The Illinois Video Gaming Act, 230 ILCS 40, enacted in 2009, permits video gaming terminals to be operated by licensed entities in Illinois. This law does not address financial institution lending to such entities, and we are not aware of any state or federal law that would prohibit a bank from making such loans pursuant to its authority to engage in the “general banking business” or the “business of banking.”  See 205 ILCS 5/3 (for state-chartered banks); 12 USC 24 (Seventh) (for national banks).

We do note that a financial institution’s business relationship with a lawful gambling enterprise will raise many special considerations for the institution based on a plethora of federal and state banking laws, including heightened due diligence when establishing the relationship and heightened monitoring of the ongoing relationship, among other considerations that go beyond the scope of your question.  We also note that such a banking relationship would create compliance considerations for the financial institution relating to many of the requirements in the Video Gaming Act and the Illinois Gaming Board’s regulations. For example, the Illinois law requires video game terminal operators to deposit revenues into “a specially created, separate bank account” for making electronic tax payments. 230 ILCS 40/60(c)11 Ill. Adm. Code 1800.250(i). The Illinois Gaming Board has posted substantial information on its Video Gaming Page, including FAQs and a list of municipalities permitting video gaming, that may be helpful in this regard.

Please be advised that our response above does not constitute legal advice, and we would urge any financial institution considering a commercial banking relationship with a licensee of the Video Gaming Act to consult with its bank counsel or primary prudential regulator for additional guidance.