Bill Text: IL HB5035 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Amends the Video Gaming Act. Creates a sales agent and broker license to solicit or receive business from current or potential establishments licensed under the Act. Provides that a person may not solicit the signing of a use agreement on behalf of a terminal operator or enter into a use agreement as agent of a terminal operator unless that person either has a valid sales agent and broker license or owns, manages, or significantly influences or controls the terminal operator. Provides the fee for the issuance and renewal for the sales agent and broker license. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2020-06-23 - Rule 19(b) / Re-referred to Rules Committee [HB5035 Detail]

Download: Illinois-2019-HB5035-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 HB5035 Introduced , by Rep. Robert Rita SYNOPSIS AS INTRODUCED:
230 ILCS 40/5
230 ILCS 40/25
230 ILCS 40/30
230 ILCS 40/45
Amends the Video Gaming Act. Creates a sales agent and broker license to solicit or receive business from current or potential establishments licensed under the Act. Provides that a person may not solicit the signing of a use agreement on behalf of a terminal operator or enter into a use agreement as agent of a terminal operator unless that person either has a valid sales agent and broker license or owns, manages, or significantly influences or controls the terminal operator. Provides the fee for the issuance and renewal for the sales agent and broker license. Effective immediately.
LRB101 19604 SMS 69081 b
FISCAL NOTE ACT MAY APPLY
A BILL FOR
HB5035 LRB101 19604 SMS 69081 b
AN ACT concerning gaming.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 20. The Video Gaming Act is amended by changing
Sections 5, 25, 30, and 45 as follows:
(230 ILCS 40/5)
Sec. 5. Definitions. As used in this Act:
"Board" means the Illinois Gaming Board.
"Credit" means one, 5, 10, or 25 cents either won or
purchased by a player.
"Distributor" means an individual, partnership,
corporation, or limited liability company licensed under this
Act to buy, sell, lease, or distribute video gaming terminals
or major components or parts of video gaming terminals to or
from terminal operators.
"Electronic card" means a card purchased from a licensed
establishment, licensed fraternal establishment, licensed
veterans establishment, licensed truck stop establishment, or
licensed large truck stop establishment for use in that
establishment as a substitute for cash in the conduct of gaming
on a video gaming terminal.
"Electronic voucher" means a voucher printed by an
electronic video game machine that is redeemable in the

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licensed establishment for which it was issued.
"In-location bonus jackpot" means one or more video gaming
terminals at a single licensed establishment that allows for
wagers placed on such video gaming terminals to contribute to a
cumulative maximum jackpot of up to $10,000.
"Terminal operator" means an individual, partnership,
corporation, or limited liability company that is licensed
under this Act and that owns, services, and maintains video
gaming terminals for placement in licensed establishments,
licensed truck stop establishments, licensed large truck stop
establishments, licensed fraternal establishments, or licensed
veterans establishments.
"Licensed technician" means an individual who is licensed
under this Act to repair, service, and maintain video gaming
terminals.
"Licensed terminal handler" means a person, including but
not limited to an employee or independent contractor working
for a manufacturer, distributor, supplier, technician, or
terminal operator, who is licensed under this Act to possess or
control a video gaming terminal or to have access to the inner
workings of a video gaming terminal. A licensed terminal
handler does not include an individual, partnership,
corporation, or limited liability company defined as a
manufacturer, distributor, supplier, technician, or terminal
operator under this Act.
"Manufacturer" means an individual, partnership,

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corporation, or limited liability company that is licensed
under this Act and that manufactures or assembles video gaming
terminals.
"Supplier" means an individual, partnership, corporation,
or limited liability company that is licensed under this Act to
supply major components or parts to video gaming terminals to
licensed terminal operators.
"Net terminal income" means money put into a video gaming
terminal minus credits paid out to players.
"Video gaming terminal" means any electronic video game
machine that, upon insertion of cash, electronic cards or
vouchers, or any combination thereof, is available to play or
simulate the play of a video game, including but not limited to
video poker, line up, and blackjack, as authorized by the Board
utilizing a video display and microprocessors in which the
player may receive free games or credits that can be redeemed
for cash. The term does not include a machine that directly
dispenses coins, cash, or tokens or is for amusement purposes
only.
"Licensed establishment" means any licensed retail
establishment where alcoholic liquor is drawn, poured, mixed,
or otherwise served for consumption on the premises, whether
the establishment operates on a nonprofit or for-profit basis.
"Licensed establishment" includes any such establishment that
has a contractual relationship with an inter-track wagering
location licensee licensed under the Illinois Horse Racing Act

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of 1975, provided any contractual relationship shall not
include any transfer or offer of revenue from the operation of
video gaming under this Act to any licensee licensed under the
Illinois Horse Racing Act of 1975. Provided, however, that the
licensed establishment that has such a contractual
relationship with an inter-track wagering location licensee
may not, itself, be (i) an inter-track wagering location
licensee, (ii) the corporate parent or subsidiary of any
licensee licensed under the Illinois Horse Racing Act of 1975,
or (iii) the corporate subsidiary of a corporation that is also
the corporate parent or subsidiary of any licensee licensed
under the Illinois Horse Racing Act of 1975. "Licensed
establishment" does not include a facility operated by an
organization licensee, an inter-track wagering licensee, or an
inter-track wagering location licensee licensed under the
Illinois Horse Racing Act of 1975 or a riverboat licensed under
the Illinois Gambling Act, except as provided in this
paragraph. The changes made to this definition by Public Act
98-587 are declarative of existing law.
"Licensed fraternal establishment" means the location
where a qualified fraternal organization that derives its
charter from a national fraternal organization regularly
meets.
"Licensed veterans establishment" means the location where
a qualified veterans organization that derives its charter from
a national veterans organization regularly meets.

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"Licensed truck stop establishment" means a facility (i)
that is at least a 3-acre facility with a convenience store,
(ii) with separate diesel islands for fueling commercial motor
vehicles, (iii) that sells at retail more than 10,000 gallons
of diesel or biodiesel fuel per month, and (iv) with parking
spaces for commercial motor vehicles. "Commercial motor
vehicles" has the same meaning as defined in Section 18b-101 of
the Illinois Vehicle Code. The requirement of item (iii) of
this paragraph may be met by showing that estimated future
sales or past sales average at least 10,000 gallons per month.
"Licensed large truck stop establishment" means a facility
located within 3 road miles from a freeway interchange, as
measured in accordance with the Department of Transportation's
rules regarding the criteria for the installation of business
signs: (i) that is at least a 3-acre facility with a
convenience store, (ii) with separate diesel islands for
fueling commercial motor vehicles, (iii) that sells at retail
more than 50,000 gallons of diesel or biodiesel fuel per month,
and (iv) with parking spaces for commercial motor vehicles.
"Commercial motor vehicles" has the same meaning as defined in
Section 18b-101 of the Illinois Vehicle Code. The requirement
of item (iii) of this paragraph may be met by showing that
estimated future sales or past sales average at least 50,000
gallons per month.
"Sales agent and broker" means an individual, partnership,
corporation, limited liability company, or other business

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entity engaged in the solicitation or receipt of business from
current or potential licensed establishments, licensed
fraternal establishments, licensed veterans establishments,
licensed truck stop establishments, or licensed large truck
stop establishments either on an employment or contractual
basis.
(Source: P.A. 101-31, eff. 6-28-19.)
(230 ILCS 40/25)
Sec. 25. Restriction of licensees.
(a) Manufacturer. A person may not be licensed as a
manufacturer of a video gaming terminal in Illinois unless the
person has a valid manufacturer's license issued under this
Act. A manufacturer may only sell video gaming terminals for
use in Illinois to persons having a valid distributor's
license.
(b) Distributor. A person may not sell, distribute, or
lease or market a video gaming terminal in Illinois unless the
person has a valid distributor's license issued under this Act.
A distributor may only sell video gaming terminals for use in
Illinois to persons having a valid distributor's or terminal
operator's license.
(c) Terminal operator. A person may not own, maintain, or
place a video gaming terminal unless he has a valid terminal
operator's license issued under this Act. A terminal operator
may only place video gaming terminals for use in Illinois in

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licensed establishments, licensed truck stop establishments,
licensed large truck stop establishments, licensed fraternal
establishments, and licensed veterans establishments. No
terminal operator may give anything of value, including but not
limited to a loan or financing arrangement, to a licensed
establishment, licensed truck stop establishment, licensed
large truck stop establishment, licensed fraternal
establishment, or licensed veterans establishment as any
incentive or inducement to locate video terminals in that
establishment. Of the after-tax profits from a video gaming
terminal, 50% shall be paid to the terminal operator and 50%
shall be paid to the licensed establishment, licensed truck
stop establishment, licensed large truck stop establishment,
licensed fraternal establishment, or licensed veterans
establishment, notwithstanding any agreement to the contrary.
A video terminal operator that violates one or more
requirements of this subsection is guilty of a Class 4 felony
and is subject to termination of his or her license by the
Board.
(d) Licensed technician. A person may not service,
maintain, or repair a video gaming terminal in this State
unless he or she (1) has a valid technician's license issued
under this Act, (2) is a terminal operator, or (3) is employed
by a terminal operator, distributor, or manufacturer.
(d-5) Licensed terminal handler. No person, including, but
not limited to, an employee or independent contractor working

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for a manufacturer, distributor, supplier, technician, or
terminal operator licensed pursuant to this Act, shall have
possession or control of a video gaming terminal, or access to
the inner workings of a video gaming terminal, unless that
person possesses a valid terminal handler's license issued
under this Act.
(d-10) Solicitation of use agreements. A person may not
solicit the signing of a use agreement on behalf of a terminal
operator or enter into a use agreement as agent of a terminal
operator unless that person either has a valid sales agent and
broker license issued under this Act or owns, manages, or
significantly influences or controls the terminal operator.
(e) Licensed establishment. No video gaming terminal may be
placed in any licensed establishment, licensed veterans
establishment, licensed truck stop establishment, licensed
large truck stop establishment, or licensed fraternal
establishment unless the owner or agent of the owner of the
licensed establishment, licensed veterans establishment,
licensed truck stop establishment, licensed large truck stop
establishment, or licensed fraternal establishment has entered
into a written use agreement with the terminal operator for
placement of the terminals. A copy of the use agreement shall
be on file in the terminal operator's place of business and
available for inspection by individuals authorized by the
Board. A licensed establishment, licensed truck stop
establishment, licensed veterans establishment, or licensed

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fraternal establishment may operate up to 6 video gaming
terminals on its premises at any time. A licensed large truck
stop establishment may operate up to 10 video gaming terminals
on its premises at any time.
(f) (Blank).
(g) Financial interest restrictions. As used in this Act,
"substantial interest" in a partnership, a corporation, an
organization, an association, a business, or a limited
liability company means:
(A) When, with respect to a sole proprietorship, an
individual or his or her spouse owns, operates, manages, or
conducts, directly or indirectly, the organization,
association, or business, or any part thereof; or
(B) When, with respect to a partnership, the individual
or his or her spouse shares in any of the profits, or
potential profits, of the partnership activities; or
(C) When, with respect to a corporation, an individual
or his or her spouse is an officer or director, or the
individual or his or her spouse is a holder, directly or
beneficially, of 5% or more of any class of stock of the
corporation; or
(D) When, with respect to an organization not covered
in (A), (B) or (C) above, an individual or his or her
spouse is an officer or manages the business affairs, or
the individual or his or her spouse is the owner of or
otherwise controls 10% or more of the assets of the

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organization; or
(E) When an individual or his or her spouse furnishes
5% or more of the capital, whether in cash, goods, or
services, for the operation of any business, association,
or organization during any calendar year; or
(F) When, with respect to a limited liability company,
an individual or his or her spouse is a member, or the
individual or his or her spouse is a holder, directly or
beneficially, of 5% or more of the membership interest of
the limited liability company.
For purposes of this subsection (g), "individual" includes
all individuals or their spouses whose combined interest would
qualify as a substantial interest under this subsection (g) and
whose activities with respect to an organization, association,
or business are so closely aligned or coordinated as to
constitute the activities of a single entity.
(h) Location restriction. A licensed establishment,
licensed truck stop establishment, licensed large truck stop
establishment, licensed fraternal establishment, or licensed
veterans establishment that is (i) located within 1,000 feet of
a facility operated by an organization licensee licensed under
the Illinois Horse Racing Act of 1975 or the home dock of a
riverboat licensed under the Illinois Gambling Act or (ii)
located within 100 feet of a school or a place of worship under
the Religious Corporation Act, is ineligible to operate a video
gaming terminal. The location restrictions in this subsection

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(h) do not apply if (A) a facility operated by an organization
licensee, a school, or a place of worship moves to or is
established within the restricted area after a licensed
establishment, licensed truck stop establishment, licensed
large truck stop establishment, licensed fraternal
establishment, or licensed veterans establishment becomes
licensed under this Act or (B) a school or place of worship
moves to or is established within the restricted area after a
licensed establishment, licensed truck stop establishment,
licensed large truck stop establishment, licensed fraternal
establishment, or licensed veterans establishment obtains its
original liquor license. For the purpose of this subsection,
"school" means an elementary or secondary public school, or an
elementary or secondary private school registered with or
recognized by the State Board of Education.
Notwithstanding the provisions of this subsection (h), the
Board may waive the requirement that a licensed establishment,
licensed truck stop establishment, licensed large truck stop
establishment, licensed fraternal establishment, or licensed
veterans establishment not be located within 1,000 feet from a
facility operated by an organization licensee licensed under
the Illinois Horse Racing Act of 1975 or the home dock of a
riverboat licensed under the Illinois Gambling Act. The Board
shall not grant such waiver if there is any common ownership or
control, shared business activity, or contractual arrangement
of any type between the establishment and the organization

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licensee or owners licensee of a riverboat. The Board shall
adopt rules to implement the provisions of this paragraph.
(h-5) Restrictions on licenses in malls. The Board shall
not grant an application to become a licensed video gaming
location if the Board determines that granting the application
would more likely than not cause a terminal operator,
individually or in combination with other terminal operators,
licensed video gaming location, or other person or entity, to
operate the video gaming terminals in 2 or more licensed video
gaming locations as a single video gaming operation.
(1) In making determinations under this subsection
(h-5), factors to be considered by the Board shall include,
but not be limited to, the following:
(A) the physical aspects of the location;
(B) the ownership, control, or management of the
location;
(C) any arrangements, understandings, or
agreements, written or otherwise, among or involving
any persons or entities that involve the conducting of
any video gaming business or the sharing of costs or
revenues; and
(D) the manner in which any terminal operator or
other related entity markets, advertises, or otherwise
describes any location or locations to any other person
or entity or to the public.
(2) The Board shall presume, subject to rebuttal, that

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the granting of an application to become a licensed video
gaming location within a mall will cause a terminal
operator, individually or in combination with other
persons or entities, to operate the video gaming terminals
in 2 or more licensed video gaming locations as a single
video gaming operation if the Board determines that
granting the license would create a local concentration of
licensed video gaming locations.
For the purposes of this subsection (h-5):
"Mall" means a building, or adjoining or connected
buildings, containing 4 or more separate locations.
"Video gaming operation" means the conducting of video
gaming and all related activities.
"Location" means a space within a mall containing a
separate business, a place for a separate business, or a place
subject to a separate leasing arrangement by the mall owner.
"Licensed video gaming location" means a licensed
establishment, licensed fraternal establishment, licensed
veterans establishment, licensed truck stop establishment, or
licensed large truck stop.
"Local concentration of licensed video gaming locations"
means that the combined number of licensed video gaming
locations within a mall exceed half of the separate locations
within the mall.
(i) Undue economic concentration. In addition to
considering all other requirements under this Act, in deciding

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whether to approve the operation of video gaming terminals by a
terminal operator in a location, the Board shall consider the
impact of any economic concentration of such operation of video
gaming terminals. The Board shall not allow a terminal operator
to operate video gaming terminals if the Board determines such
operation will result in undue economic concentration. For
purposes of this Section, "undue economic concentration" means
that a terminal operator would have such actual or potential
influence over video gaming terminals in Illinois as to:
(1) substantially impede or suppress competition among
terminal operators;
(2) adversely impact the economic stability of the
video gaming industry in Illinois; or
(3) negatively impact the purposes of the Video Gaming
Act.
The Board shall adopt rules concerning undue economic
concentration with respect to the operation of video gaming
terminals in Illinois. The rules shall include, but not be
limited to, (i) limitations on the number of video gaming
terminals operated by any terminal operator within a defined
geographic radius and (ii) guidelines on the discontinuation of
operation of any such video gaming terminals the Board
determines will cause undue economic concentration.
(j) The provisions of the Illinois Antitrust Act are fully
and equally applicable to the activities of any licensee under
this Act.

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(Source: P.A. 101-31, eff. 6-28-19.)
(230 ILCS 40/30)
Sec. 30. Multiple types of licenses prohibited. A video
gaming terminal manufacturer may not be licensed as a video
gaming terminal operator or own, manage, or control a licensed
establishment, licensed truck stop establishment, licensed
large truck stop establishment, licensed fraternal
establishment, or licensed veterans establishment, and shall
be licensed to sell only to persons having a valid
distributor's license or, if the manufacturer also holds a
valid distributor's license, to sell, distribute, lease, or
market to persons having a valid terminal operator's license. A
video gaming terminal distributor may not be licensed as a
video gaming terminal operator or own, manage, or control a
licensed establishment, licensed truck stop establishment,
licensed large truck stop establishment, licensed fraternal
establishment, or licensed veterans establishment, and shall
only contract with a licensed terminal operator. A video gaming
terminal operator may not be licensed as a video gaming
terminal manufacturer or distributor or own, manage, or control
a licensed establishment, licensed truck stop establishment,
licensed large truck stop establishment, licensed fraternal
establishment, or licensed veterans establishment, and shall
be licensed only to contract with licensed distributors and
licensed establishments, licensed truck stop establishments,

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licensed large truck stop establishments, licensed fraternal
establishments, and licensed veterans establishments. An owner
or manager of a licensed establishment, licensed truck stop
establishment, licensed large truck stop establishment,
licensed fraternal establishment, or licensed veterans
establishment may not be licensed as a video gaming terminal
manufacturer, distributor, or operator, and shall only
contract with a licensed operator to place and service this
equipment. A sales agent and broker may not be licensed as a
manufacturer, distributor, supplier, licensed establishment,
licensed fraternal establishment, licensed veterans
establishment, licensed truck stop establishment, or licensed
large truck stop establishment.
(Source: P.A. 101-31, eff. 6-28-19.)
(230 ILCS 40/45)
Sec. 45. Issuance of license.
(a) The burden is upon each applicant to demonstrate his
suitability for licensure. Each video gaming terminal
manufacturer, distributor, supplier, operator, handler,
licensed establishment, licensed truck stop establishment,
licensed large truck stop establishment, licensed fraternal
establishment, and licensed veterans establishment shall be
licensed by the Board. The Board may issue or deny a license
under this Act to any person pursuant to the same criteria set
forth in Section 9 of the Illinois Gambling Act.

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(a-5) The Board shall not grant a license to a person who
has facilitated, enabled, or participated in the use of
coin-operated devices for gambling purposes or who is under the
significant influence or control of such a person. For the
purposes of this Act, "facilitated, enabled, or participated in
the use of coin-operated amusement devices for gambling
purposes" means that the person has been convicted of any
violation of Article 28 of the Criminal Code of 1961 or the
Criminal Code of 2012. If there is pending legal action against
a person for any such violation, then the Board shall delay the
licensure of that person until the legal action is resolved.
(b) Each person seeking and possessing a license as a video
gaming terminal manufacturer, distributor, supplier, operator,
handler, licensed establishment, licensed truck stop
establishment, licensed large truck stop establishment,
licensed fraternal establishment, or licensed veterans
establishment 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 for each
category of licensure: (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

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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 video
gaming terminal manufacturer, distributor, supplier, operator,
handler, licensed establishment, licensed truck stop
establishment, licensed large truck stop establishment,
licensed fraternal establishment, or licensed veterans
establishment 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 video gaming terminal operation 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) No person may be licensed as a video gaming terminal
manufacturer, distributor, supplier, operator, handler,
licensed establishment, licensed truck stop establishment,
licensed large truck stop establishment, licensed fraternal
establishment, or licensed veterans establishment 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

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prior activities that pose a threat to the public interests
of the State or to the security and integrity of video
gaming;
(2) create or enhance the dangers of unsuitable,
unfair, or illegal practices, methods, and activities in
the conduct of video gaming; or
(3) present questionable business practices and
financial arrangements incidental to the conduct of video
gaming activities.
(e) Any applicant for any 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 video gaming in this State.
(f) 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) Manufacturer..........................$5,000
(2) Distributor...........................$5,000
(3) Terminal operator.....................$5,000
(4) Supplier..............................$2,500
(5) Technician..............................$100
(6) Terminal Handler........................$100
(7) Licensed establishment, licensed truck stop
establishment, licensed large truck stop establishment,
licensed fraternal establishment, or licensed

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veterans establishment..........................$100
(8) Sales agent and broker.......................$100
(g) The Board shall establish an annual fee for each
license not to exceed the following:
(1) Manufacturer.........................$10,000
(2) Distributor..........................$10,000
(3) Terminal operator.....................$5,000
(4) Supplier..............................$2,000
(5) Technician..............................$100
(6) Licensed establishment, licensed truck stop
establishment, licensed large truck stop establishment,
licensed fraternal establishment, or licensed
veterans establishment..........................$100
(7) Video gaming terminal...................$100
(8) Terminal Handler........................$100
(9) Sales agent and broker......................$100
(h) A terminal operator and a licensed establishment,
licensed truck stop establishment, licensed large truck stop
establishment, licensed fraternal establishment, or licensed
veterans establishment shall equally split the fees specified
in item (7) of subsection (g).
(Source: P.A. 100-1152, eff. 12-14-18; 101-31, eff. 6-28-19.)
Section 99. Effective date. This Act takes effect upon
becoming law.