HB3633 100TH GENERAL ASSEMBLY

LRB100 08205 AMC 18302 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB3633

Introduced , by Rep. Michael J. Zalewski

SYNOPSIS AS INTRODUCED:

New Act
5 ILCS 80/4.31
305 ILCS 5/10-17.15
720 ILCS 5/28-1	from Ch. 38, par. 28-1

Creates the Fantasy Sports Contest Act to provide regulation of companies providing access to paid fantasy sports contests and protect Illinois consumers who play paid fantasy sports contests for prizes from unfair acts and practices that may arise in the gaming process. Provides for the licensure of fantasy sports contest operators by the Illinois Gaming Board. Contains provisions concerning definitions, applicability, authority of the Board, fantasy sports player accounts, data security requirements, restrictions on games offered, prohibited activities, advertising, withholding of delinquent child support, audits, annual reports, applications, background investigations, fees, imposition and distribution of a privilege tax, and limitations on taxation of fantasy sports contest operators. Amends the Regulatory Sunset Act to provide that the Fantasy Sports Contest Act is scheduled to be repealed on January 1, 2021. Amends the Public Aid Code to add a fantasy sports contest operator licensed under the Fantasy Sports Contest Act to the definition of "State gaming licensee" under provisions concerning certification to any State gaming licensee of past due child support. Amends the Criminal Code of 2012 to provide that participants in fantasy sports contests and participation in fantasy sports contests as defined and offered under the Fantasy Sports Contest Act shall not be convicted of gambling. Effective immediately.

CORRECTIONAL BUDGET AND IMPACT NOTE ACT MAY APPLY

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

Section 5. Legislative intent. This Act is designed to provide regulation of companies providing access to paid fantasy sports contests and protect Illinois consumers who play paid fantasy sports contests for prizes from unfair acts and practices that may arise in the gaming process. The regulation is also intended to protect the families of persons who play paid fantasy sports contests to the extent that they may be affected by unfair and deceptive practices that lead to unaffordable losses.

Section 10. Definitions. In this Act:

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

"Board" means the Illinois Gaming Board.

"Confidential information" means information related to the play of a fantasy sports contest by fantasy sports players obtained as a result of or by virtue of a person's employment with a fantasy sports contest operator.

"Entry fee" means the cash or cash equivalent paid by a fantasy sports player located in Illinois at the time of entry for participation in a fantasy sports contest.

"Fantasy sports contest" means any 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.

A fantasy sports contest in a game or contest that involves individual athletes from real-world professional athletic teams, such as football, baseball, basketball, hockey, soccer, and other team sports: (i) shall consist of individual athletes from at least 3 different real-world professional athletic teams and (ii) shall not have more than 4 individual athletes from a single real-world professional athletic team. However, the prohibition contained in item (ii) of this paragraph does not apply to a season-long fantasy sports contest.

"Fantasy sports contest operator" means any individual, partnership, corporation, or limited liability company 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 fantasy sports contests to persons.

"Fantasy sports contest platform" means any website, smart phone application, or other portal providing access to a fantasy sports contest.

"Fantasy sports contest revenues" means the amount of entry fees collected from fantasy sports players located in Illinois accepted by a fantasy sports contest operator that are not awarded as prizes to fantasy sports players.

"Fantasy sports player" means an individual 21 years of age or over who enters into a fantasy sports contest with an entry fee offered by a fantasy sports contest operator.

"Highly experienced fantasy sports player" means an individual who is at least 21 years of age and has (1) entered more than 1,000 contests offered by a single fantasy sports contest operator or (2) has won more than 3 prizes valued at $1,000 or more. Once a fantasy sports player is classified as a highly experienced fantasy sports player, a player shall remain classified as such.

"Minor" means an individual under 21 years of age.

"Prize" means anything of value, including money, contest credits, merchandise, or admission to another contest.

"Scripts" means commands that a fantasy sports contest-related computer program can execute that are created by fantasy sports players (or by third parties for the use of fantasy sports players) to automate processes on a fantasy sports contest platform.

"Season-long fantasy sports contest" means a fantasy sports contest offered by a fantasy sports contest operator that is conducted over an entire sports season where the entry fee is paid prior to the start of the season.

Section 15. Applicability. This Act and all rules adopted under the authority of this Act shall only apply to fantasy sports contests when an entry fee is paid by a fantasy sports player at the time of entry for participation in a fantasy sports contest.

Section 20. Authority of the Board.

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

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

(2) To adopt such rules as in its judgment may be necessary to protect or enhance the credibility and integrity of fantasy sports contests authorized by this Act and the regulatory process under this Act.

(3) To provide for the establishment and collection of all license and registration fees and taxes imposed by this Act and the rules issued pursuant to this Act. All license fees shall be deposited into the State Gaming Fund, and all taxes collected shall be deposited into the Education Assistance Fund.

(4) To suspend, revoke, or restrict licenses; to require the removal of a fantasy sports contest operator or an employee of a fantasy sports contest operator for a violation of this Act or a Board rule or for engaging in a fraudulent practice; and to impose civil penalties of up to $5,000 against individuals and up to $10,000 or an amount equal to the fantasy sports contest revenues, whichever is larger, against licensees for each violation of any provision of the Act, any rules adopted by the Board, any order of the Board, or any other action which, in the Board's discretion, is a detriment or impediment to fantasy sports contests.

(5) To provide for the levy and collection of penalties and fines for the violation of provisions of this Act and the rules adopted under this Act. All such fines and penalties shall be deposited into the State Gaming Fund.

(b) 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 to the public interest, safety, and welfare.

Section 25. Fantasy sports player accounts.

(a) A fantasy sports contest operator shall not allow a fantasy sports player to create more than one username or more than one account. A fantasy sports contest operator shall take commercially and technologically reasonable measures to verify a fantasy sports player's true identity and address. A fantasy sports contest operator shall implement and prominently publish procedures to terminate all accounts of a fantasy sports player that establishes or seeks to establish more than one username or more than one account, whether directly or by use of another person as a proxy. The procedures may allow a fantasy sports player that establishes or seeks to establish more than one username or more than one account to retain one account provided that the fantasy sports contest operator investigates and makes a good faith determination that the fantasy sports player's conduct was not intended to obtain a competitive advantage.

(b) Fantasy sports contest operators shall not allow fantasy sports players to use a proxy server for the purpose of misrepresenting their location in order to engage in fantasy sports contests.

(c) Fantasy sports contest operators shall implement and prominently publish procedures to terminate all accounts of any fantasy sports player that establishes or seeks to establish more than one username or more than one account, whether directly or by use of another person as a proxy. If an account is terminated for establishing or seeking to establish more than one username or more than one account, the account holder is prohibited from establishing another account with that fantasy sports contest operator.

(d) Fantasy sports contest operators shall take commercially and technologically reasonable measures to prevent one fantasy sports player from acting as a proxy for another. These measures shall include, without limitation, use of geolocation technologies to prevent simultaneous logins to a single account from geographically inconsistent locations.

Section 30. Protection of consumer funds on deposit and compliance with data security requirements.

(a) Fantasy sports contest operators shall comply with all applicable State and federal requirements for data security, including, but not limited to, age verification and location software.

(b) Funds in fantasy sports players' accounts shall be held in segregated accounts by the fantasy sports contest operators for the fantasy sports players that establish the accounts. Fantasy sports contest operators shall implement and prominently publish procedures that:

(1) prevent unauthorized withdrawals from fantasy sports player accounts by fantasy sports contest operators or others;

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

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

(c) Fantasy sports contest 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 fantasy sports contest platform used by that fantasy sports player to make deposits into a fantasy sports player account. A copy of a fantasy sports contest operator's procedures shall be submitted to the Board and any changes shall be submitted within 30 days.

(d) When a fantasy sports player account is closed, the fantasy sports contest 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 fantasy sports contest 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 fantasy sports contest 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 (d), a request for withdrawal shall be considered honored if it is processed by the fantasy sports contest operator, but delayed by a payment processor, a credit card issuer, or the custodian of the financial account.

(e) 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 fantasy sports contest operator within 5 business days, or 10 business days of submission of any tax reporting information required by law, unless the fantasy sports contest 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 contest who would have won the prize had the fantasy sports player with the closed account not participated.

(f) A fantasy sports contest 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 and by mail to the account holder's last known address. When a fantasy sports player account is closed due to inactivity, the fantasy sports contest operator shall 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 fantasy sports contest operator shall provide notice of the existence of funds to the fantasy sports player no less often than annually for 3 years. If the funds in a closed fantasy sports player account are for $5 or less, such notice shall be provided one time upon the closing of the account. Such notice shall be provided by email and by mail to the account holder's last known address and shall provide a process for claiming the funds. 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 fantasy sports contest operator to the Unclaimed Property Trust Fund in the Office of the State Treasurer.

(g) A fantasy sports contest 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 onboarding a new fantasy sports player shall not suffice.

(h) Fantasy sports player's deposits shall be limited to no more than $3,000 per quarter. However, a fantasy sports contest 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 $3,000 per quarter. Such procedures shall be submitted to the Board.

If established by a fantasy sports contest 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 fantasy sports contest operator's procedures shall provide for annual re-certification of a player's financial ability to afford losses.

Section 35. Restrictions on games offered by a fantasy sports contest operator.

(a) All fantasy sports contest operators, except fantasy sports contest operators who only offer season-long fantasy sports contests, shall develop games that are limited to beginner fantasy sports players and shall prohibit fantasy sports players who are not beginner fantasy sports players from participating in those games either directly or through another person as a proxy. A fantasy sports contest operator shall suspend the account of any fantasy sports player who is not a beginner fantasy sports player and attempts to enter a game limited to beginner fantasy sports players directly or through another person as a proxy and shall ban such individual from further play.

(b) All fantasy sports contest operators, except fantasy sports contest operators who only offer season-long fantasy sports contests, shall develop games in which highly experienced fantasy sports players cannot participate either directly or through another person as a proxy. A fantasy sports contest operator shall suspend the account of any highly experienced fantasy sports player who attempts to enter a game that excludes highly experienced fantasy sports players directly or through another person as a proxy and shall ban such individual from further play. Fantasy sports contest operators shall identify highly experienced fantasy sports players by a symbol attached to their username, or by other easily visible means, on all fantasy sports contest platforms.

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

(d) Fantasy sports contest operators shall restrict the number of entries into fantasy sports contests in the following manner:

(1) Fantasy sports contest operators shall not allow fantasy sports players to submit more than one entry in any fantasy sports contest involving 12 total entries or less.

(2) Fantasy sports contest operators shall not allow fantasy sports players to submit more than 2 entries in any fantasy sports contest involving 13 to 36 total entries.

(3) Fantasy sports contest operators shall not allow fantasy sports players to submit more than 3 entries in any fantasy sports contest involving 37 to 100 total entries.

(4) Fantasy sports contest operators shall not allow fantasy sports players to submit more than 3% of all entries in any contest involving more than 100 total entries.

(5) For all advertised fantasy sports contests, the fantasy sports contest operator shall prominently include information about the maximum number of entries that may be submitted for that contest.

(e) Fantasy sports contest operators shall allow individuals to restrict themselves from entering fantasy sports contests under this Act. These restrictions shall include, but not be limited to, (1) fantasy sports contest entry limits, (2) limiting play to fantasy sports contest with entry fees below an established limit, and (3) self-imposed deposit limits less than allowed under this Act. Fantasy sports contest 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.

Section 40. Prohibited activities by a fantasy sports contest operator.

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

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

(c) No fantasy sports contest operator shall allow a professional athlete whose individual statistics or performance may be used to determine any part of the outcome of any fantasy sports contest to enter fantasy sports contests in the sports in which he or she participates. A fantasy sports contest 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 fantasy sports contests to enter 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) Fantasy sports contest operators shall take commercially reasonable efforts to obtain lists of persons described in this subsection (c) for the purpose of implementing this subsection (c).

(2) Fantasy sports contest operators, upon learning of a violation of this subsection (c), shall bar the individual committing the violation from playing in any 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) Fantasy sports contest operators shall make these restrictions known to all affected individuals and corporate entities.

(d) No fantasy sports contest operator shall allow minors to create a fantasy sports contest account. Fantasy sports contest operators shall include age verification measures when establishing a fantasy sports contest account.

(e) No fantasy sports contest operator may extend credit to a fantasy sports player.

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

(g) A fantasy sports contest operator shall bar any individual or corporation found to be using an unauthorized script from playing in any fantasy sports contest by terminating the individual or corporate account and by banning that individual or corporation from further play.

(h) A fantasy sports contest operator shall not authorize scripts that provide a player with a competitive advantage over another player.

(i) For the purpose of subsections (f), (g), and (h) of this Section, a script shall be treated as offering a competitive advantage for reasons including, but not limited to, its potential use to:

(1) facilitate entry of multiple contests with a single line-up;

(2) facilitate changes in many line-ups at one time;

(3) facilitate use of commercial products designed and distributed by third parties to identify advantageous game strategies; or

(4) gather information about the performance of others for the purpose of identifying or entering contests against fantasy sports players who are less likely to be successful.

Section 45. Advertising.

(a) Advertisements of fantasy sports contest operators shall not depict (i) minors (other than professional athletes who may be minors), (ii) students, (iii) schools, colleges, or universities, or (iv) 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) Fantasy sports contest operators shall not advertise on school, college, or university campuses.

(c) Fantasy sports contest 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 50. Withholding of delinquent child support.

(a) From individual winnings of $600 or more that are subject to reporting to the Internal Revenue Service on Form 1099, a fantasy sports contest operator shall withhold up to the full amount of winnings necessary to pay the winner's past due child support amount as certified by the Department of Healthcare and Family Services under Section 10-17.15 of the Illinois Public Aid Code. Amounts withheld shall be paid to the Department of Healthcare and Family Services by the fantasy sports contest operator, as applicable. This process shall be accomplished as provided in 89 Ill. Adm. Code 160.70(q).

(b) For withholding of winnings, the fantasy sports contest operator shall be entitled to an administrative fee not to exceed the lesser of 4% of the total amount of cash winnings paid to the fantasy sports player or $150.

(c) In no event shall the total amount withheld from the cash payout exceed the total cash winnings claimed by the obligor. If the cash payout claimed is greater than the amount sufficient to satisfy the obligor's delinquent child support payments, the fantasy sports contest operator shall pay the obligor the remaining balance of the payout.

(d) Any fantasy sports player that knowingly claims winnings from a single fantasy sports contest in a manner to intentionally avoid reporting winnings to the Internal Revenue Service shall be guilty of a Class A misdemeanor. Fantasy sports contest operators shall take commercially and technologically reasonable measures to ensure fantasy sports players comply with all reporting requirements. If a fantasy sports contest operator reasonably believes that the fantasy sports player engaged in conduct that would constitute a violation of federal reporting requirements, the fantasy sports contest operator shall bar the individual committing the violation from playing in any fantasy sports contest by suspending the individual's account and banning such individual from further play until the individual provides the fantasy sports contest operator proof that the individual has resolved all compliance issues with the Internal Revenue Service.

(e) A fantasy sports contest operator who in good faith complies with the requirements of this Section shall not be liable to the gaming winner or any other individual or entity.

(f) Upon request of a fantasy sports contest operator under this Act, an agent of the Board (such as a gaming special agent employed by the Board, a State police officer, or a revenue agent) shall be responsible for notifying the person identified as being delinquent in child support payments that the fantasy sports contest operator is required by law to withhold all or a portion of his or her winnings. If given, this notification must be provided at the time the winnings are withheld.

(g) The provisions of this Section shall be operative on and after the date that rules are adopted by the Department of Healthcare and Family Services pursuant to Section 10-17.15 of the Illinois Public Aid Code.

(h) The delinquent child support required to be withheld under this Section has priority over any secured or unsecured claim on cash winnings, except claims for federal or State taxes that are required to be withheld under federal or State law.

Section 55. Audits. All fantasy sports contest operators with annual fantasy sports contest revenue of $100,000 or more shall annually be subject to an audit of the financial transactions and condition of the fantasy sports contest operator's total operations as they relate to the offering and operating of fantasy sports contests and to ensure compliance with all of the requirements in this Act. Fantasy sports contest operators with annual fantasy sports contest revenues less than $100,000 shall every 3 years be subject to an audit of the financial transactions and condition of the fantasy sports contest operator's total operations as they relate to the offering and operating of 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. Each certified public accountant must be registered in the State of Illinois under the Illinois Public Accounting Act. The compensation for each certified public accountant or independent testing laboratory shall be paid directly by the fantasy sports contest operator to the certified public accountant or independent testing laboratory. The audit shall be conducted and submitted to the Board by January 31 of each year.

Section 60. Annual reports. All fantasy sports contest operators licensed by the Board must annually submit a report to the Board no later than January 31 of each year. Information included in the report shall include:

(1) the number of fantasy sports player accounts with the fantasy sports contest operator; this shall be broken down between beginner fantasy sports players and highly experienced fantasy sports players;

(2) the number of new accounts established;

(3) the number of accounts closed;

(4) the total amount of entry fees received from fantasy sports players located in Illinois;

(5) the total amount of prizes awarded to fantasy sports players located in Illinois;

(6) the total amount of fantasy sports contest revenue;

(7) the number of fantasy sports players that are located in Illinois that requested deposit limit increases; and

(8) the number of deposit limit increases granted to fantasy sports players located in Illinois by the fantasy sports contest operator.

Section 65. Application for licensure; background investigation; fees.

(a) A qualified person may apply to the Board for a fantasy sports contest operator license to conduct 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 fantasy sports contest 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 fantasy sports contest operators with annual fantasy sports revenues less than $100,000, for up to 3 years.

(b) Each person seeking and possessing a license as a fantasy sports contest 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.

(c) Each person seeking and possessing a license as a fantasy sports contest 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 fantasy sports contest 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.

(d) 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.

(e) No person may be licensed as a fantasy sports contest 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 fantasy sports contests;

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

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

(f) 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 fantasy sports contests in this State.

(g) A fantasy sports contest 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 a fantasy sports contest operator license.

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

(1) Fantasy sports contest operator with annual

fantasy sports contest revenue greater

than $10,000,000..............................$25,000

(2) Fantasy sports contest operator with annual

fantasy sports contest revenue greater than

$5,000,000 but not more than $10,000,000......$12,500

(3) Fantasy sports contest operator with annual

fantasy sports contest revenue greater than

$1,000,000 but not more than $5,000,000........$7,500

(4) Fantasy sports contest operator with annual

fantasy sports contest revenue of at least

$100,000 but not more than $1,000,000..........$5,000

(5) Fantasy sports contest operator with annual

fantasy sports contest revenue less

than $100,000....................................$500

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

(1) Fantasy sports contest operator with annual

fantasy sports contest revenue greater

than $10,000,000..............................$50,000

(2) Fantasy sports contest operator with annual

fantasy sports contest revenue greater than

$5,000,000 but not more than $10,000,000......$25,000

(3) Fantasy sports contest operator with annual

fantasy sports contest revenue greater than

$1,000,000 but not more than $5,000,000.......$15,000

(4) Fantasy sports contest operator with annual

fantasy sports contest revenue of at least

$100,000 but not more than $1,000,000.........$10,000

(5) Fantasy sports contest operator with annual

fantasy sports contest revenue less

than $100,000..................................$1,500

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

(1) Fantasy sports contest operator with annual

fantasy sports contest revenue greater

than $10,000,000..............................$37,500

(2) Fantasy sports contest operator with annual

fantasy sports contest revenue greater than

$5,000,000 but not more than $10,000,000......$18,750

(3) Fantasy sports contest operator with annual

fantasy sports contest revenue greater than

$1,000,000 but no more than $5,000,000........$11,250

(4) Fantasy sports contest operator with annual

fantasy sports contest revenue of at least

$100,000 but not more than $1,000,000..........$7,500

(5) Fantasy sports contest operator with annual

fantasy sports contest revenue less

than $100,000..................................$1,125

Section 70. Distribution of license fees.

(a) All fees collected under Section 65 of this Act shall be deposited into the State Gaming Fund.

(b) Fees collected under Section 65 of this Act shall be used for the administration of this Act.

(c) All licenses issued by the Board under this Act are renewable every 2 years for fantasy sports contest operators with annual fantasy sports contest revenues of $100,000 or more and every 3 years for fantasy sports contest operators with annual fantasy sports contest revenues less than $100,000 unless sooner cancelled or terminated. No license issued under this Act is transferable or assignable.

Section 75. Imposition and distribution of tax.

(a) A privilege tax is imposed on persons engaged in the business of operating fantasy sports contests based on the fantasy sports contest revenues received by a fantasy sports contest operator licensed under this Act at the following graduated tax rates:

(1) 5% of annual fantasy sports contest revenues up to and including $1,000,000;

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

(3) 10% of annual fantasy sports contest revenues in excess of $3,000,000 but not exceeding $8,000,000;

(4) 15% of annual fantasy sports contest revenues in excess of $8,000,000 but not exceeding $15,000,000; and

(5) 22.5% of annual fantasy sports contest revenues in excess of $15,000,000;

(b) The taxes imposed by this Section shall be paid by the fantasy sports contest operator to the Board not later than the fifteenth day of every month for the previous month's privilege taxes. All payments not remitted when due shall be paid together with a penalty assessment on the unpaid balance at a rate of 1.5% per month.

(c) All of the tax collected under this Section shall be deposited into the Education Assistance Fund.

Section 80. Limitation on taxation of fantasy sports contest operators. Fantasy sports contest operators shall not be subjected to any excise tax, license tax, permit tax, privilege tax, or occupation tax that is imposed exclusively upon the licensee by the State or any political subdivision thereof, except as provided in this Act.

Section 900. The Regulatory Sunset Act is amended by changing Section 4.31 as follows:

(5 ILCS 80/4.31)

Sec. 4.31. Acts repealed on January 1, 2021. The following Acts are repealed on January 1, 2021:

The Crematory Regulation Act.

The Cemetery Oversight Act.

The Illinois Health Information Exchange and Technology Act.

The Radiation Protection Act of 1990.

The Fantasy Sports Contest Act.

(Source: P.A. 96-1041, eff. 7-14-10; 96-1331, eff. 7-27-10; incorporates P.A. 96-863, eff. 3-1-10; 97-333, eff. 8-12-11.)

Section 905. The Illinois Public Aid Code is amended by changing Section 10-17.15 as follows:

(305 ILCS 5/10-17.15)

Sec. 10-17.15. Certification of information to State gaming licensees.

(a) For purposes of this Section, "State gaming licensee" means, as applicable, an organization licensee or advance deposit wagering licensee licensed under the Illinois Horse Racing Act of 1975, an owners licensee licensed under the Riverboat Gambling Act, or a licensee that operates, under any law of this State, one or more facilities or gaming locations at which lawful gambling is authorized and licensed as provided in the Riverboat Gambling Act, or a fantasy sports contest operator licensed under the Fantasy Sports Contest Act.

(b) The Department may provide, by rule, for certification to any State gaming licensee of past due child support owed by a responsible relative under a support order entered by a court or administrative body of this or any other State on behalf of a resident or non-resident receiving child support services under this Article in accordance with the requirements of Title IV-D, Part D, of the Social Security Act. The State gaming licensee shall have the ability to withhold from winnings required to be reported to the Internal Revenue Service on Form W-2G, or, in the case of a fantasy sports contest operator, the ability to withhold from individual winnings of $600 or more that are subject to reporting to the Internal Revenue Service on Form 1099, up to the full amount of winnings necessary to pay the winner's past due child support. The rule shall provide for notice to and an opportunity to be heard by each responsible relative affected and any final administrative decision rendered by the Department shall be reviewed only under and in accordance with the Administrative Review Law.

(c) For withholding of winnings, the State gaming licensee shall be entitled to an administrative fee not to exceed the lesser of 4% of the total amount of cash winnings paid to the gambling winner or $150.

(d) In no event may the total amount withheld from the cash payout, including the administrative fee, exceed the total cash winnings claimed by the obligor. If the cash payout claimed is greater than the amount sufficient to satisfy the obligor's delinquent child support payments, the State gaming licensee shall pay the obligor the remaining balance of the payout, less the administrative fee authorized by subsection (c) of this Section, at the time it is claimed.

(e) A State gaming licensee who in good faith complies with the requirements of this Section shall not be liable to the gaming winner or any other individual or entity.

(Source: P.A. 98-318, eff. 8-12-13.)

Section 910. 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) of subsection (b) of this Section. This item (12) does not apply to activities referenced in item (15) 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) Fantasy sports contests and participation in fantasy sports contests as defined and offered 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.)

Section 999. Effective date. This Act takes effect upon becoming law.