Section 432.100  Definitions

 

As used in this Part, the terms listed below are defined as follows:  

 

            "Act":  The Illinois Pull Tabs and Jar Games Act (Ill. Rev. Stat. 1989, ch. 120, pars. 1051 et seq.);

 

            "Deal":  A separate package, series of packages, or card consisting of one game of pull tabs with the same serial number, purchased from a licensed manufacturer or supplier;

 

            "Department":  The Illinois Department of Revenue;

 

            "Flare":  The posted display setting forth the rules and prizes of a particular deal of pull tabs;

 

            "Member":  A person who is eligible to participate in the sale of pull tabs for a regular licensee;

 

            "Organization":  A corporation, agency, partnership, association, firm or other entity consisting of 2 or more persons joined by a common interest or purpose (Section 1.1 of the Act);

 

            "Pull tabs":  Any of several different but closely related types of charitable gaming tickets which may be sold by licensees under the Act.  As used in this Part, the term includes pull tabs, jar tickets, and tipboards, each of which is separately defined below.  Nothing in the Act or this Part applies in any way to pull tabs sold in accordance with the Charitable Games Act (Ill. Rev. Stat. 1989, ch. 120, par. 1121 et seq.) or the rules implementing that Act (86 Ill. Adm. Code 435):  

 

            A pull tab, also known as a "break open", is a card, the face of which is initially covered or otherwise hidden from view in order to conceal a number, symbol or set of symbols, some of which have been designated in advance as prize winners (Section 1.1 of the Act);

 

            A jar ticket is a folded and banded ticket concealing a number, symbol or set of numbers or symbols, some of which have been designated in advance as winners;

 

            A tipboard is a board or placard to which are attached tickets which contain concealed numbers.  The winning number is determined by removing a seal on the board.

 

            "Received by the Department" or similar phrases:  Whenever this Part requires that any writing or payment must be received within a specified number of days or by a specified date, the provisions of Section 1.25 of "AN ACT to revise the law in relation to the construction of the statutes" (Ill. Rev. Stat. 1989, ch. 1, par. 1026) shall apply;

 

            "Regular licensee":  An organization holding a license authorizing it to sell pull tabs in Illinois to the public.

 

(Source:  Amended at 15 Ill. Reg. 10993, effective July 10, 1991)

 

Section 432.110  Regular Licenses

 

a)         Eligibility.  To be eligible for a regular license, an organization must have been organized in Illinois.  It must have been in existence continuously during the entire five-year period preceding application, and during that period must have had a bona fide membership engaged in carrying out its stated objectives on a regular basis.  The five year requirement shall be reduced to two years, as applied to a local organization which is affiliated with and chartered by a national organization which meets the five year requirement (Section 2 of the Act).  To be "chartered" by a national organization, an Illinois organization must have a document issued by the national organization formally authorizing the establishment of the Illinois organization.  The organization must be conducted on a not-for-profit basis with no personal profit inuring to anyone as a result of the operation, and must fall within one of the following categories:  

 

1)         Charitable Organization:  an organization organized and operated to benefit an indefinite number of the public (Section 1.1 of the Act);

 

2)         Educational Organization:  an organization organized and operated to provide systematic instruction in useful branches of learning by methods common to schools and institutions of learning which compare favorably in their scope and intensity with the course of study presented in tax-supported schools (Section 1.1 of the Act).  Public schools and school districts are not eligible for regular licenses.  Organizations affiliated with public schools, such as booster clubs, may be eligible if they fall within any of the other categories listed in this Section;

 

3)         Religious Organization:  any church, congregation, society or organization founded for the purpose of religious worship (Section 1.1 of the Act);

 

4)         Fraternal Organization:  an organization of persons, including but not limited to ethnic organizations, having a common interest, organized and operated exclusively to promote the welfare of its members and to benefit the general public on a continuing and consistent basis (Section 1.1 of the Act);

 

5)         Veterans' Organization:  an organization comprised of members of which substantially all are individuals who are veterans or spouses, widows, or widowers of veterans, the primary purpose of which is to promote the welfare of its members and to provide assistance to the general public in such a way as to confer a public benefit (Section 1.1 of the Act);

 

6)         Labor Organization:  an organization composed of labor unions or workers organized with the objective of betterment of the conditions of those engaged in such pursuit and the development of a higher degree of efficiency in their respective occupations (Section 1.1 of the Act);

 

7)         Youth Athletic Organization:  an organization having as its exclusive purpose the promotion and provision of athletic activities for youth aged 18 and under (Section 1.1 of the Act).  Marching bands and drum and bugle corps are considered to promote and provide athletic activities.  A youth athletic organization otherwise eligible for a regular license does not lose its eligibility because youths served by the organization become nineteen while participating in an athletic activity with a season of definite duration;

 

8)         Senior Citizens Organization:  an organization or association comprised of members of which substantially all are individuals who are 55 years of age or older, or who are nearing the age of 55 and for whom opportunities for employment and participation in community life are unavailable or severely limited and who, as a result thereof, have difficulty in maintaining self-sufficiency and contributing to the life of the community.  The primary purpose of the organization must be the promotion of the welfare of its members (Section 1.1 of the Act; Section 3.05 of the Illinois Act on the Aging [20 ILCS 105/1]).

 

b)         Applications.  Application for a regular license must be made on the form prescribed by the Department, and must be accompanied by a license fee of $500 in the form of a check or money order payable to the Illinois Department of Revenue, and by the following documents and information:  

 

1)         Documentary evidence sufficient to show that the organization meets the eligibility requirements of subsection (a) above.  Such documentation should include, when applicable, a copy of the organization's bylaws, constitution, charter, minutes of past meetings, promotional materials, and Articles of Incorporation;

 

2)         The names of the members of the organization who will participate in the sale of pull tabs.  The presiding officer of the organization must certify that the persons listed are eligible to sell pull tabs, and have been members of the organization for at least 30 days before participating in the organization's sale of pull tabs;

 

3)         For license renewal applications, a report, on a form provided by the Department, accounting for the disposition of the gross proceeds derived from the sale of pull tabs during the period covered by the report (see Section 432.180);

 

4)         Any other information requested by the Department which is necessary to establish the eligibility of the organization for a regular license;

 

5)         If, during a license year, any of the information provided to the Department by the licensee changes, the licensee must notify the Department within 20 days, in writing, of any such changes;

 

6)         The application form shall include the following information:

 

A)        Name of organization

 

B)        Address

 

C)        Mailing Address

 

D)        Name and address of person responsible for filing tax returns

 

E)        Type of organization

 

F)         Address(es) of place where pull tabs are to be sold

 

G)        Does applicant own or lease premises?

 

H)        In what municipality will the applicant be making the most pull tab sales in terms of gross receipts?  If you are outside any municipality, in what county?

 

I)         Tax registration or license number (if registered with the Illinois Department of Revenue under any Illinois tax Act)

 

J)         Number of members in good standing

 

K)        How long has organization had a bona fide membership engaged in carrying out its objectives?

 

L)        Place and date of incorporation of organization

 

M)       If not a corporation, state how and when organized

 

N)        Estimated amount of pull tabs and jar games tax per calendar quarter

 

O)        For president of organization:  name, address, home and business phone numbers, social security number, date of birth and race

 

P)         For secretary of organization:  name, address, home and business phone numbers, social security number, date of birth and race

 

Q)        For person in charge of and primarily responsible for selling of the pull tabs:  name, address, home and business phone numbers, social security number, date of birth and race

 

R)        Are criteria for membership in the organization included with the application?

 

S)         Is documentary evidence verifying the claimed status of the applicant as a bona fide, nonprofit religious, charitable, labor, fraternal, educational, veteran's, youth athletic, or senior citizen's organization included with the application?

 

T)         Is the documentary evidence verifying that the location(s) where you will be selling pull tabs is owned or occupied by your organization and used for your general activities or is the location where you conduct bingo included with the application?

 

U)        Is a description of the activities and programs which qualify for support from pull tabs proceeds included with the application?

 

V)        Is a list of your organization's members who will be selling pull tabs included with the application?

 

W)       Is a completed Form PT-12, Expenditures of Funds Earned through Pull Tabs and Jar Games, for the past license year included with the application?

 

X)        Signatures of officers and person primarily responsible for the sale of the pull tabs

 

c)         Licenses.  Within 30 days after the receipt of a completed application, the Department will attempt to approve or deny the application.  If the Department determines that an organization meets all of the eligibility requirements of this Section, and is not ineligible for any of the reasons stated in Section 432.150, the Department will issue a regular license to the organization.  If the Department does not respond prior to expiration of the current license, the licensee is no longer authorized to conduct pull tab sales until such time as authorization is received.  A regular license authorizes the licensee to sell pull tabs only at the locations stated on the license.  Such locations must be owned or occupied by the regular licensee and used by its members for general activities, or must be used by the regular licensee for conducting bingo (see Section 432.160(b)).

 

1)         No organization may begin to sell pull tabs without having a valid license in its possession.

 

2)         Each license expires at midnight, June 30, following its date of issuance, except that, beginning with applicants whose licenses expire on June 30, 1990, the following license expiration dates and license fees will apply:

 

A)        Licenses in Group 1 will expire December 31, 1990.  The license fee is $250;

 

B)        Licenses in Group 2 will expire March 31, 1991.  The license fee is $375;

 

C)        Licenses in Group 3 will expire June 30, 1991.  The license fee is $500;

 

D)        Licenses in Group 4 will expire September 30, 1991.  The license fee is $625.

 

3)         Each license shall be in effect for one year from its date of issuance unless suspended or revoked by the Department before that date.  After June 30, 1990, every new license shall expire one year from the date of issuance unless suspended or revoked.  The Department cannot prorate the $500 license fee when a license is issued for less than a full year.

 

4)         It is the Department's policy to mail a renewal application to each regular licensee at least 30 days prior to the expiration of the license. However, failure to receive a renewal application does not excuse an organization of its obligation to submit a renewal application prior to the expiration of its current license.  If the licensee fails to file a substantially complete renewal application prior to the expiration of a license, the organization may continue to sell pull tabs until the Department takes action on the renewal application.  If the Department receives a renewal application more than seven days after the expiration of a license, the organization must immediately discontinue the sale of pull tabs until it receives a renewed license from the Department. It must discontinue the sale of pull tabs until a renewal license is issued.

 

d)         Special permits.  Once during each license year a regular licensee may obtain a special permit to sell pull tabs at a different, additional location for a period of up to ten consecutive days.  To apply for a special permit, a regular licensee must submit a written request to the Illinois Department of Revenue, Office of Bingo and Charitable Games, P.O. Box 19480, Springfield, Illinois 62794-9480.  The request must be received at least fourteen days before the first day of the scheduled pull tab event, and must include a statement of the specific dates and exact location for which the permit is requested, and the name and address of the person or organization which owns or controls the site at which pull tabs will be sold.

 

(Source:  Amended at 18 Ill. Reg. 11636, effective July 7, 1994)

 

Section 432.120  Limited Licenses

 

a)         Eligibility.  Any organization which would be eligible for a regular license but which does not hold one, is eligible for a special permit to sell pull tabs.  A special permit issued pursuant to this Section shall be known as a "limited license", solely for the purpose of differentiating these special permits from special permits issued pursuant to Section 432.110(d).

 

b)         Applications.  Application for a limited license must be made on the form prescribed by the Department, and must be accompanied by a license fee of $50 in the form of a check or money order payable to the Illinois Department of Revenue.  Applications must be accompanied by the same documents and information which are required to accompany applications for regular licenses (see Section 432.110(b)).

 

c)         Licenses.  Within 30 days after the receipt of a completed application, the Department will approve or deny the application.  If the Department determines that an organization meets all of the eligibility requirements of this Section, and is not ineligible for any of the reasons stated in Section 432.150, the Department will issue a limited license to the organization.

 

1)         A limited license authorizes the licensee to sell pull tabs at no more than 2 indoor or outdoor festivals in a year for a maximum of 5 days on each occasion. No more than 2 limited licenses may be issued to any organization in any year.

 

2)         If the Department receives a completed application less than 30 days before the first date on which the applicant wants to sell pull tabs, the Department will make every reasonable effort to act on the application prior to that date.  However, no organization may begin to sell pull tabs without having a valid limited license in its possession.

 

d)         All provisions of this Part governing the sale of pull tabs by regular licensees also apply to limited licensees.

 

(Source:  Amended at 15 Ill. Reg. 10993, effective July 10, 1991)

 

Section 432.130  Manufacturer's Licenses

 

a)         Applications.  Application for a manufacturer's license must be made on the form prescribed by the Department, and must be accompanied by a license fee of $5,000 in the form of a check or money order payable to the Illinois Department of Revenue, and by the following documents and information:  

 

1)         If the applicant is a corporation, a copy of the applicant's Articles of Incorporation and bylaws;

 

2)         Any other information requested by the Department which is necessary to establish the applicant's eligibility for a manufacturer's license.

 

3)         If, during a license year, any of the information provided to the Department by the licensee changes or becomes inaccurate, the licensee must notify the Department within 20 days, in writing, of any changes.

 

4)         The application form shall include the following information:

 

A)        Name of business

 

B)        Place of business

 

C)        Mailing address

 

D)        Registration number (if registered under Retailer's Occupation Tax Act)

 

E)        Ownership (specify individual, partnership, corporation, or other)

 

F)         Date established

 

G)        If foreign corporation, date qualified to do business in Illinois

 

H)        If doing business under an assumed name, enter county and number of your Assumed Name Certificate

 

I)         For each officer and director, enter name, title, address, social security number, date of birth, and race.  (If partnership enter name and address of all partners)

 

J)         Has any person not in the application herein, or if corporate applicant, any person not an officer, director or stockholder of such a corporation any interest, financial proprietary, or other, direct or indirect, in the business to be licensed, or has made any loan to the applicant, for said business (If so, set forth the names and addresses of such persons, the nature of the interest and the date acquired)

 

K)        Has the applicant or any officer, director, partner, or employee of the applicant been convicted of a felony within the last 10 years, or convicted of a violation of Article 28 (gambling) of the Criminal Code of 1961?

 

L)        Has the applicant of (if a partnership) any partner or (if a corporation) any of the officers, directors, or stockholders, or any employee thereof ever been a professional gambler?

 

M)       Has the applicant or any officer, director, partner, or employee of the applicant ever had a pull tab, bingo, or charitable games license revoked by the Department?

 

N)        Name and phone number of the person responsible for furnishing records and information about company

 

O)        Signature of applicant, president and secretary

 

b)         Licenses.  If, after receipt of a completed application the Department determines that the applicant is not ineligible for a license for any of the reasons stated in Section 432.150, the Department will issue a manufacturer's license.  The license authorizes the manufacturer to produce pull tabs for sale to suppliers licensed under the Act (see Section 432.140).  No other sales of pull tabs for delivery within Illinois, or to persons or organizations located in Illinois, are authorized.

 

1)         Manufacturer's licenses are issued for a period of one year from the date of issue.  If a manufacturer submits a license renewal application which the Department receives not more than 7 days after the expiration of the manufacturer's license, the manufacturer may continue to operate under its expired license until the Department approves or denies the renewal application.  It is the Department's policy to send a renewal application to each manufacturer at least six weeks prior to the expiration of its license.  However, failure to receive a renewal application does not relieve a manufacturer of its obligation to either renew its license in a timely manner, or to discontinue the sale of pull tabs if a timely application is not filed.

 

2)         Manufacturer's licensees are requested to notify the Department immediately, in writing, whenever the licensee has knowledge of the sale of pull tabs in Illinois, or for delivery to persons or organizations who are located in Illinois, by unlicensed manufacturers or suppliers, or the sale of pull tabs in Illinois to the public by unlicensed organizations.  The notification should be addressed to the Illinois Department of Revenue, Bingo and Charitable Games Unit, P.O. Box 19019, Springfield, Illinois 62794-9019.  The Department will keep the source of any such notification strictly confidential.

 

c)         Pull tab production standards.  Having considered the minimum quality production standards for pull tabs adopted by the National Association of Gambling Regulatory Agencies and the National Association of Fundraising Ticket Manufacturers, the following production standards are hereby adopted for all pull tabs sold to regular and limited licensees:  

 

1)         Opacity.  Concealed numbers or symbols must not be able to be viewed or winning numbers or symbols determined from the outside of the pull tab using a high intensity lamp of 500 watts or less.  Protection shall be provided by using opaque paper stock or by use of an aluminum foil laminate;

 

2)         Randomization.  The deal must be assembled so that no placement of winners or losers exists that allows the possibility of prize manipulation; i.e. prior knowledge of which pull tabs are winning tickets;

 

3)         Information printed on pull tabs.  Every pull tab shall have printed on it at least the following information:  The manufacturer's name or logo; the serial number assigned by the manufacturer and the supplier's name, both of which must be printed on the face (game information side) of break open tickets and must appear in plain view to the casual observer; and the number of winners, respective winning numbers or symbols, selling price of each ticket, and prize amounts (this information may be printed on a flare rather than on the pull tab).  A supplier's name may be reasonably abbreviated, but initials alone are not sufficient unless they constitute the supplier's full name.  A person or organization holding both a manufacturer's license and a supplier's license must include the supplier's license number on pull tabs which it manufactures and sells to regular licensees;

 

4)         Specific requirements for break opens.  In addition to the requirements of subsection (c)(3) above, the following information must be printed on each gaming ticket which falls into the category of break open:  The name of the game, the manufacturer's form number, the selling price (not to exceed one dollar), and the prize amount (not to exceed $250).  In addition, the back side of a break open ticket shall contain a series of perforated tabs marked "open here" (Section 5 of the Act);

 

5)         Game construction.  The pull tabs shall be designed, constructed, glued, and assembled in such a manner as to prevent the determination of a winning ticket without removing the tabs or otherwise uncovering the symbols or numbers as intended.  Each ticket in a deal must bear the same serial number of at least five digits.  There shall not be more than one serial number in a deal.  A manufacturer may not use one deal's serial number on a second deal with the same form number unless at least three years have elapsed between the manufacture of the first and second deals. The break opens' numbers or symbols must be fully visible in the window, and shall be centered so that no part of a symbol or number remains covered when the tab is removed;

 

6)         Cutting variations.  It must not be possible to isolate winning or potential winning tickets from variations in size or the appearance of a cut edge of the pull tabs comprising a particular game;

 

7)         Color or printing variations.  It must not be possible to detect or pick out winning pull tabs from losing pull tabs through variations in printing graphics or colors, especially those involving different printing plates;

 

8)         Winner protection.  A unique symbol or printed security device, such as a specific number keyed to particular winners, or the name of the symbol or some of the symbol colors changed for a winner, or other similar protection shall be placed in the winning windows of prize winners.  This does not apply to numeral games;

 

9)         Packaging.  Each deal's package shall be sealed by the manufacturer with a seal including a warning that the deal may have been tampered with if the package was received by the purchaser with the seal broken.  A deal's serial number shall be clearly placed on the outside of the deal's package, or be able to be viewed from the outside of the package.  No deal shall contain more than 4,000 tickets.

 

d)         Records.  Every manufacturer shall maintain a record, by serial and form number, of the disposition of every deal of pull tabs it produces. When provided by the Department with the serial and form number of a deal it has produced, a licensed manufacturer must be able to inform the Department of the name and address of the person or organization that received the deal.  Manufacturers shall retain the record for each deal for a period of three years from the date the deal left the manufacturer's possession.

 

Section 432.140  Supplier's Licenses

 

a)         Applications.  Application for a supplier's license must be made on the form prescribed by the Department, and must be accompanied by a license fee of $5,000 in the form of a check or money order payable to the Illinois Department of Revenue, and by the following documents and information:  

 

1)         If the applicant is a corporation, a copy of the applicant's Articles of Incorporation and bylaws;

 

2)         Any other information requested by the Department which is necessary to establish the applicant's eligibility for a supplier's license;

 

3)         If, during a license year, any of the information provided to the Department changes or becomes inaccurate, the licensee must notify the Department within 20 days, in writing, of any changes.

 

4)         The application form shall include information identical to that listed in Section 432.130(a)(4).

 

b)         Licenses.  If, after receipt of a completed application, the Department determines that the applicant is not ineligible for a license for any of the reasons stated in Section 432.150, the Department will issue a supplier's license.  The license authorizes the supplier to sell pull tabs to organizations holding a valid regular or limited license.  No other sale of pull tabs in Illinois, or for delivery to persons or organizations located in Illinois, is authorized.  Pull tabs sold to regular or limited licensees must have been purchased by the supplier from a licensed manufacturer, and must in all respects comply with the manufacturing standards set forth in Section 432.130.

 

1)         Supplier's licenses are issued for a period of one year from date of issue.  If a supplier submits a license renewal application, which the Department receives not more than 7 days after the expiration of the supplier's license, the supplier may continue to operate under its expired license until the Department approves or denies the renewal application. It is the Department's policy to send a renewal application to each supplier at least six weeks prior to the expiration of its license. However, failure to receive a renewal application does not relieve a supplier of its obligation to either renew its license in a timely manner, or to discontinue the sale of pull tabs to regular and limited licensees if a timely application is not filed.

 

2)         Supplier's licensees are requested to notify the Department immediately, in writing, whenever the licensee has knowledge of the sale of pull tabs in Illinois, or for delivery to persons or organizations located in Illinois, by unlicensed manufacturers or suppliers, or the sale of pull tabs in Illinois to the public by unlicensed organizations.  The notification should be addressed to the Illinois Department of Revenue, Bingo and Charitable Games Unit, P.O. Box 19019, Springfield, Illinois 62794-9019. The Department will keep the source of any such notification strictly confidential.

 

c)         Records and reports.

 

1)         For each sale of pull tabs authorized by its license the supplier shall give to the regular or limited licensee a receipt.  The receipt must include the following information:  Names and license numbers of the supplier (seller) and the regular or limited licensee (purchaser); the name of the manufacturer; the serial number and ideal gross receipts for each deal; and the date of the sale.

 

2)         Within 30 days after the end of every calendar quarter, each supplier shall file with the Department a report, which shall consist of a copy of each receipt issued pursuant to subsection (c)(1) above, accompanied by a certification that no other sales, authorized or unauthorized, were made during the quarter covered by the report.  Suppliers shall maintain all books and records pertaining to the sale of pull tabs for a period of 3 years.

 

d)         Any advertising or promotional material or announcements mailed, broadcast, or otherwise distributed or transmitted to any organization in Illinois shall include the supplier's name and license number.

 

Section 432.150  Ineligibility for License

 

a)         The following are ineligible for any license under the Act:

 

1)         Any person who has been convicted of a felony within 10 years of the date of the application;

 

2)         Any person who has been convicted of a violation of Article 28 (gambling) of the Criminal Code of 1961 (Ill. Rev. Stat. 1987, ch. 38, par. 28-1 et seq.);

 

3)         Any person who has had a pull tab, bingo, or charitable games license revoked by the Department;

 

4)         Any person who is or has been a professional gambler; for example, one who has declared himself to be a professional gambler on an income tax return, or who has been convicted of a gambling offense in another jurisdiction;

 

5)         Any firm or corporation in which a person defined in subsections (1), (2), (3), or (4) above has a proprietary, equitable, or credit interest, or in which such person is active or employed;

 

6)         Any organization in which a person defined in subsections (1), (2), (3), or (4) above is an officer, director, or employee, whether compensated or not;

 

7)         Any organization in which a person defined in subsections (1), (2), (3), or (4) above is to participate in the management or operation of pull tabs (Section 2 of the Act);

 

8)         Any unlicensed person or organization engaging in any activities required to be licensed under the Act;

 

9)         Any person or organization submitting any application, supporting documentation, return, or report containing statements which the person or organization knows, or should know, to be false;

 

10)       Any person or organization which, when required pursuant to the Act or this Part, has failed to file or submit any report, return, application, or documentation, or which has failed to pay any fee, tax, penalty, or interest due the Department for any period during which the person or organization had a valid license issued under the Act;

 

11)       Any person or organization which fails to file a return, or to pay the tax, penalty or interest shown in a filed return, or to pay any final assessment of tax, penalty or interest as required by any other tax act administered by the Department (Section 39b47 of The Civil Administrative Code of Illinois, (Ill. Rev. Stat. 1987, ch. 127, par. 39b47)).

 

b)         The ineligibility of a firm, corporation, or organization under subsections (a)(5), (6), or (7) above shall continue so long as any person defined in subsections (a)(1), (2), (3), or (4) above maintains a relationship causing ineligibility with the firm, corporation, or organization.  The ineligibility of a person or organization under subsections (a)(8) and (9) above shall continue for a period of up to one year from the date the unlicensed activity was discontinued (subsection (a)(8)), or from the date the Department learned of the false statement (subsection (a)(9)).  The ineligibility of a person or organization under subsections (a)(10) and (11) above shall continue until the required information has been provided, or until the amounts owed to the Department have been paid or arrangements for payment have been made with the Department.

 

Section 432.160  Restrictions and Limitations on the Sale of Pull Tabs

 

a)         Licenses.  No person or organization may sell pull tabs or advertise pull tabs for sale in Illinois without having a valid license to do so.

 

1)         Licensed manufacturers may sell pull tabs only to licensed suppliers, licensed suppliers may sell pull tabs only to regular and limited licensees, and regular and limited licensees may sell pull tabs only to the public.  A manufacturer or supplier may rely on its customers' representations that they are properly licensed (under the license numbers provided by the customers) unless the manufacturer or supplier has received notification from the Department that a particular person or organization does not have a valid license.

 

2)         Regular and limited licensees may obtain pull tabs only from licensed suppliers.  It is the responsibility of regular and limited licensees to ensure that all pull tabs which they obtain are marked with the name of the supplier on each pull tab.  Regular and limited licensees are requested to notify the Department whenever they receive any printed material advertising the availability of pull tabs if no supplier's license number appears on the material.  A supplier's license number will be in the form of the letters "PS" followed by a hyphen and one or more numerals.  The notification to the Department, which may consist entirely of a copy of the printed material, should be addressed to the Illinois Department of Revenue, Office of Bingo and Charitable Games, P.O. Box 19480, Springfield, Illinois 62794-9480.

 

b)         Locations.  A regular or limited licensee may sell pull tabs only at the locations stated on its license.  Pull tabs may be sold only at the following locations: 

 

1)         On premises owned or occupied by a licensed organization and used by its members for general activities (Section 4(6) of the Act).  "Premises" means a distinct parcel of land and the buildings thereon.  Premises are "occupied" by an organization when the organization is using the premises for its general activities in accordance with a contractual right to possess the premises on a regular basis;

 

2)         On premises owned or rented for conducting bingo (Section 4(6) of the Act).  If a licensee rents premises for the purpose of conducting bingo, and does not regularly conduct other activities at other times on such premises, then pull tabs may be sold on such premises only during the licensee's bingo session, which is defined as "the time during which bingo is conducted, including the time during which bingo cards are sold" (86 Ill. Adm. Code 430.100);

 

3)         For regular licensees only, at other premises specified in a special permit obtained pursuant to Section 432.110(d).

 

4)         A license issued by the Department does not grant an unqualified right to sell pull tabs at a specified location.  If premises are owned or controlled by a person or organization other than the licensee, that person or organization may prohibit the licensee from selling pull tabs on the premises.

 

EXAMPLE:  The American Legion Post conducts bingo at the Moose Lodge.  Although the Post may legally obtain a license to sell pull tabs at the Lodge, the Lodge is not required to allow the Post to sell pull tabs on the Lodge's premises - this would be a matter to be determined by and between the Post and the Lodge.

5)         A regular or limited license or a special permit shall be prominently displayed in the area where pull tabs are sold.  If pull tabs are sold in more than one area on the licensed premises, the license shall be prominently displayed in the area where the greatest volume of sales normally occurs.  If pull tabs are sold at multiple premises, the license shall be prominently displayed at the premises where the greatest volume of sales normally occurs, and a sign stating where the license is located shall be prominently displayed on all other premises.  "Prominently displayed" means that a license or sign is clearly visible and legible to the naked eye.  Under no circumstances may any licensee duplicate or reproduce any license issued under the Act.

 

c)         No person under the age of 18 years shall play or participate in the sale of pull tabs.  A person under the age of 18 years may be within the area where pull tabs are sold only when accompanied by his or her parent or guardian (Section 4(5) of the Act).

 

d)         Only a bona fide member or employee of the regular or limited licensee may participate in the sale of pull tabs.  A "bona fide" member is one who has been a member of the licensee for at least 30 days prior to participating in the sale of pull tabs. A "bona fide" employee is one whose principal duties are other than managing or operating pull tabs or jar games.  No person may receive any remuneration or compensation for participating in the sale of pull tabs.

 

e)         Regular and limited licensees must sell pull tabs for the price printed on the tickets, but in no case may pull tabs be sold for more than $2 each.  Pull tabs must be sold for cash - no credit may be extended to purchasers.  There shall be no more than 6,000 tickets in each game.

 

f)         No single pull tab prize may exceed $500 in cash or merchandise (valued at retail).  The aggregate value of all prizes or merchandise awarded in any single day shall not exceed $5,000 (Section 4(4) of the Act).  All winning pull tabs which are redeemed for prizes each day shall be retained by the licensee for a period of 60 days, and shall be segregated from winning pull tabs which are redeemed on other days.  Winning pull tabs should be defaced so that they may not be used or redeemed a second time, but defacement must leave the prize amount printed on the ticket legible.

 

g)         All advertising of pull tabs for sale in Illinois by any licensee under this Act must include the license number and name of the licensee.

 

h)         The entire net proceeds from the sale of pull tabs must be exclusively devoted to the lawful purposes of the licensee (Section 4(1) of the Act).  The net proceeds (gross proceeds less cash returned to winners) must not be commingled with any other funds belonging to the licensee (except interest paid on the deposited proceeds), and must be deposited into the pull tabs checking account established pursuant to Section 432.180(a).

 

i)          No regular or limited licensee, while pull tabs are being sold, shall knowingly permit entry to any part of the licensed premises to any person who has been convicted of a felony or a violation of Article 28 (gambling) of the Criminal Code of 1961 (Section 6 of the Act).

 

(Source:  Amended at 24 Ill. Reg. 8120, effective May 26, 2000)

 

Section 432.170  Imposition of Tax; Returns

 

a)         There shall be paid to the Department 5% of the gross proceeds from the sale of pull tabs (Section 5 of the Act).  Gross proceeds includes the total receipts, in whatever form, before winning tickets are paid. "Gross proceeds" expressly includes the prize value of winning pull tab tickets which are exchanged for additional pull tabs rather than for cash. "Gross proceeds" should be distinguished from "net proceeds", which is the amount left after winning tickets are paid.

 

b)         Payment of tax must be made by money order or certified check (Section 5 of the Act).  For regular licensees payment must be received within 20 days after the end of each calendar quarter (i.e. by April 20, July 20, October 20, and January 20).  For limited licensees payment must be received within 20 days after the license expires.

 

c)         Each tax payment must be accompanied by a return on forms provided by the Department.  The return shall state the number of days on which pull tabs were sold, the gross proceeds from the sale of pull tabs, the name and supplier's license number of all suppliers from whom the regular or limited licensee obtained pull tabs during the quarter, and any other information requested by the Department relating to books or records which the regular or limited licensee is required to maintain.

 

d)         A return must be filed as provided in subsection (c) above even if no tax is due.  The return shall state that no pull tabs were sold during the quarter covered by the return.

 

e)         Regular and limited licensees should be aware that they may be subject to federal excise tax liability on the proceeds from the sale of pull tabs. Licensees should contact the nearest office of the United States Internal Revenue Service for more information.

 

f)         Any officer or employee of any corporation subject to the provisions of the Act who has the control, supervision or responsibility of filing returns and making payment of the amount of tax imposed by the Act and who willfully fails to file such return or to make such payment to the Department or willfully attempts in any other manner to evade or defeat the tax shall be personally liable to a penalty equal to the total amount of tax evaded, including interest and penalties thereon; and the personal liability of such officer or employee shall survive the dissolution of the corporation. (Section 13½ of the Retailers' Occupation Tax Act, Ill. Rev. Stat. 1987, ch. 120, par. 452½).

 

Section 432.180  Records; Audits

 

a)         Pull tabs checking account.  Before a regular or limited licensee may begin selling pull tabs it must establish a checking account into which its gross proceeds from pull tab sales (less cash returned to winners) must be deposited.  All expenditures of pull tab proceeds (other than cash prizes) must be by electronic funds transfers or checks, having consecutive numbers, payable to a specific person or organization.  No checks shall be written to "cash."  The amount of gross receipts from pull tabs, the amount paid back in prizes, and the expenditures from the pull tabs checking account shall be reported on a form provided by the Department and submitted annually along with the organization's application for renewal of its pull tabs license (see Section 432.110(b)(4)).

 

b)         Records.  In addition to a current membership list, regular and limited licensees shall keep the following records for a period of 3 years:  

 

1)         The gross proceeds from the sale of pull tabs and the amount returned in prizes for each day that pull tabs are sold;

 

2)         The receipts obtained from licensed suppliers when pull tabs are purchased (see Section 432.140(c)(1)).

 

c)         All records and receipts which this Part requires any licensee under the Act to maintain shall be available for inspection by representatives of the Department during reasonable business hours.  All records pertaining to pull tabs of any licensee under the Act shall be subject to an audit by the Department without notice, performed during reasonable business hours at the premises where the records are located.  In the event of an audit by the Department the person or organization being audited shall provide all such records, provide a place where the audit may be performed, and provide any requested information relevant to the conduct of the audit.

 

Section 432.190  Denial, Suspension, or Revocation of Licenses; Criminal Sanctions

 

a)         The Department will deny the application of any person or organization which does not satisfy all eligibility requirements for the license for which application is made, or which is ineligible for a license under Section 432.150.

 

b)         The Department will suspend the license of any person or organization which, while its license is in effect, becomes ineligible for any reason. The suspension will remain in force until the person or organization regains eligibility.

 

c)         The Department will issue a warning to, suspend, or revoke the license of any person or organization violating the Act or this Part.

 

1)         Suspensions and revocations imposed under this subsection will range in duration from one day to one year.  The choice and duration of sanctions will be made on a case by case basis, and will be based on the licensee's history of compliance; the number, seriousness, and duration of violations; the cooperation extended to the Department by licensees in discontinuing and correcting violations; and the sanctions imposed on others by the Department under similar circumstances.

 

2)         A suspension or revocation is effective immediately upon receipt by the licensee of the notice of suspension or revocation, or five days after the Department mails the notice, whichever occurs first.

 

d)         Notification of denial, warning, suspension, or revocation; requests for hearing:  

 

1)         The Department will send notices of denial, warning, suspension, or revocation by certified mail, return receipt requested, to the applicant or licensee at the mailing address stated on the applicant's or licensee's most recent license application.  All such notices will include a statement of the reasons for the Department's action.

 

2)         An applicant or licensee may request a hearing to contest the Department's action pursuant to 86 Ill. Adm. Code 200.  The request shall be in writing, and must be received by the Department within 20 days after the date the Department mailed the notice of its action to the applicant or licensee.

 

e)         Any person who violates the Act, or any person who files a fraudulent return under the Act, or any person who willfully violates this Part, or any officer or agent of a corporation licensed under the Act who signs a fraudulent return filed on behalf of such corporation is guilty of a class A misdemeanor (Section 7 of the Act).

 

Section 432.200  State – Local Relations

 

a)         One-half of the payments made to the Department under the Act are deposited into the Illinois Gaming Law Enforcement Fund.  The Act provides that the General Assembly shall make appropriations from the Fund to the Department so that the Department can make grants to counties and municipalities for law enforcement purposes.  The amounts of grants to counties or municipalities shall bear the same ratio as the number of licenses issued in counties or municipalities bears to the total number of licenses issued in the state (Section 5(b) of the Act).  As used in this section "license" means a regular license.  A license is "issued" in the county or municipality in which the licensee states on its application that it will be making the most pull tab sales in terms of gross receipts.

 

b)         In addition to the criminal penalties for violations set forth in Section 7 of the Act, sale of pull tabs in violation of the Act also constitutes illegal gambling in violation of Article 28 of the Criminal Code of 1961.  Accordingly, it is the Department's policy to inform local law enforcement authorities, in writing, when the Department has information concerning such illegal gambling.