Illinois Senate Passes Online Poker, DFS Legalization Measure, Uphill Battle Remains

Updated: June 3rd, 2017 by Haley Hintze

In an eleventh-hour move, the Illinois State Senate approved on Wednesday a bill which would authroize and regulate both online poker and daily fantasy sports in the state.  The bill passed by a 42-10-1 vote after rushed second and third readings, passing just prior to the end of the Senate’s spring legislative session.

The approvd bill, House Bill 479, began as a House measure, but due to two amendments being added and approved before the measure passed the Illinois Senate, the bill will have to return to the House for further consideration.  HB 479 was officially added today to the House’s calender of waiting legislation, to be considered soon after the House returns from its own legislative recess on June 9th.

HB 479 passed only after online poker and a widened window for operator licensing was added to what was originally a DFS-only bill.  Casino interests, led by Rish Street Gaming, which operates the new Rivers Casino near Des Plaines, pushed for the inclusion of online poker in the bill.

According to HB 479 co-sponsor State Senator Kwame Raoul, in a comment to the Chicago Tribune, the state’s largest newspaper, “There was controversy last year as to why are we regulating daily fantasy sports activity, which is ongoing in the state, and not regulating internet gaming, which is also occurring.  So what this bill attempts to do is also regulate and bring licensure and supervision of internet gaming under the jurisdiction of the Gaming Board. And it would limit the operation of internet gaming to existing casinos.”

One hurdle to the bill was hurried handled via one of the amendments inserted on Wednesday.  Text was inserted to allow Illinois’ prominent pari-mutuel industry to also be eligible for licensing if the market is authorized and opened.  As with the prior resistance from Rush Street to a DFS-only bill, the horseracing interests stood in opposition to HB 479 prior to the amendment being inserted.

For now, though the proposed online gambling expansion would include only DFS and online poker, and not other foms of online gambling.  A couple of years back, a measure that would have created a widespread expansion in the online arena was nixed — primarily because of opposition from Republican Governor Bruce Rauner’s office — that it was too much on top of the land-based casino expansion that actually allowed Rush Street’s Des Plaines casino to open.

Rauner may still not be a fan of the online-gambling legalization effort, as he has opposed such measures on other occasions as well.  Nonetheless, the possibility of a veto override exists even if HB 479 passes the Illinois House and is then vetoed by Rauner.  Rauner also remains embedded in a bitter, three-years-running budget war with Illinois’ Dmocrat-controlled legislator.  That struggle looms over any fiscally-connected legislation as well, including HB 479.

According to the state’s official overview of HB 479, the bill creates a broad administrative structure, including a new oversight agency.  Note that this overview is from the pre-amended version of HB 479; the same provisions will largely apply to online poker as well.  Among the provisions of the overview:

Creates the Fantasy Sports Contest Act, and authorizes interactive fantasy sports contests conducted in accordance with the provisions of the Act;

Prohibits the conduct of interactive fantasy sports contests by unlicensed interactive fantasy sports operators;

Provides that no interactive fantasy sports operator shall administer, manage, or otherwise make available an interactive fantasy sports platform to persons located in Illinois unless licensed by the Illinois Gaming Board under the Act;

Provides that the Illinois Gaming Board shall have jurisdiction over and shall supervise all interactive fantasy sports contests governed by the Act;

Provides that the Board shall adopt emergency rules to implement the Act;

Contains provisions concerning applicability, licensing, the powers and duties of the Board, required safeguards and minimum standards for operators, multiple interactive fantasy sports platforms and interactive fantasy sports contests, annual reports, state taxes, the disposition of taxes, audits, limitations on the taxation of operators, and application fees and license fees;

Provides that the Act is repealed on January 1, 2021. Creates the Internet Gaming Act. Authorizes internet wagering to the extent that it is carried out in accordance with the provisions of the Act;

Creates the Division of Internet Gaming within the Illinois Gaming Board to administer, regulate, and enforce the system of Internet gaming established under the Act. Contains provisions concerning powers and duties of the Division. Requires the Board to hire an Executive Director of the Division;

Provides that the Division is authorized to issue Internet gaming licenses and certify Internet gaming vendors;

Provides that each Internet gaming licensee shall be limited to using not more than 2 brands;

Contains provisions restricting the operation of computer terminals or similar devices principally used for the purpose of accessing Internet games;

Contains provisions concerning age verification and responsible gaming, taxes on Internet gaming licensees, and applicability of the Riverboat Gambling Act;

Creates the Responsible Internet Gaming Advisory Board to make recommendations to the Executive Director of the Division regarding the development of rules and procedures to reduce and prevent problem or compulsive gambling and youth gambling and to ensure the conduct of safe, fair, and responsible Internet gaming;

… legislative and agency definitions …

Provides that interactive fantasy sports contests and participation in interactive fantasy sports contests authorized under the Fantasy Sports Contest Act and internet wagering conducted in accordance with the Internet Gaming Act does not constitute gambling or syndicated gambling;

Provides that “gambling place” does not include gambling conducted in the manner authorized by the Internet Gaming Act;

Provides that certain gambling devices used as authorized under the Internet Gaming Act are exempt from seizure.

We’ll be back with an update if HB 479 does indeed pass through the Illinois State House and moves on to an uncertain fate on Rauner’s desk.

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