing of fringe gambling machines. Includes provisions for issuing licenses under the Act. Limits locations authorized to conduct fringe gambling to 5 fringe gambling machines on their premises. Makes conforming changes in the Criminal Code of 2012.


LRB101 07269 SMS 52308 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB2641LRB101 07269 SMS 52308 b

1    AN ACT concerning gaming.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the Gaming
5and Amusement Licensing, Cybersecurity, and Data Collection
6and Remittance Act.
 
7    Section 5. Definitions. As used in this Act:
8    "Department" means the Department of Revenue.
9    "Distributor" means an individual, partnership,
10corporation, or limited liability company licensed under this
11Act to buy, sell, lease, or distribute fringe gambling machines
12or major components or parts of fringe gambling machines to or
13from operators.
14    "Electronic voucher" means a voucher printed by a fringe
15gambling machine that is redeemable in the licensed
16establishment for which it was issued.
17    "Fringe gambling" means any gambling or lottery device that
18is:
19        (1) given, conducted, or offered for use or sale by a
20    business in exchange for anything of value, including, but
21    not limited to, cash, coin, cryptocurrency, vouchers, gift
22    cards, or prizes, or provides an opportunity to participate
23    in a contest, game, gaming scheme, or sweepstakes with a

 

 

HB2641- 2 -LRB101 07269 SMS 52308 b

1    potential monetary return or outcome based on an element of
2    chance, regardless of whether anything of value was
3    required to play; or
4        (2) given away incident to the purchase of other goods
5    or services.
6    "Fringe gambling" does not include a promotional activity
7that is clearly ancillary to the primary activity of a business
8or video gaming, as defined by the Video Gaming Act.
9    "Fringe gambling machine" means a mechanically or
10electronically operated machine or device that is intended to
11be used by a sweepstakes entrant or by a player for the playing
12of a game by insertion of a coin or token or any other way where
13the outcome of the game is determined by the action of the
14machine, whether manipulated by the player or not; that uses
15energy; and that displays the results of a game entry or game
16outcome to a participant on a screen or other mechanism at a
17licensed establishment, licensed fraternal establishment,
18licensed veterans establishment, or licensed truck stop
19establishment. An electronically operated machine or device
20may:
21        (1) be server-based;
22        (2) use a simulated game terminal as a representation
23    of the prizes associated with the results of the
24    sweepstakes entries;
25        (3) use software such that the simulated game
26    influences or determines the winning or value of the prize;

 

 

HB2641- 3 -LRB101 07269 SMS 52308 b

1        (4) select prizes from a predetermined finite pool of
2    entries;
3        (5) offer a monetary prize or electronic voucher of any
4    amount, including cash, coin, or cryptocurrency;
5        (6) use a mechanism that reveals the content of a
6    predetermined sweepstakes entry;
7        (7) predetermine the prize results and stores those
8    results for delivery at the time the sweepstakes entry
9    results are revealed;
10        (8) use software to create a game result;
11        (9) require direct payment into the electronic machine
12    or device or remote activation of the electronic machine or
13    device;
14        (10) require purchase of a related product having
15    legitimate value;
16        (11) reveal the prize incrementally, even though it may
17    not influence if a prize is awarded or the value of any
18    prize awarded;
19        (12) determine and associate the prize with an entry or
20    entries at the time the sweepstakes is entered; or
21        (13) be a slot machine or other form of electrical,
22    mechanical, or computer game.
23    "Licensed establishment", "licensed fraternal
24establishment", "licensed veterans establishment", and
25"licensed truck stop establishment" have the same meanings as
26those terms are given in the Video Gaming Act.

 

 

HB2641- 4 -LRB101 07269 SMS 52308 b

1    "Licensed handler" means a person, including, but not
2limited to, an employee or independent contractor working for a
3manufacturer, distributor, supplier, technician, or operator,
4who is licensed under this Act to possess or control a fringe
5gambling machine or to have access to the inner workings of a
6fringe gambling machine. "Licensed handler" does not include an
7individual, partnership, corporation, or limited liability
8company that is a manufacturer, distributor, supplier,
9technician, or operator.
10    "Licensed technician" means an individual who is licensed
11under this Act to repair, service, and maintain fringe gambling
12machines.
13    "Manufacturer" means an individual, partnership,
14corporation, or limited liability company that is licensed
15under this Act and that manufactures or assembles fringe
16gambling machines.
17    "Operator" means an individual, partnership, corporation,
18or limited liability company that is licensed under this Act
19and that owns, services, and maintains fringe gambling machines
20for placement in licensed establishments, licensed truck stop
21establishments, licensed fraternal establishments, or licensed
22veterans establishments.
23    "Prize" means any gift, award, gratuity, good, service,
24credit, or anything else of value that may be transferred to a
25person, whether possession of the prize is actually transferred
26or placed on an account or other record as evidence of the

 

 

HB2641- 5 -LRB101 07269 SMS 52308 b

1intent to transfer the prize.
2    "Supplier" means an individual, partnership, corporation,
3or limited liability company that is licensed under this Act to
4supply major components or parts to fringe gambling machines to
5licensed operators.
6    "Sweepstakes" means any game, advertising scheme or plan,
7or other promotion that, with or without payment of any
8consideration, a person may enter to win or become eligible to
9receive any prize, the determination of which is based upon
10chance.
 
11    Section 10. Fringe gambling by minors prohibited. No
12licensee shall cause or permit any person under the age of 21
13years to use or play a fringe gambling machine. Any licensee
14who knowingly permits a person under the age of 21 years to use
15or play a fringe gambling machine is guilty of a business
16offense and shall be fined an amount not to exceed $5,000.
 
17    Section 15. Minimum requirements for licensing and
18registration of fringe gambling machines. Every machine
19engaged in fringe gambling offered for play in this State must,
20at a minimum, meet the following criteria:
21        (1) It must conform to all requirements of federal law
22    and regulations, including Federal Communications
23    Commission Class A emissions standards.
24        (2) It must theoretically pay out a mathematically

 

 

HB2641- 6 -LRB101 07269 SMS 52308 b

1    demonstrable percentage during the expected lifetime of
2    the machine of all amounts played, which must not be less
3    than 80%. Fringe gambling machines that may be affected by
4    skill must meet this standard when using a method of play
5    that will provide the greatest return to the player over a
6    period of continuous play.
7        (3) It must use a random selection process to determine
8    the outcome of each play of a game. The random selection
9    process must meet 99% confidence limits using a standard
10    chi-squared test for (randomness) goodness of fit.
11        (4) It must display an accurate representation of the
12    game outcome.
13        (5) It must not automatically alter pay tables or any
14    function of the video gaming terminal based on internal
15    computation of hold percentage or have any means of
16    manipulation that affects the random selection process or
17    probabilities of winning a game.
18        (6) It must not be adversely affected by static
19    discharge or other electromagnetic interference.
20        (7) It must be capable of detecting and displaying the
21    following conditions during idle states or on demand: power
22    reset; door open; and door just closed.
23        (8) It must have the capacity to display complete play
24    history (outcome, intermediate play steps, credits
25    available, bets placed, credits paid, and credits cashed
26    out) for the most recent game played and 10 previous games.

 

 

HB2641- 7 -LRB101 07269 SMS 52308 b

1        (9) The theoretical payback percentage of a fringe
2    gambling machine must not be capable of being changed
3    without making a hardware or software change in the fringe
4    gambling machine, either on site or through the central
5    communications system.
6        (10) It must be designed so that replacement of parts
7    or modules required for normal maintenance does not
8    necessitate replacement of the electromechanical meters.
9        (11) It must have nonresettable meters housed in a
10    locked area of the terminal that keep a permanent record of
11    all cash inserted into the machine, all winnings made by
12    the machine printer, credits played in for fringe gambling
13    machines (if required), and credits won by video gaming
14    players. The fringe gambling machine must provide the means
15    for on-demand display of stored information as determined
16    by the Department.
17        (12) Electronically stored meter information must be
18    preserved for a minimum of 180 days after a power loss to
19    the service.
20        (13) It must have one or more mechanisms that accept
21    cash in the form of bills. The mechanisms shall be designed
22    to prevent obtaining credits without paying by stringing,
23    slamming, drilling, or other means. If such attempts at
24    physical tampering are made, the fringe gambling machine
25    shall suspend itself from operating until reset.
26        (14) It shall have accounting software that keeps an

 

 

HB2641- 8 -LRB101 07269 SMS 52308 b

1    electronic record that includes, but is not limited to, the
2    following: total cash inserted into the fringe gambling
3    machine; the value of winning tickets claimed by players;
4    the total credits played; the total credits awarded by a
5    fringe gambling machine; and payback percentage credited
6    to players of each video game.
7        (15) It shall be linked by a central communications
8    system to provide auditing program information. The
9    central communications system shall use a standard
10    industry protocol, as defined by the Gaming Standards
11    Association, and shall have the functionality to enable the
12    State of Illinois or its designee to activate or deactivate
13    individual gaming devices from the central communications
14    system. The central communications system may not limit
15    participation to only one manufacturer of a fringe gambling
16    machine by either the cost in implementing the necessary
17    program modifications to communicate or the inability to
18    communicate with the central communications system.
19    The Department may adopt rules to establish additional
20criteria to preserve the integrity and security of fringe
21gambling in this State. The central communications system
22vendor may be licensed as a fringe gambling machine
23manufacturer under this Act or a video gaming terminal
24distributor under the Video Gaming Act, or both, but the
25central communications system vendor may not be licensed as a
26video gaming terminal operator under the Video Gaming Act.

 

 

HB2641- 9 -LRB101 07269 SMS 52308 b

1    The Department shall not permit the development of
2information or the use by any licensee of gaming device or
3individual game performance data. Nothing in this Act shall
4inhibit or prohibit the Department from the use of gaming
5device or individual game performance data in its regulatory
6duties.
 
7    Section 20. Issuance of license.
8    (a) The burden is upon each applicant to demonstrate his or
9her suitability for licensure. Each fringe gambling machine
10manufacturer, distributor, supplier, operator, and handler
11shall be licensed by the State. The Department may issue or
12deny a license under this Act to any person pursuant to the
13same criteria set forth in Section 9 of the Riverboat Gambling
14Act.
15    (b) The Department shall not grant a license to a person
16who has facilitated, enabled, or participated in the use of
17coin-operated devices for gambling purposes or who is under the
18significant influence or control of such a person. For the
19purposes of this Act, "facilitated, enabled, or participated in
20the use of coin-operated amusement devices for gambling
21purposes" means that the person has been convicted of any
22violation of Article 28 of the Criminal Code of 1961 or the
23Criminal Code of 2012. If there is pending legal action against
24a person for any such violation, then the Department shall
25delay the licensure of that person until the legal action is

 

 

HB2641- 10 -LRB101 07269 SMS 52308 b

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

 

 

HB2641- 11 -LRB101 07269 SMS 52308 b

1names and addresses of all members; or, if a partnership, the
2names and addresses of all partners, both general and limited.
3    (e) No person may be licensed as a fringe gambling machine
4manufacturer, distributor, supplier, operator, or handler if
5that person has been found by the Department to:
6        (1) have a background, including a criminal record of
7    any felony or any misdemeanor involving dishonesty or
8    fraud, reputation, habits, social or business
9    associations, or prior activities that pose a threat to the
10    public interests of the State or to the security and
11    integrity of fringe gambling;
12        (2) create or enhance the dangers of unsuitable,
13    unfair, or illegal practices, methods, and activities in
14    the conduct of fringe gambling; or
15        (3) present questionable business practices and
16    financial arrangements incidental to the conduct of fringe
17    gambling activities.
18    (f) Any applicant for any license under this Act has the
19burden of proving his or her qualifications to the satisfaction
20of the Department. The Department may adopt rules to establish
21additional qualifications and requirements to preserve the
22integrity and security of fringe gambling in this State.
23    (g) A non-refundable application fee shall be paid at the
24time an application for a license is filed with the Department
25in the following amounts:
26        (1) Manufacturer...............................$3,000

 

 

HB2641- 12 -LRB101 07269 SMS 52308 b

1        (2) Distributor................................$3,000
2        (3) Operator...................................$3,000
3        (4) Supplier...................................$2,500
4        (5) Technician...................................$100
5        (6) Handler......................................$100
6    (h) The Department shall establish an annual fee for each
7license not to exceed the following:
8        (1) Manufacturer..............................$10,000
9        (2) Distributor...............................$10,000
10        (3) Operator...................................$5,000
11        (4) Supplier...................................$2,000
12        (5) Technician...................................$100
13        (6) Fringe gambling machine......................$100
14        (7) Handler......................................$100
15    (i) An operator and a licensed establishment, licensed
16truck stop establishment, licensed fraternal establishment, or
17licensed veterans establishment shall equally split the fees
18specified in item (6) of subsection (h).
 
19    Section 25. Restrictions on fringe gambling machines. A
20licensed establishment, licensed truck stop establishment,
21licensed veterans establishment, or licensed fraternal
22establishment may operate up to 5 fringe gambling machines on
23its premises at any time.
 
24    Section 90. The Criminal Code of 2012 is amended by

 

 

HB2641- 13 -LRB101 07269 SMS 52308 b

1changing Section 28-1 as follows:
 
2    (720 ILCS 5/28-1)  (from Ch. 38, par. 28-1)
3    Sec. 28-1. Gambling.
4    (a) A person commits gambling when he or she:
5        (1) knowingly plays a game of chance or skill for money
6    or other thing of value, unless excepted in subsection (b)
7    of this Section;
8        (2) knowingly makes a wager upon the result of any
9    game, contest, or any political nomination, appointment or
10    election;
11        (3) knowingly operates, keeps, owns, uses, purchases,
12    exhibits, rents, sells, bargains for the sale or lease of,
13    manufactures or distributes any gambling device;
14        (4) contracts to have or give himself or herself or
15    another the option to buy or sell, or contracts to buy or
16    sell, at a future time, any grain or other commodity
17    whatsoever, or any stock or security of any company, where
18    it is at the time of making such contract intended by both
19    parties thereto that the contract to buy or sell, or the
20    option, whenever exercised, or the contract resulting
21    therefrom, shall be settled, not by the receipt or delivery
22    of such property, but by the payment only of differences in
23    prices thereof; however, the issuance, purchase, sale,
24    exercise, endorsement or guarantee, by or through a person
25    registered with the Secretary of State pursuant to Section

 

 

HB2641- 14 -LRB101 07269 SMS 52308 b

1    8 of the Illinois Securities Law of 1953, or by or through
2    a person exempt from such registration under said Section
3    8, of a put, call, or other option to buy or sell
4    securities which have been registered with the Secretary of
5    State or which are exempt from such registration under
6    Section 3 of the Illinois Securities Law of 1953 is not
7    gambling within the meaning of this paragraph (4);
8        (5) knowingly owns or possesses any book, instrument or
9    apparatus by means of which bets or wagers have been, or
10    are, recorded or registered, or knowingly possesses any
11    money which he has received in the course of a bet or
12    wager;
13        (6) knowingly sells pools upon the result of any game
14    or contest of skill or chance, political nomination,
15    appointment or election;
16        (7) knowingly sets up or promotes any lottery or sells,
17    offers to sell or transfers any ticket or share for any
18    lottery;
19        (8) knowingly sets up or promotes any policy game or
20    sells, offers to sell or knowingly possesses or transfers
21    any policy ticket, slip, record, document or other similar
22    device;
23        (9) knowingly drafts, prints or publishes any lottery
24    ticket or share, or any policy ticket, slip, record,
25    document or similar device, except for such activity
26    related to lotteries, bingo games and raffles authorized by

 

 

HB2641- 15 -LRB101 07269 SMS 52308 b

1    and conducted in accordance with the laws of Illinois or
2    any other state or foreign government;
3        (10) knowingly advertises any lottery or policy game,
4    except for such activity related to lotteries, bingo games
5    and raffles authorized by and conducted in accordance with
6    the laws of Illinois or any other state;
7        (11) knowingly transmits information as to wagers,
8    betting odds, or changes in betting odds by telephone,
9    telegraph, radio, semaphore or similar means; or knowingly
10    installs or maintains equipment for the transmission or
11    receipt of such information; except that nothing in this
12    subdivision (11) prohibits transmission or receipt of such
13    information for use in news reporting of sporting events or
14    contests; or
15        (12) knowingly establishes, maintains, or operates an
16    Internet site that permits a person to play a game of
17    chance or skill for money or other thing of value by means
18    of the Internet or to make a wager upon the result of any
19    game, contest, political nomination, appointment, or
20    election by means of the Internet. This item (12) does not
21    apply to activities referenced in items (6) and (6.1) of
22    subsection (b) of this Section.
23    (b) Participants in any of the following activities shall
24not be convicted of gambling:
25        (1) Agreements to compensate for loss caused by the
26    happening of chance including without limitation contracts

 

 

HB2641- 16 -LRB101 07269 SMS 52308 b

1    of indemnity or guaranty and life or health or accident
2    insurance.
3        (2) Offers of prizes, award or compensation to the
4    actual contestants in any bona fide contest for the
5    determination of skill, speed, strength or endurance or to
6    the owners of animals or vehicles entered in such contest.
7        (3) Pari-mutuel betting as authorized by the law of
8    this State.
9        (4) Manufacture of gambling devices, including the
10    acquisition of essential parts therefor and the assembly
11    thereof, for transportation in interstate or foreign
12    commerce to any place outside this State when such
13    transportation is not prohibited by any applicable Federal
14    law; or the manufacture, distribution, or possession of
15    video gaming terminals, as defined in the Video Gaming Act,
16    by manufacturers, distributors, and terminal operators
17    licensed to do so under the Video Gaming Act.
18        (5) The game commonly known as "bingo", when conducted
19    in accordance with the Bingo License and Tax Act.
20        (6) Lotteries when conducted by the State of Illinois
21    in accordance with the Illinois Lottery Law. This exemption
22    includes any activity conducted by the Department of
23    Revenue to sell lottery tickets pursuant to the provisions
24    of the Illinois Lottery Law and its rules.
25        (6.1) The purchase of lottery tickets through the
26    Internet for a lottery conducted by the State of Illinois

 

 

HB2641- 17 -LRB101 07269 SMS 52308 b

1    under the program established in Section 7.12 of the
2    Illinois Lottery Law.
3        (7) Possession of an antique slot machine that is
4    neither used nor intended to be used in the operation or
5    promotion of any unlawful gambling activity or enterprise.
6    For the purpose of this subparagraph (b)(7), an antique
7    slot machine is one manufactured 25 years ago or earlier.
8        (8) Raffles and poker runs when conducted in accordance
9    with the Raffles and Poker Runs Act.
10        (9) Charitable games when conducted in accordance with
11    the Charitable Games Act.
12        (10) Pull tabs and jar games when conducted under the
13    Illinois Pull Tabs and Jar Games Act.
14        (11) Gambling games conducted on riverboats when
15    authorized by the Riverboat Gambling Act.
16        (12) Video gaming terminal games at a licensed
17    establishment, licensed truck stop establishment, licensed
18    fraternal establishment, or licensed veterans
19    establishment when conducted in accordance with the Video
20    Gaming Act.
21        (13) Games of skill or chance where money or other
22    things of value can be won but no payment or purchase is
23    required to participate.
24        (14) Savings promotion raffles authorized under
25    Section 5g of the Illinois Banking Act, Section 7008 of the
26    Savings Bank Act, Section 42.7 of the Illinois Credit Union

 

 

HB2641- 18 -LRB101 07269 SMS 52308 b

1    Act, Section 5136B of the National Bank Act (12 U.S.C.
2    25a), or Section 4 of the Home Owners' Loan Act (12 U.S.C.
3    1463).
4        (15) Fringe gambling on a fringe gambling machine at a
5    licensed establishment, licensed truck stop establishment,
6    licensed fraternal establishment, or licensed veterans
7    establishment when conducted in accordance with the Gaming
8    and Amusement Cybersecurity and Data Collection and
9    Remittance Act.
10    (c) Sentence.
11    Gambling is a Class A misdemeanor. A second or subsequent
12conviction under subsections (a)(3) through (a)(12), is a Class
134 felony.
14    (d) Circumstantial evidence.
15    In prosecutions under this Section circumstantial evidence
16shall have the same validity and weight as in any criminal
17prosecution.
18(Source: P.A. 98-644, eff. 6-10-14; 99-149, eff. 1-1-16.)