SB1531ham001 100TH GENERAL ASSEMBLY

Rep. Michael J. Zalewski

Filed: 5/31/2017

10000SB1531ham001 LRB100 05772 AMC 27430 a

AMENDMENT TO SENATE BILL 1531

AMENDMENT NO. ______. Amend Senate Bill 1531 by replacing everything after the enacting clause with the following:

"Section 1. Short title. This Act may be cited as the Fantasy Sports Contest Act.

Section 5. Legislative intent.

(a) The General Assembly hereby finds and declares that:

(1) Interactive fantasy sports contests are contests of skill in which fantasy or simulation teams are selected based upon the skill and knowledge of the participants and not based solely on the membership of an actual team.

(2) Interactive fantasy sports contests are not wagers on future contingent events not under the contestants' control or influence because contestants have control over which players they choose and the outcome of each contest is not dependent upon the performance of any one player or any one actual team. The outcome of any interactive fantasy sports contest does not correspond to the outcome of any one real-life competitive event. Instead, the outcome depends on how the performances of participants' fantasy roster choices compared to the performance of others' roster choices.

(b) Based on the findings in this Section, the General Assembly declares that interactive fantasy sports contests do not constitute gambling as defined in Section 28-1 of the Criminal Code of 2012.

(c) The General Assembly further finds that as the Internet has become an integral part of society, and interactive fantasy sports contests a major form of entertainment for many consumers, any interactive fantasy sports enforcement and regulatory structure must begin from the bedrock premise that participation in a lawful and licensed interactive fantasy sports industry is a privilege and not a right, and that regulatory oversight is intended to safeguard the integrity of the games and participants and to ensure accountability and the public trust.

Section 10. Definitions. As used in this Act:

"Authorized player" means an individual located in this State that participates in an interactive fantasy sports contest offered by an interactive fantasy sports operator.

"Beginner fantasy sports player" means an individual who is at least 21 years of age and who has entered fewer than 51 interactive fantasy sports contests offered by a single interactive fantasy sports operator.

"Board" means the Illinois Gaming Board.

"Collegiate sport or athletic event" means a sport or athletic event offered or sponsored by or played in connection with a public or private institution that offers education services beyond the secondary level.

"Entry fee" means cash or cash equivalent that is paid by an authorized player to an interactive fantasy sports operator to participate in an interactive fantasy sports contest offered by that interactive fantasy sports operator.

"High school sport or athletic event" means a sport or athletic event offered or sponsored by or played in connection with a public or private institution that offers education services at the secondary level.

"Highly experienced player" means an authorized player who has:

(1) entered more than 1,000 interactive fantasy sports contests offered by a single interactive fantasy sports operator; or

(2) won more than 3 prizes valued at $1,000 each or more from a single interactive fantasy sports operator.

"Interactive fantasy sports contest" means a fantasy contest, in which:

(1) the value of all prizes and awards offered to winning participants are established and made known to the participants in advance of the contest and their value is not determined by the number of participants or the amount of any fees paid by those participants;

(2) all winning outcomes are determined predominantly by accumulated statistical results of the performance of individual athletes in real-world professional athletic competitions; a professional athletic competition does not include any amateur or collegiate level sport; and

(3) no winning outcome is based on the score, point spread, or any performance or performances of any single actual team or combination of such teams or solely on any single performance of an individual athlete or player in any single actual event.

"Interactive fantasy sports gross revenue" means the amount equal to the total of all entry fees that an interactive fantasy sports operator collects from all players, multiplied by the location percentage for the State.

"Interactive fantasy sports operator" means a person or entity that engages in the business of offering, by means of the Internet, a smart phone application, or other similar electronic or digital media or communication technologies, multiple interactive fantasy sports contests to persons.

"Interactive fantasy sports platform" means any website, smart phone application, or other portal providing access to an interactive fantasy sports contest.

"Location percentage" means, for each interactive fantasy sports contest, the percentage, rounded to the nearest tenth of a percent, of the total entry fees collected by an interactive fantasy sports operator from players located in this State, divided by the total entry fees collected by an interactive fantasy sports operator from all players in interactive fantasy sports contests.

"Minor" means a person under the age of 21 years.

"Permitted sports event" means a professional sport or athletic event or other competitive event. "Permitted sports event" does not include a prohibited sports event.

"Prohibited sports event" means an amateur sport or athletic event, a collegiate sport or athletic event, or a high school sport or athletic event.

Section 15. Applicability. This Act and all rules adopted under the authority of this Act shall apply only to interactive fantasy sports contests for which an authorized player pays an entry fee.

Section 20. Licensing.

(a) No interactive fantasy sports operator shall administer, manage, or otherwise make available an interactive fantasy sports platform to persons located in the State unless licensed by the Board under this Act.

(b) A qualified person may apply to the Board for an interactive fantasy sports operator license to conduct interactive fantasy sports contests as provided in this Act. The application shall be made on forms provided by the Board. The burden is upon each applicant to demonstrate suitability for licensure. Each interactive fantasy sports operator shall be licensed by the Board. The Board may issue a license for a period of up to 2 years or, in the case of interactive fantasy sports operators with annual interactive fantasy sports gross revenues less than $100,000, for up to 3 years.

(c) Each person seeking and possessing a license as an interactive fantasy sports operator shall submit to a background investigation conducted by the Board with the assistance of the State Police or other law enforcement. To the extent that the corporate structure of the applicant allows, the background investigation shall include any or all of the following as the Board deems appropriate or as provided by rule: (i) each beneficiary of a trust, (ii) each partner of a partnership, (iii) each member of a limited liability company, (iv) each director and officer of a publicly or non-publicly held corporation, (v) each stockholder of a non-publicly held corporation, (vi) each stockholder of 5% or more of a publicly held corporation, or (vii) each stockholder of 5% or more in a parent or subsidiary corporation.

(d) Each person seeking and possessing a license as an interactive fantasy sports operator shall disclose the identity of every person, association, trust, corporation, or limited liability company having a greater than 1% direct or indirect pecuniary interest in the interactive fantasy sports operator for which the license is sought. If the disclosed entity is a trust, the application shall disclose the names and addresses of the beneficiaries; if a corporation, the names and addresses of all stockholders and directors; if a limited liability company, the names and addresses of all members; or if a partnership, the names and addresses of all partners, both general and limited.

(e) All information, records, interviews, reports, statements, memoranda, or other data supplied to or used by the Board in the course of its review or investigation of an application for a license or a renewal under this Act shall be privileged and strictly confidential and shall be used only for the purpose of evaluating an applicant for a license or a renewal. The information, records, interviews, reports, statements, memoranda, or other data shall not be admissible as evidence nor discoverable in any action of any kind in any court or before any tribunal, board, agency, or person, except for any action deemed necessary by the Board.

(f) No person may be licensed as an interactive fantasy sports operator if that person has been found by the Board to:

(1) have a background, including a criminal record, reputation, habits, social or business associations, or prior activities, that poses a threat to the public interests of the State or to the security and integrity of interactive fantasy sports contests;

(2) create or enhance the dangers of unsuitable, unfair, or illegal practices, methods, and activities in the conduct of interactive fantasy sports contests; or

(3) present questionable business practices and financial arrangements incidental to the conduct of interactive fantasy sports contests.

(g) Any applicant for a license under this Act has the burden of proving his or her qualifications to the satisfaction of the Board. The Board may adopt rules to establish additional qualifications and requirements to preserve the integrity and security of interactive fantasy sports contests in this State.

(h) An interactive fantasy sports operator that has been operating in Illinois for at least 6 months on December 23, 2015 may operate in Illinois until a final decision is rendered on the application for an interactive fantasy sports operator license.

(i) The Board, by rule, shall establish a process for license renewal.

(j) The Board shall publish a list of all interactive fantasy sports operators licensed in this State under this Section on the Board's website for public use.

Section 25. Operators; required safeguards; minimum standards.

(a) As a condition of licensure in this State, each interactive fantasy sports operator shall implement and maintain commercially reasonable measures to:

(1) limit each authorized player to one username and one account and verify a fantasy sports player's true identity;

(2) prohibit minors from participating in an interactive fantasy sports contest, including:

(A) if the interactive fantasy sports operator becomes or is made aware that a minor has participated in one of its interactive fantasy sports contests, promptly refund any deposit received from the minor, whether or not the minor has engaged in or attempted to engage in an interactive fantasy sports contest; however, any refund may be offset by any prizes already awarded;

(B) publishing and facilitating parental control procedures to allow parents or guardians to exclude minors from access to any interactive fantasy sports contest or interactive fantasy sports platform; and

(C) taking appropriate steps to confirm that an individual opening an account is not a minor;

(3) when referencing the likelihood of winning in advertisements or upon interactive fantasy sports contest entry, make clear and conspicuous statements that are not inaccurate or misleading concerning the likelihood of winning and the number of winners;

(4) enable authorized players to restrict themselves from interactive fantasy sports contests and take reasonable steps to prevent these players from entering an interactive fantasy sports contest from which they have excluded themselves; these restrictions shall include, but not be limited to: (A) interactive fantasy sports contest entry limits, (B) limiting play to interactive fantasy sports contest with entry fees below an established limit, and (C) self-imposed deposit limits less than allowed under this Act; interactive fantasy sports operators shall implement and prominently publish procedures for fantasy sports players to implement the restrictions; fantasy sports players shall have the option to adjust these limits to make them more restrictive of gameplay as often as they like, but shall not have the option to make limits less restrictive of gameplay within 90 days after setting the limits;

(5) offer introductory procedures for authorized players, that shall be prominently displayed on the interactive fantasy sports operator's interactive fantasy sports platform, that explain interactive fantasy sports contest play and how to identify a highly experienced player;

(6) identify all highly experienced players in an interactive fantasy sports contest by a symbol attached to the players' user names, or by other easily visible means, on all interactive fantasy sports platforms supported by an interactive fantasy sports operator;

(7) disclose the number of entries a single authorized player may submit to each interactive fantasy sports contest;

(8) disclose the maximum number of total entries allowed for each interactive fantasy sports contest;

(9) implement measures to comply with all applicable State and federal requirements for data security, including, but not limited to, age verification and location software;

(10) offer all authorized players access to his or her account history and account details;

(11) ensure funds in fantasy sports players' accounts are held in segregated accounts by the interactive fantasy sports operators for the fantasy sports players that establish the accounts; interactive fantasy sports operators shall implement and prominently publish procedures that:

(A) prevent unauthorized withdrawals from fantasy sports player accounts by interactive fantasy sports operators or others;

(B) prevent commingling of funds in a fantasy sports player's account with other funds, including, without limitation, funds of the interactive fantasy sports operator; fantasy sports player funds shall be segregated from interactive fantasy sports operators' operational funds and any other funds held by the interactive fantasy sports operator; and

(C) address reporting on complaints by fantasy sports players that their accounts have been misallocated, compromised, or otherwise mishandled;

(12) provide on the interactive fantasy sports platform, in a prominent place, information concerning assistance for compulsive play;

(13) prohibit the extension of credit from an interactive fantasy sports operator to an authorized player;

(14) develop policies to prevent the use of proxy servers for the purpose of misrepresenting a player's location in order to engage in interactive fantasy sports contests; and

(15) prevent one fantasy sports player from acting as a proxy for another.

(b) No interactive fantasy sports operator employee, principal, officer, director, or contractor shall play any interactive fantasy sports contest offered to the general public or play in such contest through another person as a proxy. For the purposes of this subsection (b), a contractor is limited to a contractor who can access information of an interactive fantasy sports operator related to the conduct of an interactive fantasy sports contest that is not available to other fantasy sports players. Interactive fantasy sports operators shall make these restrictions known to all affected individuals and corporate entities.

(c) No interactive fantasy sports operator employee, principal, officer, director, or contractor shall disclose confidential information that may affect interactive fantasy sports contest gameplay to any person permitted to engage in interactive fantasy sports contest gameplay. Interactive fantasy sports operators shall make these restrictions known to all affected individuals and corporate entities.

(d) No interactive fantasy sports operator shall allow a professional athlete whose individual statistics or performance may be used to determine any part of the outcome of any interactive fantasy sports contest to enter interactive fantasy sports contests in the sports in which he or she participates. An interactive fantasy sports operator shall take commercially reasonable efforts to prevent a sports agent, team employee, referee, or league official associated with any competition that is the subject of interactive fantasy sports contests to enter interactive fantasy sports contests in the sport in which he or she participates, nor shall such athlete, sports agent, team official, team representative, referee, or league official play through another person as a proxy.

(1) Interactive fantasy sports operators shall take commercially reasonable efforts to obtain lists of persons described in this subsection (d) for the purpose of implementing this subsection (d).

(2) Interactive fantasy sports operators, upon learning of a violation of this subsection (d), shall bar the individual committing the violation from playing in any interactive fantasy sports contest by suspending the individual's account and banning the individual from further play, shall terminate any existing promotional agreements with the individual, and shall refuse to make any new promotional agreements that compensate the individual.

(3) Interactive fantasy sports operators shall make these restrictions known to all affected individuals and corporate entities.

(e) Each interactive fantasy sports operator shall:

(1) ensure the value of any prizes and awards offered to authorized players are established and made known to the players in advance of the interactive fantasy sports contest;

(2) ensure all winning outcomes reflect the relative knowledge and skill of the authorized players and are determined predominantly by accumulated statistical results of the performance of individuals in permitted sports events;

(3) ensure no winning outcome is based on the score, point spread, or performance of a single sports team, or a combination of sports teams;

(4) ensure no winning outcome is based solely on a single performance of an individual athlete in a single sport or athletic event; and

(5) ensure no interactive fantasy sports contest is based on a prohibited sports event.

(f) Interactive fantasy sports operators shall implement and prominently publish procedures that allow any fantasy sports player to permanently close an account at any time and for any reason. The procedures shall allow for cancellation by any means, including, without limitation, by a fantasy sports player on any interactive fantasy sports contest used by that fantasy sports player to make deposits into a fantasy sports player account. A copy of an interactive fantasy sports operator's procedures shall be submitted to the Board and any changes shall be submitted within 30 days.

(g) When a fantasy sports player account is closed, the interactive fantasy sports operator shall refund all funds in the account no later than 5 business days after submission of the request or 10 business days after submission of any tax reporting information required by law, whichever is later, unless the interactive fantasy sports operator makes a good faith determination that the fantasy sports player engaged in fraudulent or other conduct that would constitute a violation of this Act, rules adopted pursuant to this Act, or the interactive fantasy sports operator's policies, in which case, upon notice to the fantasy sports player of that determination, the withdrawal may be held pending a reasonable investigative period to resolve its investigation. For the purposes of this subsection (g), a request for withdrawal shall be considered honored if it is processed by the interactive fantasy sports operator, but delayed by a payment processor, a credit card issuer, or the custodian of the financial account.

(h) If a prize is awarded to a fantasy sports player with a closed account, that prize, to the extent it consists of funds, shall be distributed by the interactive fantasy sports operator within 5 business days, or 10 business days of submission of any tax reporting information required by law, unless the interactive fantasy sports operator makes a good faith determination that the fantasy sports player engaged in fraudulent or other conduct that would constitute a violation of this Act or rules adopted pursuant to this Act. If such determination is made, then the prize may be withheld, provided that it is then awarded to another fantasy sports player in the same interactive fantasy sports contest who would have won the prize had the fantasy sports player with the closed account not participated.

(i) An interactive fantasy sports operator shall prominently publish all contractual terms and conditions and rules of general applicability that affect a fantasy sports player's account. Presentation of such terms, conditions, and rules at the time of on boarding a new fantasy sports player shall not suffice.

(j) Interactive fantasy sports operators shall have prominently published rules that govern when each interactive fantasy sports contest shall close or lock. Each interactive fantasy sports contest operator shall also prominently disclose contest-specific information about the time that the interactive fantasy sports contest closes or locks in connection with each interactive fantasy sports contest offered. An interactive fantasy sports operator shall strictly enforce all disclosed closing or lock times.

(k) Fantasy sports player's deposits shall be limited to no more than $1,000 per month. However, an interactive fantasy sports operator may establish and prominently publish procedures for temporarily or permanently increasing a fantasy sports player's deposit limit, at the request of the fantasy sports player, above $1,000 per month. Such procedures shall be submitted to the Board.

If established by an interactive fantasy sports operator, such procedures shall include evaluation of information, including income or asset information, sufficient to establish that the fantasy sports player can afford losses that might result from gameplay at the deposit limit level requested.

When a temporary or permanent deposit level limit increase is approved, the interactive fantasy sports operator's procedures shall provide for annual re-certification of a player's financial ability to afford losses.

(l) The following entry limits apply:

(1) interactive fantasy sports operators shall not allow players to submit more than one entry in an interactive fantasy sports contest involving 12 entries or fewer;

(2) interactive fantasy sports operators shall not allow players to submit more than 2 entries in an interactive fantasy sports contest involving more than 13 entries but fewer than 36 entries;

(3) interactive fantasy sports operators shall not allow players to submit more than 3 entries in an interactive fantasy sports contest involving 36 or more entries but fewer than 101 entries; and

(4) interactive fantasy sports operators shall not allow fantasy sports players to submit more than 3% of all entries in an interactive fantasy sports contest involving 101 or more entries.

An interactive fantasy sports operator may establish interactive fantasy sports contests, representing less than 2% of the total number of interactive fantasy sports contests that the interactive fantasy sports operator offers, in which there is no restriction on the number of entries, provided that (i) the interactive fantasy sports operator clearly discloses that there are no limits on the number of entries by each player in the interactive fantasy sports contest and (ii) that the cost of participating in the interactive fantasy sports contest is $50 or more per entry.

(m) Interactive fantasy sports operators shall not offer an interactive fantasy sports contest based on a prohibited sports event.

(n) An interactive fantasy sports operator shall not participate in an interactive fantasy sports contest offered by the interactive fantasy sports operator.

(o) An interactive fantasy sports operator shall not permit unauthorized scripts to be used on interactive fantasy sports platforms and shall use commercially reasonable efforts to monitor for and to prevent use of such scripts.

(p) Interactive fantasy sports operators shall develop and prominently display procedures on the interactive fantasy sports operator's interactive fantasy sports platform for the filing of a complaint by the authorized player against the interactive fantasy sports operator. The interactive fantasy sports operator shall give an initial response to the player within 48 hours after the player files the complaint. The interactive fantasy sports operator shall give a complete response to the player filing the complaint within 10 business days after the initial response is issued. An authorized player may file a complaint alleging a violation of the provisions of this Act with the Board.

(q) An interactive fantasy sports operator shall close any fantasy player account that is inactive for 2 years and notify the account holder that the account has been closed by email to the account holder's last known email address. When a fantasy sports player account is closed due to inactivity, the interactive fantasy sports operator shall take commercially reasonable steps to refund all funds in the fantasy sports player account within 30 days, subject to the receipt of any tax information required by law. In the event that funds in a closed fantasy sports player account exceed $5 and cannot be refunded and remain unclaimed, the interactive fantasy sports operator shall provide notice of the existence of funds to the fantasy sports player. Such notice shall be provided by email to the account holder's last known email address. In the event that funds in a closed fantasy sports player account cannot be refunded and remain unclaimed by the fantasy sports player after 3 years, such funds shall be paid by the interactive fantasy sports operator to the Unclaimed Property Trust Fund in the Office of the State Treasurer. The interactive fantasy sports operator shall provide notice to the fantasy sports player's email address at least 60 days prior to paying the funds to the Unclaimed Property Trust Fund.

(r) Interactive fantasy sports operators shall develop games that are limited to beginner fantasy sports players and shall prohibit individuals who are not beginner fantasy sports players from participating in those games either directly or through another person as a proxy. An interactive fantasy sports operator shall suspend the account of an individual who is not a beginner fantasy sports player and who enters a game limited to beginner fantasy sports players and shall ban the player from future play.

(s) All interactive fantasy sports operators shall develop games in which highly experienced fantasy sports players cannot participate either directly or through another person as a proxy. An interactive fantasy sports operator shall suspend the account of a highly experienced fantasy sports player who enters a game that excludes highly experienced fantasy sports players directly or through another person as a proxy and shall ban the individual from future play.

Section 30. Multiple interactive fantasy sports platforms; interactive fantasy sports contests. A licensee may use multiple interactive fantasy sports platforms and offer multiple types of interactive fantasy sports contests.

Section 35. Advertising.

(a) Advertisements of interactive fantasy sports operators shall not feature: (1) minors (other than professional athletes who may be minors), (2) students, (3) schools, colleges, or universities, or (4) school, college, or university settings. However, incidental depiction of non-featured minors or minors accompanying adults shall not be a violation of this subsection (a).

(b) Interactive fantasy sports operators shall not advertise on school, college, or university campuses.

(c) Interactive fantasy sports operators shall not advertise at amateur athletic competitions, except to the extent that those competitions are played in stadiums where professional competitions are held and where non-digital advertisements have been posted, erected, or otherwise displayed in a manner that would require substantial effort to remove.

Section 40. Powers and duties of the Board.

(a) The Board has jurisdiction over and shall supervise all interactive fantasy sports contests governed by this Act. The Board has all powers and duties necessary and proper to fully and exclusively execute the provisions of the Act, including, but not limited to, the following:

(1) To investigate applicants and determine the eligibility of applicants that best serve the interests of the citizens of Illinois.

(2) To provide for the establishment and collection of all fees, fines, and taxes imposed by this Act and the rules adopted under this Act.

(3) To suspend, revoke, or restrict licenses; to require the removal of an interactive fantasy sports operator or an employee of an interactive fantasy sports operator for a violation of this Act; and to impose civil penalties of an amount up to $5,000 against individuals and $10,000 against licensees for each violation of the provisions of this Act.

(4) To approve and deny applications for licensure to conduct interactive fantasy sports contests in this State, and to suspend, refuse or renew, or revoke a license issued under this Act.

(5) To accept and investigate complaints of any kind from an authorized player and attempt to mediate the complaints where appropriate.

(6) To investigate alleged violations of this Act.

(7) To initiate proper enforcement proceedings where such action is deemed by the Board to be necessary or appropriate.

(8) To exercise all powers and duties assigned by this Act.

(b) The Board shall adopt rules to implement the provisions of and effectuate the policy and objectives of this Act as the Board may deem necessary or advisable, including, but not limited to, the development of the initial form of the application for licensure. These rules shall include, but not be limited to, responsible protections with regard to compulsive play and safeguards for fair play. The Board shall not adopt rules limiting or regulating:

(1) the rules or the administration of an individual interactive fantasy sports contest;

(2) the statistical makeup of an interactive fantasy sports contest; or

(3) the digital interactive fantasy sports platform of an interactive fantasy sports operator.

(c) The Board shall adopt emergency rules to administer this Act in accordance with Section 5-45 of the Illinois Administrative Procedure Act. For the purposes of the Illinois Administrative Procedure Act, the General Assembly finds that the adoption of rules to implement this Act is deemed an emergency and necessary for the public interest, safety, and welfare.

Section 45. Annual report.

(a) Each licensee shall annually submit a report to the Board by no later than June 30 of each year that shall include the following information as it applies to accounts held by authorized players located in this State:

(1) the number of accounts held by authorized players on all interactive fantasy sports platforms offered by the interactive fantasy sports operator and the number of accounts held by highly experienced players on all interactive fantasy sports platforms offered by the interactive fantasy sports operator;

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

(3) the total amount of entry fees received from authorized players;

(4) the total amount of prizes awarded to authorized players;

(5) the total amount of interactive fantasy sports gross revenue received by the licensee; and

(6) the total number of authorized players that requested to exclude themselves from interactive fantasy sports contests.

(b) The Board shall annually publish a report based on the aggregate information provided by all interactive fantasy sports operators in accordance with this Section, that shall be published on the Board's website no later than 180 days after the deadline for the submission of individual reports as specified in this Section.

Section 50. State tax.

(a) A privilege tax is imposed on persons engaged in the business of operating an interactive fantasy sports contest in this State. For the privilege of conducting interactive fantasy sports contests in the State, interactive fantasy sports operators shall pay a tax at the following graduated rates:

(1) 5% of annual interactive fantasy sports gross revenue up to and including $1,000,000;

(2) 7.5% of annual interactive fantasy sports gross revenue in excess of $1,000,000 but not exceeding $3,000,000;

(3) 10% of annual interactive fantasy sports gross revenue in excess of $3,000,000 but not exceeding $8,000,000;

(4) 15% of annual interactive fantasy sports gross revenue in excess of $8,000,000.

(b) The tax imposed by this Section shall be paid by the interactive fantasy sports operator to the Board not later than the 15th day of every month for the previous month's privilege taxes.

Section 55. Disposition of taxes. The Board shall deposit all taxes imposed by this Act, any interest and penalties imposed by the Board relating to those taxes, all penalties levied and collected by the Board, and the appropriate funds, cash, or prizes forfeited from interactive fantasy sports contests into the Mental Health Services Fund.

Section 60. Audits. All interactive fantasy sports operators with annual interactive fantasy sports contest gross revenue of $100,000 or more shall annually be subject to an audit of the financial transactions and condition of the interactive fantasy sports operator's total operations as they relate to the offering and operating of interactive fantasy sports contests and to ensure compliance with all of the requirements in this Act. Interactive fantasy sports operators with annual interactive fantasy sports contest gross revenues less than $100,000 shall every 3 years be subject to an audit of the financial transactions and condition of the interactive fantasy sports operator's total operations as they relate to the offering and operating of interactive fantasy sports contests and to ensure compliance with all of the requirements in this Act. All audits and compliance engagements shall be conducted by certified public accountants or an independent testing laboratory approved by the Board. The compensation for each certified public accountant or independent testing laboratory shall be paid directly by the interactive fantasy sports operator to the certified public accountant or independent testing laboratory. The audit shall be conducted and submitted to the Board by June 30 of each year.

Section 65. Limitation on the taxation of interactive fantasy sports operators. Interactive fantasy sports operators shall not be subjected to an excise tax, license tax, permit tax, privilege tax, amusement tax, or occupation tax that is imposed upon the licensee by the State or any political subdivision thereof, except as provided in this Act.

Section 70. Application fees; license fees.

(a) A non-refundable application fee shall be paid at the time an application for licensure is filed with the Board in the following amounts:

(1) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue greater than $10,000,000 ......................................... $25,000

(2) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue greater than $5,000,000 but not more than $10,000,000 ............ $12,500

(3) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue greater than $1,000,000 but not more than $5,000,000 .............. $7,500

(4) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue of at least $100,000 but not more than $1,000,000 ................ $5,000

(5) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue less than $100,000 ............................................... $500

(b) The Board shall establish a fee for each license not to exceed the following for the initial licensure period:

(1) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue greater than $10,000,000 ......................................... $50,000

(2) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue greater than $5,000,000 but not more than $10,000,000 ............ $25,000

(3) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue greater than $1,000,000 but not more than $5,000,000 ..............$15,000

(4) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue of at least $100,000 but not more than $1,000,000 ............... $10,000

(5) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue less than $100,000 ............................................. $1,500

(c) For subsequent licensure periods, the renewal fee shall not exceed the following:

(1) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue greater than $10,000,000 ......................................... $37,500

(2) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue greater than $5,000,000 but not more than $10,000,000 ............ $18,750

(3) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue greater than $1,000,000 but not more than $5,000,000 ............. $11,250

(4) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue of at least $100,000 but not more than $1,000,000 .................$7,500

(5) Interactive fantasy sports operators with annual interactive fantasy sports gross revenue less than $100,000 ............................................. $1,125

(d) All fees collected under this Section shall be deposited into the State Gaming Fund.

(e) All fees collected under this Section shall be used for the administration of this Act.

Section 75. Interactive fantasy sports contests authorized. Interactive fantasy sports contests conducted in accordance with the provisions of this Act are hereby authorized.

Section 80. Interactive fantasy sports contests prohibited. The conduct of interactive fantasy sports contests by unlicensed operators is prohibited.

Section 85. Interactive fantasy sports contests; Criminal Code of 2012. Interactive fantasy sports contests offered in accordance with the provisions of this Act shall not constitute gambling as defined in Section 28-1 of the Criminal Code of 2012.

Section 900. Repeal. This Act is repealed on January 1, 2021.

Section 905. The Department of Healthcare and Family Services Law of the Civil Administrative Code of Illinois is amended by adding Section 2205-17 as follows:

(20 ILCS 2205/2205-17 new)

Sec. 2205-17. The Mental Health Services Fund. The Mental Health Services Fund is created as a special fund in the State treasury. From appropriations to the Department of Healthcare and Family Services from the Fund, the Department of Healthcare and Family Services shall make grants to support mental health and addiction services in the State. Any federal Medicaid matching funds received by the Department of Healthcare and Family Services for the grants made under this Section shall be deposited into the Fund.

Section 910. The State Finance Act is amended by adding Section 5.878 as follows:

(30 ILCS 105/5.878 new)

Sec. 5.878. The Mental Health Services Fund.

Section 950. The Criminal Code of 2012 is amended by changing Section 28-1 as follows:

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

Sec. 28-1. Gambling.

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

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

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

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

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

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

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

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

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

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

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

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

(12) knowingly establishes, maintains, or operates an Internet site that permits a person to play a game of chance or skill for money or other thing of value by means of the Internet or to make a wager upon the result of any game, contest, political nomination, appointment, or election by means of the Internet. This item (12) does not apply to activities referenced in items (6), and (6.1), or (15) of subsection (b) of this Section.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(15) Interactive fantasy sports contests and participation in interactive fantasy sports contests authorized under the Fantasy Sports Contest Act.

(c) Sentence.

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

(d) Circumstantial evidence.

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

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