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Public Act 100-0647 |
HB5513 Enrolled | LRB100 20824 SMS 36316 b |
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AN ACT concerning gaming.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Illinois Lottery Law is amended by changing |
Sections 2, 9.1, and 20 and by adding Section 21.10 as follows:
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(20 ILCS 1605/2) (from Ch. 120, par. 1152)
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(Text of Section before amendment by P.A. 100-466 )
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Sec. 2. This Act is enacted to implement and establish |
within the State
a lottery to be conducted by the State through |
the Department. The entire net proceeds of the Lottery
are to |
be used for the support of the State's Common School Fund,
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except as provided in subsection (o) of Section 9.1 and |
Sections 21.5, 21.6, 21.7, 21.8, and 21.9 , and 21.10 . The |
General Assembly finds that it is in the public interest for |
the Department to conduct the functions of the Lottery with the |
assistance of a private manager under a management agreement |
overseen by the Department. The Department shall be accountable |
to the General Assembly and the people of the State through a |
comprehensive system of regulation, audits, reports, and |
enduring operational oversight. The Department's ongoing |
conduct of the Lottery through a management agreement with a |
private manager shall act to promote and ensure the integrity, |
security, honesty, and fairness of the Lottery's operation and |
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administration. It is the intent of the General Assembly that |
the Department shall conduct the Lottery with the assistance of |
a private manager under a management agreement at all times in |
a manner consistent with 18 U.S.C. 1307(a)(1), 1307(b)(1), |
1953(b)(4).
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(Source: P.A. 98-649, eff. 6-16-14; 99-933, eff. 1-27-17.)
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(Text of Section after amendment by P.A. 100-466 ) |
Sec. 2. This Act is enacted to implement and establish |
within the State
a lottery to be conducted by the State through |
the Department. The entire net proceeds of the Lottery
are to |
be used for the support of the State's Common School Fund,
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except as provided in subsection (o) of Section 9.1 and |
Sections 21.5, 21.6, 21.7, 21.8, and 21.9 , and 21.10 . The |
General Assembly finds that it is in the public interest for |
the Department to conduct the functions of the Lottery with the |
assistance of a private manager under a management agreement |
overseen by the Department. The Department shall be accountable |
to the General Assembly and the people of the State through a |
comprehensive system of regulation, audits, reports, and |
enduring operational oversight. The Department's ongoing |
conduct of the Lottery through a management agreement with a |
private manager shall act to promote and ensure the integrity, |
security, honesty, and fairness of the Lottery's operation and |
administration. It is the intent of the General Assembly that |
the Department shall conduct the Lottery with the assistance of |
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a private manager under a management agreement at all times in |
a manner consistent with 18 U.S.C. 1307(a)(1), 1307(b)(1), |
1953(b)(4).
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Beginning with Fiscal Year 2018 and every year thereafter, |
any moneys transferred from the State Lottery Fund to the |
Common School Fund shall be supplemental to, and not in lieu |
of, any other money due to be transferred to the Common School |
Fund by law or appropriation. |
(Source: P.A. 99-933, eff. 1-27-17; 100-466, eff. 6-1-18.)
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(20 ILCS 1605/9.1) |
Sec. 9.1. Private manager and management agreement. |
(a) As used in this Section: |
"Offeror" means a person or group of persons that responds |
to a request for qualifications under this Section. |
"Request for qualifications" means all materials and |
documents prepared by the Department to solicit the following |
from offerors: |
(1) Statements of qualifications. |
(2) Proposals to enter into a management agreement, |
including the identity of any prospective vendor or vendors |
that the offeror intends to initially engage to assist the |
offeror in performing its obligations under the management |
agreement. |
"Final offer" means the last proposal submitted by an |
offeror in response to the request for qualifications, |
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including the identity of any prospective vendor or vendors |
that the offeror intends to initially engage to assist the |
offeror in performing its obligations under the management |
agreement. |
"Final offeror" means the offeror ultimately selected by |
the Governor to be the private manager for the Lottery under |
subsection (h) of this Section. |
(b) By September 15, 2010, the Governor shall select a |
private manager for the total management of the Lottery with |
integrated functions, such as lottery game design, supply of |
goods and services, and advertising and as specified in this |
Section. |
(c) Pursuant to the terms of this subsection, the |
Department shall endeavor to expeditiously terminate the |
existing contracts in support of the Lottery in effect on the |
effective date of this amendatory Act of the 96th General |
Assembly in connection with the selection of the private |
manager. As part of its obligation to terminate these contracts |
and select the private manager, the Department shall establish |
a mutually agreeable timetable to transfer the functions of |
existing contractors to the private manager so that existing |
Lottery operations are not materially diminished or impaired |
during the transition. To that end, the Department shall do the |
following: |
(1) where such contracts contain a provision |
authorizing termination upon notice, the Department shall |
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provide notice of termination to occur upon the mutually |
agreed timetable for transfer of functions; |
(2) upon the expiration of any initial term or renewal |
term of the current Lottery contracts, the Department shall |
not renew such contract for a term extending beyond the |
mutually agreed timetable for transfer of functions; or |
(3) in the event any current contract provides for |
termination of that contract upon the implementation of a |
contract with the private manager, the Department shall |
perform all necessary actions to terminate the contract on |
the date that coincides with the mutually agreed timetable |
for transfer of functions. |
If the contracts to support the current operation of the |
Lottery in effect on the effective date of this amendatory Act |
of the 96th General Assembly are not subject to termination as |
provided for in this subsection (c), then the Department may |
include a provision in the contract with the private manager |
specifying a mutually agreeable methodology for incorporation. |
(c-5) The Department shall include provisions in the |
management agreement whereby the private manager shall, for a |
fee, and pursuant to a contract negotiated with the Department |
(the "Employee Use Contract"), utilize the services of current |
Department employees to assist in the administration and |
operation of the Lottery. The Department shall be the employer |
of all such bargaining unit employees assigned to perform such |
work for the private manager, and such employees shall be State |
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employees, as defined by the Personnel Code. Department |
employees shall operate under the same employment policies, |
rules, regulations, and procedures, as other employees of the |
Department. In addition, neither historical representation |
rights under the Illinois Public Labor Relations Act, nor |
existing collective bargaining agreements, shall be disturbed |
by the management agreement with the private manager for the |
management of the Lottery. |
(d) The management agreement with the private manager shall |
include all of the following: |
(1) A term not to exceed 10 years, including any |
renewals. |
(2) A provision specifying that the Department: |
(A) shall exercise actual control over all |
significant business decisions; |
(A-5) has the authority to direct or countermand |
operating decisions by the private manager at any time; |
(B) has ready access at any time to information |
regarding Lottery operations; |
(C) has the right to demand and receive information |
from the private manager concerning any aspect of the |
Lottery operations at any time; and |
(D) retains ownership of all trade names, |
trademarks, and intellectual property associated with |
the Lottery. |
(3) A provision imposing an affirmative duty on the |
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private manager to provide the Department with material |
information and with any information the private manager |
reasonably believes the Department would want to know to |
enable the Department to conduct the Lottery. |
(4) A provision requiring the private manager to |
provide the Department with advance notice of any operating |
decision that bears significantly on the public interest, |
including, but not limited to, decisions on the kinds of |
games to be offered to the public and decisions affecting |
the relative risk and reward of the games being offered, so |
the Department has a reasonable opportunity to evaluate and |
countermand that decision. |
(5) A provision providing for compensation of the |
private manager that may consist of, among other things, a |
fee for services and a performance based bonus as |
consideration for managing the Lottery, including terms |
that may provide the private manager with an increase in |
compensation if Lottery revenues grow by a specified |
percentage in a given year. |
(6) (Blank). |
(7) A provision requiring the deposit of all Lottery |
proceeds to be deposited into the State Lottery Fund except |
as otherwise provided in Section 20 of this Act. |
(8) A provision requiring the private manager to locate |
its principal office within the State. |
(8-5) A provision encouraging that at least 20% of the |
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cost of contracts entered into for goods and services by |
the private manager in connection with its management of |
the Lottery, other than contracts with sales agents or |
technical advisors, be awarded to businesses that are a |
minority-owned business, a women-owned business, or a |
business owned by a person with disability, as those terms |
are defined in the Business Enterprise for Minorities, |
Women, and Persons with Disabilities Act. |
(9) A requirement that so long as the private manager |
complies with all the conditions of the agreement under the |
oversight of the Department, the private manager shall have |
the following duties and obligations with respect to the |
management of the Lottery: |
(A) The right to use equipment and other assets |
used in the operation of the Lottery. |
(B) The rights and obligations under contracts |
with retailers and vendors. |
(C) The implementation of a comprehensive security |
program by the private manager. |
(D) The implementation of a comprehensive system |
of internal audits. |
(E) The implementation of a program by the private |
manager to curb compulsive gambling by persons playing |
the Lottery. |
(F) A system for determining (i) the type of |
Lottery games, (ii) the method of selecting winning |
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tickets, (iii) the manner of payment of prizes to |
holders of winning tickets, (iv) the frequency of |
drawings of winning tickets, (v) the method to be used |
in selling tickets, (vi) a system for verifying the |
validity of tickets claimed to be winning tickets, |
(vii) the basis upon which retailer commissions are |
established by the manager, and (viii) minimum |
payouts. |
(10) A requirement that advertising and promotion must |
be consistent with Section 7.8a of this Act. |
(11) A requirement that the private manager market the |
Lottery to those residents who are new, infrequent, or |
lapsed players of the Lottery, especially those who are |
most likely to make regular purchases on the Internet as |
permitted by law. |
(12) A code of ethics for the private manager's |
officers and employees. |
(13) A requirement that the Department monitor and |
oversee the private manager's practices and take action |
that the Department considers appropriate to ensure that |
the private manager is in compliance with the terms of the |
management agreement, while allowing the manager, unless |
specifically prohibited by law or the management |
agreement, to negotiate and sign its own contracts with |
vendors. |
(14) A provision requiring the private manager to |
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periodically file, at least on an annual basis, appropriate |
financial statements in a form and manner acceptable to the |
Department. |
(15) Cash reserves requirements. |
(16) Procedural requirements for obtaining the prior |
approval of the Department when a management agreement or |
an interest in a management agreement is sold, assigned, |
transferred, or pledged as collateral to secure financing. |
(17) Grounds for the termination of the management |
agreement by the Department or the private manager. |
(18) Procedures for amendment of the agreement. |
(19) A provision requiring the private manager to |
engage in an open and competitive bidding process for any |
procurement having a cost in excess of $50,000 that is not |
a part of the private manager's final offer. The process |
shall favor the selection of a vendor deemed to have |
submitted a proposal that provides the Lottery with the |
best overall value. The process shall not be subject to the |
provisions of the Illinois Procurement Code, unless |
specifically required by the management agreement. |
(20) The transition of rights and obligations, |
including any associated equipment or other assets used in |
the operation of the Lottery, from the manager to any |
successor manager of the lottery, including the |
Department, following the termination of or foreclosure |
upon the management agreement. |
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(21) Right of use of copyrights, trademarks, and |
service marks held by the Department in the name of the |
State. The agreement must provide that any use of them by |
the manager shall only be for the purpose of fulfilling its |
obligations under the management agreement during the term |
of the agreement. |
(22) The disclosure of any information requested by the |
Department to enable it to comply with the reporting |
requirements and information requests provided for under |
subsection (p) of this Section. |
(e) Notwithstanding any other law to the contrary, the |
Department shall select a private manager through a competitive |
request for qualifications process consistent with Section |
20-35 of the Illinois Procurement Code, which shall take into |
account: |
(1) the offeror's ability to market the Lottery to |
those residents who are new, infrequent, or lapsed players |
of the Lottery, especially those who are most likely to |
make regular purchases on the Internet; |
(2) the offeror's ability to address the State's |
concern with the social effects of gambling on those who |
can least afford to do so; |
(3) the offeror's ability to provide the most |
successful management of the Lottery for the benefit of the |
people of the State based on current and past business |
practices or plans of the offeror; and |
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(4) the offeror's poor or inadequate past performance |
in servicing, equipping, operating or managing a lottery on |
behalf of Illinois, another State or foreign government and |
attracting persons who are not currently regular players of |
a lottery. |
(f) The Department may retain the services of an advisor or |
advisors with significant experience in financial services or |
the management, operation, and procurement of goods, services, |
and equipment for a government-run lottery to assist in the |
preparation of the terms of the request for qualifications and |
selection of the private manager. Any prospective advisor |
seeking to provide services under this subsection (f) shall |
disclose any material business or financial relationship |
during the past 3 years with any potential offeror, or with a |
contractor or subcontractor presently providing goods, |
services, or equipment to the Department to support the |
Lottery. The Department shall evaluate the material business or |
financial relationship of each prospective advisor. The |
Department shall not select any prospective advisor with a |
substantial business or financial relationship that the |
Department deems to impair the objectivity of the services to |
be provided by the prospective advisor. During the course of |
the advisor's engagement by the Department, and for a period of |
one year thereafter, the advisor shall not enter into any |
business or financial relationship with any offeror or any |
vendor identified to assist an offeror in performing its |
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obligations under the management agreement. Any advisor |
retained by the Department shall be disqualified from being an |
offeror.
The Department shall not include terms in the request |
for qualifications that provide a material advantage whether |
directly or indirectly to any potential offeror, or any |
contractor or subcontractor presently providing goods, |
services, or equipment to the Department to support the |
Lottery, including terms contained in previous responses to |
requests for proposals or qualifications submitted to |
Illinois, another State or foreign government when those terms |
are uniquely associated with a particular potential offeror, |
contractor, or subcontractor. The request for proposals |
offered by the Department on December 22, 2008 as |
"LOT08GAMESYS" and reference number "22016176" is declared |
void. |
(g) The Department shall select at least 2 offerors as |
finalists to potentially serve as the private manager no later |
than August 9, 2010. Upon making preliminary selections, the |
Department shall schedule a public hearing on the finalists' |
proposals and provide public notice of the hearing at least 7 |
calendar days before the hearing. The notice must include all |
of the following: |
(1) The date, time, and place of the hearing. |
(2) The subject matter of the hearing. |
(3) A brief description of the management agreement to |
be awarded. |
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(4) The identity of the offerors that have been |
selected as finalists to serve as the private manager. |
(5) The address and telephone number of the Department. |
(h) At the public hearing, the Department shall (i) provide |
sufficient time for each finalist to present and explain its |
proposal to the Department and the Governor or the Governor's |
designee, including an opportunity to respond to questions |
posed by the Department, Governor, or designee and (ii) allow |
the public and non-selected offerors to comment on the |
presentations. The Governor or a designee shall attend the |
public hearing. After the public hearing, the Department shall |
have 14 calendar days to recommend to the Governor whether a |
management agreement should be entered into with a particular |
finalist. After reviewing the Department's recommendation, the |
Governor may accept or reject the Department's recommendation, |
and shall select a final offeror as the private manager by |
publication of a notice in the Illinois Procurement Bulletin on |
or before September 15, 2010. The Governor shall include in the |
notice a detailed explanation and the reasons why the final |
offeror is superior to other offerors and will provide |
management services in a manner that best achieves the |
objectives of this Section. The Governor shall also sign the |
management agreement with the private manager. |
(i) Any action to contest the private manager selected by |
the Governor under this Section must be brought within 7 |
calendar days after the publication of the notice of the |
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designation of the private manager as provided in subsection |
(h) of this Section. |
(j) The Lottery shall remain, for so long as a private |
manager manages the Lottery in accordance with provisions of |
this Act, a Lottery conducted by the State, and the State shall |
not be authorized to sell or transfer the Lottery to a third |
party. |
(k) Any tangible personal property used exclusively in |
connection with the lottery that is owned by the Department and |
leased to the private manager shall be owned by the Department |
in the name of the State and shall be considered to be public |
property devoted to an essential public and governmental |
function. |
(l) The Department may exercise any of its powers under |
this Section or any other law as necessary or desirable for the |
execution of the Department's powers under this Section. |
(m) Neither this Section nor any management agreement |
entered into under this Section prohibits the General Assembly |
from authorizing forms of gambling that are not in direct |
competition with the Lottery. |
(n) The private manager shall be subject to a complete |
investigation in the third, seventh, and tenth years of the |
agreement (if the agreement is for a 10-year term) by the |
Department in cooperation with the Auditor General to determine |
whether the private manager has complied with this Section and |
the management agreement. The private manager shall bear the |
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cost of an investigation or reinvestigation of the private |
manager under this subsection. |
(o) The powers conferred by this Section are in addition |
and supplemental to the powers conferred by any other law. If |
any other law or rule is inconsistent with this Section, |
including, but not limited to, provisions of the Illinois |
Procurement Code, then this Section controls as to any |
management agreement entered into under this Section. This |
Section and any rules adopted under this Section contain full |
and complete authority for a management agreement between the |
Department and a private manager. No law, procedure, |
proceeding, publication, notice, consent, approval, order, or |
act by the Department or any other officer, Department, agency, |
or instrumentality of the State or any political subdivision is |
required for the Department to enter into a management |
agreement under this Section. This Section contains full and |
complete authority for the Department to approve any contracts |
entered into by a private manager with a vendor providing |
goods, services, or both goods and services to the private |
manager under the terms of the management agreement, including |
subcontractors of such vendors. |
Upon receipt of a written request from the Chief |
Procurement Officer, the Department shall provide to the Chief |
Procurement Officer a complete and un-redacted copy of the |
management agreement or any contract that is subject to the |
Department's approval authority under this subsection (o). The |
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Department shall provide a copy of the agreement or contract to |
the Chief Procurement Officer in the time specified by the |
Chief Procurement Officer in his or her written request, but no |
later than 5 business days after the request is received by the |
Department. The Chief Procurement Officer must retain any |
portions of the management agreement or of any contract |
designated by the Department as confidential, proprietary, or |
trade secret information in complete confidence pursuant to |
subsection (g) of Section 7 of the Freedom of Information Act. |
The Department shall also provide the Chief Procurement Officer |
with reasonable advance written notice of any contract that is |
pending Department approval. |
Notwithstanding any other provision of this Section to the |
contrary, the Chief Procurement Officer shall adopt |
administrative rules, including emergency rules, to establish |
a procurement process to select a successor private manager if |
a private management agreement has been terminated. The |
selection process shall at a minimum take into account the |
criteria set forth in items (1) through (4) of subsection (e) |
of this Section and may include provisions consistent with |
subsections (f), (g), (h), and (i) of this Section. The Chief |
Procurement Officer shall also implement and administer the |
adopted selection process upon the termination of a private |
management agreement. The Department, after the Chief |
Procurement Officer certifies that the procurement process has |
been followed in accordance with the rules adopted under this |
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subsection (o), shall select a final offeror as the private |
manager and sign the management agreement with the private |
manager. |
Except as provided in Sections 21.5, 21.6, 21.7, 21.8, and |
21.9, and 21.10 the Department shall distribute all proceeds of |
lottery tickets and shares sold in the following priority and |
manner: |
(1) The payment of prizes and retailer bonuses. |
(2) The payment of costs incurred in the operation and |
administration of the Lottery, including the payment of |
sums due to the private manager under the management |
agreement with the Department. |
(3) On the last day of each month or as soon thereafter |
as possible, the State Comptroller shall direct and the |
State Treasurer shall transfer from the State Lottery Fund |
to the Common School Fund an amount that is equal to the |
proceeds transferred in the corresponding month of fiscal |
year 2009, as adjusted for inflation, to the Common School |
Fund. |
(4) On or before the last day of each fiscal year, |
deposit any remaining proceeds, subject to payments under |
items (1), (2), and (3) into the Capital Projects Fund each |
fiscal year. |
(p) The Department shall be subject to the following |
reporting and information request requirements: |
(1) the Department shall submit written quarterly |
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reports to the Governor and the General Assembly on the |
activities and actions of the private manager selected |
under this Section; |
(2) upon request of the Chief Procurement Officer, the |
Department shall promptly produce information related to |
the procurement activities of the Department and the |
private manager requested by the Chief Procurement |
Officer; the Chief Procurement Officer must retain |
confidential, proprietary, or trade secret information |
designated by the Department in complete confidence |
pursuant to subsection (g) of Section 7 of the Freedom of |
Information Act; and |
(3) at least 30 days prior to the beginning of the |
Department's fiscal year, the Department shall prepare an |
annual written report on the activities of the private |
manager selected under this Section and deliver that report |
to the Governor and General Assembly. |
(Source: P.A. 99-933, eff. 1-27-17; 100-391, eff. 8-25-17.)
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(20 ILCS 1605/20) (from Ch. 120, par. 1170)
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Sec. 20. State Lottery Fund.
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(a) There is created in the State Treasury a special fund |
to be
known as the "State Lottery Fund". Such fund shall |
consist of all revenues
received from (1) the sale of lottery |
tickets or shares, (net of
commissions, fees
representing those |
expenses that are directly proportionate to the
sale of tickets |
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or shares at the agent location, and prizes of less
than
$600 |
which
have been validly paid at the agent
level), (2) |
application fees,
and (3) all other sources including moneys |
credited or transferred thereto
from
any other fund
or source |
pursuant to law. Interest earnings of the State Lottery Fund
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shall be credited to the Common School Fund.
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(b) The receipt and distribution of moneys under Section |
21.5 of this Act shall be in accordance with Section 21.5.
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(c) The receipt and distribution of moneys under Section |
21.6 of this Act shall be in accordance with Section 21.6. |
(d) The receipt and distribution of moneys under Section |
21.7 of this Act shall be in accordance with Section 21.7.
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(e)
The receipt and distribution of moneys under Section |
21.8
of this Act shall be in accordance with Section 21.8.
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(f) The receipt and distribution of moneys under Section |
21.9 of this Act shall be in accordance with Section 21.9. |
(g) The receipt and distribution of moneys under Section |
21.10 of this Act shall be in accordance with Section 21.10. |
(Source: P.A. 98-649, eff. 6-16-14.)
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(20 ILCS 1605/21.10 new) |
Sec. 21.10. Scratch-off for State police memorials. |
(a) The Department shall offer a special instant |
scratch-off game for the benefit of State police memorials. The |
game shall commence on January 1, 2019 or as soon thereafter, |
at the discretion of the Director, as is reasonably practical. |
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The operation of the game shall be governed by this Act and any |
rules adopted by the Department. If any provision of this |
Section is inconsistent with any other provision of this Act, |
then this Section governs. |
(b) The net revenue from the State police memorials |
scratch-off game shall be deposited into the Criminal Justice |
Information Projects Fund and distributed equally, as soon as |
practical but at least on a monthly basis, to the Chicago |
Police Memorial Foundation Fund, the Police Memorial Committee |
Fund, and the Illinois State Police Memorial Park Fund. Moneys |
transferred to the funds under this Section shall be used, |
subject to appropriation, to fund grants for building and |
maintaining memorials and parks; holding annual memorial |
commemorations; giving scholarships to children of officers |
killed or catastrophically injured in the line of duty, or |
those interested in pursuing a career in law enforcement; |
providing financial assistance to police officers and their |
families when a police officer is killed or injured in the line |
of duty; and providing financial assistance to officers for the |
purchase or replacement of bullet proof vests to be used in the |
line of duty. |
For purposes of this subsection, "net revenue" means the |
total amount for which tickets have been sold less the sum of |
the amount paid out in the prizes and the actual administrative |
expenses of the Department solely related to the scratch-off |
game under this Section. |
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(c) During the time that tickets are sold for the State |
police memorials scratch-off game, the Department shall not |
unreasonably diminish the efforts devoted to marketing any |
other instant scratch-off lottery game. |
(d) The Department may adopt any rules necessary to |
implement and administer the provisions of this Section. |
Section 10. The Illinois Criminal Justice Information Act |
is amended by changing Section 9.1 as follows:
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(20 ILCS 3930/9.1)
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Sec. 9.1. Criminal Justice Information Projects Fund. The |
Criminal
Justice Information Projects Fund is hereby created as |
a special fund in the
State Treasury. Grants and other moneys |
obtained by the Authority from
governmental entities (other |
than the federal government), private sources, and
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not-for-profit organizations for use in investigating criminal |
justice issues
or undertaking other criminal justice |
information projects , or pursuant to the uses identified in |
Section 21.10 of the Illinois Lottery Law, shall be deposited
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into the Fund. Moneys in the Fund may be used by the Authority, |
subject to
appropriation, for undertaking such projects and for |
the operating and other
expenses of the Authority incidental to |
those projects. Any interest earned on moneys in the Fund must |
be deposited into the Fund.
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(Source: P.A. 88-538.)
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Section 95. No acceleration or delay. Where this Act makes |
changes in a statute that is represented in this Act by text |
that is not yet or no longer in effect (for example, a Section |
represented by multiple versions), the use of that text does |
not accelerate or delay the taking effect of (i) the changes |
made by this Act or (ii) provisions derived from any other |
Public Act.
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Section 99. Effective date. This Act takes effect upon |
becoming law. |