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This is the same reason Google's Arts & Culture face-matching tool wasn't available in Illinois:

Also why Nest IQ (which uses biometric face detection) isn't available in Illinois.

Does anybody know if this affects the iPhone's Face ID in any way?

It supposedly does not, as the data is kept on the phone and Apple does not take possession of the data.

Moving to Illinois sounds more appealing than ever.

Besides the winters and pension underfunding, it’s a great place to live for a bit.