99TH GENERAL ASSEMBLY State of Illinois 2015 and 2016 HB3418

Introduced , by Rep. Arthur Turner

SYNOPSIS AS INTRODUCED:

`230 ILCS 40/15`
`230 ILCS 40/45`
`230 ILCS 40/50`

Amends the Video Gaming Act. Provides that central communication system vendors may develop and provide information regarding gaming devices or individual gaming performance data to all manufacturers related to their respective video gaming terminals. Provides that publicly held corporations that have a registration statement filed or pending with the federal Securities and Exchange Commission seeking and possessing a license under the Act are not required to 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 video gaming terminal operation for which license is sought. Provides that licenses issued to licensed establishments, licensed veterans establishment, licensed truck stop establishments, licensed technicians, and licensed terminal handlers shall be renewed annually. Provides that, upon expiration of an initial license, for licenses issued to manufacturers, distributors, suppliers, and terminal operators, licenses are to be issued annually for 3 years, and then shall be valid for up to 4 years in the Board's discretion. Provides that licenses for manufacturers, distributors, suppliers, terminal operators, licensed establishments, licensed fraternal establishments, licensed veterans establishments, and licensed truck stop establishments are not assignable or transferrable without prior approval of the Board or as provided by Board rule. Effective immediately.

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A BILL FOR

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1 AN ACT concerning gaming.

2 Be it enacted by the People of the State of Illinois,

3 represented in the General Assembly:

4 Section 5. The Video Gaming Act is amended by changing

5 Sections 15, 45, and 50 as follows:

6 (230 ILCS 40/15)

7 Sec. 15. Minimum requirements for licensing and

8 registration. Every video gaming terminal offered for play

9 shall first be tested and approved pursuant to the rules of the

10 Board, and each video gaming terminal offered in this State for

11 play shall conform to an approved model. For the examination of

12 video gaming machines and associated equipment as required by

13 this Section, the Board may utilize the services of one or more

14 independent outside testing laboratories that have been

15 accredited by a national accreditation body and that, in the

16 judgment of the Board, are qualified to perform such

17 examinations. Every video gaming terminal offered in this State

18 for play must meet minimum standards set by an independent

19 outside testing laboratory approved by the Board. Each approved

20 model shall, at a minimum, meet the following criteria:

21 (1) It must conform to all requirements of federal law

22 and regulations, including FCC Class A Emissions

23 Standards.

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1 (2) It must theoretically pay out a mathematically

2 demonstrable percentage during the expected lifetime of

3 the machine of all amounts played, which must not be less

4 than 80%. The Board shall establish a maximum payout

5 percentage for approved models by rule. Video gaming

6 terminals that may be affected by skill must meet this

7 standard when using a method of play that will provide the

8 greatest return to the player over a period of continuous

9 play.

10 (3) It must use a random selection process to determine

11 the outcome of each play of a game. The random selection

12 process must meet 99% confidence limits using a standard

13 chi-squared test for (randomness) goodness of fit.

14 (4) It must display an accurate representation of the

15 game outcome.

16 (5) It must not automatically alter pay tables or any

17 function of the video gaming terminal based on internal

18 computation of hold percentage or have any means of

19 manipulation that affects the random selection process or

20 probabilities of winning a game.

21 (6) It must not be adversely affected by static

22 discharge or other electromagnetic interference.

23 (7) It must be capable of detecting and displaying the

24 following conditions during idle states or on demand: power

25 reset; door open; and door just closed.

26 (8) It must have the capacity to display complete play

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1 history (outcome, intermediate play steps, credits

2 available, bets placed, credits paid, and credits cashed

3 out) for the most recent game played and 10 games prior

4 thereto.

5 (9) The theoretical payback percentage of a video

6 gaming terminal must not be capable of being changed

7 without making a hardware or software change in the video

8 gaming terminal, either on site or via the central

9 communications system.

10 (10) Video gaming terminals must be designed so that

11 replacement of parts or modules required for normal

12 maintenance does not necessitate replacement of the

13 electromechanical meters.

14 (11) It must have nonresettable meters housed in a

15 locked area of the terminal that keep a permanent record of

16 all cash inserted into the machine, all winnings made by

17 the terminal printer, credits played in for video gaming

18 terminals, and credits won by video gaming players. The

19 video gaming terminal must provide the means for on-demand

20 display of stored information as determined by the Board.

21 (12) Electronically stored meter information required

22 by this Section must be preserved for a minimum of 180 days

23 after a power loss to the service.

24 (13) It must have one or more mechanisms that accept

25 cash in the form of bills. The mechanisms shall be designed

26 to prevent obtaining credits without paying by stringing,

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1 slamming, drilling, or other means. If such attempts at

2 physical tampering are made, the video gaming terminal

3 shall suspend itself from operating until reset.

4 (14) It shall have accounting software that keeps an

5 electronic record which includes, but is not limited to,

6 the following: total cash inserted into the video gaming

7 terminal; the value of winning tickets claimed by players;

8 the total credits played; the total credits awarded by a

9 video gaming terminal; and pay back percentage credited to

10 players of each video game.

11 (15) It shall be linked by a central communications

12 system to provide auditing program information as approved

13 by the Board. The central communications system shall use a

14 standard industry protocol, as defined by the Gaming

15 Standards Association, and shall have the functionality to

16 enable the Board or its designee to activate or deactivate

17 individual gaming devices from the central communications

18 system. In no event may the communications system approved

19 by the Board limit participation to only one manufacturer

20 of video gaming terminals by either the cost in

21 implementing the necessary program modifications to

22 communicate or the inability to communicate with the

23 central communications system.

24 (16) The Board, in its discretion, may require video

25 gaming terminals to display Amber Alert messages if the

26 Board makes a finding that it would be economically and

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1 technically feasible and pose no risk to the integrity and

2 security of the central communications system and video

3 gaming terminals.

4 The Board may adopt rules to establish additional criteria

5 to preserve the integrity and security of video gaming in this

6 State. The central communications system vendor may be licensed

7 as a video gaming terminal manufacturer or a video gaming

8 terminal distributor, or both, but in no event shall the

9 central communications system vendor be licensed as a video

10 gaming terminal operator.

11 The Board shall not permit the central communication system

12 vendor to develop or use ~~development of~~ information regarding

13 ~~or the use by any licensee of~~ gaming device or individual game

14 performance data for its or its affiliates' exclusive use or

15 benefit. The central communication system vendor may develop

16 and provide information regarding gaming devices or individual

17 gaming performance data to all manufacturers related to their

18 respective video gaming terminals. Nothing in this Act shall

19 inhibit or prohibit the Board from the use of gaming device or

20 individual game performance data in its regulatory duties. The

21 Board shall adopt rules to ensure that all licensees are

22 treated and all licensees act in a non-discriminatory manner

23 and develop processes and penalties to enforce those rules.

24 (Source: P.A. 98-31, eff. 6-24-13; 98-377, eff. 1-1-14; 98-582,

25 eff. 8-27-13; 98-756, eff. 7-16-14.)

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1 (230 ILCS 40/45)

2 Sec. 45. Issuance of license.

3 (a) The burden is upon each applicant to demonstrate his

4 suitability for licensure. Each video gaming terminal

5 manufacturer, distributor, supplier, operator, handler,

6 licensed establishment, licensed truck stop establishment,

7 licensed fraternal establishment, and licensed veterans

8 establishment shall be licensed by the Board. The Board may

9 issue or deny a license under this Act to any person pursuant

10 to the same criteria set forth in Section 9 of the Riverboat

11 Gambling Act.

12 (a-5) The Board shall not grant a license to a person who

13 has facilitated, enabled, or participated in the use of

14 coin-operated devices for gambling purposes or who is under the

15 significant influence or control of such a person. For the

16 purposes of this Act, "facilitated, enabled, or participated in

17 the use of coin-operated amusement devices for gambling

18 purposes" means that the person has been convicted of any

19 violation of Article 28 of the Criminal Code of 1961 or the

20 Criminal Code of 2012. If there is pending legal action against

21 a person for any such violation, then the Board shall delay the

22 licensure of that person until the legal action is resolved.

23 (b) Each person seeking and possessing a license as a video

24 gaming terminal manufacturer, distributor, supplier, operator,

25 handler, licensed establishment, licensed truck stop

26 establishment, licensed fraternal establishment, or licensed

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1 veterans establishment shall submit to a background

2 investigation conducted by the Board with the assistance of the

3 State Police or other law enforcement. To the extent that the

4 corporate structure of the applicant and applicable securities

5 laws allow ~~allows~~, the background investigation shall include

6 any or all of the following as the Board deems appropriate or

7 as provided by rule for each category of licensure: (i) each

8 beneficiary of a trust, (ii) each partner of a partnership,

9 (iii) each member of a limited liability company, (iv) each

10 director and officer of a publicly or non-publicly held

11 corporation, (v) each stockholder of a non-publicly held

12 corporation, (vi) each stockholder of 5% or more of a publicly

13 held corporation, or (vii) each stockholder of 5% or more in a

14 parent or subsidiary corporation.

15 (c) Each person seeking and possessing a license as a video

16 gaming terminal manufacturer, distributor, supplier, operator,

17 handler, licensed establishment, licensed truck stop

18 establishment, licensed fraternal establishment, or licensed

19 veterans establishment shall, to the extent that the corporate

20 structure of the applicant and applicable securities laws

21 allow, disclose the identity of every person, association,

22 trust, corporation, or limited liability company having a

23 greater than 1% direct or indirect pecuniary interest in the

24 video gaming terminal operation for which the license is sought

25 as the Board deems appropriate or as provided for by rule for

26 each category of licensure; however, a publicly held

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1 corporation that has a registration statement filed or pending

2 with the federal Securities and Exchange Commission, or its

3 equivalent, is not required to provide information under this

4 Section. If the disclosed entity is a trust, the application

5 shall disclose the names and addresses of the beneficiaries; if

6 a corporation, the names and addresses of all stockholders and

7 directors; if a limited liability company, the names and

8 addresses of all members; or if a partnership, the names and

9 addresses of all partners, both general and limited.

10 (d) No person may be licensed as a video gaming terminal

11 manufacturer, distributor, supplier, operator, handler,

12 licensed establishment, licensed truck stop establishment,

13 licensed fraternal establishment, or licensed veterans

14 establishment if that person has been found by the Board to:

15 (1) have a background, including a criminal record,

16 reputation, habits, social or business associations, or

17 prior activities that pose a threat to the public interests

18 of the State or to the security and integrity of video

19 gaming;

20 (2) create or enhance the dangers of unsuitable,

21 unfair, or illegal practices, methods, and activities in

22 the conduct of video gaming; or

23 (3) present questionable business practices and

24 financial arrangements incidental to the conduct of video

25 gaming activities.

26 (e) Any applicant for any license under this Act has the

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1 burden of proving his or her qualifications to the satisfaction

2 of the Board. The Board may adopt rules to establish additional

3 qualifications and requirements to preserve the integrity and

4 security of video gaming in this State.

5 (f) A non-refundable application fee shall be paid at the

6 time an application for a license is filed with the Board in

7 the following amounts:

8 (1) Manufacturer..........................$5,000

9 (2) Distributor...........................$5,000

10 (3) Terminal operator.....................$5,000

11 (4) Supplier..............................$2,500

12 (5) Technician..............................$100

13 (6) Terminal Handler..............................$50

14 (g) The Board shall establish an annual fee for each

15 license not to exceed the following:

16 (1) Manufacturer.........................$10,000

17 (2) Distributor..........................$10,000

18 (3) Terminal operator.....................$5,000

19 (4) Supplier..............................$2,000

20 (5) Technician..............................$100

21 (6) Licensed establishment, licensed truck stop

22 establishment, licensed fraternal establishment,

23 or licensed veterans establishment..............$100

24 (7) Video gaming terminal...................$100

25 (8) Terminal Handler..............................$50

26 (h) A terminal operator and a licensed establishment,

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1 licensed truck stop establishment, licensed fraternal

2 establishment, or licensed veterans establishment shall

3 equally split the fees specified in item (7) of subsection (g).

4 (Source: P.A. 97-1150, eff. 1-25-13; 98-31, eff. 6-24-13;

5 98-587, eff. 8-27-13; 98-756, eff. 7-16-14.)

6 (230 ILCS 40/50)

7 Sec. 50. Distribution of license fees; expiration of

8 licenses; transfer of licenses.

9 (a) All fees collected under Section 45 shall be deposited

10 into the State Gaming Fund.

11 (b) Fees collected under Section 45 shall be used as

12 follows:

13 (1) Twenty-five percent shall be paid, subject to

14 appropriation by the General Assembly, to the Department of

15 Human Services for administration of programs for the

16 treatment of compulsive gambling.

17 (2) Seventy-five percent shall be used for the

18 administration of this Act.

19 (c) All initial licenses issued ~~by the Board~~ under this Act

20 shall be valid for one year, ~~are renewable annually~~unless

21 sooner cancelled or terminated. ~~No license issued under this~~

22 ~~Act is transferable or assignable.~~

23 (d) Upon expiration of the initial license, licenses issued

24 to licensed establishments, licensed fraternal establishment,

25 licensed veterans establishment, licensed truck stop

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1 establishments, licensed technicians, and licensed terminal

2 handlers by the Board shall be: (1) valid for one year, unless

3 sooner cancelled or terminated, and (2) renewed annually upon a

4 determination by the Board that the licensee continues to meet

5 all of the requirements of this Act and the Board's rules.

6 (e) Upon expiration of the initial license, and for 3 years

7 thereafter, licenses issued to manufacturers, distributors,

8 suppliers, and terminal operators shall be: (1) valid for one

9 year, unless sooner cancelled or terminated, and (2) renewed

10 annually upon a determination by the Board that the licensee

11 continues to meet all of the requirements of this Act and the

12 Board's rules; thereafter, such licenses shall be (1) valid for

13 up to 4 years in the Board's discretion, and (2) renewed upon a

14 determination by the Board that the licensee continues to meet

15 all of the requirements of this Act and the Board's rules.

16 (f) Nothing in this Section shall prohibit the Board from

17 investigating any licensee to determine that the licensee

18 continues to meet all of the requirements of this Act and the

19 Board's rules.

20 (g) Licenses for manufacturers, distributors, suppliers,

21 terminal operators, licensed establishments, licensed

22 fraternal establishments, licensed veterans establishments,

23 and licensed truck stop establishments are not assignable or

24 transferrable without prior approval by the Board or as

25 provided by Board rule.

26 (Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09.)

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1 Section 99. Effective date. This Act takes effect upon

2 becoming law.