In the final hours of the legislative veto session, on Oct. 28, 2021, the Illinois General Assembly passed House Bill 3136, as amended by Senate Amendments 2 and 4. Once signed into law by Governor Pritzker, this legislation will amend certain provisions of the Illinois Gambling Act, Sports Wagering Act, Video Gaming Act, Raffles and Poker Run Act, and Horse Racing Act of 1975. The full text of HB3136 can be found here.
Below is a summary of the various amendments to Illinois’ gaming laws.
AMENDMENTS TO THE ILLINOIS GAMBLING ACT
Harmonization of “Supplier Category Licenses”
Creates Section 8.1 to harmonize the expiration of “Supplier Category Licenses,” which are defined to include a Supplier License under the Gambling Act, a Supplier License under the Sports Wagering Act, or a Manufacturer, Distributor, or Supplier License under Video Gaming Act. For Supplier Category Licenses currently held by a licensee, all such Supplier Category Licenses will expire at the earliest expiration date of any other Supplier Category License held by the licensee. Moving forward, if the holder of a Supplier Category License is granted an additional Supplier Category License, the new Supplier Category License will expire at the earliest expiration date of any other Supplier Category License held by the licensee.
Extension of Supplier License Term
Creates subsection 8(a-5), which adjusts the initial Supplier License term from one year to four years, or shorter if necessary to coincide with the earlier expiration date of a Supplier License issued under the Gambling Act or a Manufacturer, Distributor, or Supplier License under Video Gaming Act, pursuant to the Supplier License harmonization amendment to the Gambling Act (discussed above). Thereafter, the Supplier License may be renewed for additional four-year periods.
Issuance of Certain Supplier Licenses Without Board Investigation/Approval
Amends subsection 8(a) to provide that an applicant for a Supplier License under the Gambling Act is entitled to receive that license without additional investigation or approval by the Illinois Gaming Board (the “IGB” or “Board”) if the applicant is already licensed as a manufacturer, distributor, or supplier under the Video Gaming Act or as a supplier under the Sports Wagering Act. Payment of the Supplier License fee is still required.
Privilege Tax Imposed on Owners Licensees
Amends subsection 13(a-5) to adjust the requirements for the holder of the Owners Licensee conducting gambling operations in the City of East St. Louis to qualify for the imposition of the privilege tax on modified annual gross receipts, as opposed to adjusted gross receipts, for the first ten years that the privilege tax is imposed, as follows: (1) the minimum employment requirement of 450 people is waived for years 2020 and 2021, or any other periods that the riverboat or casino is ordered to close by State officials for health and other emergencies; and (2) instead of requiring such Owners Licensee to provide employees an employee stock ownership plan, the Owners Licensee may sponsor a 401(k) retirement plan provided that the employer makes matching contributions at specified levels.
Transfers from State Gaming Fund
Amends subsection 13(d-5), to require, at the direction of the Board, the Comptroller to direct the Treasurer and the Treasurer to transfer the sum of $22,500,000, along with any deficiencies in such amounts from prior months in the same fiscal year, from the State Gaming Fund to the Education Assistance Fund after certain required distributions and transfers have been made. Further, at the direction of the Board, the Comptroller shall direct and the Treasurer shall transfer, any remaining amounts to the Capital Projects Fund.
AMENDMENTS TO THE SPORTS WAGERING ACT
In-Person Registration Requirement
Sets March 5, 2022 as the date certain for expiration of the in-person registration requirement. This is consistent with the previous projected statutory timeline for the expiration of this requirement upon the issuance of the first Online-Only Master Sports Wagering License, but removes any uncertainty. In the event that the IGB issues Illinois’ first Online-Only Master Sports Wagering License before March 5, 2022, then the in-person registration requirement will expire at that earlier time.
Sports Facility Master Sports Wagering Eligibility
Updates the definition of "sports facility" to also include facilities with a seating capacity of 10,000 or more if the facility is located in a county with a population of more than 1,000,000 people — versus the previous 17,000 seat requirement. This allows Wintrust Arena, home of the WNBA’s Chicago Sky, to be eligible for a Master Sports Wagering License.
Occupational License Equivalency
Creates license equivalency for occupational licensees already licensed under the Gambling Act for employees of an owners licensee or organizational licensee to work in sports wagering positions at the same casino or racetrack facility.
Wagering on Illinois Collegiate Sports
Allows for wagering on the outcome of Illinois collegiate sports events — but not individual player performance — for a two-year trial period, expiring on July 1, 2023. These wagers must be made in person, and cannot be made via the internet or mobile app.
Supplier License Terms
Adjusts the initial Supplier License term length to be four years, or shorter if necessary to coincide with the earlier expiration date of a Supplier License issued under the Gambling Act or Video Gaming Act, pursuant to the Supplier License harmonization amendment to the Gambling Act. The $150,000 license renewal fee will still be assessed four years from the issuance of the Supplier License under the Sports Wagering Act.
AMENDMENTS TO THE ILLINOIS VIDEO GAMING ACT
New Category of Licensure for Sales Agents
Creates subsection 25(d-10) to create a new category of licensure for sales agents. A sales agent is now defined as a person that is engaged in the solicitation or receipt of business from current or potential licensed video gaming establishments either on an employment or contractual basis. A person may not solicit the signing of a use agreement, or act as an agent of a terminal operator to sign a use agreement, unless that person has a valid Sales Agent License or is a person with significant influence and control of a terminal operator (i.e., already vetted and approved by the IGB in such capacity). Moreover, Section 30 was expanded to prohibit a sales agent from holding dual licenses. Therefore, a sales agent may not be licensed as a manufacturer, distributor, supplier, or licensed video gaming establishment. Section 45 sets the annual license fee for sales agents at $100.
Expansion of Eligibility for Fraternal Establishments and Veteran Establishments in Opt-Out Jurisdictions
Creates subsection 27(b), which more broadly allows for the licensure of fraternal establishments and veteran establishments across the state, including in opt-out municipalities, subject to certain restrictions. Specifically, on or after July 1, 2022, a qualified fraternal establishment or qualified veteran establishment will be eligible to apply for an Establishment License in either a municipality or county with a population of not more than 1,000,000.
Longer Licensing Terms for All Licenses
Amends Section 50 such that all initial licenses for terminal handlers, technicians, sales agents, and licensed video gaming establishments will be for a period of two years — as opposed to the current one-year cycle — and are renewable for additional two-year periods thereafter. Moreover, HB3136 further amends Section 50 to provide that, subject to the Gambling Act, all initial licenses for manufacturers, distributors, suppliers, and terminal Operator licenses shall be for a period of four years — as opposed to the current one-year cycle — and are renewable for additional four-year periods thereafter.
Video Gaming Terminal Fees
Amends Section 65 to restrict a non-home rule unit of government from imposing any fee for the operation of a Video Gaming Terminal in excess of $250 (previously $25) per year. Moreover, the fee imposed by any home rule or non-home rule unit of government must now be shared equally between the Terminal Operator and Licensed Video Gaming Establishment. For a list of current home rule municipalities in Illinois, please visit here.
Preemption of Municipal Taxes and Regulations on Video Gaming Terminals and Licensees
Adds Section 90(a) which preempts the licensure, registration, and regulation of manufacturers, distributors, terminal operators, and licensed video gaming establishments, including the imposition of fees and other charges. No non-home rule unit may license, register, or otherwise regulate or impose any type of fee or any other charge upon manufacturers, distributors, terminal operators, and licensed video gaming establishments.
Adds Section 90(b) which preempts the licensure, registration, and regulation of video gaming terminals. No non-home rule unit may license, register, or otherwise regulate video gaming terminals.
Adds Section 90(c) which preempts the imposition of any tax upon (i) manufacturers, distributors, terminal operators, and licensed video gaming establishments; (ii) video gaming terminal; (iii) user or player of any video gaming terminals; or (iv) other use, play or operation of video gaming terminals authorized under this act by any person or entity. This prohibition applies to both home rule municipalities and non-home rule units.
Adds Section 90(d) which provides that any home rule municipality that has adopted an ordinance imposing an amusement tax on persons who participate in the playing of video gaming terminals before Nov. 1, 2021 may continue to impose such amusement tax but shall not increase, expand, or extend the tax or tax rate.
AMENDMENTS TO THE RAFFLES AND POKERS RUN ACT
Expands License Eligibility to Fire Protection Agencies
Amends subsection 2(b) to allow for the issuance of raffle licenses to any fire protection agencies and associations that represent fire protection officials.
AMENDMENTS TO HORSE RACING ACT OF 1975
Requires Board to Conduct Initial Examination of Application Within 21 Days of Receipt
Amends Section 19.5 to provide that the application for an Organization License for a standardbred racetrack in Cook County shall be submitted to the Illinois Racing Board (the “IRB”) and grants the IRB authority to grant that license at any meeting of the IRB. Moreover, Section 19.5 requires the IRB to examine an application within 21 days of receipt to confirm it conforms with the Horse Racing Act and rules adopted by the IRB.
Clarifies Bond Requirement
Amends subsection 21(e) to clarify the amount of the bond filing requirement is set forth in subsection (d) of Section 27.
Adjusts Qualification Requirements for Stallions
Amends subsection 31(j) to eliminate the residency requirement for the owners of stallions to be owned by a resident of the State of Illinois. It also allows for the breeding of stallions with out-of-state semen.