HB4048 100TH GENERAL ASSEMBLY

LRB100 12718 MJP 26208 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB4048

Introduced 5/11/2017, by Rep. Arthur Turner

SYNOPSIS AS INTRODUCED:

230 ILCS 40/20
230 ILCS 40/25

Amends the Video Gaming Act. Increases the maximum wager played per hand from $2 to $4. Increases the maximum cash award for a wager on any individual hand from $500 to $1,199. Adds a maximum cash award for the maximum wager on a jackpot, progressive or otherwise, of $10,000. Provides that no terminal operator or officer, employee, or agent of a terminal operator (currently, no terminal operator) may offer, promise, or give anything of value (currently, may give anything of value), including, but not limited to, a loan or financing arrangement, to a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment in accordance with an agreement or arrangement or with the intent that the offer, promise, or gift of the thing of value shall act as an incentive or inducement with respect to locating or maintaining (rather than incentive or inducement to locate) video gaming terminals in that establishment. Provides that specified items and activities are permissible and do not constitute "of value" violations under these provisions. Provides that a licensed location that violates one or more requirements of provisions concerning restrictions on the licenses of terminal operators is guilty of a Class 4 felony and is subject to termination of his or her license by the Illinois Gaming Board. Allows a licensed establishment, licensed truck stop establishment, licensed veterans establishment, or licensed fraternal establishment that operates 5 video gaming terminals on its premises and that generates at least $150,000 in net terminal income over the preceding 6 consecutive calendar months, to add and operate a sixth video gaming terminal. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning gaming.

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

Section 5. The Video Gaming Act is amended by changing Sections 20 and 25 as follows:

(230 ILCS 40/20)

Sec. 20. Direct dispensing of receipt tickets only. A video gaming terminal may not directly dispense coins, cash, tokens, or any other article of exchange or value except for receipt tickets. Tickets shall be dispensed by pressing the ticket dispensing button on the video gaming terminal at the end of one's turn or play. The ticket shall indicate the total amount of credits and the cash award, the time of day in a 24-hour format showing hours and minutes, the date, the terminal serial number, the sequential number of the ticket, and an encrypted validation number from which the validity of the prize may be determined. The player shall turn in this ticket to the appropriate person at the licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment to receive the cash award. The cost of the credit shall be one cent, 5 cents, 10 cents, or 25 cents, and the maximum wager played per hand shall not exceed $4 $2. No cash award for the maximum wager on any individual hand shall exceed $1,199 $500. No cash award for the maximum wager on a jackpot, progressive or otherwise, shall exceed $10,000.

(Source: P.A. 96-34, eff. 7-13-09; 96-1410, eff. 7-30-10.)

(230 ILCS 40/25)

Sec. 25. Restriction of licensees.

(a) Manufacturer. A person may not be licensed as a manufacturer of a video gaming terminal in Illinois unless the person has a valid manufacturer's license issued under this Act. A manufacturer may only sell video gaming terminals for use in Illinois to persons having a valid distributor's license.

(b) Distributor. A person may not sell, distribute, or lease or market a video gaming terminal in Illinois unless the person has a valid distributor's license issued under this Act. A distributor may only sell video gaming terminals for use in Illinois to persons having a valid distributor's or terminal operator's license.

(c) Terminal operator. A person may not own, maintain, or place a video gaming terminal unless he has a valid terminal operator's license issued under this Act. A terminal operator may only place video gaming terminals for use in Illinois in licensed establishments, licensed truck stop establishments, licensed fraternal establishments, and licensed veterans establishments. No terminal operator or officer, employee, or agent of a terminal operator may offer, promise, or give anything of value, including, but not limited to, a loan or financing arrangement, to a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment in accordance with an agreement or arrangement or with the intent that the offer, promise, or gift of the thing of value shall act as an any incentive or inducement with respect to locating or maintaining locate video terminals in that establishment. The following items and activities are permissible and do not constitute "of value" violations under this subsection:

(1) A terminal operator may reimburse a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment for the actual cost of the food or non-alcoholic beverages given directly to video gaming terminal players in an amount not to exceed 5% of the terminal operator's monthly share of net terminal income if the licensed location has, for the preceding 6 consecutive calendar months, averaged monthly cumulative net terminal income for the location equivalent to net terminal income of at least $120 per day per video gaming terminal immediately on the premises, and if the reimbursement terms, including the requirement that the terminal operator be provided with receipts or documentation of the actual cost of the food or non-alcoholic beverages, are set forth in the written use agreement between the parties. In the event of the authorization of a players' rewards program, if food or non-alcoholic beverage awards are made available through the program, then a terminal operator may reimburse a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment up to 50% of the actual cost of the food or non-alcoholic beverages awarded, and the reimbursement terms, including the requirement that the terminal operator be provided with receipts or documentation of the actual cost of the food or non-alcoholic beverages, are set forth in the written use agreement between the parties.

(2) A terminal operator may reimburse a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment for up to 50% of the actual cost of promotional items, excluding food or non-alcoholic beverages, of more than nominal value, such as vacation trips and prizes that are given directly to video gaming terminal players if the reimbursement terms, including the requirement that the terminal operator be provided with receipts or documentation of the actual cost of these items, are set forth in the written use agreement between the parties. The cost of promotional items of nominal value that bear a logo or name and that are given to patrons or video gaming terminal players, however, may not be reimbursed or shared and shall be paid for entirely by the terminal operator or the licensed location whose name or logo appears on the item. As used in this paragraph, "promotional items of nominal value" does not include gift cards, gift certificates, cash, and cash equivalents.

(3) A terminal operator may reimburse a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment for up to 50% of the actual cost of advertising that promotes video gaming at that licensed location if the reimbursement terms, including the requirement that the terminal operator be provided with receipts or documentation of the actual cost of the advertising, are set forth in the written use agreement between the parties.

The Board shall adopt rules concerning the items and activities permissible under this subsection as well as other activities that do not constitute "of value" violations under this subsection.

Of the after-tax profits from a video gaming terminal, 50% shall be paid to the terminal operator and 50% shall be paid to the licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment, notwithstanding any agreement to the contrary. A video terminal operator or licensed location that violates one or more requirements of this subsection is guilty of a Class 4 felony and is subject to termination of his or her license by the Board.

(d) Licensed technician. A person may not service, maintain, or repair a video gaming terminal in this State unless he or she (1) has a valid technician's license issued under this Act, (2) is a terminal operator, or (3) is employed by a terminal operator, distributor, or manufacturer.

(d-5) Licensed terminal handler. No person, including, but not limited to, an employee or independent contractor working for a manufacturer, distributor, supplier, technician, or terminal operator licensed pursuant to this Act, shall have possession or control of a video gaming terminal, or access to the inner workings of a video gaming terminal, unless that person possesses a valid terminal handler's license issued under this Act.

(e) Licensed establishment. No video gaming terminal may be placed in any licensed establishment, licensed veterans establishment, licensed truck stop establishment, or licensed fraternal establishment unless the owner or agent of the owner of the licensed establishment, licensed veterans establishment, licensed truck stop establishment, or licensed fraternal establishment has entered into a written use agreement with the terminal operator for placement of the terminals. A copy of the use agreement shall be on file in the terminal operator's place of business and available for inspection by individuals authorized by the Board.

(e-5) A licensed establishment, licensed truck stop establishment, licensed veterans establishment, or licensed fraternal establishment may operate up to 5 video gaming terminals on its premises at any time. A licensed establishment, licensed truck stop establishment, licensed veterans establishment, or licensed fraternal establishment that operates 5 video gaming terminals on its premises and that generates at least $150,000 in net terminal income in the preceding 6 consecutive calendar months may add and operate a sixth video gaming terminal.

(f) (Blank).

(g) Financial interest restrictions. As used in this Act, "substantial interest" in a partnership, a corporation, an organization, an association, a business, or a limited liability company means:

(A) When, with respect to a sole proprietorship, an individual or his or her spouse owns, operates, manages, or conducts, directly or indirectly, the organization, association, or business, or any part thereof; or

(B) When, with respect to a partnership, the individual or his or her spouse shares in any of the profits, or potential profits, of the partnership activities; or

(C) When, with respect to a corporation, an individual or his or her spouse is an officer or director, or the individual or his or her spouse is a holder, directly or beneficially, of 5% or more of any class of stock of the corporation; or

(D) When, with respect to an organization not covered in (A), (B) or (C) above, an individual or his or her spouse is an officer or manages the business affairs, or the individual or his or her spouse is the owner of or otherwise controls 10% or more of the assets of the organization; or

(E) When an individual or his or her spouse furnishes 5% or more of the capital, whether in cash, goods, or services, for the operation of any business, association, or organization during any calendar year; or

(F) When, with respect to a limited liability company, an individual or his or her spouse is a member, or the individual or his or her spouse is a holder, directly or beneficially, of 5% or more of the membership interest of the limited liability company.

For purposes of this subsection (g), "individual" includes all individuals or their spouses whose combined interest would qualify as a substantial interest under this subsection (g) and whose activities with respect to an organization, association, or business are so closely aligned or coordinated as to constitute the activities of a single entity.

(h) Location restriction. A licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment that is (i) located within 1,000 feet of a facility operated by an organization licensee licensed under the Illinois Horse Racing Act of 1975 or the home dock of a riverboat licensed under the Riverboat Gambling Act or (ii) located within 100 feet of a school or a place of worship under the Religious Corporation Act, is ineligible to operate a video gaming terminal. The location restrictions in this subsection (h) do not apply if (A) a facility operated by an organization licensee, a school, or a place of worship moves to or is established within the restricted area after a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment becomes licensed under this Act or (B) a school or place of worship moves to or is established within the restricted area after a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment obtains its original liquor license. For the purpose of this subsection, "school" means an elementary or secondary public school, or an elementary or secondary private school registered with or recognized by the State Board of Education.

Notwithstanding the provisions of this subsection (h), the Board may waive the requirement that a licensed establishment, licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment not be located within 1,000 feet from a facility operated by an organization licensee licensed under the Illinois Horse Racing Act of 1975 or the home dock of a riverboat licensed under the Riverboat Gambling Act. The Board shall not grant such waiver if there is any common ownership or control, shared business activity, or contractual arrangement of any type between the establishment and the organization licensee or owners licensee of a riverboat. The Board shall adopt rules to implement the provisions of this paragraph.

(i) Undue economic concentration. In addition to considering all other requirements under this Act, in deciding whether to approve the operation of video gaming terminals by a terminal operator in a location, the Board shall consider the impact of any economic concentration of such operation of video gaming terminals. The Board shall not allow a terminal operator to operate video gaming terminals if the Board determines such operation will result in undue economic concentration. For purposes of this Section, "undue economic concentration" means that a terminal operator would have such actual or potential influence over video gaming terminals in Illinois as to:

(1) substantially impede or suppress competition among terminal operators;

(2) adversely impact the economic stability of the video gaming industry in Illinois; or

(3) negatively impact the purposes of the Video Gaming Act.

The Board shall adopt rules concerning undue economic concentration with respect to the operation of video gaming terminals in Illinois. The rules shall include, but not be limited to, (i) limitations on the number of video gaming terminals operated by any terminal operator within a defined geographic radius and (ii) guidelines on the discontinuation of operation of any such video gaming terminals the Board determines will cause undue economic concentration.

(j) The provisions of the Illinois Antitrust Act are fully and equally applicable to the activities of any licensee under this Act.

(Source: P.A. 97-333, eff. 8-12-11; 98-31, eff. 6-24-13; 98-77, eff. 7-15-13; 98-112, eff. 7-26-13; 98-756, eff. 7-16-14.)

Section 99. Effective date. This Act takes effect upon becoming law.