HB3276 104TH GENERAL ASSEMBLY

LRB104 09923 LNS 19993 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB3276

Introduced 2/18/2025, by Rep. Marcus C. Evans, Jr.

SYNOPSIS AS INTRODUCED:

5 ILCS 100/5-45.65 new
20 ILCS 1605/9.3
20 ILCS 1605/20	from Ch. 120, par. 1170
230 ILCS 45/25-15
230 ILCS 45/25-70a new

Amends the Sports Wagering Act. Provides for a lottery sports wagering pilot program. Provides that the Department of the Lottery shall implement and administer the lottery sports wagering pilot program no later than June 30, 2025. Provides that every sports lottery terminal offered in this State for play shall first be tested and approved pursuant to the rules of the Department, and each sports lottery terminal offered in this State for play shall conform to an approved model, which shall be ready for play in Illinois within 90 days after the effective date of the amendatory Act and any system testing dates designated by the Department. Provides that lottery games are a part of the private management agreement and competitive bidding process. Provides that sports lottery terminals may be placed in any lottery retailer in the State. Provides that no lottery retailer may cause or permit any person under the age of 21 years to use a sports lottery terminal or sports wagering application. Sets forth provisions concerning definitions, testing, apportionment of revenues, transfer of funds, jurisdiction of the Department, and the purchase or lease of sports lottery terminals. Makes other changes. Amends the Illinois Lottery Law to make conforming changes. Amends the Illinois Administrative Procedure Act to authorize emergency rulemaking. Effective immediately.

A BILL FOR

AN ACT concerning gaming.

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

Section 5. The Illinois Administrative Procedure Act is amended by adding Section 5-45.65 as follows:

(5 ILCS 100/5-45.65 new)

Sec. 5-45.65. Emergency rulemaking; lottery sports wagering pilot program. To provide for the expeditious and timely implementation of the lottery sports wagering pilot program, emergency rules implementing the lottery sports wagering pilot program under Section 25-70a of the Sports Wagering Act may be adopted in accordance with Section 5-45 by the Department of the Lottery. The adoption of emergency rules authorized by Section 5-45 and this Section is deemed to be necessary for the public interest, safety, and welfare.

This Section is repealed one year after the effective date of this amendatory Act of the 104th General Assembly.

Section 10. The Illinois Lottery Law is amended by changing Sections 9.3 and 20 as follows:

(20 ILCS 1605/9.3)

Sec. 9.3. Expenditure and distribution of lottery proceeds.

(a) Beginning July 1, 2022, except as provided in Sections 21.4, 21.5, 21.6, 21.7, 21.8, 21.9, 21.10, 21.11, 21.13, 21.15, and 21.16 of this Law and Section 25-70a 25-70 of the Sports Wagering Act, the Department shall distribute all proceeds of lottery tickets and shares sold in the following priority and manner:

(1) The payment of prizes and retailer bonuses.

(2) The payment of costs incurred in the operation and administration of the Lottery, including the payment of sums due to the private manager under the management agreement with the Department and including costs of administering the Lottery sports wagering program pursuant to Section 25-70a 25-70 of the Sports Wagering Act.

(3) On the last day of each month or as soon thereafter as possible, the State Comptroller shall direct and the State Treasurer shall transfer from the State Lottery Fund to the Common School Fund the Department's estimate of net lottery proceeds.

(4) If an amount in excess of the annual net lottery proceeds is transferred for a fiscal year, then the Department shall offset the monthly transfers of estimated net lottery proceeds during the following fiscal year by that excess amount. If an amount less than the annual net lottery proceeds is transferred for a fiscal year, then after the related annual fiscal year audit is completed following such fiscal year, the Department shall direct the deposit of any remaining annual net lottery proceeds from such fiscal year, subject to payments under paragraphs (1) and (2), into the Common School Fund as soon thereafter as possible.

(b) The net lottery proceeds shall be determined by deducting from total annual lottery proceeds the expenditures required by paragraphs (1) and (2) of subsection (a). The total annual lottery proceeds and annual net lottery proceeds shall be determined according to generally accepted accounting principles for governmental entities and verified by an annual fiscal year audit.

(Source: P.A. 102-699, eff. 4-19-22; 103-381, eff. 7-28-23.)

(20 ILCS 1605/20) (from Ch. 120, par. 1170)

Sec. 20. State Lottery Fund.

(a) There is created in the State Treasury a special fund to be known as the State Lottery Fund. Such fund shall consist of all revenues received from (1) the sale of lottery tickets or shares, (net of commissions, fees representing those expenses that are directly proportionate to the sale of tickets or shares at the agent location, and prizes of less than $600 which have been validly paid at the agent level), (2) application fees, and (3) all other sources including moneys credited or transferred thereto from any other fund or source pursuant to law. Interest earnings of the State Lottery Fund shall be credited to the Common School Fund.

(a-5) The receipt and distribution of moneys under Section 21.4 of this Act shall be in accordance with Section 21.4.

(b) The receipt and distribution of moneys under Section 21.5 of this Law shall be in accordance with Section 21.5.

(c) The receipt and distribution of moneys under Section 21.6 of this Law shall be in accordance with Section 21.6.

(d) The receipt and distribution of moneys under Section 21.7 of this Law shall be in accordance with Section 21.7.

(e) The receipt and distribution of moneys under Section 21.8 of this Law shall be in accordance with Section 21.8.

(f) The receipt and distribution of moneys under Section 21.9 of this Law shall be in accordance with Section 21.9.

(g) The receipt and distribution of moneys under Section 21.10 of this Law shall be in accordance with Section 21.10.

(h) The receipt and distribution of moneys under Section 21.11 of this Law shall be in accordance with Section 21.11.

(i) (Blank).

(j) The receipt and distribution of moneys under Section 21.13 of this Law shall be in accordance with Section 21.13.

(k) The receipt and distribution of moneys under Section 25-70a 25-70 of the Sports Wagering Act shall be in accordance with Section 25-70a 25-70 of the Sports Wagering Act.

(l) The receipt and distribution of moneys under Section 21.15 of this Law shall be in accordance with Section 21.15.

(m) The receipt and distribution of moneys under Section 21.16 of this Law shall be in accordance with Section 21.16.

(Source: P.A. 102-16, eff. 6-17-21; 103-381, eff. 7-28-23.)

Section 15. The Sports Wagering Act is amended by changing Section 25-15 and by adding Section 25-70a as follows:

(230 ILCS 45/25-15)

Sec. 25-15. Board duties and powers.

(a) Except for sports wagering conducted under Section 25-70a 25-70, the Board shall have the authority to regulate the conduct of sports wagering under this Act.

(b) The Board may adopt any rules the Board considers necessary for the successful implementation, administration, and enforcement of this Act, except for Section 25-70a 25-70. Rules proposed by the Board may be adopted as emergency rules pursuant to Section 5-45 of the Illinois Administrative Procedure Act.

(c) The Board shall levy and collect all fees, surcharges, civil penalties, and monthly taxes on adjusted gross sports wagering receipts imposed by this Act and deposit all moneys into the Sports Wagering Fund, except as otherwise provided under this Act.

(d) The Board may exercise any other powers necessary to enforce the provisions of this Act that it regulates and the rules of the Board.

(e) The Board shall adopt rules for a license to be employed by a master sports wagering licensee when the employee works in a designated gaming area that has sports wagering or performs duties in furtherance of or associated with the operation of sports wagering by the master sports wagering licensee (occupational license), which shall require an annual license fee of $250. However, occupational licenses issued under the Illinois Gambling Act for employees of an owners license or organization gaming licensee, once granted, are considered equivalent licenses to work in sports wagering positions located at the same gaming facility. License fees shall be deposited into the State Gaming Fund and used for the administration of this Act.

(f) The Board may require that licensees share, in real time and at the sports wagering account level, information regarding a wagerer, amount and type of wager, the time the wager was placed, the location of the wager, including the Internet protocol address, if applicable, the outcome of the wager, and records of abnormal wagering activity. Information shared under this subsection (f) must be submitted in the form and manner as required by rule. If a sports governing body has notified the Board that real-time information sharing for wagers placed on its sports events is necessary and desirable, licensees may share the same information in the form and manner required by the Board by rule with the sports governing body or its designee with respect to wagers on its sports events subject to applicable federal, State, or local laws or regulations, including, without limitation, privacy laws and regulations. Such information may be provided in anonymized form and may be used by a sports governing body solely for integrity purposes. For purposes of this subsection (f), "real time" "real-time" means a commercially reasonable periodic interval.

(g) A master sports wagering licensee, professional sports team, league, or association, sports governing body, or institution of higher education may submit to the Board in writing a request to prohibit a type or form of wagering if the master sports wagering licensee, professional sports team, league, or association, sports governing body, or institution of higher education believes that such wagering by type or form is contrary to public policy, unfair to consumers, or affects the integrity of a particular sport or the sports betting industry. The Board shall grant the request upon a demonstration of good cause from the requester and consultation with licensees. The Board shall respond to a request pursuant to this subsection (g) concerning a particular event before the start of the event or, if it is not feasible to respond before the start of the event, as soon as practicable.

(h) The Board and master sports wagering licensees may cooperate with investigations conducted by sports governing bodies or law enforcement agencies, including, but not limited to, providing and facilitating the provision of account-level betting information and audio or video files relating to persons placing wagers.

(i) A master sports wagering licensee shall make commercially reasonable efforts to promptly notify the Board any information relating to:

(1) criminal or disciplinary proceedings commenced against the master sports wagering licensee in connection with its operations;

(2) abnormal wagering activity or patterns that may indicate a concern with the integrity of a sports event or sports events;

(3) any potential breach of the relevant sports governing body's internal rules and codes of conduct pertaining to sports wagering that a licensee has knowledge of;

(4) any other conduct that corrupts a wagering outcome of a sports event or sports events for purposes of financial gain, including match fixing; and

(5) suspicious or illegal wagering activities, including use of funds derived from illegal activity, wagers to conceal or launder funds derived from illegal activity, using agents to place wagers, and using false identification.

A master sports wagering licensee shall also make commercially reasonable efforts to promptly report information relating to conduct described in paragraphs (2), (3), and (4) of this subsection (i) to the relevant sports governing body.

(Source: P.A. 101-31, eff. 6-28-19; 102-689, eff. 12-17-21; revised 8-13-24.)

(230 ILCS 45/25-70a new)

Sec. 25-70a. Lottery sports wagering pilot program.

(a) As used in this Section:

"Central lottery system" means the hardware, software, peripherals, platform, and network components that link and support all required lottery games, programs, and lottery terminals, including, but not limited to, Illinois sports betting games and programs through sports lottery terminals.

"Central lottery system provider" means an individual, partnership, corporation, or limited liability company that provides the hardware, software, peripherals, platform, risk management, operations, support services, and network components that link and support all required lottery games and lottery terminals, including, but not limited to, Illinois lottery sports betting games and programs through sports lottery terminals.

"Department" means the Department of the Lottery.

"Electronic card" means a card purchased from a lottery retailer.

"Lottery game" means any game provided for sale or distribution by the Illinois lottery, including, but not limited to, Illinois sports betting games, including those defined in Section 25 of this Act and 11 Ill. Adm. Code Part 1900, and programs through sports lottery terminals.

"Lottery retailer" means a location licensed by the Department or otherwise eligible for a license to sell lottery tickets or shares, including any licensed retail establishment where alcoholic liquor is drawn, poured, mixed, or otherwise served for consumption on premises, whether the establishment operates on a nonprofit or for-profit basis, any location or establishment that is licensed to operate video gaming terminals, and any other retail food establishment.

"Sports lottery systems" means systems provided by the central system provider consisting of sports wagering products, including those defined in Section 25 of this Act and 11 Ill. Adm. Code Part 1900, risk management, operations, and support services.

"Sports lottery terminal" means a terminal linked to the central system in which bills or coins are deposited or an electronic card is inserted in order to place wagers on a sports event and lottery offerings and includes sports wagering conducted over the Internet or through mobile applications or another digital platform.

(b) Lottery games are a part of the private management agreement and competitive bidding process as set forth in Section 9.1.

(c) Every sports lottery terminal offered in this State for play shall first be tested and approved pursuant to the rules of the Department, and each sports lottery terminal offered in this State for play shall conform to an approved model, which shall be ready for play in Illinois within 90 days after the effective date of this amendatory Act of the 104th General Assembly and any system testing dates designated by the Department. For the examination of sports lottery terminals and associated equipment as required by this Section, the central lottery system provider may use the services of one or more independent outside testing laboratories that have been accredited by a national accreditation body and that, in the judgment of the Department, are qualified to perform such examinations. Every sports lottery terminal offered in this State for play must meet minimum standards set by an independent outside testing laboratory approved by the Department.

(d) Sports lottery terminals may be placed in any lottery retail location in the State.

(e) A sports lottery terminal may not directly dispense coins, cash, tokens, or any other article of exchange or value except for receipt tickets. Tickets shall be dispensed by pressing the ticket dispensing button on the sports lottery terminal at the end of the placement of one's wager or wagers. The ticket shall indicate information as required by the Department.

(f) No lottery retailer may cause or permit any person under the age of 21 years to use a sports lottery terminal or sports wagering application. A lottery retailer who knowingly causes or permits a person under the age of 21 years to use a sports lottery terminal or sports wagering application is guilty of a business offense and shall be fined an amount not to exceed $5,000.

(g) A sports lottery terminal shall accept any wagers as determined by rule by the Department, including those defined in Section 25 of this Act and 11 Ill. Adm. Code Part 1900. The payouts for the sports lottery program shall be set by the Department.

Of the gross gaming revenue remaining, which is calculated as the gross dollars played minus prizes paid, to be distributed as follows:

(1) 30% to the State of Illinois, of which the local municipality shall receive 5%.

(2) 20% to the central system provider.

(3) The remaining split evenly between the owner and operator of the sports lottery terminal and the lottery retailer.

(h) The Department shall have exclusive jurisdiction over and shall supervise all lottery sports wagering operations governed by this Section. The Department shall implement and administer the lottery sports wagering pilot program no later than June 30, 2025. The Department shall have all powers necessary and proper to execute the provisions of this Section fully and effectively, including, but not limited to, the following:

(1) To investigate applicants and determine the eligibility of applicants for licenses with a goal of advancing minority business opportunities including lottery retailer ownership of sports lottery terminals.

(2) To have jurisdiction and supervision over all lottery sports wagering operations in this State.

(3) To adopt rules for the purpose of administering the provisions of this Section and to adopt rules and conditions under which all lottery sports wagering in the State shall be conducted. Such rules are to provide for the prevention of practices detrimental to the public interest and for the best interests of lottery sports wagering, including rules (i) regarding the inspection of such licensees necessary to operate a lottery retailer under any laws or rules applicable to licensees, (ii) to impose penalties for violations of the Act and its rules, (iii) establishing standards for advertising lottery sports wagering, (iv) to effectuate policies that advance minority business ownership and participation in the sports lottery program, and (v) to apportion the total revenues accruing from the lottery sports wagering pilot program for the purchase or lease of the hardware.

(i) The Department shall adopt emergency rules to administer this Section in accordance with Section 5-45 of the Illinois Administrative Procedure Act.

(j) For the privilege of operating lottery sports wagering under this Section, all proceeds minus net of proceeds returned to players shall be electronically transferred daily or weekly, at the discretion of the Director of the Lottery, into the State Lottery Fund. After amounts owed to the central system provider and licensed agents, as determined by the Department, are paid from the moneys deposited into the State Lottery Fund under this subsection, the remainder shall be transferred on the 15th of each month to the Capital Projects Fund.

(k) The Department shall be responsible for facilitating either the purchase or lease of all sports lottery terminals, including facilitating opportunities for minority business lottery retailers to obtain suitable financing. The Department shall allow for any licensed terminal operator under the Video Gaming Act or owners licensee under the Illinois Gambling Act to purchase or lease the sports lottery terminals and shall allow for a lottery retail location to own or lease the sports lottery terminals.

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