Sen. Kwame Raoul

Filed: 5/17/2016

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 469

2    AMENDMENT NO. ______. Amend Senate Bill 469 by replacing
3everything after the enacting clause with the following:
 
4    "Section 1. Short title. This Act may be cited as the
5Fantasy Sports Contest Act.
 
6    Section 5. Legislative intent. This Act is designed to
7provide regulation of companies providing access to paid
8fantasy sports contests and protect Illinois consumers who play
9paid fantasy sports contests for prizes from unfair acts and
10practices that may arise in the gaming process. The regulation
11is also intended to protect the families of persons who play
12paid fantasy sports contests to the extent that they may be
13affected by unfair and deceptive practices that lead to
14unaffordable losses.
 
15    Section 10. Definitions. In this Act:

 

 

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1    "Beginner fantasy sports player" means an individual who is
2at least 21 years of age and who has entered fewer than 51
3fantasy sports contests offered by a single fantasy sports
4contest operator.
5    "Board" means the Illinois Gaming Board.
6    "Confidential information" means information related to
7the play of a fantasy sports contest by fantasy sports players
8obtained as a result of or by virtue of a person's employment
9with a fantasy sports contest operator.
10    "Entry fee" means the cash or cash equivalent paid by a
11fantasy sports player located in Illinois at the time of entry
12for participation in a fantasy sports contest.
13    "Fantasy sports contest" means any fantasy contest, in
14which:
15        (1) the value of all prizes and awards offered to
16    winning participants are established and made known to the
17    participants in advance of the contest and their value is
18    not determined by the number of participants or the amount
19    of any fees paid by those participants;
20        (2) all winning outcomes are determined predominantly
21    by accumulated statistical results of the performance of
22    individual athletes in real-world professional athletic
23    competitions; a professional athletic competition does not
24    include any amateur-level or collegiate-level sport; and
25        (3) no winning outcome is based on the score, point
26    spread, or any performance or performances of any single

 

 

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1    actual team or combination of such teams or solely on any
2    single performance of an individual athlete or player in
3    any single actual event.
4    A fantasy sports contest in a game or contest that involves
5individual athletes from real-world professional athletic
6teams, such as football, baseball, basketball, hockey, soccer,
7and other team sports: (i) shall consist of individual athletes
8from at least 3 different real-world professional athletic
9teams and (ii) shall not have more than 4 individual athletes
10from a single real-world professional athletic team. However,
11the prohibition contained in item (ii) of this paragraph does
12not apply to a season-long fantasy sports contest.
13    "Fantasy sports contest operator" means any individual,
14partnership, corporation, or limited liability company that
15engages in the business of offering, by means of the Internet,
16a smart phone application, or other similar electronic or
17digital media or communication technologies, multiple fantasy
18sports contests to persons.
19    "Fantasy sports contest platform" means any website, smart
20phone application, or other portal providing access to a
21fantasy sports contest.
22    "Fantasy sports contest revenues" means the amount of entry
23fees collected from fantasy sports players located in Illinois
24accepted by a fantasy sports contest operator that are not
25awarded as prizes to fantasy sports players.
26    "Fantasy sports player" means an individual 21 years of age

 

 

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1or over who enters into a fantasy sports contest with an entry
2fee offered by a fantasy sports contest operator.
3    "Highly experienced fantasy sports player" means an
4individual who is at least 21 years of age and has (1) entered
5more than 1,000 contests offered by a single fantasy sports
6contest operator or (2) has won more than 3 prizes valued at
7$1,000 or more. Once a fantasy sports player is classified as a
8highly experienced fantasy sports player, a player shall remain
9classified as such.
10    "Minor" means an individual under 21 years of age.
11    "Prize" means anything of value, including money, contest
12credits, merchandise, or admission to another contest.
13    "Scripts" means commands that a fantasy sports
14contest-related computer program can execute that are created
15by fantasy sports players (or by third parties for the use of
16fantasy sports players) to automate processes on a fantasy
17sports contest platform.
18    "Season-long fantasy sports contest" means a fantasy
19sports contest offered by a fantasy sports contest operator
20that is conducted over an entire sports season where the entry
21fee is paid prior to the start of the season.
 
22    Section 15. Applicability. This Act and all rules adopted
23under the authority of this Act shall only apply to fantasy
24sports contests when an entry fee is paid by a fantasy sports
25player at the time of entry for participation in a fantasy

 

 

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1sports contest.
 
2    Section 20. Authority of the Board.
3    (a) The Board shall have jurisdiction over and shall
4supervise all fantasy sports contests governed by this Act. The
5Board shall have all powers necessary and proper to fully and
6effectively execute the provisions of this Act, including, but
7not limited to, the following:
8        (1) To investigate applicants and determine the
9    eligibility of applicants for licenses that best serve the
10    interests of the citizens of Illinois.
11        (2) To adopt such rules as in its judgment may be
12    necessary to protect or enhance the credibility and
13    integrity of fantasy sports contests authorized by this Act
14    and the regulatory process under this Act.
15        (3) To provide for the establishment and collection of
16    all license and registration fees and taxes imposed by this
17    Act and the rules issued pursuant to this Act. All license
18    fees shall be deposited into the State Gaming Fund, and all
19    taxes collected shall be deposited into the Education
20    Assistance Fund.
21        (4) To suspend, revoke, or restrict licenses; to
22    require the removal of a fantasy sports contest operator or
23    an employee of a fantasy sports contest operator for a
24    violation of this Act or a Board rule or for engaging in a
25    fraudulent practice; and to impose civil penalties of up to

 

 

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1    $5,000 against individuals and up to $10,000 or an amount
2    equal to the daily fantasy sports contest revenues,
3    whichever is larger, against licensees for each violation
4    of any provision of the Act, any rules adopted by the
5    Board, any order of the Board, or any other action which,
6    in the Board's discretion, is a detriment or impediment to
7    fantasy sports contests.
8        (5) To provide for the levy and collection of penalties
9    and fines for the violation of provisions of this Act and
10    the rules adopted under this Act. All such fines and
11    penalties shall be deposited into the State Gaming Fund.
12    (b) The Board shall adopt emergency rules to administer
13this Act in accordance with Section 5-45 of the Illinois
14Administrative Procedure Act. For the purposes of the Illinois
15Administrative Procedure Act, the General Assembly finds that
16the adoption of rules to implement this Act is deemed an
17emergency and necessary to the public interest, safety, and
18welfare.
 
19    Section 25. Fantasy sports player accounts.
20    (a) A fantasy sports contest operator shall not allow a
21fantasy sports player to create more than one username or more
22than one account. A fantasy sports contest operator shall take
23commercially and technologically reasonable measures to verify
24a fantasy sports player's true identity and address. A fantasy
25sports contest operator shall implement and prominently

 

 

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1publish procedures to terminate all accounts of a fantasy
2sports player that establishes or seeks to establish more than
3one username or more than one account, whether directly or by
4use of another person as a proxy. The procedures may allow a
5fantasy sports player that establishes or seeks to establish
6more than one username or more than one account to retain one
7account provided that the fantasy sports contest operator
8investigates and makes a good faith determination that the
9fantasy sports player's conduct was not intended to obtain a
10competitive advantage.
11    (b) Fantasy sports contest operators shall not allow
12fantasy sports players to use a proxy server for the purpose of
13misrepresenting their location in order to engage in fantasy
14sports contests.
15    (c) Fantasy sports contest operators shall implement and
16prominently publish procedures to terminate all accounts of any
17fantasy sports player that establishes or seeks to establish
18more than one username or more than one account, whether
19directly or by use of another person as a proxy. If an account
20is terminated for establishing or seeking to establish more
21than one username or more than one account, the account holder
22is prohibited from establishing another account with that
23fantasy sports contest operator.
24    (d) Fantasy sports contest operators shall take
25commercially and technologically reasonable measures to
26prevent one fantasy sports player from acting as a proxy for

 

 

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1another. These measures shall include, without limitation, use
2of geolocation technologies to prevent simultaneous logins to a
3single account from geographically inconsistent locations.
 
4    Section 30. Protection of consumer funds on deposit and
5compliance with data security requirements.
6    (a) Fantasy sports contest operators shall comply with all
7applicable State and federal requirements for data security,
8including, but not limited to, age verification and location
9software.
10    (b) Funds in fantasy sports players' accounts shall be held
11in segregated accounts by the fantasy sports contest operators
12for the fantasy sports players that establish the accounts.
13Fantasy sports contest operators shall implement and
14prominently publish procedures that:
15        (1) prevent unauthorized withdrawals from fantasy
16    sports player accounts by fantasy sports contest operators
17    or others;
18        (2) prevent commingling of funds in a fantasy sports
19    player's account with other funds, including, without
20    limitation, funds of the fantasy sports contest operator;
21    fantasy sports player funds shall be segregated from
22    fantasy sports contest operators' operational funds and
23    any other funds held by the fantasy sports contest
24    operator; and
25        (3) address reporting on complaints by fantasy sports

 

 

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1    players that their accounts have been misallocated,
2    compromised, or otherwise mishandled.
3    (c) Fantasy sports contest operators shall implement and
4prominently publish procedures that allow any fantasy sports
5player to permanently close an account at any time and for any
6reason. The procedures shall allow for cancellation by any
7means, including, without limitation, by a fantasy sports
8player on any fantasy sports contest platform used by that
9fantasy sports player to make deposits into a fantasy sports
10player account. A copy of a fantasy sports contest operator's
11procedures shall be submitted to the Board and any changes
12shall be submitted within 30 days.
13    (d) When a fantasy sports player account is closed, the
14fantasy sports contest operator shall refund all funds in the
15account no later than 5 business days after submission of the
16request or 10 business days after submission of any tax
17reporting information required by law, whichever is later,
18unless the fantasy sports contest operator makes a good faith
19determination that the fantasy sports player engaged in
20fraudulent or other conduct that would constitute a violation
21of this Act, rules adopted pursuant to this Act, or the fantasy
22sports contest operator's policies, in which case, upon notice
23to the fantasy sports player of that determination, the
24withdrawal may be held pending a reasonable investigative
25period to resolve its investigation. For the purposes of this
26subsection (d), a request for withdrawal shall be considered

 

 

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1honored if it is processed by the fantasy sports contest
2operator, but delayed by a payment processor, a credit card
3issuer, or the custodian of the financial account.
4    (e) If a prize is awarded to a fantasy sports player with a
5closed account, that prize, to the extent it consists of funds,
6shall be distributed by the fantasy sports contest operator
7within 5 business days, or 10 business days of submission of
8any tax reporting information required by law, unless the
9fantasy sports contest operator makes a good faith
10determination that the fantasy sports player engaged in
11fraudulent or other conduct that would constitute a violation
12of this Act or rules adopted pursuant to this Act. If such
13determination is made, then the prize may be withheld, provided
14that it is then awarded to another fantasy sports player in the
15same contest who would have won the prize had the fantasy
16sports player with the closed account not participated.
17    (f) A fantasy sports contest operator shall close any
18fantasy player account that is inactive for 2 years and notify
19the account holder that the account has been closed by email
20and by mail to the account holder's last known address. When a
21fantasy sports player account is closed due to inactivity, the
22fantasy sports contest operator shall refund all funds in the
23fantasy sports player account within 30 days, subject to the
24receipt of any tax information required by law. In the event
25that funds in a closed fantasy sports player account exceed $5
26and cannot be refunded and remain unclaimed, the fantasy sports

 

 

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1contest operator shall provide notice of the existence of funds
2to the fantasy sports player no less often than annually for 3
3years. If the funds in a closed fantasy sports player account
4are for $5 or less, such notice shall be provided one time upon
5the closing of the account. Such notice shall be provided by
6email and by mail to the account holder's last known address
7and shall provide a process for claiming the funds. In the
8event that funds in a closed fantasy sports player account
9cannot be refunded and remain unclaimed by the fantasy sports
10player after 3 years, such funds shall be reported and
11delivered by the fantasy sports contest operator to the State
12Treasurer for deposit in the Unclaimed Property Trust Fund as
13reportable property under the Uniform Disposition of Unclaimed
14Property Act.
15    (g) A fantasy sports contest operator shall prominently
16publish all contractual terms and conditions and rules of
17general applicability that affect a fantasy sports player's
18account. Presentation of such terms, conditions, and rules at
19the time of onboarding a new fantasy sports player shall not
20suffice.
21    (h) Fantasy sports player's deposits shall be limited to no
22more than $3,000 per quarter. However, a fantasy sports contest
23operator may establish and prominently publish procedures for
24temporarily or permanently increasing a fantasy sports
25player's deposit limit, at the request of the fantasy sports
26player, above $3,000 per quarter. Such procedures shall be

 

 

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1submitted to the Board.
2    If established by a fantasy sports contest operator, such
3procedures shall include evaluation of information, including
4income or asset information, sufficient to establish that the
5fantasy sports player can afford losses that might result from
6gameplay at the deposit limit level requested.
7    When a temporary or permanent deposit level limit increase
8is approved, the fantasy sports contest operator's procedures
9shall provide for annual re-certification of a player's
10financial ability to afford losses.
 
11    Section 35. Restrictions on games offered by a fantasy
12sports contest operator.
13    (a) All fantasy sports contest operators, except fantasy
14sports contest operators who only offer season-long fantasy
15sports contests, shall develop games that are limited to
16beginner fantasy sports players and shall prohibit fantasy
17sports players who are not beginner fantasy sports players from
18participating in those games either directly or through another
19person as a proxy. A fantasy sports contest operator shall
20suspend the account of any fantasy sports player who is not a
21beginner fantasy sports player and attempts to enter a game
22limited to beginner fantasy sports players directly or through
23another person as a proxy and shall ban such individual from
24further play.
25    (b) All fantasy sports contest operators, except fantasy

 

 

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1sports contest operators who only offer season-long fantasy
2sports contests, shall develop games in which highly
3experienced fantasy sports players cannot participate either
4directly or through another person as a proxy. A fantasy sports
5contest operator shall suspend the account of any highly
6experienced fantasy sports player who attempts to enter a game
7that excludes highly experienced fantasy sports players
8directly or through another person as a proxy and shall ban
9such individual from further play. Fantasy sports contest
10operators shall identify highly experienced fantasy sports
11players by a symbol attached to their username, or by other
12easily visible means, on all fantasy sports contest platforms.
13    (c) Fantasy sports contest operators shall have
14prominently published rules that govern when each fantasy
15sports contest shall close or lock. Each fantasy sports contest
16operator shall also prominently disclose contest-specific
17information about the time that the contest closes or locks in
18connection with each contest offered. A fantasy sports contest
19operator shall strictly enforce all disclosed closing or lock
20times.
21    (d) Fantasy sports contest operators shall restrict the
22number of entries into fantasy sports contests in the following
23manner:
24        (1) Fantasy sports contest operators shall not allow
25    fantasy sports players to submit more than one entry in any
26    fantasy sports contest involving 12 total entries or less.

 

 

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1        (2) Fantasy sports contest operators shall not allow
2    fantasy sports players to submit more than 2 entries in any
3    fantasy sports contest involving 13 to 36 total entries.
4        (3) Fantasy sports contest operators shall not allow
5    fantasy sports players to submit more than 3 entries in any
6    fantasy sports contest involving 37 to 100 total entries.
7        (4) Fantasy sports contest operators shall not allow
8    fantasy sports players to submit more than 3% of all
9    entries in any contest involving more than 100 total
10    entries.
11        (5) For all advertised fantasy sports contests, the
12    fantasy sports contest operator shall prominently include
13    information about the maximum number of entries that may be
14    submitted for that contest.
15    (e) Fantasy sports contest operators shall allow
16individuals to restrict themselves from entering fantasy
17sports contests under this Act. These restrictions shall
18include, but not be limited to, (1) fantasy sports contest
19entry limits, (2) limiting play to fantasy sports contest with
20entry fees below an established limit, and (3) self-imposed
21deposit limits less than allowed under this Act. Fantasy sports
22contest operators shall implement and prominently publish
23procedures for fantasy sports players to implement the
24restrictions. Fantasy sports players shall have the option to
25adjust these limits to make them more restrictive of gameplay
26as often as they like, but shall not have the option to make

 

 

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1limits less restrictive of gameplay within 90 days after
2setting the limits.
 
3    Section 37. Fantasy sports contest disclosures. Fantasy
4sports contest operators, except fantasy sports contest
5operators who only offer season-long fantasy sports contests,
6must display for each fantasy sports contest the maximum
7percentage of the total entry fees to be retained by the
8fantasy sports contest operator. The maximum percentage
9retained shall be conspicuously displayed above, next to, or
10under the entry fee listed for each fantasy sports contest;
11however, a fantasy sports contest operator may satisfy this
12requirement by providing a hyperlink above, next to, or under
13the entry fee listed for each fantasy sports contest that will
14take the fantasy sports player directly to the maximum
15percentage of the total entry fees to be retained by the
16fantasy sports contest operator for that fantasy sports
17contest.
 
18    Section 40. Prohibited activities by a fantasy sports
19contest operator.
20    (a) No fantasy sports contest operator employee,
21principal, officer, director, or contractor shall play on any
22fantasy sports contest platform of any fantasy sports contest
23operator or play through another person as a proxy. For the
24purposes of this subsection (a), a contractor is limited to a

 

 

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1contractor who can access information of a fantasy sports
2contest operator related to the conduct of a fantasy sports
3contest that is not available to other fantasy sports players.
4Fantasy sports contest operators shall make these restrictions
5known to all affected individuals and corporate entities.
6    (b) No fantasy sports contest operator employee,
7principal, officer, director, or contractor shall disclose
8confidential information that may affect fantasy sports
9contest gameplay to any person permitted to engage in fantasy
10sports contest gameplay. Fantasy sports contest operators
11shall make these restrictions known to all affected individuals
12and corporate entities.
13    (c) No fantasy sports contest operator shall allow a
14professional athlete whose individual statistics or
15performance may be used to determine any part of the outcome of
16any fantasy sports contest to enter fantasy sports contests in
17the sports in which he or she participates. A fantasy sports
18contest operator shall take commercially reasonable efforts to
19prevent a sports agent, team employee, referee, or league
20official associated with any competition that is the subject of
21fantasy sports contests to enter fantasy sports contests in the
22sport in which he or she participates, nor shall such athlete,
23sports agent, team official, team representative, referee, or
24league official play through another person as a proxy.
25        (1) Fantasy sports contest operators shall take
26    commercially reasonable efforts to obtain lists of persons

 

 

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1    described in this subsection (c) for the purpose of
2    implementing this subsection (c).
3        (2) Fantasy sports contest operators, upon learning of
4    a violation of this subsection (c), shall bar the
5    individual committing the violation from playing in any
6    fantasy sports contest by suspending the individual's
7    account and banning the individual from further play, shall
8    terminate any existing promotional agreements with the
9    individual, and shall refuse to make any new promotional
10    agreements that compensate the individual.
11        (3) Fantasy sports contest operators shall make these
12    restrictions known to all affected individuals and
13    corporate entities.
14    (d) No fantasy sports contest operator shall allow minors
15to create a fantasy sports contest account. Fantasy sports
16contest operators shall include age verification measures when
17establishing a fantasy sports contest account.
18    (e) No fantasy sports contest operator may extend credit to
19a fantasy sports player.
20    (f) A fantasy sports contest operator shall not permit
21unauthorized scripts to be used on fantasy sports contest
22platforms and shall use commercially reasonable efforts to
23monitor for and to prevent use of such scripts.
24    (g) A fantasy sports contest operator shall bar any
25individual or corporation found to be using an unauthorized
26script from playing in any fantasy sports contest by

 

 

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1terminating the individual or corporate account and by banning
2that individual or corporation from further play.
3    (h) A fantasy sports contest operator shall not authorize
4scripts that provide a player with a competitive advantage over
5another player.
6    (i) For the purpose of subsections (f), (g), and (h) of
7this Section, a script shall be treated as offering a
8competitive advantage for reasons including, but not limited
9to, its potential use to:
10        (1) facilitate entry of multiple contests with a single
11    line-up;
12        (2) facilitate changes in many line-ups at one time;
13        (3) facilitate use of commercial products designed and
14    distributed by third parties to identify advantageous game
15    strategies; or
16        (4) gather information about the performance of others
17    for the purpose of identifying or entering contests against
18    fantasy sports players who are less likely to be
19    successful.
20    (j) A fantasy sports contest operator shall not offer a
21fantasy sports contest that involves an amateur-level or
22collegiate-level sport.
 
23    Section 45. Advertising.
24    (a) Advertisements of fantasy sports contest operators
25shall not depict (i) minors (other than professional athletes

 

 

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1who may be minors), (ii) students, (iii) schools, colleges, or
2universities, or (iv) school, college, or university settings.
3However, incidental depiction of non-featured minors or minors
4accompanying adults shall not be a violation of this subsection
5(a).
6    (b) Fantasy sports contest operators shall not advertise on
7school, college, or university campuses.
8    (c) Fantasy sports contest operators shall not advertise at
9amateur athletic competitions, except to the extent that those
10competitions are played in stadiums where professional
11competitions are held and where non-digital advertisements
12have been posted, erected, or otherwise displayed in a manner
13that would require substantial effort to remove.
 
14    Section 50. Withholding of delinquent child support.
15    (a) From individual winnings of $600 or more that are
16subject to reporting to the Internal Revenue Service on Form
171099, a fantasy sports contest operator shall withhold up to
18the full amount of winnings necessary to pay the winner's past
19due child support amount as certified by the Department of
20Healthcare and Family Services under Section 10-17.15 of the
21Illinois Public Aid Code. Amounts withheld shall be paid to the
22Department of Healthcare and Family Services by the fantasy
23sports contest operator, as applicable. This process shall be
24accomplished as provided in 89 Ill. Adm. Code 160.70(q).
25    (b) For withholding of winnings, the fantasy sports contest

 

 

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1operator shall be entitled to an administrative fee not to
2exceed the lesser of 4% of the total amount of cash winnings
3paid to the fantasy sports player or $150.
4    (c) In no event shall the total amount withheld from the
5cash payout exceed the total cash winnings claimed by the
6obligor. If the cash payout claimed is greater than the amount
7sufficient to satisfy the obligor's delinquent child support
8payments, the fantasy sports contest operator shall pay the
9obligor the remaining balance of the payout.
10    (d) Any fantasy sports player that knowingly claims
11winnings from a single fantasy sports contest in a manner to
12intentionally avoid reporting winnings to the Internal Revenue
13Service shall be guilty of a Class A misdemeanor. Fantasy
14sports contest operators shall take commercially and
15technologically reasonable measures to ensure fantasy sports
16players comply with all reporting requirements. If a fantasy
17sports contest operator reasonably believes that the fantasy
18sports player engaged in conduct that would constitute a
19violation of federal reporting requirements, the fantasy
20sports contest operator shall bar the individual committing the
21violation from playing in any fantasy sports contest by
22suspending the individual's account and banning such
23individual from further play until the individual provides the
24fantasy sports contest operator proof that the individual has
25resolved all compliance issues with the Internal Revenue
26Service.

 

 

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1    (e) A fantasy sports contest operator who in good faith
2complies with the requirements of this Section shall not be
3liable to the gaming winner or any other individual or entity.
4    (f) Upon request of a fantasy sports contest operator under
5this Act, an agent of the Board (such as a gaming special agent
6employed by the Board, a State police officer, or a revenue
7agent) shall be responsible for notifying the person identified
8as being delinquent in child support payments that the fantasy
9sports contest operator is required by law to withhold all or a
10portion of his or her winnings. If given, this notification
11must be provided at the time the winnings are withheld.
12    (g) The provisions of this Section shall be operative on
13and after the date that rules are adopted by the Department of
14Healthcare and Family Services pursuant to Section 10-17.15 of
15the Illinois Public Aid Code.
16    (h) The delinquent child support required to be withheld
17under this Section has priority over any secured or unsecured
18claim on cash winnings, except claims for federal or State
19taxes that are required to be withheld under federal or State
20law.
 
21    Section 55. Audits. All fantasy sports contest operators
22with annual fantasy sports contest revenue of $100,000 or more
23shall annually be subject to an audit of the financial
24transactions and condition of the fantasy sports contest
25operator's total operations as they relate to the offering and

 

 

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1operating of fantasy sports contests and to ensure compliance
2with all of the requirements in this Act. Fantasy sports
3contest operators with annual fantasy sports contest revenues
4less than $100,000 shall every 3 years be subject to an audit
5of the financial transactions and condition of the fantasy
6sports contest operator's total operations as they relate to
7the offering and operating of fantasy sports contests and to
8ensure compliance with all of the requirements in this Act. All
9audits and compliance engagements shall be conducted by
10certified public accountants or an independent testing
11laboratory approved by the Board. Each certified public
12accountant must be registered in the State of Illinois under
13the Illinois Public Accounting Act. The compensation for each
14certified public accountant or independent testing laboratory
15shall be paid directly by the fantasy sports contest operator
16to the certified public accountant or independent testing
17laboratory. The audit shall be conducted and submitted to the
18Board by January 31 of the year in which the audit is due.
 
19    Section 60. Annual reports. All fantasy sports contest
20operators licensed by the Board must annually submit a report
21to the Board no later than January 31 of each year. Information
22included in the report shall include:
23        (1) the number of fantasy sports player accounts with
24    the fantasy sports contest operator; this shall be broken
25    down between beginner fantasy sports players and highly

 

 

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1    experienced fantasy sports players;
2        (2) the number of new accounts established;
3        (3) the number of accounts closed;
4        (4) the total amount of entry fees received from
5    fantasy sports players located in Illinois;
6        (5) the total amount of prizes awarded to fantasy
7    sports players located in Illinois;
8        (6) the total amount of fantasy sports contest revenue;
9        (7) the number of fantasy sports players that are
10    located in Illinois that requested deposit limit
11    increases; and
12        (8) the number of deposit limit increases granted to
13    fantasy sports players located in Illinois by the fantasy
14    sports contest operator.
 
15    Section 65. Application for licensure; background
16investigation; fees.
17    (a) A qualified person may apply to the Board for a fantasy
18sports contest operator license to conduct fantasy sports
19contests as provided in this Act. The application shall be made
20on forms provided by the Board. The burden is upon each
21applicant to demonstrate suitability for licensure. Each
22fantasy sports contest operator shall be licensed by the Board.
23The Board may issue a license for a period of up to 2 years or,
24in the case of fantasy sports contest operators with annual
25fantasy sports revenues less than $100,000, for up to 3 years.

 

 

09900SB0469sam001- 24 -LRB099 03186 AMC 48825 a

1    (b) Each person seeking and possessing a license as a
2fantasy sports contest operator shall submit to a background
3investigation conducted by the Board with the assistance of the
4State Police or other law enforcement. To the extent that the
5corporate structure of the applicant allows, the background
6investigation shall include any or all of the following as the
7Board deems appropriate or as provided by rule: (i) each
8beneficiary of a trust, (ii) each partner of a partnership,
9(iii) each member of a limited liability company, (iv) each
10director and officer of a publicly or non-publicly held
11corporation, (v) each stockholder of a non-publicly held
12corporation, (vi) each stockholder of 5% or more of a publicly
13held corporation, or (vii) each stockholder of 5% or more in a
14parent or subsidiary corporation.
15    (c) Each person seeking and possessing a license as a
16fantasy sports contest operator shall disclose the identity of
17every person, association, trust, corporation, or limited
18liability company having a greater than 1% direct or indirect
19pecuniary interest in the fantasy sports contest operator for
20which the license is sought. If the disclosed entity is a
21trust, the application shall disclose the names and addresses
22of the beneficiaries; if a corporation, the names and addresses
23of all stockholders and directors; if a limited liability
24company, the names and addresses of all members; or if a
25partnership, the names and addresses of all partners, both
26general and limited.

 

 

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1    (d) All information, records, interviews, reports,
2statements, memoranda, or other data supplied to or used by the
3Board in the course of its review or investigation of an
4application for a license or a renewal under this Act shall be
5privileged and strictly confidential and shall be used only for
6the purpose of evaluating an applicant for a license or a
7renewal. The information, records, interviews, reports,
8statements, memoranda, or other data shall not be admissible as
9evidence nor discoverable in any action of any kind in any
10court or before any tribunal, board, agency, or person, except
11for any action deemed necessary by the Board.
12    (e) No person may be licensed as a fantasy sports contest
13operator if that person has been found by the Board to:
14        (1) have a background, including a criminal record,
15    reputation, habits, social or business associations, or
16    prior activities, that poses a threat to the public
17    interests of the State or to the security and integrity of
18    fantasy sports contests;
19        (2) create or enhance the dangers of unsuitable,
20    unfair, or illegal practices, methods, and activities in
21    the conduct of fantasy sports contests; or
22        (3) present questionable business practices and
23    financial arrangements incidental to the conduct of
24    fantasy sports contests.
25    (f) Any applicant for a license under this Act has the
26burden of proving his or her qualifications to the satisfaction

 

 

09900SB0469sam001- 26 -LRB099 03186 AMC 48825 a

1of the Board. The Board may adopt rules to establish additional
2qualifications and requirements to preserve the integrity and
3security of fantasy sports contests in this State.
4    (g) A fantasy sports contest operator that has been
5operating in Illinois for at least 6 months on December 23,
62015 may operate in Illinois until a final decision is rendered
7on the application for a fantasy sports contest operator
8license.
9    (h) A non-refundable application fee shall be paid at the
10time an application for a license is filed with the Board in
11the following amounts:
12    (1) Fantasy sports contest operator with annual
13        fantasy sports contest revenue greater
14        than $10,000,000..............................$25,000
15    (2) Fantasy sports contest operator with annual
16        fantasy sports contest revenue greater than
17        $5,000,000 but not more than $10,000,000......$12,500
18    (3) Fantasy sports contest operator with annual
19        fantasy sports contest revenue greater than
20        $1,000,000 but not more than $5,000,000........$7,500
21    (4) Fantasy sports contest operator with annual
22        fantasy sports contest revenue of at least
23        $100,000 but not more than $1,000,000..........$5,000
24    (5) Fantasy sports contest operator with annual
25        fantasy sports contest revenue less
26        than $100,000....................................$500

 

 

09900SB0469sam001- 27 -LRB099 03186 AMC 48825 a

1    (i) The Board shall establish a fee for each license not to
2exceed the following for the initial licensure period:
3    (1) Fantasy sports contest operator with annual
4        fantasy sports contest revenue greater
5        than $10,000,000..............................$50,000
6    (2) Fantasy sports contest operator with annual
7        fantasy sports contest revenue greater than
8        $5,000,000 but not more than $10,000,000......$25,000
9    (3) Fantasy sports contest operator with annual
10        fantasy sports contest revenue greater than
11        $1,000,000 but not more than $5,000,000.......$15,000
12    (4) Fantasy sports contest operator with annual
13        fantasy sports contest revenue of at least
14        $100,000 but not more than $1,000,000.........$10,000
15    (5) Fantasy sports contest operator with annual
16        fantasy sports contest revenue less
17        than $100,000..................................$1,500
18    (j) For subsequent licensure periods, the renewal fee shall
19not exceed the following:
20    (1) Fantasy sports contest operator with annual
21        fantasy sports contest revenue greater
22        than $10,000,000..............................$37,500
23    (2) Fantasy sports contest operator with annual
24        fantasy sports contest revenue greater than
25        $5,000,000 but not more than $10,000,000......$18,750
26    (3) Fantasy sports contest operator with annual

 

 

09900SB0469sam001- 28 -LRB099 03186 AMC 48825 a

1        fantasy sports contest revenue greater than
2        $1,000,000 but no more than $5,000,000........$11,250
3    (4) Fantasy sports contest operator with annual
4        fantasy sports contest revenue of at least
5        $100,000 but not more than $1,000,000..........$7,500
6    (5) Fantasy sports contest operator with annual
7        fantasy sports contest revenue less
8        than $100,000..................................$1,125
 
9    Section 70. Distribution of license fees.
10    (a) All fees collected under Section 65 of this Act shall
11be deposited into the State Gaming Fund.
12    (b) Fees collected under Section 65 of this Act shall be
13used for the administration of this Act.
14    (c) All licenses issued by the Board under this Act are
15renewable every 2 years for fantasy sports contest operators
16with annual fantasy sports contest revenues of $100,000 or more
17and every 3 years for fantasy sports contest operators with
18annual fantasy sports contest revenues less than $100,000
19unless sooner cancelled or terminated. No license issued under
20this Act is transferable or assignable.
 
21    Section 75. Imposition and distribution of tax.
22    (a) A privilege tax is imposed on persons engaged in the
23business of operating fantasy sports contests based on the
24fantasy sports contest revenues received by a fantasy sports

 

 

09900SB0469sam001- 29 -LRB099 03186 AMC 48825 a

1contest operator licensed under this Act at the following
2graduated tax rates:
3        (1) 5% of annual fantasy sports contest revenues up to
4    and including $1,000,000;
5        (2) 7.5% of annual fantasy sports contest revenues in
6    excess of $1,000,000 but not exceeding $3,000,000;
7        (3) 10% of annual fantasy sports contest revenues in
8    excess of $3,000,000 but not exceeding $8,000,000;
9        (4) 15% of annual fantasy sports contest revenues in
10    excess of $8,000,000 but not exceeding $15,000,000;
11        (5) 22.5% of annual fantasy sports contest revenues in
12    excess of $15,000,000 but not exceeding $25,000,000; and
13        (6) 30% of annual fantasy sports contest revenues in
14    excess of $25,000,000.
15     (b) The taxes imposed by this Section shall be paid by the
16fantasy sports contest operator to the Board not later than the
17fifteenth day of every month for the previous month's privilege
18taxes. All payments not remitted when due shall be paid
19together with a penalty assessment on the unpaid balance at a
20rate of 1.5% per month.
21    (c) All of the tax collected under this Section shall be
22deposited into the Education Assistance Fund.
 
23    Section 80. Limitation on taxation of fantasy sports
24contest operators. Fantasy sports contest operators shall not
25be subjected to any excise tax, license tax, permit tax,

 

 

09900SB0469sam001- 30 -LRB099 03186 AMC 48825 a

1privilege tax, or occupation tax that is imposed exclusively
2upon the licensee by the State or any political subdivision
3thereof, except as provided in this Act.
 
4    Section 900. The Regulatory Sunset Act is amended by
5changing Section 4.30 as follows:
 
6    (5 ILCS 80/4.30)
7    Sec. 4.30. Acts repealed on January 1, 2020. The following
8Acts are repealed on January 1, 2020:
9    The Auction License Act.
10    The Community Association Manager Licensing and
11Disciplinary Act.
12    The Illinois Architecture Practice Act of 1989.
13    The Illinois Landscape Architecture Act of 1989.
14    The Illinois Professional Land Surveyor Act of 1989.
15    The Land Sales Registration Act of 1999.
16    The Orthotics, Prosthetics, and Pedorthics Practice Act.
17    The Perfusionist Practice Act.
18    The Professional Engineering Practice Act of 1989.
19    The Real Estate License Act of 2000.
20    The Structural Engineering Practice Act of 1989.
21    The Fantasy Sports Contest Act.
22(Source: P.A. 96-610, eff. 8-24-09; 96-626, eff. 8-24-09;
2396-682, eff. 8-25-09; 96-726, eff. 7-1-10; 96-730, eff.
248-25-09; 96-855, eff. 12-31-09; 96-856, eff. 12-31-09;

 

 

09900SB0469sam001- 31 -LRB099 03186 AMC 48825 a

196-1000, eff. 7-2-10.)
 
2    Section 905. The Illinois Public Aid Code is amended by
3changing Section 10-17.15 as follows:
 
4    (305 ILCS 5/10-17.15)
5    Sec. 10-17.15. Certification of information to State
6gaming licensees.
7    (a) For purposes of this Section, "State gaming licensee"
8means, as applicable, an organization licensee or advance
9deposit wagering licensee licensed under the Illinois Horse
10Racing Act of 1975, an owners licensee licensed under the
11Riverboat Gambling Act, or a licensee that operates, under any
12law of this State, one or more facilities or gaming locations
13at which lawful gambling is authorized and licensed as provided
14in the Riverboat Gambling Act, or a fantasy sports contest
15operator licensed under the Fantasy Sports Contest Act.
16    (b) The Department may provide, by rule, for certification
17to any State gaming licensee of past due child support owed by
18a responsible relative under a support order entered by a court
19or administrative body of this or any other State on behalf of
20a resident or non-resident receiving child support services
21under this Article in accordance with the requirements of Title
22IV-D, Part D, of the Social Security Act. The State gaming
23licensee shall have the ability to withhold from winnings
24required to be reported to the Internal Revenue Service on Form

 

 

09900SB0469sam001- 32 -LRB099 03186 AMC 48825 a

1W-2G or, in the case of a fantasy sports contest operator, the
2ability to withhold from individual winnings of $600 or more
3that are subject to reporting to the Internal Revenue Service
4on Form 1099, up to the full amount of winnings necessary to
5pay the winner's past due child support. The rule shall provide
6for notice to and an opportunity to be heard by each
7responsible relative affected and any final administrative
8decision rendered by the Department shall be reviewed only
9under and in accordance with the Administrative Review Law.
10    (c) For withholding of winnings, the State gaming licensee
11shall be entitled to an administrative fee not to exceed the
12lesser of 4% of the total amount of cash winnings paid to the
13gambling winner or $150.
14    (d) In no event may the total amount withheld from the cash
15payout, including the administrative fee, exceed the total cash
16winnings claimed by the obligor. If the cash payout claimed is
17greater than the amount sufficient to satisfy the obligor's
18delinquent child support payments, the State gaming licensee
19shall pay the obligor the remaining balance of the payout, less
20the administrative fee authorized by subsection (c) of this
21Section, at the time it is claimed.
22    (e) A State gaming licensee who in good faith complies with
23the requirements of this Section shall not be liable to the
24gaming winner or any other individual or entity.
25(Source: P.A. 98-318, eff. 8-12-13.)
 

 

 

09900SB0469sam001- 33 -LRB099 03186 AMC 48825 a

1    Section 910. The Criminal Code of 2012 is amended by
2changing Section 28-1 as follows:
 
3    (720 ILCS 5/28-1)  (from Ch. 38, par. 28-1)
4    Sec. 28-1. Gambling.
5    (a) A person commits gambling when he or she:
6        (1) knowingly plays a game of chance or skill for money
7    or other thing of value, unless excepted in subsection (b)
8    of this Section;
9        (2) knowingly makes a wager upon the result of any
10    game, contest, or any political nomination, appointment or
11    election;
12        (3) knowingly operates, keeps, owns, uses, purchases,
13    exhibits, rents, sells, bargains for the sale or lease of,
14    manufactures or distributes any gambling device;
15        (4) contracts to have or give himself or herself or
16    another the option to buy or sell, or contracts to buy or
17    sell, at a future time, any grain or other commodity
18    whatsoever, or any stock or security of any company, where
19    it is at the time of making such contract intended by both
20    parties thereto that the contract to buy or sell, or the
21    option, whenever exercised, or the contract resulting
22    therefrom, shall be settled, not by the receipt or delivery
23    of such property, but by the payment only of differences in
24    prices thereof; however, the issuance, purchase, sale,
25    exercise, endorsement or guarantee, by or through a person

 

 

09900SB0469sam001- 34 -LRB099 03186 AMC 48825 a

1    registered with the Secretary of State pursuant to Section
2    8 of the Illinois Securities Law of 1953, or by or through
3    a person exempt from such registration under said Section
4    8, of a put, call, or other option to buy or sell
5    securities which have been registered with the Secretary of
6    State or which are exempt from such registration under
7    Section 3 of the Illinois Securities Law of 1953 is not
8    gambling within the meaning of this paragraph (4);
9        (5) knowingly owns or possesses any book, instrument or
10    apparatus by means of which bets or wagers have been, or
11    are, recorded or registered, or knowingly possesses any
12    money which he has received in the course of a bet or
13    wager;
14        (6) knowingly sells pools upon the result of any game
15    or contest of skill or chance, political nomination,
16    appointment or election;
17        (7) knowingly sets up or promotes any lottery or sells,
18    offers to sell or transfers any ticket or share for any
19    lottery;
20        (8) knowingly sets up or promotes any policy game or
21    sells, offers to sell or knowingly possesses or transfers
22    any policy ticket, slip, record, document or other similar
23    device;
24        (9) knowingly drafts, prints or publishes any lottery
25    ticket or share, or any policy ticket, slip, record,
26    document or similar device, except for such activity

 

 

09900SB0469sam001- 35 -LRB099 03186 AMC 48825 a

1    related to lotteries, bingo games and raffles authorized by
2    and conducted in accordance with the laws of Illinois or
3    any other state or foreign government;
4        (10) knowingly advertises any lottery or policy game,
5    except for such activity related to lotteries, bingo games
6    and raffles authorized by and conducted in accordance with
7    the laws of Illinois or any other state;
8        (11) knowingly transmits information as to wagers,
9    betting odds, or changes in betting odds by telephone,
10    telegraph, radio, semaphore or similar means; or knowingly
11    installs or maintains equipment for the transmission or
12    receipt of such information; except that nothing in this
13    subdivision (11) prohibits transmission or receipt of such
14    information for use in news reporting of sporting events or
15    contests; or
16        (12) knowingly establishes, maintains, or operates an
17    Internet site that permits a person to play a game of
18    chance or skill for money or other thing of value by means
19    of the Internet or to make a wager upon the result of any
20    game, contest, political nomination, appointment, or
21    election by means of the Internet. This item (12) does not
22    apply to activities referenced in items (6) and (6.1) of
23    subsection (b) of this Section. This item (12) does not
24    apply to activities referenced in item (15) subsection (b)
25    of this Section.
26    (b) Participants in any of the following activities shall

 

 

09900SB0469sam001- 36 -LRB099 03186 AMC 48825 a

1not be convicted of gambling:
2        (1) Agreements to compensate for loss caused by the
3    happening of chance including without limitation contracts
4    of indemnity or guaranty and life or health or accident
5    insurance.
6        (2) Offers of prizes, award or compensation to the
7    actual contestants in any bona fide contest for the
8    determination of skill, speed, strength or endurance or to
9    the owners of animals or vehicles entered in such contest.
10        (3) Pari-mutuel betting as authorized by the law of
11    this State.
12        (4) Manufacture of gambling devices, including the
13    acquisition of essential parts therefor and the assembly
14    thereof, for transportation in interstate or foreign
15    commerce to any place outside this State when such
16    transportation is not prohibited by any applicable Federal
17    law; or the manufacture, distribution, or possession of
18    video gaming terminals, as defined in the Video Gaming Act,
19    by manufacturers, distributors, and terminal operators
20    licensed to do so under the Video Gaming Act.
21        (5) The game commonly known as "bingo", when conducted
22    in accordance with the Bingo License and Tax Act.
23        (6) Lotteries when conducted by the State of Illinois
24    in accordance with the Illinois Lottery Law. This exemption
25    includes any activity conducted by the Department of
26    Revenue to sell lottery tickets pursuant to the provisions

 

 

09900SB0469sam001- 37 -LRB099 03186 AMC 48825 a

1    of the Illinois Lottery Law and its rules.
2        (6.1) The purchase of lottery tickets through the
3    Internet for a lottery conducted by the State of Illinois
4    under the program established in Section 7.12 of the
5    Illinois Lottery Law.
6        (7) Possession of an antique slot machine that is
7    neither used nor intended to be used in the operation or
8    promotion of any unlawful gambling activity or enterprise.
9    For the purpose of this subparagraph (b)(7), an antique
10    slot machine is one manufactured 25 years ago or earlier.
11        (8) Raffles and poker runs when conducted in accordance
12    with the Raffles and Poker Runs Act.
13        (9) Charitable games when conducted in accordance with
14    the Charitable Games Act.
15        (10) Pull tabs and jar games when conducted under the
16    Illinois Pull Tabs and Jar Games Act.
17        (11) Gambling games conducted on riverboats when
18    authorized by the Riverboat Gambling Act.
19        (12) Video gaming terminal games at a licensed
20    establishment, licensed truck stop establishment, licensed
21    fraternal establishment, or licensed veterans
22    establishment when conducted in accordance with the Video
23    Gaming Act.
24        (13) Games of skill or chance where money or other
25    things of value can be won but no payment or purchase is
26    required to participate.

 

 

09900SB0469sam001- 38 -LRB099 03186 AMC 48825 a

1        (14) Savings promotion raffles authorized under
2    Section 5g of the Illinois Banking Act, Section 7008 of the
3    Savings Bank Act, Section 42.7 of the Illinois Credit Union
4    Act, Section 5136B of the National Bank Act (12 U.S.C.
5    25a), or Section 4 of the Home Owners' Loan Act (12 U.S.C.
6    1463).
7        (15) Fantasy sports contests and participation in
8    fantasy sports contests as defined and offered under the
9    Fantasy Sports Contest Act.
10    (c) Sentence.
11    Gambling is a Class A misdemeanor. A second or subsequent
12conviction under subsections (a)(3) through (a)(12), is a Class
134 felony.
14    (d) Circumstantial evidence.
15    In prosecutions under this Section circumstantial evidence
16shall have the same validity and weight as in any criminal
17prosecution.
18(Source: P.A. 98-644, eff. 6-10-14; 99-149, eff. 1-1-16.)
 
19    Section 999. Effective date. This Act takes effect upon
20becoming law.".