Illinois’ new video gaming law
I’m changing direction this week. Although I plan more posts on healthcare nationalized, this week I’m going to cover the State of Illinois and its new push to increase revenue by allowing gambling/video poker throughout the State.
I had computer problems yesterday and couldn’t post. Trying again tonight.
As I wrote on my last post, the total Illinois budget expenditures increased by over 18% from the 2005 fiscal year to the 2007 fiscal year. That, of course, was a significantly greater increase than inflation and probably a significantly greater increase than most residents received in income. The government seems to think it’s a sport’s athlete entitled to large increases in income/spending each year.
However, since the nation is in a recession this year, the State legislature turned to increased taxes and the implementation of a new video gaming provision to raise additional income so that they could spend more money in selected areas.
To do this late in the regular session, the legislature used an oft used tactic. They gutted one bill before the legislature and replaced it with all new provisions. House bill 255 originally stated this: “Short Description: ESTATE AND GST TAX-QTIP” and had this synopsis: “Synopsis As Introduced
Amends the Illinois Estate and Generation-Skipping Transfer Tax. Provides that the State tax credit for the estates of persons dying after December 31, 2005 and on or before December 31, 2009 includes a reduction for qualified terminable interest property. Provides that the trustee of a trust for which a QTIP election is made may not retain non-income producing assets for more than a reasonable amount of time without the consent of the surviving spouse. Effective immediately.
Thus, this bill was gutted and replaced as follows: “Senate Floor Amendment No. 1
Replaces everything after the enacting clause. Creates the Video Gaming Act (i) to allow licensed retail establishments where alcoholic liquor is served for consumption, licensed fraternal establishments, and licensed veterans establishments and truck stops to conduct video gaming and (ii) to require taxes to be deposited into the Capital Projects Fund and Local Government Video Gaming Distributive Fund. Creates the Capital Spending Accountability Law to require GOMB to make reports. Amends the Riverboat Gambling Act to provide for administration and enforcement by the Illinois Gaming Board. Amends the State Finance Act (i) to create the Capital Projects Fund and to require transfers to GRF and to require the Fund to be used for capital projects and debt service, (ii) to create the Local Government Video Gaming Distributive Fund, and (iii) to stop all diversions from the Road Fund to the Secretary of State and the State Police. Amends the use tax and occupation tax Acts (i) to provide that candy, certain beverages, and grooming and hygiene products are taxed at the 6.25% rate (instead of the 1% rate) and (ii) to require deposit of the increased revenue into the Capital Projects Fund. Amends the Motor Fuel Tax Law to make changes concerning the Grade Crossing Protection Fund. Amends the Liquor Control Act of 1934 to increase the tax on wine, on beer, and on alcohol and spirits. Amends the Illinois Vehicle Code (i) to increase various fees and fines and require deposit of the increased revenue into the Capital Projects Fund and (ii) to make changes concerning load and weight restrictions. Amends the Illinois Lottery Law (i) to allow the Department of Revenue to conduct the Lottery through a management agreement with a private manager and (ii) to authorize a pilot program that allows an individual to purchase Illinois lottery tickets on the Internet. Provides for revenue from the Internet program, after payment of vendor compensation, to be deposited into the Common School Fund and the Capital Projects Fund. Amends the University of Illinois Act to require the University to conduct a study on the effect on Illinois families of members of the family purchasing Illinois Lottery tickets and to report its findings. Amends the Gambling Article of the Criminal Code of 1961 to make corresponding changes. Effective July 1, 2009, except that some parts related to truck weights take effect January 1, 2010.”
And by: “Senate Floor Amendment No. 3
Provides that the bill does not take effect unless House Bill 312 of the 96th General Assembly, as amended, becomes law. Amends the Environmental Protection Act. Provides that the Underground Storage Tank Fund is not subject to administrative charges authorized under Section 8h of the State Finance Act.”
Wasn’t that easy?
Here are some pertinent sections of the law dealing with video gaming. The law is 277 pages long so obviously can’t all be posted here:
“Section 27. Prohibition of video gaming by political subdivision.
A municipality may pass an ordinance prohibiting video gaming within the corporate limits of the municipality. A county board may, for the unincorporated area of the county, pass an ordinance prohibiting video gaming within the unincorporated area of the county.”
Translation: Cities, towns, and villages may prevent video gaming within their jurisdictions and county boards may do the same for those unincorporated areas of the county.
This is an unusual provision in a State law. Do you think the legislature may be passing the buck to the local jurisdictions? They know that video gaming can be/will be harmful but now can say: “Well, if the local jurisdictions don’t want it, we gave them the power to outlaw it. It’s the local jurisdictions fault for not outlawing this type of gambling!”
“Section 40. Video gaming terminal use by minors prohibited.
No licensee shall cause or permit any person under the age of 21 years to use or play a video gaming terminal. Any licensee who knowingly permits a person under the age of 21 years to use or play a video gaming terminal is guilty of a business offense and shall be fined an amount not to exceed $5,000.”
Translation: Just as smoking and consuming alcohol is harmful to minors, so is gambling. Thus, one must be mature enough to gamble using video gaming. At 21, everyone is mature enough!
“Section 50. Distribution of license fees.
(a) All fees collected under Section 45 (license fees—my addition) shall be deposited into the State Gaming Fund.
(b) Fees collected under Section 45 shall be used as follows:
(1) Twenty-five percent shall be paid to programs for the treatment of compulsive gambling.
(2) Seventy-five percent shall be used for the administration of this Act.”
Translation: The legislature knows that gambling can be addictive. Thus, the legislature will use ¼ of the fees collected to combat this addiction caused by the legislature by legalizing this addictive activity. Makes sense doesn’t it?
“Section 55. Precondition for licensed establishment.
In all cases of application for a licensed establishment, to operate a video gaming terminal, each licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment shall possess a valid liquor license issued by the Illinois Liquor Control Commission in effect at the time of application and at all times thereafter during which a video gaming terminal is made available to the public for play at that location. (All licensed bars which also have a license may also participate—my addition)”
Translation: The legislature is only allowing this particular addictive activity—gambling/video gaming—to occur at places where another addictive behavior—excessive alcohol consumption—is already allowed. Makes sense to me! Two addictive behaviors make one new source for increases in tax revenue. Sort of a take off on two wrongs make a right. Right?
“Section 60. Imposition and distribution of tax.
(a) A tax of 30% is imposed on net terminal income and shall be collected by the Board.
(b) Of the tax collected under this Section, five-sixths shall be deposited into the Capital Projects Fund and one-sixth shall be deposited into the Local Government Video Gaming
Distributive Fund.”
Translation: The State gets almost ⅓ of the income generated by this new form of legalized gambling. However, the State will bribe local governments with 16⅔% of that 30% to placate them for the increased local problems caused.
Section 70. Referendum.
Upon the filing in the office of the clerk, at least 90 days before an election in any municipality or county, as the case may be, of a petition directed to such clerk, containing the signatures of not less than 25% of the legal voters of that municipality or county, the clerk shall certify such proposition to the proper election officials, who shall submit the proposition at such election to the voters of such municipality or county. The proposition
shall be in the following form:
------------------------------------------------------------
Shall video gaming YES
be prohibited in ----------------------
..............................? NO
------------------------------------------------------------
If a majority of the voters voting upon such last mentioned proposition in any municipality or county vote ‘YES’, such video gaming shall be prohibited in such municipality or county. The petition mentioned in this Section shall be a public document and shall be subject to inspection by the public.”
Translation: If local governments aren’t wise enough to outlaw video gaming, local voters may do so by referendum.
Again, do you think the legislature may be passing the buck to the local voters? They know that video poker can be/will be harmful but now can say: “Well, if the local jurisdictions don’t want it, we gave them the power to outlaw it. And if the local governments don’t outlaw it, we also gave the power to local voters to outlaw it. It’s the local voters fault for not outlawing this type of gambling!”
“Section 75. Revenue sharing; Local Government Video Gaming Distributive Fund.
(a) As soon as may be after the first day of each month, the Department of Revenue shall allocate among those municipalities and counties of this State that have not prohibited video gaming pursuant to Section 27 or Section 70 the amount available in the Local Government Video Gaming Distributive Fund, a special fund in the State Treasury, as provided in Section 60. The Department shall then certify such allocations to the State Comptroller, who shall pay over to those eligible municipalities and counties the respective amounts allocated to them. The amount of such funds allocable to each such municipality and county shall be in proportion to the tax revenue generated from video gaming within the eligible municipality or county compared to the tax revenue generated
from video gaming Statewide.
Translation: The legislature hopefully (we aren’t always successful at this) will distribute to the local governments their “30 pieces of silver” monthly to keep them placated.
(b) The amounts allocated and paid to a municipality or county of this State pursuant to the provisions of this Section may be used for any general corporate purpose authorized for that municipality or county.”
Translation: Use your “30 pieces of silver” anyway you want. No restrictions. We want to keep you placated.
I’m changing direction this week. Although I plan more posts on healthcare nationalized, this week I’m going to cover the State of Illinois and its new push to increase revenue by allowing gambling/video poker throughout the State.
I had computer problems yesterday and couldn’t post. Trying again tonight.
As I wrote on my last post, the total Illinois budget expenditures increased by over 18% from the 2005 fiscal year to the 2007 fiscal year. That, of course, was a significantly greater increase than inflation and probably a significantly greater increase than most residents received in income. The government seems to think it’s a sport’s athlete entitled to large increases in income/spending each year.
However, since the nation is in a recession this year, the State legislature turned to increased taxes and the implementation of a new video gaming provision to raise additional income so that they could spend more money in selected areas.
To do this late in the regular session, the legislature used an oft used tactic. They gutted one bill before the legislature and replaced it with all new provisions. House bill 255 originally stated this: “Short Description: ESTATE AND GST TAX-QTIP” and had this synopsis: “Synopsis As Introduced
Amends the Illinois Estate and Generation-Skipping Transfer Tax. Provides that the State tax credit for the estates of persons dying after December 31, 2005 and on or before December 31, 2009 includes a reduction for qualified terminable interest property. Provides that the trustee of a trust for which a QTIP election is made may not retain non-income producing assets for more than a reasonable amount of time without the consent of the surviving spouse. Effective immediately.
Thus, this bill was gutted and replaced as follows: “Senate Floor Amendment No. 1
Replaces everything after the enacting clause. Creates the Video Gaming Act (i) to allow licensed retail establishments where alcoholic liquor is served for consumption, licensed fraternal establishments, and licensed veterans establishments and truck stops to conduct video gaming and (ii) to require taxes to be deposited into the Capital Projects Fund and Local Government Video Gaming Distributive Fund. Creates the Capital Spending Accountability Law to require GOMB to make reports. Amends the Riverboat Gambling Act to provide for administration and enforcement by the Illinois Gaming Board. Amends the State Finance Act (i) to create the Capital Projects Fund and to require transfers to GRF and to require the Fund to be used for capital projects and debt service, (ii) to create the Local Government Video Gaming Distributive Fund, and (iii) to stop all diversions from the Road Fund to the Secretary of State and the State Police. Amends the use tax and occupation tax Acts (i) to provide that candy, certain beverages, and grooming and hygiene products are taxed at the 6.25% rate (instead of the 1% rate) and (ii) to require deposit of the increased revenue into the Capital Projects Fund. Amends the Motor Fuel Tax Law to make changes concerning the Grade Crossing Protection Fund. Amends the Liquor Control Act of 1934 to increase the tax on wine, on beer, and on alcohol and spirits. Amends the Illinois Vehicle Code (i) to increase various fees and fines and require deposit of the increased revenue into the Capital Projects Fund and (ii) to make changes concerning load and weight restrictions. Amends the Illinois Lottery Law (i) to allow the Department of Revenue to conduct the Lottery through a management agreement with a private manager and (ii) to authorize a pilot program that allows an individual to purchase Illinois lottery tickets on the Internet. Provides for revenue from the Internet program, after payment of vendor compensation, to be deposited into the Common School Fund and the Capital Projects Fund. Amends the University of Illinois Act to require the University to conduct a study on the effect on Illinois families of members of the family purchasing Illinois Lottery tickets and to report its findings. Amends the Gambling Article of the Criminal Code of 1961 to make corresponding changes. Effective July 1, 2009, except that some parts related to truck weights take effect January 1, 2010.”
And by: “Senate Floor Amendment No. 3
Provides that the bill does not take effect unless House Bill 312 of the 96th General Assembly, as amended, becomes law. Amends the Environmental Protection Act. Provides that the Underground Storage Tank Fund is not subject to administrative charges authorized under Section 8h of the State Finance Act.”
Wasn’t that easy?
Here are some pertinent sections of the law dealing with video gaming. The law is 277 pages long so obviously can’t all be posted here:
“Section 27. Prohibition of video gaming by political subdivision.
A municipality may pass an ordinance prohibiting video gaming within the corporate limits of the municipality. A county board may, for the unincorporated area of the county, pass an ordinance prohibiting video gaming within the unincorporated area of the county.”
Translation: Cities, towns, and villages may prevent video gaming within their jurisdictions and county boards may do the same for those unincorporated areas of the county.
This is an unusual provision in a State law. Do you think the legislature may be passing the buck to the local jurisdictions? They know that video gaming can be/will be harmful but now can say: “Well, if the local jurisdictions don’t want it, we gave them the power to outlaw it. It’s the local jurisdictions fault for not outlawing this type of gambling!”
“Section 40. Video gaming terminal use by minors prohibited.
No licensee shall cause or permit any person under the age of 21 years to use or play a video gaming terminal. Any licensee who knowingly permits a person under the age of 21 years to use or play a video gaming terminal is guilty of a business offense and shall be fined an amount not to exceed $5,000.”
Translation: Just as smoking and consuming alcohol is harmful to minors, so is gambling. Thus, one must be mature enough to gamble using video gaming. At 21, everyone is mature enough!
“Section 50. Distribution of license fees.
(a) All fees collected under Section 45 (license fees—my addition) shall be deposited into the State Gaming Fund.
(b) Fees collected under Section 45 shall be used as follows:
(1) Twenty-five percent shall be paid to programs for the treatment of compulsive gambling.
(2) Seventy-five percent shall be used for the administration of this Act.”
Translation: The legislature knows that gambling can be addictive. Thus, the legislature will use ¼ of the fees collected to combat this addiction caused by the legislature by legalizing this addictive activity. Makes sense doesn’t it?
“Section 55. Precondition for licensed establishment.
In all cases of application for a licensed establishment, to operate a video gaming terminal, each licensed truck stop establishment, licensed fraternal establishment, or licensed veterans establishment shall possess a valid liquor license issued by the Illinois Liquor Control Commission in effect at the time of application and at all times thereafter during which a video gaming terminal is made available to the public for play at that location. (All licensed bars which also have a license may also participate—my addition)”
Translation: The legislature is only allowing this particular addictive activity—gambling/video gaming—to occur at places where another addictive behavior—excessive alcohol consumption—is already allowed. Makes sense to me! Two addictive behaviors make one new source for increases in tax revenue. Sort of a take off on two wrongs make a right. Right?
“Section 60. Imposition and distribution of tax.
(a) A tax of 30% is imposed on net terminal income and shall be collected by the Board.
(b) Of the tax collected under this Section, five-sixths shall be deposited into the Capital Projects Fund and one-sixth shall be deposited into the Local Government Video Gaming
Distributive Fund.”
Translation: The State gets almost ⅓ of the income generated by this new form of legalized gambling. However, the State will bribe local governments with 16⅔% of that 30% to placate them for the increased local problems caused.
Section 70. Referendum.
Upon the filing in the office of the clerk, at least 90 days before an election in any municipality or county, as the case may be, of a petition directed to such clerk, containing the signatures of not less than 25% of the legal voters of that municipality or county, the clerk shall certify such proposition to the proper election officials, who shall submit the proposition at such election to the voters of such municipality or county. The proposition
shall be in the following form:
------------------------------------------------------------
Shall video gaming YES
be prohibited in ----------------------
..............................? NO
------------------------------------------------------------
If a majority of the voters voting upon such last mentioned proposition in any municipality or county vote ‘YES’, such video gaming shall be prohibited in such municipality or county. The petition mentioned in this Section shall be a public document and shall be subject to inspection by the public.”
Translation: If local governments aren’t wise enough to outlaw video gaming, local voters may do so by referendum.
Again, do you think the legislature may be passing the buck to the local voters? They know that video poker can be/will be harmful but now can say: “Well, if the local jurisdictions don’t want it, we gave them the power to outlaw it. And if the local governments don’t outlaw it, we also gave the power to local voters to outlaw it. It’s the local voters fault for not outlawing this type of gambling!”
“Section 75. Revenue sharing; Local Government Video Gaming Distributive Fund.
(a) As soon as may be after the first day of each month, the Department of Revenue shall allocate among those municipalities and counties of this State that have not prohibited video gaming pursuant to Section 27 or Section 70 the amount available in the Local Government Video Gaming Distributive Fund, a special fund in the State Treasury, as provided in Section 60. The Department shall then certify such allocations to the State Comptroller, who shall pay over to those eligible municipalities and counties the respective amounts allocated to them. The amount of such funds allocable to each such municipality and county shall be in proportion to the tax revenue generated from video gaming within the eligible municipality or county compared to the tax revenue generated
from video gaming Statewide.
Translation: The legislature hopefully (we aren’t always successful at this) will distribute to the local governments their “30 pieces of silver” monthly to keep them placated.
(b) The amounts allocated and paid to a municipality or county of this State pursuant to the provisions of this Section may be used for any general corporate purpose authorized for that municipality or county.”
Translation: Use your “30 pieces of silver” anyway you want. No restrictions. We want to keep you placated.
posted by Christian Gunslinger at 4:47 AM
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