FAQ | Illinois Video Gaming Board

FAQ

 

Information provided by the Illinois Gaming Board – http://www.cms.il.gov.

 

Video Gaming

 

 

On July 13, 2009 Governor Pat Quinn signed the Video Gaming Act (Public Acts 096-0034, 096-0037 and 096-0038) making video gaming terminals legal in Illinois. The Act allows for video gaming terminals to be placed in certain liquor establishments, truck stops and fraternal/veterans clubs throughout the state.

The Illinois Gaming Board (the IGB or Board) has the responsibility of implementing and regulating video gaming in Illinois. Initially, the Board must promulgate administrative rules. The rules will provide guidance on matters such as, but not limited to, standards, testing requirements, application procedures and hearings. There will be a hearing for the public to comment on the proposed rules on a date to be determined.

In addition to rulemaking, the Board must secure a central communications system. The system will be linked to every licensed video gaming terminal in Illinois. On July 28, 2009, the Board issued a Request For Information (RFI) relative to central communications systems. Responses are due by August 24, 2009. At some point, thereafter, the Board will issue a Request For Proposal (RFP) for a central communications system.

The RFI can be viewed at the State of Illinois, Central Management System’s web-site, www.cms.il.gov.

 

Frequently asked questions regarding the Video Gaming Act

 

 

The Board is aware that there are many questions associated with video gaming that remain unanswered at this time. First and foremost, the Board has not projected a start date for video gaming in Illinois. Additionally, many questions will be answered through the rulemaking process. Answers to some common and frequently asked questions related to the Video Gaming Act are provided below. Finally, the Board wishes to emphasize that it will not compromise integrity for haste.

Q: Does the IGB have jurisdiction over “amusement only” devices in Illinois.

A: The IGB does not have jurisdiction and does not license “amusement only” devices in Illinois. Questions about such devices should be directed to the Illinois Department of Revenue at (312) 814-5232 (Chicago) or (217) 782-3336 (Springfield).

Q: When will the IGB adopt Rules for video gambling?

A: The IGB is working to formulate the Administrative Rules which will dictate how video gambling will operate and be regulated in Illinois. No date can be set as to when

those Administrative Rules will be submitted to the Joint Committee on Administrative Rules (JCAR) or adopted by the Board.

Q: What is a video gaming terminal?

A: A “Video Gaming Terminal” (“VGT”) is an electronic video gaming machine that plays or simulates the play of a video game authorized by the Board, upon the insertion of cash. Authorized video games include, but are not limited to, video poker, line up, and blackjack. The video gaming terminal must utilize a video display and microprocessors in which the player may receive free games or credits that can be redeemed for cash. “Video Gaming Terminal” does not include a machine that directly dispenses coins, cash, or tokens or is for amusement purposes only.

Q: Can local jurisdictions restrict the use of video gaming terminals?

A: Yes. A municipality may pass an ordinance prohibiting video gaming within the corporate limits of the municipality. A county board may pass an ordinance prohibiting video gaming within the unincorporated areas of the county.

In addition, a local government may hold a referendum proposing to prohibit video gaming. A petition for referendum must be filed in the office of the clerk (municipal or county) at least 90 days before the date of an election. The petition must contain the signatures of not less than 25% of the voters of the municipality or county. The clerk shall certify the proposition to the proper elections officials, who shall submit the proposition to the voters of the municipality or county. The proposition shall be in the following form: “Shall video gaming be prohibited in ______?” The choices “YES” or “NO” shall be selected by the voters. If a majority of the voters vote “YES”, video gaming shall be prohibited within the municipality or county. Petitions to prohibit video gaming shall be public documents.

Q: When will license applications be available for video gambling terminals?

A: No date has been set as to when license applications will be available. The IGB must first adopt Administrative Rules dictating how video gaming will operate and be regulated in Illinois before any applications will be made available.

Q: What types of licenses will be available?

A: The following licenses will be available on some date not yet determined:

“Distributor.” A distributor is an individual, partnership or corporation licensed to buy, sell, lease, or distribute video gaming terminals, or major components or parts thereof, to or from terminal operators.

“Terminal operator.” A terminal operator is an individual, partnership, or corporation licensed to own, service, and maintain video gaming terminals for placement in licensed establishments, licensed truck stop establishments, licensed fraternal establishments, or licensed veterans establishments.

“Licensed technician.” A licensed technician is an individual licensed to repair, service, and maintain video gaming terminals.

“Licensed terminal handler.” A licensed terminal handler is a person licensed to possess or control a video gaming terminal or to have access to the inner workings of a video gaming terminal. The category of “licensed terminal handler” may include, but is not limited to, an employee or independent contractor working for a manufacturer, distributor, supplier, technician, or terminal operator.

“Manufacturer.” A manufacturer is an individual, partnership, or corporation licensed to manufacture or assemble video gaming terminals.

“Supplier.” A supplier is an individual, partnership, or corporation licensed to supply major components or parts of video gaming terminals to terminal operators.

Q: What types of establishments will be able to have VGT’s?

A: Video gaming machines may be placed in the following four categories of establishments:

“Licensed establishment.” A licensed establishment is any licensed retail establishment where alcoholic liquor is served for consumption on the premises.

“Licensed fraternal establishment.” A licensed fraternal establishment is a location where a fraternal organization that derives its charter from its national parent organization regularly meets.

“Licensed veterans establishment.” A licensed veterans establishment is a location where a qualified veterans organization that holds a charter from its national parent organization regularly meets.

“Licensed truck stop establishment.” A licensed truck stop establishment is a facility of at least three acres with a convenience store, separate diesel islands for fueling commercial motor vehicles, and parking spaces for commercial vehicles.

Q: Where will video gaming be allowed?

A: In licensed retail liquor establishments where “on-premise” consumption of alcohol is served (e.g., bars and restaurants), licensed truck stops, and licensed fraternal and veterans establishments.

Video gaming is restricted from the following locations:

1.) 1,000 feet of a facility operated by an organizational licensee, intertrack wagering licensee, or intertrack wagering location licensee licensed under the Illinois Horse Racing Act of 1975 (230 ILCS 5/1 et seq. (West 2008));

2.) 1,000 feet of the home dock of a riverboat licensed under the Riverboat Gambling Act (230 ILCS 10/1 et seq. (West 2008)); or

3.) 100 feet of either a school or a place of worship under the Religious Corporation Act (805 ILCS 110/0.01 et seq. (West 2008)).

Q: Is a license required to place a video gaming terminal in your establishment?

A: Yes. Those found without a proper license are subject to penalties.

Among the requirements for licensure:

(a) Burden is upon applicant. The burden is upon each applicant to demonstrate suitability for licensure. Each VGT manufacturer, distributor, supplier, operator, handler, and licensed establishment shall be licensed by the Board. The Board may issue or deny a license under this Act to any person under the same criteria set forth in Section 9 of the Riverboat Gambling Act (230 ILCS 10/9 (West 2008)).

(b) Background investigations. Each person seeking and possessing a license as a VGT manufacturer, distributor, supplier, operator, handler, and licensed establishment shall submit to a background investigation conducted by the Board with the assistance of the State Police or other law enforcement. This investigation shall include each trust beneficiary, partnership partner, director, and officer of the entity being investigated, as well as all stockholders of 5% or more in a parent or subsidiary corporation.

(c) Disclosure of financial interests. Each person seeking and possessing a license as a VGT manufacturer, distributor, supplier, operator, handler, and licensed establishment shall disclose the identity of every person, association, trust, or corporation having a direct or indirect interest of more than 1% in the VGT 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 partnership, the names and addresses of all partners, both general and limited.

(d) License disqualifications. No person may receive a license under the Act if found by the Board to:

(1) Have a background (including a criminal record, reputation, habits, social or business associations, or prior activities) that poses 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) Burden of proof: additional license requirements promulgated by Gaming Board. All applicants for licensure have the burden of proving their 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 Illinois.

(f) License application fees:

Manufacturer $5,000

Distributor $5,000

Terminal operator $5,000

Supplier $2,500

Technician $100

Terminal handler $50

(g) Annual license fees. Annual fees may not exceed these levels:

Manufacturer $10,000

Distributor $10,000

Terminal operator $5,000

Supplier $2,000

Technician $100

Licensed establishment (in any category) $100

Video gaming terminal $100

Terminal handler $50

Q: Are terminals allowed anywhere inside a licensed establishment?

A: VGTs must be located in an area restricted to persons over 21 years of age, the entrance to which is within the view of at least one employee who is over 21 years of age. The placement of VGTs in licensed establishments shall be subject to rules promulgated by the Board.

Q: How many video gaming machines will be allowed at each site?

A: Up to five machines may be placed at each licensed establishment.

Q: Can a limited liability company be an Illinois licensee under the Video Gaming Act?

A: No, the Video Gaming Act does not allow a limited liability company to hold a license. 

Illinious video gaming