SB1654 96TH GENERAL ASSEMBLY

LRB096 11100 AMC 21448 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SB1654

Introduced 2/19/2009, by Sen. John J. Cullerton

SYNOPSIS AS INTRODUCED:

See Index

Amends the Illinois Lottery Law. Provides that the State may enter into a Management Agreement with a third party in which the third party is authorized to manage or operate the Lottery. Provides that the Department of Revenue shall create a pilot program that allows an individual to purchase Illinois lottery tickets or shares on the Internet without using a Lottery retailer with on-line status. Provides that only Lotto and Mega Million games offered by the Illinois Lottery may be offered through the program. Requires that, before beginning the pilot program, the Department of Revenue must seek a clarifying memo from the federal Department of Justice it is legal for Illinois residents and non-Illinois residents to purchase the private company to sell lottery tickets on the Internet on behalf of the State of Illinois under the federal Unlawful Internet Gambling Enforcement Act of 2006. Requires the Department to limit the individuals authorized to purchase the lottery tickets to individuals who are 18 years of age or older and Illinois residents, unless the clarifying memo from the federal Department of Justice indicates that it is legal for non-Illinois residents to purchase lottery tickets on the Internet. Contains provisions concerning verification of age and residency restrictions. Amends the Criminal Code of 1961. Provides that the exemption from conviction of gambling for lotteries when conducted by the State of Illinois in accordance with the Illinois Lottery Law 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. Provides that persons who purchase lottery tickets through the Internet in connection with the Department of Revenue's pilot program shall not be convicted of gambling. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning the lottery.

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

Section 5. The Illinois Lottery Law is amended by adding Sections 2, 2.1, 7.12, 7.15, and 7.16 as follows:

(20 ILCS 1605/2) (from Ch. 120, par. 1152)

Sec. 2. This Act is enacted to implement and establish within the State a lottery to be conducted operated by the State, through the Department, whether that lottery is operated and managed by the State or by a third party pursuant to a Management Agreement. The operations of a lottery are unique activities for State government, and private management will best enable the lottery to be operated in an entrepreneurial and business-like manner, thereby maximizing value for and benefit to the citizens of the State. Any such private manager shall be accountable to the State through a comprehensive system of State regulation and enduring operational oversight. The State's ongoing conduct of the Lottery throughout the term of the Management Agreement shall act to promote and ensure the integrity, security, honesty, and fairness of the Lottery's operation and administration. the entire net proceeds of which are to be used for the support of the State's Common School Fund, except as provided in Sections 21.2, 21.5, 21.6, 21.7, and 21.8.

(Source: P.A. 94-120, eff. 7-6-05; 94-585, eff. 8-15-05; 95-331, eff. 8-21-07; 95-673, eff. 10-11-07; 95-674, eff. 10-11-07; 95-876, eff. 8-21-08.)

(20 ILCS 1605/2.1 new)

Sec. 2.1. Sale of Lottery prohibited. Notwithstanding any provision of this Act or other applicable law to the contrary, the State may, pursuant to a competitive process, enter into a Management Agreement with a third party pursuant to which that party may be authorized to manage or operate the Lottery on behalf of the State, and further pursuant to which that party may receive certain Lottery revenues in consideration of the operation of the Lottery, provided that the Lottery is managed and operated in accordance with the provisions of this Act and that the State at all times retains control of the Lottery and exercises supervisory authority over the Lottery sufficient to implement the terms of the Management Agreement and to effect the purposes of this Act. The Lottery shall remain, for so long as a private manager manages and operates the Lottery in accordance with provisions of this Act, a Lottery conducted by the State, and the State shall not be authorized to sell or transfer the Lottery to a third party.

The Director is authorized to enter into a Management Agreement on behalf of the State on such terms as the Director shall determine, consistent with this amendatory Act of the 96th General Assembly. All of the acts of officials authorized by the State that are in conformity with the intent and purposes of this amendatory Act of the 96th General Assembly, whether heretofore or hereafter taken or done, shall be and are ratified, confirmed, authorized, and approved hereby in all respects. To the extent any provision of the Illinois Procurement Code or any other law is in conflict with this amendatory Act of the 96th General Assembly insofar as it relates to any Transaction Documents, the provisions of this amendatory Act shall be controlling.

(20 ILCS 1605/7.12 new)

Sec. 7.12. Internet pilot program. The Department shall create a pilot program that allows an individual to purchase lottery tickets or shares on the Internet without using a Lottery retailer with on-line status, as those terms are defined by rule. The Department shall adopt rules necessary for the administration of this program. The provisions of this Act and the rules adopted under this Act shall apply to the sale of lottery tickets or shares under this program.

Before beginning the pilot program, the Department of Revenue must seek a clarifying memo from the federal Department of Justice that it is legal for Illinois residents and non-Illinois residents to purchase and the private company to sell lottery tickets on the Internet on behalf of the State of Illinois under the federal Unlawful Internet Gambling Enforcement Act of 2006.

The Department shall limit the individuals authorized to purchase lottery tickets on the Internet to individuals who are 18 years of age or older and Illinois residents, unless the clarifying memo from the federal Department of Justice indicates that it is legal for non-Illinois residents to purchase lottery tickets on the Internet, and shall set a limitation on the monthly purchases that may be made through any one individual's lottery account. Only Lotto and Mega Million games offered by the Illinois Lottery may be offered through the pilot program.

The pilot program must be conducted pursuant to a contract with a private vendor that has the expertise, technical capability, and knowledge of the Illinois lottery marketplace to conduct the program. The Department of the Lottery must ensure cooperation from existing vendors for the program.

The pilot program shall last for not less than 36 months, but not more than 48 months.

Results from the pilot program in terms of sales and profits, as well as biannual reports as to market penetration and controls, shall be used in any calculation of the lottery's potential worth in the case of a lease or sale of the right to operate the lottery.

(20 ILCS 1605/7.15 new)

Sec. 7.15. Verification of age and residency for Internet program; security for Internet lottery accounts. The Department must establish a procedure to verify that an individual is 18 years of age or older and an Illinois resident before he or she may establish an Internet lottery account and purchase lottery tickets or shares through the Internet program. By rule, the Department shall establish funding procedures for Internet lottery accounts and shall provide a mechanism for each Internet lottery account to have a personal identification number to prevent the unauthorized use of Internet lottery accounts.

(20 ILCS 1605/7.16 new)

Sec. 7.16. Contracts. The contract with a private vendor to fulfill the program requirements must be separate from lottery contracts existing on the effective date of this Section.

The Department shall award contracts for the development and provision of technology and controls to ensure compliance with the age and residency requirements for the purchase of lottery tickets on the Internet pursuant to competitive bidding processes. The technology and controls must include appropriate data security standards to prevent unauthorized access to Internet lottery accounts.

Section 10. The Criminal Code of 1961 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:

(1) Plays a game of chance or skill for money or other thing of value, unless excepted in subsection (b) of this Section; or

(2) Makes a wager upon the result of any game, contest, or any political nomination, appointment or election; or

(3) Operates, keeps, owns, uses, purchases, exhibits, rents, sells, bargains for the sale or lease of, manufactures or distributes any gambling device; or

(4) Contracts to have or give himself 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); or

(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; or

(6) Sells pools upon the result of any game or contest of skill or chance, political nomination, appointment or election; or

(7) Sets up or promotes any lottery or sells, offers to sell or transfers any ticket or share for any lottery; or

(8) 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; or

(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; or

(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; or

(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.

(b) Participants in any of the following activities shall not be convicted of gambling therefor:

(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. ;

(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 or a third party pursuant to a Management Agreement with 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 when conducted in accordance with the Raffles 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. ; or

(11) Gambling games conducted on riverboats when authorized by the Riverboat Gambling Act.

(c) Sentence.

Gambling under subsection (a)(1) or (a)(2) of this Section is a Class A misdemeanor. Gambling under any of subsections (a)(3) through (a)(11) of this Section is a Class A misdemeanor. A second or subsequent conviction under any of subsections (a)(3) through (a)(11), is a Class 4 felony. Gambling under subsection (a)(12) of this Section is a Class A misdemeanor. A second or subsequent conviction under subsection (a)(12) is a Class 4 felony.

(d) Circumstantial evidence.

In prosecutions under subsection (a)(1) through (a)(12) of this Section circumstantial evidence shall have the same validity and weight as in any criminal prosecution.

(Source: P.A. 91-257, eff. 1-1-00.)

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