81R4137 YDB-F
By: Ellis, Carona S.B. No. 1084
A BILL TO BE ENTITLED
AN ACT
relating to the authorization and regulation of casino and slot
gaming in this state, the creation, powers, and duties of the Texas
Gaming Commission, and the powers and duties of the Texas Racing
Commission; providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 13, Occupations Code, is amended by adding
Subtitle A-1 to read as follows:
SUBTITLE A-1. CASINO, SLOT, AND OTHER GAMING REGULATED BY TEXAS
GAMING COMMISSION
CHAPTER 2021. GENERAL PROVISIONS; TEXAS GAMING COMMISSION
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 2021.001. DEFINITIONS. In this subtitle:
(1) "Affiliate" means a person who, directly or
indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with another person. A
person is considered to control a company if the person
beneficially owns more than a five percent equity interest in the
company under the beneficial ownership rules adopted by the
commission.
(2) "Applicant" means a person who has applied for a
casino owner's license, a casino operator's license, a slot
establishment owner's license, a slot establishment operator's
license, an occupational license, a manufacturer's license, a slot
machine provider license, a casino service license, or a
qualification to hold an equity interest or creditor interest in a
casino owner's license holder or slot establishment owner's license
holder or who has applied for the approval of any act or transaction
for which approval is required or allowed under this subtitle.
(3) "Associated equipment" means any equipment,
including a mechanical, electromechanical, or electronic
contrivance, component, or machine, used in connection with gaming
or with any game that would not otherwise be classified as a gaming
device. The term includes dice, playing cards, links connecting
progressive slot machines, equipment affecting the proper
reporting of gross gaming revenue, computerized systems or software
for monitoring slot machines, and devices for weighing or counting
money.
(4) "Casino" means a facility at which gambling games
are conducted for profit that are not authorized by a law other than
Chapter 2022. The term does not include a slot establishment.
(5) "Casino operator" means a person other than the
casino owner's license holder who contractually agrees to provide
operational and managerial services for the operation of a casino
on behalf of the casino owner's license holder in return for
receiving a payment based wholly or partly on profits or receipts
from the casino.
(6) "Casino operator's license" means a license issued
under Section 2022.101.
(7) "Casino owner's license" means a license issued
under Section 2022.052.
(8) "Casino service" means the provision of goods or
services, including security service and gaming schools, to a
person holding a casino owner's or operator's license under this
subtitle, other than a service requiring a manufacturer's license.
(9) "Casino service license" means a license issued
under Section 2022.152.
(10) "Casino service license holder" means a person
who holds a casino service license.
(11) "Commission" means the Texas Gaming Commission.
(12) "Commission member" means a member of the
commission.
(13) "Company" means a corporation, partnership,
limited partnership, trust, association, joint stock company,
joint venture, limited liability company, or other form of business
organization. The term does not include a sole proprietorship or
natural person.
(14) "Creditor interest" means a right or claim of any
character against a person for the payment of money borrowed,
whether secured or unsecured, matured or unmatured, liquidated or
absolute, or fixed or contingent. The term includes an obligation
based on the person's profits or receipts.
(15) "Director" means a member of the board of
directors of a corporation and a person performing similar
functions with respect to a company other than a corporation.
(16) "Equity interest" means a proprietary interest,
right, or claim allowing the holder either to vote with respect to
matters of organizational governance or to participate in the
profits and residual assets of a company, including common and
preferred stock in a corporation, a general or limited partnership
interest in a partnership, a similar interest in any other form of
business organization, and a warrant, right, or similar interest
convertible into, or to subscribe for, a proprietary right or
claim, with or without the payment of additional consideration.
(17) "Executive director" means the executive
director of the commission.
(18) "Game" or "gambling game":
(A) means any game or similar activity that
involves the making of a bet, as defined by Section 47.01, Penal
Code, for consideration, and includes:
(i) a banking or percentage game played
with cards, dice, or a mechanical, electromechanical, or electronic
device or machine for money, property, checks, credit, or a
representative of value, including roulette, keno, twenty-one,
blackjack, craps, poker, chuck-a-luck (dai shu), wheel of fortune,
chemin de fer, baccarat, pai gow, slot machine, any other
electronic game of chance, and any other game or device approved by
the commission;
(ii) simulcast wagering on pari-mutuel
greyhound or horse racing;
(iii) the maintenance of a race book; and
(iv) any other method of effecting a wager
approved by the commission; and
(B) does not include:
(i) bingo authorized by Chapter 2001;
(ii) charitable raffles authorized by
Chapter 2002; or
(iii) the state lottery conducted under
Chapter 466, Government Code.
(19) "Gaming" or "gambling" means to deal, operate,
carry on, conduct, maintain, or expose for play a game in a casino
or slot establishment.
(20) "Gaming agreement" means an agreement authorized
under Chapter 2022 or 2023 between this state and a federally
recognized Indian tribe with Indian lands in this state under which
this state allows the tribe to conduct limited gaming activities
authorized under Chapter 2022 or 2023 or applicable federal law.
(21) "Gaming device" means a mechanical,
electromechanical, or electronic contrivance, component, or
machine used in connection with gaming or a game that affects the
result of a wager by determining win or loss. The term includes a
system for processing information that can alter the normal
criteria of random selection, affect the operation of a game, or
determine the outcome of a game.
(22) "Gaming employee":
(A) means an individual directly involved in the
operation or conduct of gaming in a casino or slot establishment
performing a service in a capacity that the commission finds
appropriate for occupational licensing under Section 2022.102 and
includes:
(i) a boxman, a cashier, change personnel,
counting room personnel, a dealer, a floor person, a host empowered
to extend credit or complimentary services, a keno runner, a keno
writer, a machine mechanic, or security personnel;
(ii) a shift or pit boss or a supervisor or
manager involved in gaming activities;
(iii) accounting or internal auditing
personnel directly involved in recordkeeping or the examination of
records generated from gaming activities; and
(iv) a junketeer or other independent agent
whose compensation is based on how much a patron wagers or loses or
who is paid per patron more than the price of admission; and
(B) does not include bartenders, cocktail
waitresses, or other individuals engaged exclusively in preparing
or serving food or beverages or individuals providing nominal,
complimentary, or maintenance services.
(23) "Gross gaming revenue":
(A) means the total of the following, less the
total of all cash paid out as losses to patrons and the amounts paid
to purchase annuities to fund losses paid to patrons by independent
financial institutions and items made deductible as losses under
Section 2022.303:
(i) money received by an owner's license
holder from players of casino games;
(ii) money received by an owner's license
holder in payment for credit extended by the owner's license holder
to a patron for the purposes of casino gaming; and
(iii) compensation received by an owner's
license holder for conducting any game in which the owner's license
holder is not a party to a wager; and
(B) does not include:
(i) counterfeit money or tokens;
(ii) coins of other countries that are
received in slot machines or gaming devices;
(iii) cash taken in fraudulent acts
perpetrated against an owner's license holder for which the holder
is not reimbursed; or
(iv) cash received as entry fees for
contests or tournaments in which the patrons compete for prizes.
(24) "Hearing examiner" means a person authorized by
the commission to conduct hearings.
(25) "Indian lands" means land that was held in trust
by the United States on January 1, 1998, for the benefit of the
Indian tribe pursuant to the Restoration Acts (Pub. L. No. 100-89)
or on which gaming is permitted under the Indian Gaming Regulatory
Act (18 U.S.C. Section 1166 et seq. and 25 U.S.C. Section 2701 et
seq.).
(26) "Institutional investor" means a person, other
than a state or federal pension plan, that meets the requirements of
a "qualified institutional buyer" as defined in 17 C.F.R. Section
230.144A and is:
(A) a bank as defined in Section 3(a)(6),
Securities Exchange Act of 1934 (15 U.S.C. Section 78c);
(B) an insurance company as defined in Section
2(a)(17), Investment Company Act of 1940 (15 U.S.C. Section 80a-2);
(C) an investment company registered under
Section 8, Investment Company Act of 1940 (15 U.S.C. Section
80a-8);
(D) an investment adviser registered under
Section 203, Investment Advisers Act of 1940 (15 U.S.C. Section
80b-3);
(E) a collective trust fund as defined by Section
3(c)(11), Investment Company Act of 1940 (15 U.S.C. Section 80a-3);
(F) an employee benefit plan or pension fund that
is subject to the Employee Retirement Income Security Act of 1974
(29 U.S.C. Section 1001 et seq.), excluding an employee benefit
plan or pension fund sponsored by a publicly traded corporation
registered with the commission;
(G) a state or federal government pension plan;
(H) a group composed entirely of persons
specified in Paragraphs (A)-(F); or
(I) such other persons as the commission may
determine for reasons consistent with the policies expressed in
Section 2022.001.
(27) "Key executive" means a corporation's directors
and executive officers, a partnership's general partners, a trust's
trustee, a joint venture's managing venturers, and each person
possessing similar responsibilities and authorities in any other
form of business organization.
(28) "License" means a license issued under this
subtitle, including a casino owner's license, a casino operator's
license, a slot establishment owner's license, a slot establishment
operator's license, an occupational license, a casino service
license, a manufacturer's license, a slot machine provider license,
or a qualification to hold an equity interest or creditor interest
in a casino owner's or slot establishment owner's license.
(29) "License holder" means a person holding a license
issued under this subtitle.
(30) "Manufacturer license holder" means the holder of
a manufacturer's license.
(31) "Manufacturer's license" means a license issued
under Section 2022.151.
(32) "Negotiable instrument" means a writing that
evidences a transaction between an individual and a casino or slot
establishment owner's license holder at the time of the transaction
whose gaming chips, tokens, or currency are exchanged for the
instrument and includes a writing taken in consolidation,
redemption, or payment of a prior instrument.
(33) "Net slot income" means the total amount of money
paid to play slot machines at a slot establishment less the value of
all credits redeemed for money, including any progressive prizes
and bonuses, by the players of the slot games. The following
provisions apply to the calculation of net slot income:
(A) the costs associated with progressive prizes
may not be deducted from the total amount of money paid to play the
games for purposes of determining net slot income; and
(B) promotional prizes offered by a slot
establishment may not be deducted or otherwise considered credits
redeemed for money by players.
(34) "Occupational license" means a license issued
under Section 2022.102.
(35) "Occupational license holder" means the holder of
an occupational license.
(36) "Operator's license" means a casino operator's
license issued under Section 2022.101 or a slot establishment
operator's license issued under Section 2022.202.
(37) "Operator license holder" means the holder of an
operator's license.
(38) "Owner's license" means a casino owner's license
issued under Section 2022.052 or a slot establishment owner's
license issued under Section 2022.202.
(39) "Owner's license holder" means a person holding
an owner's license.
(40) "Pari-mutuel license holder" means a person
licensed to conduct wagering on a greyhound race or a horse race
under the Texas Racing Act (Article 179e, Vernon's Texas Civil
Statutes).
(41) "Player" means a person who contributes any part
of the consideration to play a gambling game.
(42) "Principal manager" means a person who, as
determined under the rules of the commission, holds or exercises
managerial, supervisory, or policy-making authority over the
management or operation of a gaming activity or casino service that
in the judgment of the commission warrants the occupational
licensing as a principal manager for the protection of the public
interest. The term includes a key executive of a license holder
that is a company and each person controlling a license holder that
is a company.
(43) "Race book" means wagers accepted on the outcome
of an event held at a greyhound or horse racetrack that uses the
pari-mutuel system of wagering.
(44) "Racetrack" means a racetrack as defined by
Section 1.03, Texas Racing Act (Article 179e, Vernon's Texas Civil
Statutes), that is conducting live racing or simulcasting under an
active pari-mutuel license.
(45) "Slot establishment" means premises at which the
operation of slot machines is authorized by the commission under
this subtitle in accordance with a license or gaming agreement.
(46) "Slot establishment operator's license" means a
license issued under Section 2022.202.
(47) "Slot establishment operator's license holder"
means a person holding a slot establishment operator's license.
(48) "Slot establishment owner's license" means a
license issued under Section 2022.202.
(49) "Slot establishment owner's license holder" means
a person holding a slot establishment owner's license.
(50) "Slot machine" means a mechanical, electrical, or
other device or machine that, on insertion of a coin, token, or
similar object or on payment of consideration, is available to play
or operate, the play or operation of which, wholly or partly by the
element of chance, may deliver or entitle the person playing or
operating the machine to receive cash, premiums, merchandise,
tokens, or any other thing of value, whether the payoff is made
automatically from the machine or is made in another manner.
Sec. 2021.002. APPLICATION OF SUNSET ACT. (a) The Texas
Gaming Commission is subject to Chapter 325, Government Code (Texas
Sunset Act). Unless continued in existence as provided by that
chapter, the commission is abolished September 1, 2021.
(b) On the date the commission is abolished under Subsection
(a), the following statutes are repealed:
(1) this chapter;
(2) Chapter 2022;
(3) Chapter 2023; and
(4) the Texas Racing Act (Article 179e, Vernon's Texas
Civil Statutes).
Sec. 2021.003. REFERENCES TO LICENSE INCLUDE CERTIFICATE OF
REGISTRATION OR OTHER APPROVAL. Except as expressly provided by
this subtitle, other law, or commission rule, a reference in this
subtitle to a license applies to a certificate of registration,
finding of suitability, or other affirmative regulatory approval
under this subtitle, other law, or commission rule.
Sec. 2021.004. EXEMPTION FROM TAXATION. A political
subdivision of this state may not impose:
(1) a tax on the payment of a prize under Chapter 2023;
(2) a tax, fee, or other assessment on consideration
paid to play a gambling game authorized by this subtitle; or
(3) a tax or fee on attendance at or admission to a
casino or slot establishment authorized by this subtitle unless
specifically authorized by statute.
[Sections 2021.005-2021.050 reserved for expansion]
SUBCHAPTER B. TEXAS GAMING COMMISSION
Sec. 2021.051. COMMISSION; MEMBERSHIP. (a) The Texas
Gaming Commission is composed of five members appointed by the
governor with the advice and consent of the senate.
(b) Appointments to the commission shall be made without
regard to the race, color, disability, sex, religion, age, or
national origin of the appointee.
Sec. 2021.052. QUALIFICATIONS OF COMMISSION MEMBERS. (a)
To be eligible for appointment to the commission, a person:
(1) must be a citizen of the United States;
(2) must have resided in this state for the two years
preceding the date of the person's appointment;
(3) must submit a financial statement that contains
the information required by Chapter 572, Government Code;
(4) may not own a financial or other interest in a
person engaged in the conduct of gaming or the provision of casino
services, or in a security issued by that person, or be related
within the second degree by affinity or the third degree by
consanguinity, as determined under Chapter 573, Government Code, to
an individual who owns such a financial or other interest or
security;
(5) may not be an applicant for or holder of a license,
certificate of registration, finding of suitability, or other
affirmative regulatory approval under a law administered by the
commission or hold an equity interest or creditor interest in an
owner's license holder requiring qualification under Section
2022.060; and
(6) may not be a member of the governing body of a
political subdivision of this state.
(b) A person holding an elective office or an officer or
official of a political party is not eligible for appointment to the
commission.
Sec. 2021.053. MEMBERSHIP AND EMPLOYEE RESTRICTIONS. (a)
In this section, "Texas trade association" means a cooperative and
voluntarily joined association of business or professional
competitors in this state designed to assist its members and its
industry or profession in dealing with mutual business or
professional problems and in promoting their common interest.
(b) A person may not be a member of the commission or an
employee of the commission employed in a "bona fide executive,
administrative, or professional capacity," as that phrase is used
for purposes of establishing an exemption to the overtime
provisions of the federal Fair Labor Standards Act of 1938 (29
U.S.C. Section 201 et seq.) if:
(1) the person is an officer, employee, manager, or
paid consultant of a Texas trade association in the field of gaming;
or
(2) the person's spouse is an officer, manager, or paid
consultant of a Texas trade association in the field of gaming.
(c) A person may not be a member of the commission or act as
general counsel to the commission if the person is required to
register as a lobbyist under Chapter 305, Government Code, because
of the person's activities for compensation on behalf of a
profession related to the operation of the commission.
Sec. 2021.054. TERMS; VACANCIES. (a) Members of the
commission serve staggered six-year terms, with the term or terms
of one or two members expiring February 1 of each odd-numbered year.
(b) The governor shall fill a vacancy in a position on the
commission for the remainder of the unexpired term.
Sec. 2021.055. PRESIDING OFFICER. The governor shall
designate a member of the commission as presiding officer of the
commission to serve in that capacity at the pleasure of the
governor.
Sec. 2021.056. MEETINGS; OFFICIAL RECORD. (a) The
commission shall meet not less than six times each year.
(b) The commission may meet at other times at the call of the
presiding officer or as provided by commission rule.
(c) The commission shall keep an official record of all
commission meetings and proceedings.
Sec. 2021.057. GROUNDS FOR REMOVAL. (a) It is a ground for
removal from the commission that a member:
(1) does not have at the time of taking office the
qualifications required by Section 2021.052;
(2) does not maintain during service on the commission
the qualifications required by Section 2021.052;
(3) is ineligible for membership under Section
2021.053;
(4) cannot, because of illness or disability,
discharge the member's duties for a substantial part of the member's
term; or
(5) is absent from more than half of the regularly
scheduled commission meetings that the member is eligible to attend
during a calendar year without an excuse approved by a majority vote
of the commission.
(b) The validity of an action of the commission is not
affected by the fact that it is taken when a ground for removal of a
commission member exists.
(c) If the executive director has knowledge that a potential
ground for removal of a commission member exists, the executive
director shall notify the presiding officer of the commission of
the potential ground. The presiding officer shall then notify the
governor and the attorney general that a potential ground for
removal exists. If the potential ground for removal involves the
presiding officer, the executive director shall notify the next
highest officer of the commission, who shall notify the governor
and the attorney general that a potential ground for removal
exists.
Sec. 2021.058. TRAINING. (a) A person who is appointed to
and qualifies for office as a member of the commission may not vote,
deliberate, or be counted as a member in attendance at a meeting of
the commission until the person completes a training program that
complies with this section.
(b) The training program must provide the person with
information regarding:
(1) this subtitle and the other laws administered by
the commission;
(2) the commission's programs, functions, rules, and
budget;
(3) the results of the most recent formal audit of the
commission;
(4) the requirements of laws relating to open
meetings, public information, administrative procedure, and
conflict of interest; and
(5) any applicable ethics policies adopted by the
commission or the Texas Ethics Commission.
(c) A person appointed to the commission is entitled to
reimbursement, as provided by the General Appropriations Act, for
travel expenses incurred in attending the training program
regardless of whether the attendance at the program occurs before
or after the person qualifies for office.
Sec. 2021.059. QUALIFICATIONS AND STANDARDS OF CONDUCT
INFORMATION. The executive director or the executive director's
designee shall provide to members of the commission, as often as
necessary, information regarding their:
(1) qualifications for office under this chapter; and
(2) responsibilities under applicable laws relating
to standards of conduct for state officers.
Sec. 2021.060. BOND. (a) Before assuming the duties of
office, a member of the commission must execute a bond in the amount
of $25,000 payable to the state and conditioned on the member's
faithful performance of the member's duties of office.
(b) The bond must be approved by the governor.
(c) The cost of the bond shall be paid by the commission.
Sec. 2021.061. PROHIBITION OF CERTAIN ACTIVITIES. (a) A
member of the commission may not:
(1) use the member's official authority to affect the
result of an election or nomination for public office; or
(2) directly or indirectly coerce, attempt to coerce,
command, or advise a person to pay, lend, or contribute anything of
value to another person for political purposes.
(b) A commission member or the spouse of a commission member
may not solicit or accept employment from a license, certificate of
registration, finding of suitability, or approval holder under a
law administered by the commission or from an applicant for a
license, certificate, finding of suitability, or approval before
the second anniversary of the date the commission member's service
on the commission ends.
Sec. 2021.062. APPLICATION OF FINANCIAL DISCLOSURE LAW.
For purposes of Chapter 572, Government Code, a member of the
commission, the executive director, and the division directors are
appointed officers of a major state agency.
Sec. 2021.063. PER DIEM; EXPENSES. (a) A member of the
commission is entitled to:
(1) a per diem in an amount prescribed by
appropriation for each day spent in performing the duties of the
member; and
(2) reimbursement for actual and necessary expenses
incurred in performing those duties.
(b) Reimbursement for expenses under this section is
subject to any applicable limitation in the General Appropriations
Act.
Sec. 2021.064. EXECUTIVE DIRECTOR. (a) The commission
shall appoint an executive director, who serves at the pleasure of
the commission.
(b) A person holding an elective office or an officer or
official of a political party is not eligible for appointment as
executive director.
(c) The executive director must have five or more years of
responsible administrative experience in public or business
administration or possess broad management skills.
(d) The executive director may not pursue any other business
or occupation or hold any other office for profit.
(e) The executive director must meet all eligibility
requirements relating to members of the commission, except the
requirement for prior residency in this state.
(f) The executive director is entitled to an annual salary
and other compensation specified by the commission.
(g) The executive director may not, before the second
anniversary of the date the director's service to the commission
ends, acquire a direct or indirect interest in or be employed by a
person licensed or registered by the commission in connection with
the conduct of gaming or the provision of casino services in this
state.
Sec. 2021.065. OFFICES. The commission shall maintain its
primary office in Travis County and may maintain other offices
determined to be necessary by the commission.
Sec. 2021.066. AUTHORITY TO SUE OR BE SUED. (a) The
commission may sue and be sued.
(b) Service of process in a suit against the commission may
be secured by serving the executive director.
(c) A suit against the commission must be brought in Travis
County.
Sec. 2021.067. AUDIT. The transactions of the commission
are subject to audit by the state auditor under Chapter 321,
Government Code.
[Sections 2021.068-2021.100 reserved for expansion]
SUBCHAPTER C. POWERS AND DUTIES OF COMMISSION
Sec. 2021.101. GENERAL POWERS. (a) The commission has
broad authority and shall exercise strict control and close
supervision over all activities authorized and conducted in this
state under a law administered by the commission, including:
(1) this subtitle; and
(2) the Texas Racing Act (Article 179e, Vernon's Texas
Civil Statutes).
(b) The commission shall ensure that all casino games, slot
machine gaming, and other gaming activities subject to the
oversight or regulatory authority of the commission are conducted
fairly and in compliance with the law.
(c) The commission also has the powers and duties granted
under:
(1) Chapter 2022;
(2) Chapter 2023; and
(3) the Texas Racing Act (Article 179e, Vernon's Texas
Civil Statutes).
(d) All aspects of this subtitle and the other laws
administered by the commission, including those relating to
licensing, qualification, execution, and enforcement, shall be
administered by the executive director and the commission for the
protection of the public and in the public interest.
(e) The commission and the executive director have full
power and authority to hold hearings and, in connection with the
hearings, to issue subpoenas, to compel the attendance of witnesses
at any place in this state, to administer oaths, and to require
testimony under oath. Any process or notice relating to a hearing
may be served in the manner provided for service of process and
notices in civil actions. The commission and the executive
director may pay transportation and other expenses of witnesses as
they consider reasonable.
(f) The executive director and the executive director's
authorized employees may:
(1) inspect and examine a premises where gaming is
conducted or equipment or supplies, including an electronic or
other gaming device, or associated equipment is manufactured,
assembled, produced, programmed, sold, leased, marketed,
distributed, repaired, or modified for use in gaming;
(2) for good cause, seize and remove from a premises
and impound equipment or supplies for the purpose of examination
and inspection; and
(3) demand access to, inspect, examine, photocopy, or
audit papers, books, and records of applicants and license and
certificate holders, on their premises or elsewhere as practicable,
in the presence of the license or certificate holder or the license
or certificate holder's agent, reporting the gross income produced
by a gaming business, verification of the gross income, and other
matters affecting the enforcement of this subtitle or other law
administered by the commission.
(g) For the purpose of conducting audits after the cessation
of gaming by a license or certificate holder, a former license
holder shall furnish, on demand of the executive director or the
executive director's authorized employees, books, papers, and
records as necessary to conduct the audits. The former license or
certificate holder shall maintain all books, papers, and records
necessary for audits for three years after the date of the surrender
or revocation of the license or certificate and is responsible for
the costs incurred by the commission in the conduct of an audit
under this section. If the former license or certificate holder
seeks judicial review of a deficiency determination or files a
petition for a redetermination, the former license or certificate
holder must maintain all books, papers, and records until a final
order is entered on the determination.
(h) The commission shall contract with an independent
testing laboratory to scientifically test and technically evaluate
casino games, slot machine games, and associated equipment for
compliance with this subtitle. The independent testing laboratory
must have a national reputation of being demonstrably competent and
must be qualified to scientifically test and evaluate all
components of casino games, slot machine games, and associated
equipment for compliance with this subtitle and to perform the
functions assigned to it under this subtitle. An independent
testing laboratory may not be owned or controlled by a person
licensed to conduct casino or slot games or to manufacture gaming
equipment. The use of an independent testing laboratory for
purposes related to the conduct of gaming under this subtitle must
be made from a list of one or more laboratories approved by the
commission.
Sec. 2021.102. RULEMAKING AUTHORITY. (a) The commission
shall adopt rules the commission considers necessary or desirable
for the public interest in carrying out the policy and provisions of
this subtitle and the other laws administered by the commission.
(b) The rules shall set out:
(1) the method and form of application that an
applicant for a license or certificate of registration under this
subtitle must follow and complete before consideration of an
application by the commission;
(2) the information to be furnished by an applicant or
license or certificate holder under Chapter 2022 concerning
antecedents, habits, character, associates, criminal record,
business activities, and financial affairs;
(3) the criteria to be used in the award, revocation,
and suspension of licenses or certificates under Chapter 2022;
(4) the information to be furnished by a license or
certificate holder under Chapter 2022 relating to the holder's
employees;
(5) the manner and procedure of hearings conducted by
the commission or a hearing examiner of the commission;
(6) the payment of fees or costs an applicant or
license or certificate holder under Chapter 2022 must pay;
(7) the procedures for the issuance of temporary
licenses and certificates and temporary qualification to hold
equity interests and creditor interests in owner's license and
certificate holders under Chapter 2022;
(8) the manner and method of collection and payment of
fees and the issuance of licenses and certificates;
(9) the definition of "unsuitable method of
operation";
(10) the conditions under which the nonpayment of a
gambling debt by a license or certificate holder constitutes
grounds for disciplinary action;
(11) the manner of approval of gambling games, slot
machines, and other electronic gaming devices;
(12) access to confidential information obtained
under this chapter, Chapter 2022, Chapter 2023, or other law and
means to ensure that the confidentiality of the information is
maintained and protected;
(13) financial reporting and internal control
requirements for license or certificate holders;
(14) the manner in which money awarded to players of
casino games, compensation from casino games and slot machines,
gross gaming revenue, and net slot income must be computed and
reported under Chapter 2022;
(15) requirements for the annual audit of the
financial statements of a license or certificate holder;
(16) requirements for periodic financial reports from
each license or certificate holder consistent with standards and
intervals prescribed by the commission;
(17) the procedures to be followed by a license or
certificate holder for excluding a person from a casino or slot
establishment; and
(18) the procedures for exempting or waiving
institutional investors from the licensing or registration
requirements for shareholders of publicly traded corporations.
Sec. 2021.103. AUTHORITY OF EXECUTIVE DIRECTOR. (a) With
commission approval, the executive director may create executive
positions as the director considers necessary to implement the
provisions of this chapter, Chapter 2022, Chapter 2023, and any
other law administered by the commission.
(b) The executive director shall employ directors in the
areas of audit, investigation, and enforcement. The audit director
must be a certified public accountant, have five or more years of
progressively responsible experience in general accounting, and
have a comprehensive knowledge of the principles and practices of
corporate finance or must possess qualifications of an expert in
the field of corporate finance and auditing, general finance,
gaming, and economics. Other directors must possess five or more
years of training and experience in the fields of investigation,
law enforcement, law, or gaming.
(c) The executive director may investigate, for the purpose
of prosecution, a suspected criminal violation of this subtitle or
another law administered by the commission. For the purpose of the
administration and enforcement of this subtitle or another law
administered by the commission, the executive director and
employees designated by the executive director may be commissioned
as peace officers.
(d) The executive director, to further the objectives and
purposes of this subtitle or another law administered by the
commission, may:
(1) direct and supervise all administrative actions of
the commission;
(2) bring legal action in the name and on behalf of the
commission;
(3) make, execute, and effect an agreement or contract
authorized by the commission;
(4) employ the services of persons considered
necessary for consultation or investigation and set the salaries of
or contract for the services of legal, professional, technical, and
operational personnel and consultants, except that outside legal
assistance may be retained only with the approval of the attorney
general;
(5) acquire furnishings, equipment, supplies,
stationery, books, and all other things the executive director
considers necessary or desirable in carrying out the executive
director's functions; and
(6) perform other duties the executive director may
consider necessary to effect the purposes of this subtitle or
another law administered by the commission.
(e) Except as otherwise provided in this subtitle, the costs
of administration incurred by the executive director shall be paid
in the same manner as other claims against the state are paid.
Sec. 2021.104. OFFICE OF HEARING EXAMINERS. (a) The
commission shall create an office of hearing examiners to assist
the commission in carrying out its powers and duties.
(b) The office of hearing examiners shall:
(1) hold hearings under the authority of the
commission on matters relating to the commission's administration
of this subtitle or another law administered by the commission as
the commission orders; and
(2) report after hearing in the manner prescribed by
the commission.
(c) The commission shall refer any contested case arising
under this subtitle or another law administered by the commission
to the office of hearing examiners.
(d) The office of hearing examiners is independent of the
executive director and is under the exclusive control of the
commission.
(e) The office of hearing examiners is under the direction
of a chief hearing examiner appointed by the commission.
(f) The commission may authorize the chief hearing examiner
to delegate to one or more hearing examiners the authority to hold
any hearing called by the chief hearing examiner.
(g) The chief hearing examiner and all assistant hearing
examiners employed by the office of hearing examiners must be
attorneys licensed to practice law in this state.
(h) The chief hearing examiner and all assistant hearing
examiners may administer oaths, receive evidence, and issue
subpoenas to compel the attendance of witnesses and the production
of papers and documents in all matters delegated by the commission.
(i) The chief hearing examiner and all assistant hearing
examiners are entitled to an annual salary and other compensation
specified by the commission.
(j) The office of hearing examiners may contract for
additional services it considers necessary to carry out its powers.
Sec. 2021.105. JUDICIAL REVIEW IN CONTESTED CASES. A final
ruling of the commission in a contested case is subject to judicial
review under Chapter 2001, Government Code. Judicial review is
under the substantial evidence rule.
Sec. 2021.106. RECORDS; CONFIDENTIAL INFORMATION. (a) The
executive director shall maintain a file of all applications for
licenses, certificates of registration, findings of suitability,
or approvals under this subtitle or another law administered by the
commission, together with a record of all action taken with respect
to the applications.
(b) The commission and the executive director may maintain
other records they consider desirable.
(c) The information made confidential by this subsection
may be disclosed, wholly or partly, only in the course of the
necessary administration of this subtitle or other law administered
by the commission, under Section 2022.402, or on the order of a
court of competent jurisdiction, except that the executive director
or the commission may disclose the information to an authorized
agent of any agency of the United States, another state, or a
political subdivision of this state authorized under commission
rules. Notice of the content of any information furnished or
released under this subsection may be given to any affected
applicant or license, certificate of registration, finding of
suitability, or approval holder as prescribed by commission rule.
The following information is confidential:
(1) information requested by the commission or the
executive director to be furnished to either of them under this
subtitle or another law administered by the commission or that may
otherwise be obtained relating to the finances, earnings, or
revenue of an applicant or license, certificate, finding of
suitability, or approval holder;
(2) information pertaining to an applicant's criminal
record, antecedents, and background that has been furnished to or
obtained by the commission or the executive director from any
source;
(3) information provided to the commission or the
executive director or a commission employee by a governmental
agency or an informer or on the assurance that the information will
be held in confidence and treated as confidential;
(4) information obtained by the executive director or
the commission from a license, certificate, finding of suitability,
or approval holder, including a casino service license holder,
relating to the manufacturing, modification, or repair of gaming
devices;
(5) security plans and procedures of the commission
designed to ensure the integrity and security of the regulation and
operation of gaming;
(6) the street address and telephone number of a prize
winner, if the prize winner has not consented to the release of the
information; and
(7) information relating to all system operations of
gambling games, including security related to gambling games, and
commission plans and procedures intended to ensure the integrity
and security of the operation of gambling games.
Sec. 2021.107. REPRESENTATION BY ATTORNEY GENERAL. (a)
The attorney general shall represent the commission and the
executive director in any proceeding to which the commission or the
executive director is a party under this subtitle or another law
administered by the commission or in any suit filed against the
commission or executive director.
(b) The office of the attorney general on request shall
advise the commission and the executive director in all other
matters, including representing the commission when the commission
acts in its official capacity.
Sec. 2021.108. RULES RESTRICTING ADVERTISING OR
COMPETITIVE BIDDING. (a) The commission may not adopt rules
restricting advertising or competitive bidding by a person
regulated by the commission except to prohibit false, misleading,
or deceptive practices by that person.
(b) The commission may not include in its rules to prohibit
false, misleading, or deceptive practices by a person regulated by
the commission a rule that:
(1) restricts the use of any advertising medium;
(2) restricts the person's personal appearance or the
use of the person's voice in an advertisement;
(3) relates to the size or duration of an
advertisement by the person; or
(4) restricts the use of a trade name in advertising by
the person.
Sec. 2021.109. RULES ON CONSEQUENCES OF CRIMINAL
CONVICTION. (a) The commission shall adopt rules necessary to
comply with Chapter 53.
(b) In its rules under this section, the commission shall
list the specific offenses for which a conviction would constitute
grounds for the commission to take action under Section 53.021.
Sec. 2021.110. SUBPOENA. (a) The commission may request
and, if necessary, compel by subpoena:
(1) the attendance of a witness for examination under
oath; and
(2) the production for inspection and copying of
records and other evidence relevant to the investigation of an
alleged violation of this subtitle or another law administered by
the commission.
(b) If a person fails to comply with a subpoena issued under
this section, the commission, acting through the attorney general,
may file suit to enforce the subpoena in a district court in Travis
County or in the county in which a hearing conducted by the
commission may be held.
(c) The court shall order a person to comply with the
subpoena if the court determines that good cause exists for issuing
the subpoena.
Sec. 2021.111. DIVISION OF RESPONSIBILITIES. The
commission shall develop and implement policies that clearly
separate the policymaking responsibilities of the commission and
the management responsibilities of the executive director and the
staff of the commission.
Sec. 2021.112. USE OF TECHNOLOGY. The commission shall
implement a policy requiring the commission to use appropriate
technological solutions to improve the commission's ability to
perform its functions. The policy must ensure that the public is
able to interact with the commission on the Internet.
Sec. 2021.113. NEGOTIATED RULEMAKING AND ALTERNATIVE
DISPUTE RESOLUTION POLICY. (a) The commission shall develop and
implement a policy to encourage the use of:
(1) negotiated rulemaking procedures under Chapter
2008, Government Code, for the adoption of commission rules; and
(2) appropriate alternative dispute resolution
procedures under Chapter 2009, Government Code, to assist in the
resolution of internal and external disputes under the commission's
jurisdiction.
(b) The commission's procedures relating to alternative
dispute resolution must conform, to the extent possible, to any
model guidelines issued by the State Office of Administrative
Hearings for the use of alternative dispute resolution by state
agencies.
(c) The commission shall designate a trained person to:
(1) coordinate the implementation of the policy
adopted under Subsection (a);
(2) serve as a resource for any training needed to
implement the procedures for negotiated rulemaking or alternative
dispute resolution; and
(3) collect data concerning the effectiveness of those
procedures, as implemented by the commission.
Sec. 2021.114. COMMITTEES. The commission may appoint
committees that it considers necessary to carry out its duties.
Sec. 2021.115. DIVISIONS. (a) The commission shall
establish separate divisions to oversee and regulate:
(1) casino gaming and slot machine gaming conducted
under Chapters 2022 and 2023; and
(2) pari-mutuel racing.
(b) To facilitate the operations of the commission or a
division of the commission, the commission or executive director
may delegate to a division or a division director a specific power
or duty given to the commission or executive director under this
subtitle or other law.
(c) A division director shall, at the request of the
executive commissioner, assist in the development of rules and
policies for the operation and provision of a division of the
commission. The division director:
(1) acts on behalf of the executive director in
performing the delegated function; and
(2) reports to the executive director regarding the
delegated function and any matter affecting commission programs and
operations.
(d) The commission shall delegate responsibilities in the
administration of Chapter 2022 or 2023 to the executive director,
the director of the appropriate division, and the division's staff,
but may not delegate the following actions:
(1) a final determination in any application or
request for licensing, registration, finding of suitability, or
other affirmative regulatory approval;
(2) a final determination in any proceeding involving
the suspension or revocation of a license, certificate of
registration, finding of suitability, or other affirmative
regulatory approval;
(3) a final determination that Chapter 2022 or 2023
has been violated; or
(4) a final determination or imposition of an
assessment of fines or penalties.
Sec. 2021.116. CONTRACT AUTHORITY. (a) The commission and
executive director have broad authority and shall exercise strict
control and close supervision over gambling games played in this
state to promote and ensure integrity, security, honesty, and
fairness in the operation and administration of gaming under this
subtitle.
(b) The executive director may contract with or employ a
person to perform a function, activity, or service in connection
with the operation of gaming under this subtitle or another law
administered by the commission as prescribed by the executive
director. A contract relating to the operation of gaming must be
consistent with this subtitle.
(c) The executive director may award a contract for gaming
supplies, equipment, or services, including a contract under
Subsection (b), pending the completion of any investigation and
license, certificate of registration, finding of suitability, or
other affirmative regulatory approval authorized or required by
this subtitle. A contract awarded under this subsection must
include a provision permitting the executive director to terminate
the contract without penalty if the investigation reveals that the
person to whom the contract is awarded does not satisfy the
applicable requirements for a license, certificate of
registration, finding of suitability, or other affirmative
regulatory approval under this subtitle.
(d) In the acquisition or provision of facilities,
supplies, equipment, materials, or services related to the
implementation of gaming under Chapter 2022 or 2023, the commission
must comply with procurement procedures prescribed under Subtitle
D, Title 10, Government Code.
Sec. 2021.117. INVESTIGATIONS AND ENFORCEMENT. (a) The
attorney general, the district attorney for Travis County, or the
district attorney, criminal district attorney, or county attorney
for the county in which the violation or alleged violation occurred
may investigate a violation or alleged violation of this subtitle
or of the penal laws of this state by the commission, its employees,
or a person regulated under this subtitle.
(b) The commission may investigate violations of this
subtitle and rules adopted under this subtitle or another law
administered by the commission and may file a complaint requesting
that an investigation be conducted as provided by Subsection (a).
Sec. 2021.118. SECURITY. (a) The executive director shall
maintain a department of security in the commission. The executive
director shall appoint a deputy to administer the department. The
deputy must be qualified by training and experience in law
enforcement or security to supervise, direct, and administer the
activities of the department.
(b) The executive director may employ security officers or
investigators as the executive director considers necessary and may
commission security officers or investigators as peace officers.
The deputy and all investigators employed by the department of
security as peace officers must meet the requirements under Chapter
415, Government Code, for employment and commission as peace
officers.
(c) A security officer or investigator employed by the
department of security or a peace officer who is working in
conjunction with the commission or the Department of Public Safety
in the enforcement of this subtitle may:
(1) without a search warrant, search and seize a
gaming device or other gaming equipment that is located on premises
for which a person holds a license issued under this subtitle; or
(2) seize a gaming device or other gaming equipment
that is being used or is in the possession of any person in
violation of this subtitle or another law administered by the
commission.
(d) The Department of Public Safety or any other state or
local law enforcement agency in this state, at the commission's
request and in accordance with an interagency agreement, shall
perform a full criminal background investigation of a prospective
deputy or investigator of the department of security. The
commission shall reimburse the agency for the actual costs of an
investigation.
(e) At least once every two years, the executive director
shall employ an independent firm that is experienced in security,
including computer security and systems security, to conduct a
comprehensive study of all aspects of gaming security.
Sec. 2021.119. DEMOGRAPHIC STUDIES. (a) The executive
director shall, every two years, employ an independent firm
experienced in demographic analysis to conduct a demographic study
of players of gambling games. The study must include the income,
age, sex, race, education, and frequency of participation of
players of the games.
(b) The executive director shall report the results of the
demographic study to the commission, the governor, and the
legislature before January 1 of each odd-numbered year.
Sec. 2021.120. PROHIBITED GAMES. (a) Except as provided by
this subtitle or other law, the executive director or any other
person may not establish or operate a gambling game in which the
winner is chosen on the basis of the outcome of a sports event.
(b) Except as provided by Chapter 2001 or this subtitle, the
operation of any game using a slot machine or other gambling device
that is not authorized under this subtitle is prohibited.
(c) In this section, "sports event" means a football,
basketball, baseball, or similar game, a boxing or martial arts
match, or a horse or dog race on which pari-mutuel wagering is
allowed.
Sec. 2021.121. REPORTS OF NET SLOT INCOME. The executive
director shall prepare a monthly report of the total net slot income
for all slot establishments for the preceding month.
Sec. 2021.122. DEPARTMENT OF PUBLIC SAFETY RECORDS. (a)
Except as otherwise provided by this subtitle, all files, records,
information, compilations, documents, photographs, reports,
summaries, and reviews of information and related matters
collected, retained, or compiled by the Department of Public Safety
in the discharge of its duties under this subtitle are confidential
and are not subject to public disclosure. Each of those items is
subject to discovery by a person that is the subject of the item.
(b) An investigation report or other document submitted by
the Department of Public Safety to the commission becomes part of
the investigative files of the commission and is subject to
discovery by a person that is the subject of the investigation
report or other document.
(c) Information that is in the form available to the public
is not privileged or confidential under this section and is subject
to public disclosure.
Sec. 2021.123. CRIMINAL HISTORY INVESTIGATION FOR GAMING.
(a) The commission is entitled to conduct an investigation of and
is entitled to obtain criminal history record information
maintained by the Department of Public Safety, the Federal Bureau
of Investigation Identification Division, or another law
enforcement agency to assist in the investigation of any person
directly involved with gaming regulated under this subtitle.
(b) Except as otherwise provided by this subtitle, a
criminal history investigation is governed by commission rules
adopted under this chapter. As applicable, the commission shall
consider information obtained through a criminal history
investigation conducted under the Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes).
(c) The Department of Public Safety or a state or local law
enforcement agency in this state, in accordance with an interagency
agreement with the commission, shall provide any assistance
requested by the commission in the administration and enforcement
of this subtitle, including conducting background investigations
of a person seeking a license, certificate of registration, finding
of suitability, or other affirmative regulatory approval required
under this subtitle or of any person required to be named in an
application for a license, certificate of registration, finding of
suitability, or other affirmative regulatory approval under this
subtitle.
(d) This section does not limit the commission's right to
obtain criminal history record information from any other local,
state, or federal agency. The commission may enter into a
confidentiality agreement with the agency as necessary and proper.
(e) Except as otherwise provided by this subtitle or other
law, criminal history record information obtained by the commission
under this section may be disclosed only:
(1) to another law enforcement agency to assist in or
further an investigation related to the commission's operation and
oversight of gaming; or
(2) under a court order.
Sec. 2021.124. PLAYER AGREEMENT TO ABIDE BY RULES AND
INSTRUCTIONS. By participating as a player in a gambling game, a
player agrees to abide by and be bound by the commission's rules and
instructions, including the rules or instructions applicable to the
particular gambling game involved. The player also acknowledges
that the determination of whether the player is a valid winner is
subject to:
(1) the commission's rules, instructions, and claims
procedures, including those developed for the particular gambling
game involved;
(2) any validation tests established by the commission
for the particular gambling game involved; and
(3) the limitations and other provisions prescribed by
this subtitle.
Sec. 2021.125. VENUE. Venue is proper in Travis County or
any county in which venue is proper under Chapter 13, Code of
Criminal Procedure, for:
(1) an offense under this subtitle;
(2) an offense under the Penal Code, if the accused:
(A) is regulated under this subtitle; and
(B) is alleged to have committed the offense
while engaged in gaming activities; or
(3) an offense under Title 7 or 11, Penal Code, that
involves property consisting of or including a gaming device or
gambling game prize.
[Sections 2021.126-2021.150 reserved for expansion]
SUBCHAPTER D. PUBLIC PARTICIPATION AND COMPLAINT PROCEDURES
Sec. 2021.151. PUBLIC INTEREST INFORMATION. (a) The
commission shall prepare and disseminate consumer information that
describes the regulatory functions of the commission and the
procedures by which consumer complaints are filed with and resolved
by the commission.
(b) The commission shall make the information available to
the public and appropriate state agencies.
Sec. 2021.152. COMPLAINTS. (a) The commission by rule
shall establish methods by which consumers and service recipients
are notified of the name, mailing address, and telephone number of
the commission for the purpose of directing complaints to the
commission. The commission may provide for that notice:
(1) on each form, application, or written contract for
services of a person regulated under a law administered by the
commission;
(2) on a sign prominently displayed in the place of
business of each person regulated under a law administered by the
commission; or
(3) in a bill for service provided by a person
regulated under a law administered by the commission.
(b) The commission shall list with its regular telephone
number any toll-free telephone number established under other state
law that may be called to present a complaint about a person
regulated under a law administered by the commission.
Sec. 2021.153. RECORDS OF COMPLAINTS. (a) The commission
shall maintain a system to promptly and efficiently act on
complaints filed with the commission. The commission shall
maintain:
(1) information about the parties to the complaint and
the subject matter of the complaint;
(2) a summary of the results of the review or
investigation of the complaint; and
(3) information about the disposition of the
complaint.
(b) The commission shall make information available
describing its procedures for complaint investigation and
resolution.
(c) The commission shall periodically notify the parties of
the status of the complaint until final disposition of the
complaint.
Sec. 2021.154. GENERAL RULES REGARDING COMPLAINT
INVESTIGATION AND DISPOSITION. The commission shall adopt rules
concerning the investigation of a complaint filed with the
commission. The rules must:
(1) distinguish between categories of complaints;
(2) ensure that complaints are not dismissed without
appropriate consideration;
(3) require that the commission be advised of a
complaint that is dismissed and that a letter be sent to the person
who filed the complaint explaining the action taken on the
dismissed complaint;
(4) ensure that the person who files a complaint has an
opportunity to explain the allegations made in the complaint; and
(5) prescribe guidelines concerning the categories of
complaints that require the use of a private investigator and the
procedures for the commission to obtain the services of a private
investigator.
Sec. 2021.155. DISPOSITION OF COMPLAINT. (a) The
commission shall:
(1) dispose of each complaint in a timely manner; and
(2) establish a schedule for conducting each phase of
a complaint that is under the control of the commission not later
than the 30th day after the date the commission receives the
complaint.
(b) Each party shall be notified of the projected time
requirements for pursuing the complaint. The commission shall
notify each party to the complaint of any change in the schedule
established under Subsection (a)(2) not later than the seventh day
after the date the change is made.
(c) The executive director shall notify the commission of a
complaint that is not resolved within the time prescribed by the
commission for resolving the complaint.
Sec. 2021.156. PUBLIC PARTICIPATION. (a) The commission
shall develop and implement policies that provide the public with a
reasonable opportunity to appear before the commission and to speak
on any issue under the commission's jurisdiction.
(b) The commission shall prepare and maintain a written plan
that describes how a person who does not speak English may be
provided reasonable access to the commission's programs.
Sec. 2021.157. INFORMAL SETTLEMENT CONFERENCE. The
commission shall establish guidelines for an informal settlement
conference related to a complaint filed with the commission.
CHAPTER 2022. CASINO AND SLOT GAMING
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 2022.001. PUBLIC POLICY. (a) All casino gaming that
is conducted in this state and that is authorized by law shall be
regulated and licensed under this chapter, unless federal law or
another state law specifically provides otherwise.
(b) The legislature hereby finds, and declares it to be the
public policy of this state, that:
(1) the development of regulated limited casino gaming
in the state will benefit the general welfare of the people of this
state by enhancing investment, development, and tourism in this
state, resulting in new jobs and additional revenues to the state;
(2) the conduct of regulated casino gaming in a
limited number of casinos and slot establishments will not harm the
people of this state;
(3) the regulation of gaming in this state is
important to ensure that gaming is:
(A) conducted honestly and competitively; and
(B) free from criminal and corruptive elements;
(4) public confidence and trust can be maintained only
by strict regulation of all persons, locations, practices,
associations, and activities related to the conduct of gaming and
the casino service industry;
(5) persons owning any direct or indirect material
interest in a casino should be licensed and controlled to protect
the public health, safety, morals, good order, and general welfare
of the people of this state;
(6) certain operators and employees of casinos and
slot establishments should be regulated, licensed, and controlled
to accomplish and promote these public policies while protecting
the public health, safety, morals, good order, and general welfare
of the people of this state;
(7) certain persons engaging in the casino service
industry should be regulated, licensed, and controlled to
accomplish and promote these public policies while protecting the
public health, safety, morals, good order, and general welfare of
the people of this state; and
(8) it is the intent of this chapter, where possible,
to use the resources, goods, labor, and services of the people of
this state in the ownership, operation, and construction of casinos
and slot establishments and related amenities to the extent
allowable by law.
Sec. 2022.002. EXEMPTION FROM FEDERAL STATUTES. (a) Under
Section 2, 64 Stat. 1134 (15 U.S.C. Section 1172), this state
declares that this state is exempt from that section.
(b) All shipments of gaming devices into this state,
including slot machines, conducted in compliance with the
applicable provisions of 15 U.S.C. Sections 1173 and 1174 are legal
shipments of the devices into this state.
Sec. 2022.003. CONSTRUCTION; APPLICABILITY OF OTHER LAWS.
(a) Nothing in this chapter may be construed to implicitly repeal
or modify existing state laws with respect to gambling, except that
gaming devices or slot machines are not prohibited by another law if
conducted as authorized under this chapter.
(b) To the extent of any inconsistency between Chapter 2003,
Government Code, and this chapter or a commission rule governing
gaming devices, this chapter or the commission rule controls in all
matters related to gaming devices, including hearings before the
State Office of Administrative Hearings.
Sec. 2022.004. AUTHORITY TO IMPLEMENT GAMING. (a) The
commission may implement gaming in accordance with this subtitle
and, for a slot establishment at a racetrack, the Texas Racing Act
(Article 179e, Vernon's Texas Civil Statutes). This chapter
supersedes any conflicting or inconsistent provision of the Texas
Racing Act.
(b) The commission shall allow the operation of gaming
pursuant to this subtitle at locations on Indian lands in
accordance with an effective gaming agreement and in compliance
with applicable federal law.
Sec. 2022.005. RULES FOR ADDITIONAL QUALIFICATIONS. The
commission by rule may establish other license, certificate of
registration, finding of suitability, or approval qualifications
under this chapter that the commission determines are in the public
interest and consistent with the declared policy of this state.
Sec. 2022.006. IMMUNITY FOR STATEMENT MADE IN PROCEEDING OR
INVESTIGATION. Any written or oral statement made in the course of
an official commission proceeding or investigative activities
related to an application for commission licensing, certificate of
registration, finding of suitability, or other affirmative
regulatory approval under this chapter, by any member or agent of
the commission or any witness testifying under oath, that is
relevant to the purpose of the proceeding is absolutely privileged
and does not impose liability for defamation or constitute a ground
for recovery in any civil action.
Sec. 2022.007. FINDING OF SUITABILITY. To promote the
integrity and security of gaming under this subtitle, the
commission in its discretion may require a finding of suitability
for any person doing business with or in relation to the operation
of gaming who is not otherwise required to obtain a license,
certificate of registration, or other affirmative regulatory
approval from the commission for the person's gaming-related
operations.
Sec. 2022.008. CONSENT TO COMMISSION DETERMINATION. (a)
An application for a license, certificate of registration, finding
of suitability, or other affirmative regulatory approval under this
chapter constitutes a request to the commission for a decision on
the applicant's general suitability, character, integrity, and
ability to participate or engage in or be associated with gaming
under this chapter in the manner or position sought.
(b) By filing an application with the commission, the
applicant specifically consents to the commission's decision at the
commission's election when the application, after filing, becomes
moot for any reason other than death.
Sec. 2022.009. ABSOLUTE AUTHORITY OF COMMISSION. To
protect the integrity of gaming under this subtitle or the public
health, welfare, or safety, or to prevent financial loss to this
state, the commission has full and absolute power and authority to:
(1) deny any application or limit, condition,
restrict, revoke, or suspend any license, certificate of
registration, finding of suitability, or other affirmative
regulatory approval; and
(2) fine any person licensed, registered, found
suitable, or approved for any cause considered reasonable by the
commission.
Sec. 2022.010. LICENSING, REGISTRATION, SUITABILITY, AND
REGULATORY APPROVAL AS REVOCABLE PERSONAL PRIVILEGES. (a) An
applicant for a license, certificate of registration, finding of
suitability, or other affirmative regulatory approval under this
chapter does not have any right to the license, certificate of
registration, finding of suitability, or approval sought.
(b) Any license, certificate of registration, finding of
suitability, or other affirmative regulatory approval granted
under this chapter is a revocable privilege, and a holder of the
privilege does not acquire any vested right in or under the
privilege.
(c) The courts of this state do not have jurisdiction to
review a decision to deny, limit, or condition the license,
certificate of registration, finding of suitability, or approval
unless the judicial review is sought on the ground that the denial,
limitation, or condition is based on a suspect classification, such
as race, color, religion, sex, or national origin, in violation of
the Equal Protection Clause of the Fourteenth Amendment to the
United States Constitution. The state court must affirm the
commission's action unless the violation is proven by clear and
convincing evidence. If a state court has jurisdiction over a claim
under this section, then this state's sovereign immunity is waived
only to the extent expressly provided by Section 2022.410.
(d) A license, certificate of registration, finding of
suitability, or other affirmative regulatory approval granted or
renewed under this chapter may not be transferred or assigned to
another person unless approved in advance by the commission, and a
license, certificate, finding of suitability, or approval may not
be pledged as collateral. The purchaser or successor of a person
who has been granted a license, certificate, finding of
suitability, or approval must independently qualify for a license,
certificate, finding of suitability, or approval required by this
chapter.
(e) The following acts void the license, certificate,
finding of suitability, or other affirmative regulatory approval of
the holder unless approved in advance by the commission:
(1) the transfer, sale, or other disposition of an
interest in the holder that results in a change in the identity of
an equity or creditor interest holder; or
(2) the sale of the assets of the holder, other than
assets bought and sold in the ordinary course of business, or any
interest in the assets, to any person not already determined to have
met the applicable qualifications of this chapter.
Sec. 2022.011. PRIZE RULES, PAYMENT, AND REDEMPTION. (a)
The commission shall adopt rules governing:
(1) the amount a player may be charged to play a
gambling game; and
(2) the prizes and credits that may be awarded to the
player of a gambling game.
(b) Payment of prizes is the sole and exclusive
responsibility of the casino or slot establishment, as applicable.
A prize may not be paid by the commission or this state except as
otherwise authorized.
(c) Nothing in this chapter limits the ability of a casino
or slot establishment to provide promotional prizes, including wide
area progressive networks, in addition to prize payouts regulated
by the commission.
(d) The commission shall enact rules consistent with this
section governing the use and redemption of prizes and credits
recorded on player account records, such as players' club cards and
smart cards.
Sec. 2022.012. REPORT ON LITIGATION. (a) A casino or slot
establishment shall report to the commission any litigation
relating to the casino or slot establishment, including a criminal
proceeding, a proceeding involving an issue related to racing
activities that impact slot machine operations, or a matter related
to character or reputation relevant to a person's suitability under
this chapter.
(b) The report required under Subsection (a) must be filed
not later than the fifth day after the date the owner or operator
acquires knowledge of the litigation.
Sec. 2022.013. COMMISSION APPROVAL REQUIRED FOR PROCEDURES
AND ADMINISTRATIVE AND ACCOUNTING CONTROLS. (a) The commission's
approval is required for all internal procedures and administrative
and accounting controls of a casino owner or operator or a slot
establishment owner or operator.
(b) The commission by rule shall establish general
accounting and auditing requirements and internal control
standards for casinos and slot establishments.
Sec. 2022.014. EMPLOYEE REPORTING. (a) On or before the
15th day of each month, a casino owner or operator or slot
establishment owner or operator shall submit to the commission an
employee report for the casino or slot establishment operated by
the owner or operator. For each employee of the casino or
establishment, the report must provide the employee's name, job
title, date of birth, and social security number.
(b) The employee report is confidential and may not be
disclosed except under commission order or in accordance with this
subtitle.
(c) The commission may conduct criminal history
investigations for employees of casinos or slot establishments.
(d) The commission may prohibit an employee from performing
any act relating to gaming if the commission finds that an employee
has:
(1) committed, attempted, or conspired to commit any
act prohibited by this chapter;
(2) concealed or refused to disclose any material fact
in any commission investigation;
(3) committed, attempted, or conspired to commit
larceny or embezzlement;
(4) been convicted in any jurisdiction of an offense
involving or relating to gambling;
(5) accepted employment in a position for which
commission approval is required after commission approval was
denied for a reason involving personal unsuitability or after
failing to apply for approval on commission request;
(6) been prohibited under color of governmental
authority from being present on the premises of any casino or slot
establishment or any establishment where pari-mutuel wagering is
conducted for any reason relating to improper gambling activity or
for any illegal act;
(7) willfully defied any legislative investigative
committee or other officially constituted body acting on behalf of
the United States or any state, county, or municipality that sought
to investigate alleged or potential crimes relating to gaming,
corruption of public officials, or any organized criminal
activities; or
(8) been convicted of any felony or any crime
involving moral turpitude.
(e) The commission may prohibit an employee from performing
any act relating to gaming based on a revocation or suspension of
any gaming or wagering license, certificate of registration,
finding of suitability, or other affirmative regulatory approval or
for any other reason the commission finds appropriate, including a
refusal by a regulatory authority to issue a license, certificate
of registration, finding of suitability, or other approval for the
employee to engage in or be involved with gaming or with regulated
gaming or pari-mutuel wagering in any jurisdiction.
(f) In this section, "employee" includes any person
connected directly with or compensated by an applicant or license
holder as an agent, personal representative, consultant,
independent contractor, or lobbyist for the advocacy of the
adoption or amendment of a law related to gaming activities or the
furtherance of gaming activities in any jurisdiction or as
otherwise specified by commission rule.
Sec. 2022.015. REPORT OF VIOLATIONS. A person who holds a
license, certificate of registration, finding of suitability, or
other affirmative regulatory approval under this chapter shall
immediately report a violation or suspected violation of this
chapter or a rule adopted under this chapter by any license,
certificate, suitability, or approval holder, by an employee of a
license, certificate, suitability, or approval holder, or by any
person on the premises of a casino or slot establishment, whether or
not associated with the license, certificate, suitability, or
approval holder.
Sec. 2022.016. INDEMNIFICATION, INSURANCE, AND BONDING
REQUIREMENTS. (a) A license, certificate, suitability, or
approval holder shall indemnify and hold harmless this state, the
commission, and all officers and employees of this state and the
commission from any and all claims which may be asserted against a
holder of a license, certificate, suitability, or approval, the
commission, this state, and the members, officers, employees, and
authorized agents of this state or the commission arising from the
license, certificate, suitability, or approval holder's
participation in gaming authorized under this subtitle.
(b) Surety and insurance required under this chapter shall
be issued by companies or financial institutions financially rated
"A" or better as rated by A.M. Best Company or other rating
organization designated by the commission and duly licensed,
admitted, and authorized to conduct business in this state, or by
other surety approved by the commission.
(c) The commission shall be named as the obligee in each
required surety and as an additional insured in each required
insurance contract.
(d) A casino owner or operator or a slot establishment owner
or operator may not be self-insured with regard to gaming
operations under this section.
(e) The commission by rule shall establish minimum
insurance coverage requirements for license holders under this
chapter, including:
(1) insurance for performance;
(2) insurance against losses caused by fraudulent or
dishonest acts by an officer or employee of the license holder;
(3) general liability insurance;
(4) property insurance;
(5) liability insurance for vehicles used and drivers
employed by a license holder; and
(6) crime insurance for the location.
Sec. 2022.017. LIABILITY FOR CREDIT AWARDED OR DENIED;
PLAYER DISPUTE. This state and the commission are not liable for
any gaming device malfunction or error by a casino or slot
establishment that causes credit to be wrongfully awarded or denied
to players.
[Sections 2022.018-2022.050 reserved for expansion]
SUBCHAPTER B. CASINO OWNER'S LICENSE
Sec. 2022.051. CASINO OWNER'S LICENSE. (a) Gaming may
lawfully be conducted in a casino operating under a casino owner's
license.
(b) It is unlawful for a person to own an equity interest in
a casino that conducts gaming in this state for which a casino
owner's license is not in effect.
(c) A separate casino owner's license must be obtained for
each casino conducting gaming.
Sec. 2022.052. ALLOCATION AND ISSUANCE OF CASINO OWNER'S
LICENSES; TEMPORARY LICENSE. (a) The commission shall award nine
casino owner's licenses to applicants for casino-anchored
destination attraction development projects as follows:
(1) seven casino owner's licenses in urban areas,
allocated by population; and
(2) two casino owner's licenses on islands in the Gulf
of Mexico that are tourist destinations with at least 1,000 guest
rooms available for visitors in hotels, motels, or condominiums
existing on January 1, 2009.
(b) In addition to the casino owner's licenses issued under
the other provisions of this section, the commission may issue
three additional casino owner's licenses to applicants based on
evidence that demonstrates that the issuance of the license to the
applicant would have a significant positive economic impact in the
area in which the casino would be operated and on this state.
(c) In addition to the casino owner's licenses issued under
the other provisions of this section, the commission may issue a
casino owner's license to a federally recognized Indian tribe that
had land in this state held in trust by the United States on January
1, 1998. A license under this subsection authorizes the tribe to
operate only one casino on tribal lands held in trust by the United
States on January 1, 1998.
(d) A casino owner's license issued by the commission under
Subsection (c) to an Indian tribe constitutes an agreement between
this state and the tribe for purposes of the Indian Gaming
Regulatory Act (18 U.S.C. Section 1166 et seq. and 25 U.S.C. Section
2701 et seq.).
(e) Except as to simulcast common pool wagering conducted in
a casino and except as otherwise authorized by the commission, the
casino operations and financial records of a casino owner's license
holder under Subsection (b) who also holds a pari-mutuel license
under the Texas Racing Act (Article 179e, Vernon's Texas Civil
Statutes) shall be kept separate from the racing operations and
records of the license holder.
(f) An Indian tribe to which Subsection (c) applies may, in
lieu of a casino owner's license, operate a casino on Indian land
described by Subsection (c) under an agreement with this state. The
agreement is governed by this chapter and Chapter 2023, except that
the commission by rule may modify the provisions of this chapter and
Chapter 2023 if necessary to make those provisions applicable to
casino gaming.
(g) Notwithstanding Subsections (a), (b), and (c):
(1) a license may not be issued in a county unless:
(A) a majority of the voters of the county voting
in the 2009 constitutional amendment election to authorize casino
gaming voted in favor of the proposition to authorize casino
gaming; or
(B) the voters of the county have approved a
proposition legalizing casino gaming at a local option election
held under this chapter;
(2) not more than three casino owner's licenses may be
issued for casinos to be located in the same county; and
(3) a casino owner's license may not be issued for a
location within an area in which casino gaming or slot gaming is
prohibited under a gaming agreement.
(h) In allocating licenses under this section and in
addition to the other suitability criteria described in this
chapter, the commission may favorably consider whether a
substantial percentage of the owners of a proposed casino facility
are residents of this state who have maintained their residency in
this state for not less than two years preceding the application
date.
(i) For purposes of determining the location of a casino, a
casino is considered to be located in the county in which the main
public entrance to the casino is located.
(j) The commission may issue a temporary license for one
year or less to authorize the casino owner's license holder to
temporarily conduct casino gaming in accordance with commission
rules at a location within 1,000 feet of the site for which the
casino license was granted.
(k) A person may not beneficially own, directly or
indirectly, an equity interest of more than five percent of the
total equity interest in more than three casino owner's license
holders.
(l) A person may not operate, either under a casino owner's
license or under a casino operator's license, more than three
casinos.
Sec. 2022.053. APPLICATION. (a) Application for a casino
owner's license shall be made according to the rules of the
commission and shall contain information the commission finds
necessary to determine the suitability and eligibility of the
applicant, the eligibility of the proposed location, and the
economic impact of the overall casino project.
(b) In addition to any other information the commission may
require, an application must include the following information
concerning the feasibility of the overall casino project:
(1) proof that gaming was approved under the 2009
constitutional amendment or has been approved through a local
option election under this chapter by the voters of the county where
the casino is to be located;
(2) evidence that the applicant possesses, or has the
right to acquire, sufficient real property on which the proposed
casino will be located in order to allow the applicant's
construction and operation of the casino project substantially as
proposed;
(3) evidence that the applicant possesses, or
reasonably expects to obtain, all state, county, and municipal
permits and approvals necessary for the construction and operation
of the proposed casino within the time periods prescribed in this
chapter; and
(4) evidence that the applicant is prepared to begin
construction of its proposed casino within 18 months of receiving a
casino owner's license and to proceed with the construction of the
casino without unnecessary delay.
(c) An applicant may apply for more than one casino owner's
license relating to more than one casino but must submit a separate
application for each casino for which a casino owner's license is
sought.
(d) An application for a casino owner's license must be
accompanied by the nonrefundable application fee set out in Section
2022.252.
Sec. 2022.054. MANDATORY REQUIREMENTS. (a) A company is
eligible to apply for and hold a casino owner's license only if:
(1) the company is incorporated or organized and in
good standing in this state or organized under the laws of another
state of the United States and qualified to do business in this
state; and
(2) the company complies with all the laws of this
state.
(b) To be eligible to receive a casino owner's license to
own a casino, an applicant must submit an application to the
commission by the date established by the commission.
(c) An application may not be considered filed for purposes
of this chapter that does not include the information prescribed by
Section 2022.053(b) or that is not accompanied by the prescribed
application fee.
Sec. 2022.055. CASINO LICENSE AWARD CONSIDERATIONS. (a)
The commission shall determine the initial and continuing
suitability of each applicant for or holder of a casino owner's
license based on suitability criteria the commission adopts to
ensure that all casino owner's license holders are of good
character, honesty, integrity, and financial stability, that a
casino owner's license holder has sufficient business probity,
competence, and experience in gaming, and that a casino owner's
license holder is otherwise qualified to be licensed.
(b) The commission shall give due consideration to the
protection of the public health, safety, morals, and general
welfare of the people of this state and for the reputation of the
state's gaming industry.
(c) The burden of proving suitability to receive or hold a
casino owner's license is on the applicant or license holder.
(d) In considering the initial and continuing suitability
of an applicant for or holder of a casino owner's license, the
commission may consider the suitability of:
(1) each person holding an equity interest or creditor
interest in the applicant or holder;
(2) each person holding, or proposed to receive, a
casino operator's license, occupational license, or manufacturer's
license employed by or doing business with the applicant or holder;
and
(3) each affiliate of the applicant or holder.
(e) An applicant for or holder of a casino owner's license
may not receive or hold a casino owner's license if the person:
(1) has been convicted of a felony in the past 20 years
under the laws of this state, any other state, or the United States;
(2) has ever been convicted of a gambling or gaming
violation under the laws of this state or any other state;
(3) has ever knowingly or intentionally submitted an
application for a license under this chapter that contained false
information;
(4) served as a principal manager for a person
described by Subdivision (1), (2), or (3);
(5) retains or employs another person described by
Subdivision (2) or (3);
(6) beneficially owns any material equity interest or
creditor interest in the applicant or holder and is a person
described by Subdivision (1), (2), or (3);
(7) holds a manufacturer's license or casino service
license;
(8) is a member of the commission; or
(9) is a member of the judiciary or an elected official
of this state.
(f) The commission may adopt rules providing for a person's
reciprocal determination of suitability to hold a casino owner's
license based on a determination of suitability to own and operate a
casino in any other jurisdiction the commission considers
reasonable in light of the purpose of this chapter.
Sec. 2022.056. ECONOMIC IMPACT ANALYSIS. (a) In
determining whether or, in the case of multiple applicants
competing for a limited number of casino owner's licenses within a
county, to whom to grant a casino owner's license, the commission
shall consider the following factors:
(1) the relative prospective revenues to be collected
by the state from the conduct of gaming at the casino and the
overall economic impact of each competing applicant's proposed
casino and associated facilities;
(2) the relative number of residents of this state who
would be employed in an applicant's proposed casino and any
proposed associated hotel and nongaming businesses and the relative
extent of the applicant's good faith plan to recruit, train, and
promote a workforce that reflects the diverse populations of this
state in all employment classifications;
(3) the relative extent to which an applicant's
proposed casino and any proposed associated hotel and nongaming
businesses could be reasonably expected to encourage interstate
tourism to this state;
(4) the relative extent to which the scope, design,
location, and construction of the applicant's casino and any
associated hotel and nongaming businesses could be reasonably
expected to contribute to developing a first-class gaming industry
in this state;
(5) the applicant's experience in conducting licensed
gaming operations and the applicant's financial ability to promptly
construct and adequately maintain the casino sought to be licensed,
including the experience of partners of the applicant, of
affiliated companies of the applicant or its partners, of key
personnel of the applicant or its partners, and of operating
companies under contract with the applicant; and
(6) the percentage of equity interest in the applicant
owned or to be owned by residents of this state.
(b) To ensure that a requisite level of economic development
benefiting the people of this state accompanies each casino for
which a casino owner's license is granted, the commission shall
require an applicant, as a condition to receiving and holding a
casino owner's license, to commit to building a casino project that
meets the requirements for a casino-anchored destination
attraction development project established under Section 47a(g),
Article III, Texas Constitution.
Sec. 2022.057. REVIEW OF APPLICATION. (a) The commission
shall issue an order approving or denying an application for a
casino owner's license not more than six months after the date of
the filing of the application.
(b) The commission may adopt rules for awarding temporary or
interim licensing the commission finds necessary to administer this
chapter.
Sec. 2022.058. TRANSFERABILITY. A casino owner's license
is not transferable and applies only to the specific site
identified in the license.
Sec. 2022.059. DENIAL AND REVOCATION. (a) The commission
may deny an application or revoke a casino owner's license for a
reasonable cause.
(b) If the commission determines it has reasonable grounds
to believe that a casino owner's license holder may be unsuitable to
continue to hold a casino owner's license, the commission shall
conduct an investigation and hearing under Section 2022.401 and
may, based on its determination, suspend, limit, or revoke the
license. On suspension or revocation of a casino owner's license,
the license holder must immediately cease all gaming.
(c) If the holder of a casino owner's license fails to begin
construction of a casino within 18 months after the receipt of the
casino owner's license, or fails to begin gaming operations within
three years after the receipt of the license, the license is
forfeited, unless the commission, for good cause, has previously
granted an appropriate extension of time.
(d) The right to receive and hold a casino owner's license
is a revocable privilege, and not a right or property under the
United States Constitution or the Texas Constitution. An applicant
for or holder of a casino owner's license does not have a vested
interest or right in a license granted under this chapter.
Sec. 2022.060. REGISTRATION OF INTEREST IN LICENSE. (a)
Except as provided by Subsection (b), a person who directly or
indirectly owns an equity or creditor interest in an applicant for
or holder of a casino owner's license shall register and qualify
with the commission under commission rules and shall provide
information the commission finds necessary to determine the
suitability and eligibility of the person to retain the interest.
(b) The following persons are not required to register or
qualify under this section:
(1) a key employee of the casino owner's license holder
that is required to apply for an occupational license under Section
2022.102;
(2) an institutional investor;
(3) a person that beneficially owns 10 percent or less
of the total equity or creditor interest of the casino owner's
license holder; and
(4) any other group or class of persons that the
commission by rule exempts from registration or qualification.
(c) A casino owner's license holder shall provide to the
commission the name, address, and interest in the casino owner's
license holder of each person who is exempt from registration or
qualification under Subsection (b).
(d) A registration filed under this section must be
accompanied by the application fee set out in Section 2022.252.
Sec. 2022.061. TRANSFERABILITY OF INTEREST. (a) Except as
provided by this subsection, a casino owner's license holder may
not issue an equity or creditor interest to a person without the
commission's determination of the qualification of the proposed
subscriber or purchaser to hold the interest. A casino owner's
license holder that is a publicly held company may issue equity or
creditor interests of five percent or less of its equity or creditor
interest to any person without the consent of the commission.
(b) A person beneficially owning more than five percent of
the equity or creditor interest of a casino owner's license holder
may not transfer any portion of the interest in the license holder
to any person without the commission's determination of the
qualification of the proposed transferee to hold the interest.
(c) A subscriber or proposed transferee of an interest by a
casino owner's license holder shall provide the commission with
information the commission considers necessary to determine the
qualification of the person. The commission, not later than 60 days
after the date of the application, shall determine the
qualification of a subscriber or proposed transferee and approve or
deny the issuance or transfer.
Sec. 2022.062. DETERMINATION OF QUALIFICATION. (a) The
commission shall determine the qualification of a person to acquire
or continue to hold an equity or creditor interest in an applicant
for or holder of a casino owner's license based on the qualification
requirements the commission adopts for the protection of the public
interest to ensure that the persons holding securities issued by
license holders are of good character, honesty, integrity, and
financial stability, and are otherwise qualified to hold the
interest.
(b) The burden of proving qualification to acquire or hold
an equity or creditor interest in a license holder is on the person
acquiring or holding the interest.
(c) A person is unsuitable to acquire or retain an equity or
creditor interest in an applicant for or holder of a casino owner's
license if the person would be unsuitable to receive a casino
owner's license under Section 2022.055(e).
(d) If the commission has reasonable grounds to believe that
a person holding an equity or creditor interest in an applicant for
or holder of a casino owner's license may be unqualified to retain
the person's interest, the commission shall conduct an
investigation and hearing under Section 2022.401 and may, based on
its determination, issue an unsuitability finding and divestiture
order to the holder of the interest and the issuer of the interest.
On receipt of a divestiture order, the person holding the interest
shall tender its entire interest for purchase to the issuer or a
third party on terms the commission approves.
(e) If the commission issues an unsuitability finding and
divestiture order to a holder of an equity interest or creditor
interest, the person subject to the order may not:
(1) receive, directly or indirectly, a dividend,
interest, payment, or distribution of any kind relating to the
security that is the subject of the order; or
(2) exercise, directly or indirectly, any voting power
or other right with respect to the security to which the order
relates.
(f) A person subject to an order may receive payment for the
sale of the person's interest on terms the commission approves.
Sec. 2022.063. TEXAS ENTERPRISE FUND GRANT. A casino owner
is eligible to apply for and receive a grant from the Texas
Enterprise Fund under Section 481.078, Government Code.
[Sections 2022.064-2022.100 reserved for expansion]
SUBCHAPTER C. CASINO OPERATOR'S LICENSE AND OCCUPATIONAL LICENSE
Sec. 2022.101. CASINO OPERATOR'S LICENSE. (a) A person may
not provide services as a casino operator without holding a casino
operator's license.
(b) A casino operator must hold a separate casino operator's
license for each casino that the casino operator operates unless
the operator is also the owner of the premises and holds a casino
owner's license for the premises.
Sec. 2022.102. OCCUPATIONAL LICENSE. (a) A person may not
be employed as a gaming employee without holding an occupational
license.
(b) The holder of an owner's license or operator's license
is not required to obtain an occupational license to provide
services as a gaming employee in the casino or slot establishment to
which the license relates.
(c) A casino or slot establishment owner must at all times
have not less than one occupational license holder designated as a
key employee having responsibility over all gaming activities who
shall be available at the casino or slot establishment at all times
when gaming is conducted on the owner's license holder's premises.
(d) A gaming employee designated or determined to be a key
employee by the commission shall be issued an occupational license
designated as a key employee occupational license. In determining
whether an employee is a key employee, the commission is not
restricted by the title of the job performed by the employee but may
consider the functions and responsibilities of the employee in
making decisions.
(e) A person employed in the field of gaming as a gaming
employee shall obtain an occupational license designated as a
support occupational license. A person required to hold a support
occupational license may not be a gaming employee of or assist the
casino owner's or operator's license holder until the employee
obtains a support occupational license. A person licensed as a key
employee is not required to obtain a support occupational license.
Sec. 2022.103. APPLICATION. (a) An application for a
casino operator's license or an occupational license shall be made
in compliance with commission rules and must contain information
the commission finds necessary to determine the suitability and
eligibility of the applicant to function as a casino operator or to
be employed or retained as a gaming employee.
(b) An application for a casino operator's license or an
occupational license must be accompanied by the required
application fee.
(c) The commission may issue a temporary casino operator's
license and a temporary occupational license.
Sec. 2022.104. RESIDENCY. A person is eligible to apply for
and hold a casino operator's license or occupational license
without regard to the residency of the applicant.
Sec. 2022.105. DETERMINATION OF SUITABILITY. (a) The
commission shall determine the suitability of an applicant for or
holder of a casino operator's license or occupational license based
on suitability criteria the commission adopts in order to ensure
that a license holder:
(1) is of good character, honesty, and integrity;
(2) has sufficient business probity, competence, and
training or experience in the gaming industry to perform the
function contemplated; and
(3) is otherwise qualified to be licensed.
(b) The burden of proving suitability to receive and hold a
casino operator's license or occupational license is on the
applicant or license holder.
(c) In considering the suitability of a company applying for
or holding a casino operator's license or occupational license to
receive and continue to hold the license, the commission shall
consider the suitability of each principal manager and each holder
of an equity interest and creditor interest of the company to
individually receive and hold an occupational license based on the
suitability standards that apply to the applicants for the license
generally.
(d) A person may not be found suitable to receive or hold a
casino operator's license or occupational license if that person
would be found unsuitable to hold a casino owner's license under
Section 2022.055(e), except that an applicant for a casino
operator's license or occupational license who has been convicted
of a felony may be found suitable if the person is found to be
adequately rehabilitated under the rehabilitation requirements
adopted by the commission, and the applicant or license holder is
otherwise suitable for licensing.
Sec. 2022.106. DENIAL OR REVOCATION OF LICENSE. (a) The
commission may deny an application for or revoke a casino
operator's license or occupational license for any reasonable
cause.
(b) If the commission determines that it has reasonable
grounds to believe that a license holder may be unsuitable to
continue to hold the license, giving due consideration to the
protection of the health, safety, morals, and general welfare of
this state and to the reputation of the state's gaming industry, the
commission shall conduct an investigation and hearing provided in
Section 2022.401 and may, based on its determination, suspend,
limit, or revoke any license.
(c) On the suspension or revocation of a license, the
license holder shall cease the provision of all services in any
capacity requiring a license under Section 2022.101 or 2022.102.
(d) A holder of an occupational license that has been
revoked or suspended may not:
(1) receive, directly or indirectly, any
compensation, consideration, or payment of any kind relating to the
conduct of gaming in any capacity requiring a license under Section
2022.101 or 2022.102, other than the payment for services rendered
before the suspension or revocation; or
(2) serve or function in a capacity that would require
a license under Section 2022.101 or 2022.102.
(e) The receipt and holding of a license is a privilege and
is not a right or property under the United States Constitution or
the Texas Constitution. An applicant for or holder of a casino
operator's license or occupational license does not have a vested
interest or right in a license granted under this chapter.
[Sections 2022.107-2022.150 reserved for expansion]
SUBCHAPTER D. MANUFACTURER'S AND OTHER SERVICE PROVIDERS' LICENSES
Sec. 2022.151. MANUFACTURER'S LICENSE. (a) A person may
not engage in any segment of the slot machine manufacturing
industry in this state for which a manufacturer's license is
required under this section without obtaining a manufacturer's
license covering that segment of the industry.
(b) The commission shall adopt rules identifying segments
of the manufacturing industry directly involved in the design,
manufacture, assembly, production, programming, sale, lease,
marketing, distribution, repair, or modification of slot machines
or component parts of slot machines that the commission finds
appropriate for licensing under this section.
(c) A manufacturer's license is personal to the license
holder and allows the license holder to conduct business with any
casino or slot establishment.
Sec. 2022.152. CASINO SERVICE LICENSE. (a) A person may
not engage in any segment of the casino service industry that
requires a license without obtaining a casino service license.
(b) The commission shall adopt rules identifying segments
of the casino service industry directly involved with providing
gaming-related services, equipment, and supplies that the
commission finds appropriate for licensing.
(c) A person is required to obtain a casino service license
if the person:
(1) operates, conducts, or maintains a gaming-related
business in a casino or slot establishment; or
(2) furnishes goods, property, or services to a casino
or slot establishment in exchange for:
(A) a payment based on a percentage of the
earnings, profits, or receipts from the casino or slot
establishment; or
(B) a payment the commission finds to be grossly
disproportionate to the value of the goods, property, or service
provided.
(d) A utility company, a municipality, or another political
subdivision is not required to obtain a casino service license
under this section.
(e) A casino service license is personal to the license
holder and allows the license holder to conduct business with any
casino or slot establishment.
Sec. 2022.153. APPLICATION. (a) Application for a
manufacturer's license or casino service license shall be made in
compliance with commission rules and shall contain information the
commission finds necessary to determine the suitability and
eligibility of the applicant.
(b) An application for a manufacturer's license or casino
service license must be accompanied by the required application
fee.
Sec. 2022.154. DETERMINATION OF SUITABILITY. (a) In
considering the suitability of a company applying for or holding a
manufacturer's license or casino service license to receive and
continue to hold the license, the commission shall consider the
suitability of each principal manager and each holder of an equity
interest and creditor interest in the company applicant to
individually receive and hold a manufacturer's license or casino
service license based on the suitability standards that apply to
the company applicant. A person may not be found suitable to
receive or hold a manufacturer's license or casino service license
if that person would be found unsuitable to hold a casino owner's
license under Section 2022.055(e).
(b) If the commission determines that it has reasonable
grounds to believe that a license holder is unsuitable to hold a
manufacturer's license or casino service license, the commission
shall conduct an investigation and hearing under Section 2022.401
and may, based on its determination, suspend, limit, or revoke a
license.
(c) On suspension or revocation of a license, the license
holder must cease the performance of manufacturing activity or
casino service requiring a license under this chapter. After the
revocation or suspension of the license, the affected license
holder may not receive, directly or indirectly, compensation,
consideration, or payment of any kind relating to manufacturing
activity or provision of casino services in any capacity requiring
a license under this chapter, other than the payment for goods or
services provided before the suspension or revocation.
(d) An owner or casino operator who has entered into a lease
with a manufacturer license holder or casino services license
holder whose license has been revoked or suspended may continue to
make payments on the lease based upon its original terms and
conditions without modification or may accelerate the lease and pay
it off, at the sole option of the owner or operator.
(e) The burden of proving suitability to receive and hold a
manufacturer's license or casino service license is on the license
holder.
[Sections 2022.155-2022.200 reserved for expansion]
SUBCHAPTER E. SLOT ESTABLISHMENT LICENSES
Sec. 2022.201. SLOT ESTABLISHMENT OWNER'S OR OPERATOR'S
LICENSE REQUIRED. Except as otherwise provided by this chapter,
Chapter 2023, or a gaming agreement, a person may not own or operate
a slot machine if the person does not satisfy the requirements of
this chapter and is not licensed by the commission to act as a slot
establishment owner or operator. This section does not prohibit
the operation of slot machines by the owner or operator of a casino
licensed under this chapter.
Sec. 2022.202. APPLICATION AND QUALIFICATION. (a) An
applicant for a slot establishment owner's or operator's license
must apply to the commission under rules adopted by the commission,
provide the information necessary to determine the applicant's
eligibility for a license, and provide other information considered
necessary by the commission.
(b) Except as provided by other law, an applicant for a slot
establishment owner's license must hold a pari-mutuel license
granted under the Texas Racing Act (Article 179e, Vernon's Texas
Civil Statutes) and operate a racetrack.
(c) An applicant for a slot establishment operator's
license must have a valid and executed contract with a racetrack
that satisfies the requirements of Subsection (b) to act as a slot
establishment operator for the racetrack subject to licensing under
this chapter.
(d) Each officer, partner, director, key employee, equity
interest holder, and gaming employee of slot establishment
operations must be eligible and maintain eligibility in accordance
with this chapter to be involved in gaming in this state under this
subchapter.
(e) An applicant for a slot establishment owner's or
operator's license has the burden of proving qualification for a
license by clear and convincing evidence. In addition to
satisfying minimum requirements established by commission rules,
an applicant for a slot establishment owner's or operator's license
must:
(1) be a person of good character, honesty, and
integrity;
(2) be a person whose background and prior activities,
including criminal record, reputation, habits, and associations,
do not pose a threat to the security and integrity of gaming or to
the public interest of this state or to the effective operation and
control of gaming, or do not create or enhance the dangers of
unsuitable, unfair, or illegal practices, methods, and activities
in the conduct of gaming or in the carrying on of the business and
financial arrangements incidental to gaming;
(3) if applying for a new license, provide
fingerprints for a criminal records evaluation by the Department of
Public Safety or other law enforcement agency, including
fingerprints for each person required to be named in an
application, accompanied by a signed authorization for the release
of information to the commission by the department and the Federal
Bureau of Investigation;
(4) not have been convicted of an offense under this
chapter or of any crime related to theft, bribery, gambling, or
involving moral turpitude;
(5) demonstrate adequate financing for the operation
of the facility at which the slot machines will be operated from a
source that meets the requirements of this chapter and is adequate
to support the successful performance of the duties and
responsibilities of the license holder and disclose all financing
or refinancing arrangements for the purchase, lease, or other
acquisition of gaming equipment in the degree of detail requested
by the commission;
(6) when applying for a new license or renewing a
license under this chapter, present evidence to the commission of
the existence and terms of any agreement regarding the proceeds
from the operation of slot machines;
(7) demonstrate that each equity interest holder in
the applicant meets all applicable qualifications under this
chapter;
(8) provide all information, including financial data
and documents, consents, waivers, and any other materials,
requested by the commission for purposes of determining
qualifications for a license; and
(9) as part of its application, expressly waive any
and all claims against the commission, this state, and a member,
officer, employee, or authorized agent of the commission or this
state for damages resulting from any background investigation,
disclosure, or publication relating to an application for a slot
establishment owner's or operator's license.
(f) An application or disclosure form and any other document
submitted to the commission by or on behalf of the applicant for
purposes of determining qualification for a slot establishment
owner's or operator's license must be sworn to or affirmed before an
officer qualified to administer oaths.
(g) An applicant who knowingly fails to reveal any fact
material to qualification for a license, finding of suitability, or
other approval or who knowingly submits false or misleading
material information is ineligible for a slot establishment owner's
or operator's license.
(h) An applicant for a license or renewal of a license as a
slot establishment owner or operator shall notify the commission of
any change in the application information for a license or renewal
of a license not later than the 10th day after the date of the
change, except that a publicly traded corporation or other business
association or entity applicant is not required to notify the
commission of a transfer by which any person directly or indirectly
becomes the beneficial owner of less than 10 percent of the stock of
the corporation or association.
Sec. 2022.203. SLOT ESTABLISHMENT OWNER OR OPERATOR:
EMPLOYEE INFORMATION. (a) A slot establishment owner or operator
shall provide to the commission the name and address of the
providers of surety and insurance required under this chapter.
(b) Not later than the 10th day following the date of the
change, a license holder must report to the commission any change in
an officer, partner, director, key employee, equity interest
holder, gaming employee, or owner and any change in a surety or
insurance provider.
Sec. 2022.204. SLOT ESTABLISHMENT: REQUIREMENTS; LOCATION.
(a) A slot establishment owner or operator may not operate slot
machines at any place that is not licensed as a slot establishment.
(b) The commission by rule shall establish standards for
slot establishments to ensure that establishments are accessible,
safe, comfortable, durable, and of sufficiently high-quality
construction to promote investments in establishments and related
facilities that foster lasting economic development and continuity
in producing state revenue, and that protect the health and welfare
of employees, patrons, and all state residents. The standards must
include or incorporate high-quality commercial building standards,
including safety, air-conditioning, heating, and electrical
standards.
(c) An applicant for a slot establishment license must:
(1) consent to the application of state laws with
exclusive venue in Travis County, Texas, related to any action
arising out of the operation of slot machines;
(2) provide office space for at least one commission
employee as required by commission rule; and
(3) provide free and unrestricted access to the
establishment by the commission.
(d) An applicant for a slot establishment license must
provide the maps, surveys, site plans, architectural plans, and
financial statements required by the commission and update the
information at least annually if required by the commission.
(e) The commission may not deny, suspend, or revoke a
license under this chapter based on the fact that a slot
establishment or a proposed slot establishment is a location for
which a person holds a wine and beer retailer's permit, mixed
beverage permit, mixed beverage late hours permit, private club
registration permit, or private club late hours permit, issued
under Chapter 25, 28, 29, 32, or 33, Alcoholic Beverage Code.
(f) The commission may not issue a slot establishment
license to a racetrack if:
(1) as of January 1, 2009, any part of the real
property on which the licensed premises of the racetrack is located
is less than one-half mile from any part of the real property on
which a public school is located; or
(2) the racetrack has held an inactive racing license
for at least two of the three years preceding the date the
application is submitted.
(g) A slot establishment license is valid only on the
premises of the location for which the license is issued. The
location for a licensed slot establishment may not be moved or
transferred under the license issued, and the license may not be
amended to provide a different location for the slot establishment
even if the racetrack location is moved or transferred to a
different location. A slot establishment license is void if the
location of the racetrack to which the slot establishment owner's
pari-mutuel license applies is moved.
Sec. 2022.205. SUMMARY SUSPENSION OF SLOT ESTABLISHMENT
OWNER'S OR OPERATOR'S LICENSE. The commission may summarily
suspend the license of a slot establishment owner or operator
without notice or hearing if the commission finds the action is
necessary to maintain the integrity, security, honesty, or fairness
of the operation or administration of gaming or to prevent
financial loss to this state and:
(1) the license holder fails to deposit money received
from slot machine operations as required by this chapter or
commission rule;
(2) an event occurs that would render the license
holder ineligible for a license under this chapter;
(3) the license holder refuses to allow the
commission, the commission's agents, or the state auditor, or their
designees, to examine the license holder's books, records, papers,
or other objects; or
(4) the executive director learns the license holder
failed to disclose information that would, if disclosed, render the
owner or operator ineligible for a license under this chapter.
Sec. 2022.206. CAPITAL INVESTMENTS AND IMPROVEMENT
REQUIREMENTS FOR SLOT ESTABLISHMENT. (a) A slot establishment
owner or operator shall provide all necessary capital investments
and required improvements at a slot establishment owned or operated
by the owner or operator.
(b) The commission may not issue a license for the operation
of a slot establishment at a class 2 racetrack that has not made at
least $40 million in capital investments or improvements to new or
existing facilities at the racetrack.
[Sections 2022.207-2022.250 reserved for expansion]
SUBCHAPTER F. LICENSE RENEWAL AND FEES
Sec. 2022.251. TERMS; RENEWAL. (a) An original or renewal
license expires on the first anniversary of the date it is issued.
(b) The fee for an owner's license, operator's license,
occupational license, manufacturer's license, or casino service
license is in the amount established by Section 2022.253 and must be
paid annually. A license holder may renew an unexpired license
annually by meeting the licensing requirements of the commission
and by paying the annual fee.
Sec. 2022.252. APPLICATION FEES. (a) An application fee
received under this section shall be:
(1) deposited in the Texas casino and slot gaming
fund; and
(2) used for the operation of the commission.
(b) An applicant for a casino owner's license must pay an
application fee of $100,000.
(c) An applicant for a slot establishment owner's license
must pay an application fee of $50,000.
(d) An applicant for a manufacturer's license must pay an
application fee of $200,000.
(e) An applicant for an operator's license must pay an
application fee of $50,000.
(f) An applicant for a casino service license must pay an
application fee of $100.
(g) A person registering and applying to qualify to hold an
equity interest or creditor interest in a license holder must pay an
application fee of $100.
(h) An individual applying for an occupational license must
pay an application fee of $100.
(i) All application fees must be in the form of a money order
or cashier's check and be payable to the Texas Gaming Commission,
except that the commission may provide for the payment of the fees
by electronic funds transfer or similar method. Application fees
are nonrefundable.
(j) Application fees shall be applied toward the cost of
investigating applicants' suitability for licensing or
qualification under this chapter. Any costs of investigation
incurred in excess of the application fee shall be paid by the
applicant.
Sec. 2022.253. LICENSE FEES. (a) A holder of a casino
owner's license must pay an annual license fee of $100,000.
(b) A holder of a slot establishment owner's license must
pay an annual fee of $50,000.
(c) A holder of a manufacturer's license must pay an annual
license fee of $100,000.
(d) A holder of an operator's license must pay an annual
license fee of $50,000.
(e) A holder of a casino service license must pay an annual
license fee of $100.
(f) A holder of an equity interest or creditor interest in
any license holder that is required to qualify with the commission
must pay an annual fee of $100.
(g) A holder of an occupational license must pay an annual
license fee of $100.
[Sections 2022.254-2022.300 reserved for expansion]
SUBCHAPTER G. CASINO AND SLOT GAMING FUND; TAXES ON GROSS GAMING
REVENUE AND NET SLOT INCOME
Sec. 2022.301. TEXAS CASINO AND SLOT GAMING FUND. (a) The
Texas casino and slot gaming fund is a special fund in the state
treasury.
(b) All application fees, investigation fees, and license
fees collected by the commission or on the commission's behalf
related to casino and slot gaming shall be deposited to the credit
of the Texas casino and slot gaming fund.
(c) The Texas casino and slot gaming fund may be used only
for the operation of the commission and the administration of this
chapter. If the money in the fund exceeds the amount necessary for
the operation of the commission and the administration of this
chapter, the legislature may transfer any excess amount to a
dedicated account to be known as the higher education trust account
in the general revenue fund to be used solely to provide additional
financial aid to assist in the payment of tuition and fees for
resident students of institutions of higher education in this
state.
(d) The operation of the commission and the administration
of this chapter shall be supported by fees generated under this
chapter and by a portion of the taxes imposed by Section 2022.302.
Sec. 2022.302. CASINO AND SLOT GAMING TAX; ALLOCATION OF
TAX. (a) There is imposed on each holder of a casino owner's
license a gaming tax in an amount equal to 15 percent of the gross
gaming revenue of the casino operated under the license. The tax
shall be computed and paid on a monthly basis in accordance with the
procedures established by commission rule.
(b) There is imposed on each holder of a slot establishment
owner's license a slot gaming tax in an amount equal to 35 percent
of the net slot income of the slot establishment operated under the
license. The tax shall be computed and paid on a monthly basis in
accordance with the procedures established by commission rule.
(c) Except as provided by Subsections (d), (e), and (f), the
revenue from the taxes imposed by this section is allocated to the
higher education trust account in the general revenue fund.
(d) Of the revenue from the tax imposed by Subsection (a):
(1) one-thirtieth of the revenue is allocated to the
municipality in which the casino to which the license relates is
located, and one-thirtieth of the revenue is allocated to the
county in which the casino to which the license relates is located;
or
(2) if the casino is located in an unincorporated
area, one-fifteenth of the revenue is allocated to the county in
which the casino to which the license relates is located.
(e) The comptroller shall transfer the appropriate amount
allocated under Subsection (d) to the appropriate municipalities
and counties not less than monthly in the manner the comptroller
considers appropriate.
(f) Of the revenue from the taxes imposed by this section:
(1) one-tenth of one percent shall be allocated to the
general revenue fund and may be appropriated only to fund a
compulsive gambling program established under Subchapter L; and
(2) $200,000 may be appropriated in each state fiscal
biennium to the Department of Public Safety to be used to provide
grants to prosecuting attorneys for the investigation and
prosecution of offenses related to the possession of gambling
devices.
(g) The taxes imposed by this section are due and payable on
or before the 20th day of the month following the month in which the
taxes are imposed.
(h) If the amount of gaming taxes required to be reported
and paid under this section is later determined to be greater or
less than the amount actually reported and paid by the license
holder, the commission shall:
(1) assess and collect the additional gaming taxes
determined to be due with interest until paid; or
(2) refund any overpayment, with interest, to the
license holder.
(i) Interest must be computed, until paid, at the rate of
one percent per month from the first day of the first month
following either the due date of the additional gaming taxes or the
date of overpayment.
Sec. 2022.303. DETERMINATION OF GROSS GAMING REVENUE. (a)
In calculating gross gaming revenue, a prize, premium, drawing,
benefit, or ticket that is redeemable for money, merchandise, or
other promotional allowance, except money or tokens paid at face
value directly to a patron as the result of a specific wager and the
amount of cash paid to purchase an annuity to fund winnings, may not
be deducted from gross gaming revenue as a loss at any game except a
slot machine.
(b) In calculating gross gaming revenue from slot machines
at a casino, the actual cost to the license holder of any personal
property distributed to a patron as the result of a legitimate wager
may be deducted as a loss, but travel expenses, food, refreshments,
lodging, or services at the license holder's facility may not be
deducted. For the purposes of this subsection, "as the result of a
legitimate wager" means that the patron must make a wager before
receiving the personal property, regardless of whether the receipt
of the personal property is dependent on the outcome of the wager.
(c) Cash or the value of noncash prizes awarded to patrons
in a contest or tournament are not losses for purposes of
determining gross gaming revenue.
Sec. 2022.304. REFUND OF OVERPAYMENT. (a) Taxes imposed
under this subchapter that are erroneously collected may be
refunded, on approval of the commission, as other claims against
the state are paid.
(b) Not later than the 90th day after the date of the mailing
of the notice of the commission's action on a claim for refund filed
under this chapter, the claimant may bring an action against the
commission on the grounds stated in the claim in any court of
competent jurisdiction for the recovery of any part of the amount of
the claim that has been disallowed.
(c) Failure to bring an action within the time specified by
Subsection (b) constitutes a waiver of any demand against the state
on account of alleged overpayments.
(d) If the commission fails to mail its notice of action on a
claim within six months after the date the claim is filed, the
claimant may consider the claim disallowed and bring an action
against the commission on the grounds set forth in the claim for the
recovery of any part of the amount claimed as an overpayment.
(e) In a case where a refund is granted, interest is allowed
at the rates provided in Section 111.064, Tax Code.
(f) A claim for refund of taxes imposed under this
subchapter that are paid in excess of the amount required to be
reported and paid must be filed not later than two years after the
date of overpayment.
Sec. 2022.305. DETERMINATION OF DEFICIENCY. (a) If an
owner's license holder fails to make a report of the taxes imposed
under this subchapter as required by this chapter, or if the
executive director is not satisfied with the owner's license
holder's report of the taxes, the executive director may compute
and determine the amount required to be paid on the basis of:
(1) the facts contained in the report, if any;
(2) an audit conducted by the executive director;
(3) an estimate of the amount of taxes due;
(4) any information in the commission's possession or
that may come in the executive director's possession; or
(5) any combination of the methods described by
Subdivisions (1)-(4).
(b) In making a determination, the commission may offset
overpayments and interest due against underpayments and interest or
penalties due for the period of the audit.
(c) The executive director shall give prompt written notice
of a determination of a deficiency under this section to the owner's
license holder. Except in the case of fraud or intent to evade the
payment of the tax, a notice of a determination of a deficiency must
be mailed not later than two years after the last day of the
calendar month following the applicable reporting period in which
the deficiency occurred or not later than two years after the report
is filed by the owner's license holder, whichever is later.
(d) If the reasons for the deficiency are not apparent, the
executive director shall include an explanation of those reasons in
the notice of a determination of a deficiency.
(e) If overpayments and interest exceed underpayments,
penalties, and interest, the excess amount shall be refunded to the
owner's license holder.
Sec. 2022.306. PETITION FOR REVIEW. (a) An owner's license
holder against whom a determination is made under Section 2022.305
may petition the commission for a redetermination not later than
the 30th day after the date of the service of notice of the
determination. If a petition for redetermination satisfying the
requirements of Subsection (c) is not filed within the 30-day
period, the determination becomes final.
(b) If a petition for redetermination satisfying the
requirements of Subsection (c) is filed within the 30-day period,
the commission shall reconsider the determination and, if the
petitioner requests, shall grant a hearing.
(c) A petition for redetermination must:
(1) specify the contested portions of the
determination of deficiency;
(2) specify the grounds for redetermination;
(3) state whether a hearing is requested; and
(4) be accompanied by payment in full of the
uncontested portion of the determination, including any interest
and penalties.
(d) An order or decision of the commission on a petition for
redetermination is final 10 days after the date of service on the
petitioner.
(e) A petitioner against whom an order or decision of the
commission becomes final may, not later than the 60th day after the
date the decision is final, petition for judicial review in the
manner provided by Chapter 2001, Government Code. The executive
director may not petition for judicial review.
Sec. 2022.307. TAX ADMINISTRATION. (a) The commission
shall perform all functions incident to the administration,
collection, enforcement, and operation of a fee or tax imposed
under this subchapter. The commission may adopt rules and prescribe
forms for the administration, collection, and enforcement of a fee
or tax and for the reporting of a fee or tax.
(b) Except as modified by this chapter, Subtitle B, Title 2,
Tax Code, applies to the administration, collection, and
enforcement of a tax imposed under this subchapter. For purposes of
the application of Subtitle B, Title 2, Tax Code, to a tax imposed
under this subchapter, the powers and duties assigned to the
comptroller under that subtitle are assigned to the commission.
Sec. 2022.308. TAXES DEPOSITED IN STATE HIGHWAY FUND. (a)
Notwithstanding any other law, the comptroller quarterly shall
determine the net amount of receipts collected from a casino or slot
establishment from the taxes imposed under Chapters 151, 152, 156,
171, and 183, Tax Code, and shall deposit that amount in the state
highway fund.
(b) Money deposited in the state highway fund under this
section may be used only for transportation in this state.
[Sections 2022.309-2022.350 reserved for expansion]
SUBCHAPTER H. REGULATION OF CASINO AND SLOT ESTABLISHMENT
OPERATIONS
Sec. 2022.351. REGULATION OF CASINO AND SLOT ESTABLISHMENT
OPERATIONS. (a) The commission shall adopt rules applicable to the
operation of casinos and slot establishments as the commission
finds necessary for the protection of the health, safety, morals,
and general welfare of this state and for the reputation of the
state's gaming industry.
(b) Casinos and slot establishments may operate 24 hours a
day, seven days a week. A license holder may elect other hours of
operation.
(c) The commission may not authorize a casino or slot
establishment to conduct wagering on the outcome of a sports event
or sports activity other than greyhound or horse racing.
Sec. 2022.352. USE OF CHIPS OR TOKENS. All gaming must be
conducted with chips or tokens approved by the commission or with
the legal tender of the United States.
Sec. 2022.353. REPORTING REQUIREMENTS. (a) An owner's
license holder shall keep the license holder's books and records in
a manner that clearly shows the total amount of gross gaming revenue
or net slot income, as applicable, and other revenues received.
(b) The books and records kept by an owner's license holder
relating to gaming operations are not public records and the
publication and dissemination of the materials by the commission is
prohibited. The commission may publish and disseminate gaming
revenues and incomes of each owner's license holder at a frequency
and in the level of detail as it considers appropriate.
(c) An owner's license holder shall file a report of each
change of the corporate officers and directors with the commission.
The commission shall, not later than the 90th day after the date of
the change, approve or disapprove the change. During the 90-day
period, the officer or director is entitled to exercise the powers
of the office to which the officer or director was elected or
appointed.
(d) An owner's license holder shall report to the executive
director in writing a change in company employees who have been
designated as key employees.
(e) The commission may require that a company furnish the
commission with a copy of its federal income tax return not later
than the 30th day after the date the return is filed with the
federal government.
Sec. 2022.354. EXCLUSION OF PERSONS. (a) The commission by
rule shall provide for the establishment of a list of persons who
are to be excluded or ejected from a casino or slot establishment.
The list may include a person whose presence in the casino or
establishment is determined by the commission to pose a threat to
the interests of this state, to licensed gaming, or to both
interests.
(b) In making a determination under this section, the
commission may consider any:
(1) prior conviction of a crime that is a felony in
this state or under the laws of the United States or a crime
involving moral turpitude or a violation of the gaming laws of a
state; or
(2) violation of or conspiracy to violate the
provisions of this chapter relating to:
(A) the failure to disclose an interest in a
casino or slot establishment for which the person must obtain a
license;
(B) willful evasion of a fee or a tax;
(C) notorious or unsavory reputation that would
adversely affect public confidence and trust that the gaming
industry is free from criminal or corruptive elements; or
(D) a written order of a governmental agency that
authorizes the exclusion or ejection of the person from a casino or
slot establishment where gaming or pari-mutuel wagering is
conducted.
Sec. 2022.355. INTERNAL AUDIT AND CONTROL SYSTEMS. (a) An
owner's license holder shall adopt an internal control system that
provides for:
(1) the safeguarding of its assets and revenues,
especially the recording of cash and evidences of indebtedness; and
(2) the provision of reliable records, accounts, and
reports of transactions, operations, and events, including reports
to the executive director and the commission.
(b) The internal control system must be designed to
reasonably ensure that:
(1) assets are safeguarded;
(2) financial records are accurate and reliable;
(3) transactions are performed only in accordance with
management's general or specific authorization;
(4) transactions are recorded adequately to allow
proper reporting of gaming revenue and of fees and taxes and to
maintain accountability for assets;
(5) access to assets is allowed only in accordance
with management's specific authorization;
(6) recorded accountability for assets is compared
with actual assets at reasonable intervals and appropriate action
is taken with respect to any discrepancies; and
(7) functions, duties, and responsibilities are
appropriately segregated and performed in accordance with sound
practices by competent, qualified personnel.
(c) An owner's license holder and an applicant for an
owner's license shall describe, in a manner approved or required by
the executive director, the license holder's or applicant's
administrative and accounting procedures in detail in a written
system of internal control. An owner's license holder and
applicant for an owner's license shall submit a copy of the license
holder's or applicant's written system to the executive director. A
written system must include:
(1) an organizational chart depicting appropriate
segregation of functions and responsibilities;
(2) a description of the duties and responsibilities
of each position shown on the organizational chart;
(3) a detailed, narrative description of the
administrative and accounting procedures designed to satisfy the
requirements of Section 2022.353(a);
(4) a written statement signed by the license holder's
chief financial officer and either the license holder's chief
executive officer or an owner's license holder attesting that the
system satisfies the requirements of this section;
(5) if the written system is submitted by an
applicant, a letter from an independent certified public accountant
stating that the applicant's written system has been reviewed by
the certified public accountant and complies with the requirements
of this section; and
(6) other items the executive director may require.
(d) The commission shall adopt minimum standards for
internal control procedures.
Sec. 2022.356. AGE REQUIREMENTS. A person under the age of
21 years may not:
(1) play, be allowed to play, place wagers, or collect
winnings, personally or through an agent, from any gaming
authorized under this chapter; or
(2) be employed as a gaming employee.
Sec. 2022.357. ACCEPTANCE OF NEGOTIABLE INSTRUMENTS. (a)
A negotiable instrument evidencing a gaming transaction may be
enforced by legal process.
(b) A license holder may accept an incomplete negotiable
instrument that is signed by a patron and states the amount of the
debt. The license holder may complete the instrument as is
necessary for the instrument to be presented for payment.
(c) A license holder:
(1) may not accept a negotiable instrument that is
incomplete, except as authorized by Subsection (b); and
(2) may accept a negotiable instrument that is payable
to an affiliate or may complete a negotiable instrument in the name
of an affiliate as payee if the negotiable instrument otherwise
complies with this section and the records of the affiliate
pertaining to the negotiable instrument are made available to the
executive director on request.
(d) This section does not prohibit the establishment of an
account by a deposit of cash, recognized traveler's check, or any
other instrument that is equivalent to cash.
(e) Any person, license holder, or the agents or employees
of the person or license holder who violate this section are subject
only to the penalties provided in this chapter relating to
disciplinary actions. The failure of a person to comply with this
section or commission rules does not invalidate a negotiable
instrument or affect the ability to enforce the negotiable
instrument or the transaction that the negotiable instrument
represents.
Sec. 2022.358. GAMING DEBTS. (a) Except as otherwise
provided by this chapter, gaming debts not evidenced by a
negotiable instrument are void and unenforceable and do not give
rise to any administrative or civil cause of action.
(b) A claim by a patron of a license holder for payment of a
gaming debt not evidenced by a negotiable instrument may be
resolved by the executive director under commission rules.
(c) The executive director shall send a copy of the
director's ruling by first class mail to the attorneys of record and
shall keep an appropriate copy of the mailing. If a party is not
represented by an attorney of record, the executive director shall
send a copy of the ruling by first class mail to the party and shall
keep an appropriate record of the mailing.
(d) A party or attorney of record notified by mail under
this section is presumed to have been notified on the date on which
the notice is mailed.
(e) A party aggrieved by the executive director's ruling is
entitled to have the claim resolved by the commission in a contested
case if the party files a written complaint with the commission
challenging the executive director's decision not later than the
20th day after the date on which the party or the party's attorney
of record is notified by mail.
Sec. 2022.359. QUESTIONING AND DETENTION OF PERSONS. (a)
An owner's license holder or the license holder's officer,
employee, or agent may question any person on the license holder's
premises suspected of violating this chapter. The owner's license
holder or the license holder's officer, employee, or agent is not
criminally or civilly liable:
(1) as a result of the questioning; or
(2) for reporting the person suspected of the
violation to the executive director or law enforcement authorities.
(b) An owner's license holder or the license holder's
officer, employee, or agent who has reasonable cause to believe
that there has been a violation of this chapter in the license
holder's casino or slot establishment by a person may take that
person into custody and detain the person in the casino or slot
establishment in a reasonable manner and for a reasonable length of
time. The taking into custody and detention does not render the
license holder or the license holder's officer, employee, or agent
criminally or civilly liable unless it is established by clear and
convincing evidence that the taking into custody and detention are
unreasonable under all the circumstances.
(c) An owner's license holder or the license holder's
officer, employee, or agent is not entitled to the immunity from
liability provided by Subsection (a) or (b) unless there is
displayed in a conspicuous place in the license holder's
establishment a notice in bold-faced type, clearly legible, and in
substantially this form:
AN OWNER'S LICENSE HOLDER OR AN OWNER'S LICENSE
HOLDER'S OFFICER, EMPLOYEE, OR AGENT WHO HAS A
REASONABLE CAUSE TO BELIEVE THAT A PERSON HAS VIOLATED
A PROVISION OF CHAPTER 2005, OCCUPATIONS CODE, MAY
QUESTION OR DETAIN THAT PERSON IN THE ESTABLISHMENT.
Sec. 2022.360. SLOT MACHINE DISABLED. (a) The commission
may disable a slot machine operated by a license holder under this
chapter at the time:
(1) a proceeding to summarily suspend the license is
initiated;
(2) the commission discovers the license holder failed
to deposit money received from slot machine operation as required
if the license is being summarily suspended under this section; or
(3) an act or omission occurs that, under commission
rules, justifies the termination of slot machine operations to:
(A) protect the integrity of gaming or the public
health, welfare, or safety; or
(B) prevent financial loss to this state.
(b) The commission shall immediately disable a slot machine
if necessary to protect the public health, welfare, or safety.
Sec. 2022.361. SLOT MACHINE: DISTRIBUTION AND COMMISSION
APPROVAL. (a) A slot machine provider may not distribute a slot
machine or other gaming or associated equipment for placement at a
casino or slot establishment in this state unless the machine or
equipment has been approved by the commission.
(b) Only a person that holds a manufacturer's license issued
under this chapter may apply for approval of a slot machine or other
gaming or associated equipment.
Sec. 2022.362. TECHNICAL STANDARDS FOR GAMING EQUIPMENT.
The commission by rule shall establish minimum technical standards
for gaming equipment that may be operated in this state.
Sec. 2022.363. INCIDENT REPORTS. (a) The owner or operator
of a casino or slot establishment shall record all unusual
occurrences related to gaming activity in the casino or slot
establishment operated by the owner or operator.
(b) The owner or operator of a casino or slot establishment
shall assign each incident, without regard to materiality, a
sequential number and, at a minimum, provide the following
information in a permanent record prepared in accordance with
commission rules to ensure the integrity of the record:
(1) the number assigned to the incident;
(2) the date and time of the incident;
(3) the nature of the incident;
(4) each person involved in the incident; and
(5) the name of the employee or other agent of the
owner or operator who investigated the incident.
Sec. 2022.364. SLOT MACHINE EVENTS. The owner or operator
of a casino or slot establishment shall keep a database of slot
machine events. The commission by rule shall determine what
constitutes a slot machine event for purposes of this section.
Sec. 2022.365. SECURITY. (a) The owner or operator of a
casino or slot establishment shall:
(1) continuously monitor all slot machines through the
use of a closed-circuit television system that records activity for
a continuous 24-hour period, retain all videotapes or other media
used to store video images for at least 30 days, and make the tapes
or media available to the commission on request;
(2) submit for commission approval a security plan and
a floor plan of the area where slot machines are operated showing
slot machine locations and security camera mount locations; and
(3) employ at least the minimum number of private
security personnel the commission determines is necessary to
provide for safe and approved operation of the casino or slot
establishment and the safety and well-being of the players.
(b) Private security personnel must be present during all
hours of operation at each casino or slot establishment.
(c) An agent or employee of the commission or the Department
of Public Safety or other law enforcement personnel may be present
at a casino or slot establishment at any time.
(d) The commission may adopt rules to impose additional
surveillance and security requirements related to casinos or slot
establishments and the operation of slot machines.
Sec. 2022.366. COMMISSION RIGHT TO ENTER. The commission
or the commission's representative, after displaying appropriate
identification and credentials, has the free and unrestricted right
to:
(1) enter the premises of a casino or slot
establishment;
(2) enter at all times any other locations involved in
operation or support of slot machines; and
(3) inspect and copy the records of the owner or
operator of a casino or slot establishment pertaining to the
operation of slot machines.
Sec. 2022.367. APPOINTMENT OF SUPERVISOR. (a) The
commission by rule may provide for the appointment of a supervisor
to manage and operate a casino or slot establishment at the
direction of the commission and perform any act that a casino or
slot establishment owner or operator is entitled to perform in the
event that:
(1) an owner's or operator's license or other license
required for operation of the casino or slot establishment is
revoked or suspended, lapses, or is surrendered;
(2) a casino or slot establishment has been conveyed
or transferred to a secured party receiver or trustee who does not
hold the licenses necessary to operate the casino or establishment;
or
(3) any other event occurs that causes the casino or
establishment to cease the operation of slot machines.
(b) The rules may allow the commission to:
(1) take any action or adopt any procedure necessary
to operate a casino or slot establishment pending the licensing of
an owner or operator or a successor on the transfer or sale of the
casino, establishment, or property; and
(2) if necessary to continue the operation of the
casino or slot establishment, sell the casino or establishment to a
person that holds or has applied for the licenses required to
operate the casino or establishment under this chapter and make
appropriate distributions of the proceeds of the sale.
Sec. 2022.368. OFFENSE: CONVEYANCE OF CASINO OR SLOT
ESTABLISHMENT PROPERTY. (a) A person commits an offense if during
the pendency of any proceeding before the commission that may
result in the appointment of a supervisor or during the period of
supervision the person:
(1) sells, leases, or otherwise conveys for less than
full market value or pledges as security any property of a casino or
slot establishment; or
(2) removes from this state or secretes from the
commission or the supervisor any property, money, books, or records
of the casino or slot establishment, including evidences of debts
owed to the casino or establishment.
(b) An offense under Subsection (a) is a felony of the third
degree.
[Sections 2022.369-2022.400 reserved for expansion]
SUBCHAPTER I. ENFORCEMENT
Sec. 2022.401. ENFORCEMENT. (a) The executive director
shall conduct an appropriate investigation to:
(1) determine whether there has been a violation of
this chapter or of a commission rule;
(2) determine facts, conditions, practices, or
matters that the director considers necessary or proper to aid in
the enforcement of a law or rule;
(3) aid in adopting rules;
(4) secure information as a basis for recommending
legislation relating to this chapter; and
(5) determine whether a license holder is able to meet
the license holder's financial obligations, including all
financial obligations imposed by this chapter, as they become due.
(b) If after an investigation the executive director is
satisfied that a license should be limited, conditioned, suspended,
or revoked, or that a fine should be levied, the executive director
shall initiate a hearing under Section 2022.406.
Sec. 2022.402. PRIVILEGED DOCUMENTS. (a) A communication
or document of an applicant or license holder that is required by
law or commission rule or by a subpoena issued by the commission and
that is to be made or transmitted to the commission or the executive
director is privileged and does not impose liability for defamation
or constitute a ground for recovery in a civil action by a person
other than the commission.
(b) If a document or communication contains information
that is privileged, the privilege is not waived or lost because the
document or communication is disclosed to the commission or the
executive director.
(c) Notwithstanding the powers granted to the commission
and the executive director by this chapter:
(1) the commission and the executive director may not
release or disclose privileged information, documents, or
communications provided by an applicant and required by a lawful
court order after timely notice of the proceedings has been given to
the applicant or license holder without the prior written consent
of the applicant or license holder;
(2) the commission and the executive director shall
maintain all privileged information, documents, and communications
in a secure place accessible only to members of the commission and
the executive director; and
(3) the commission shall adopt procedures to protect
the privileged nature of information, documents, and
communications provided by an applicant or license holder.
Sec. 2022.403. RELEASE OF CONFIDENTIAL INFORMATION. An
application to a court for an order requiring the commission or the
executive director to release any information declared by law to be
confidential shall be made only on a motion in writing delivered not
later than the 10th day before the date of application to the
commission, the attorney general, and all persons who may be
affected by the entry of the order. Copies of the motion and all
papers filed in support of it shall be served with the notice by
delivering a copy in person or by certified mail to the last known
address of the person to be served.
Sec. 2022.404. EMERGENCY ORDERS. (a) The commission may
issue an emergency order for suspension, limitation, or
conditioning of a license or work permit or may issue an emergency
order requiring a casino or slot establishment to keep an
individual license holder from the premises of the licensed
establishment or to not pay the license holder any remuneration for
services or any profits, income, or accruals on the license
holder's investment in the casino or slot establishment.
(b) An emergency order may be issued only if the commission
determines that:
(1) a license holder has willfully failed to report,
pay, or truthfully account for a fee imposed under this chapter or
willfully attempted in any manner to evade or defeat a fee or
payment;
(2) a license holder or gaming employee has cheated at
a gambling game; or
(3) the action is necessary for the immediate
preservation of the public peace, health, safety, morals, good
order, or general welfare.
(c) The emergency order must state the grounds on which it
is issued, including a statement of facts constituting the alleged
emergency necessitating the action.
(d) An emergency order may be issued only with the approval
of and under the signature of four or more members of the
commission.
(e) An emergency order is effective immediately on issuance
and service on the license holder or resident agent of the license
holder, gaming employee, or, in cases involving registration, on
issuance and service on the person or entity involved or resident
agent of the entity involved. An emergency order may suspend,
limit, condition, or take other action in relation to the license of
one or more persons in an operation without affecting other
individual license holders or the casino or slot establishment. An
emergency order remains effective until further order of the
commission or final disposition of the case.
(f) Not later than the fifth day after the date of issuance
of an emergency order, the executive director shall file a
complaint and serve it on the person or entity involved. The person
or entity against whom the emergency order has been issued and
served is entitled to a hearing before the commission and to
judicial review of the decision and order of the commission under
Chapter 2001, Government Code. Judicial review is under the
substantial evidence rule.
Sec. 2022.405. REVOCATION OF LICENSE, CERTIFICATE OF
REGISTRATION, FINDING OF SUITABILITY, OR OTHER APPROVAL. (a) The
commission shall revoke or suspend a license, certificate of
registration, finding of suitability, or other affirmative
regulatory approval issued under this chapter if the holder of the
license, certificate, suitability, or approval at any time fails to
meet the eligibility requirements set forth in this chapter.
(b) Failure to timely remit gaming revenue generated by slot
machines to the commission or any tax or other fee owed to this
state as demonstrated by report from the applicable taxing
authority or to timely file any report or information required
under this chapter as a condition of any license, certificate,
finding of suitability, or other approval issued under this chapter
may be grounds for suspension or revocation, or both, of a license,
certificate, finding of suitability, or other approval issued under
this chapter.
Sec. 2022.406. DISCIPLINARY HEARING. (a) Before the
commission revokes or suspends a license, certificate of
registration, finding of suitability, or approval or imposes
monetary penalties for a violation of this chapter, the commission
shall provide written notification to the license, certificate,
finding of suitability, or approval holder of the revocation, the
period of suspension, or the monetary penalty. The notice shall
include:
(1) the effective date of the revocation or the period
of suspension or the amount of the monetary penalty, as applicable;
(2) each reason for the revocation, suspension, or
penalty;
(3) an explanation of the evidence supporting the
reasons;
(4) an opportunity to present the license,
certificate, finding of suitability, or approval holder's position
in response on or before the 15th day after the effective date of
the revocation; and
(5) a statement explaining the person's right to an
administrative hearing to determine whether the revocation,
suspension, or penalty is warranted.
(b) The notice required under Subsection (a) must be made by
personal delivery or by mail to the person's mailing address as it
appears on the commission's records.
(c) To obtain an administrative hearing on a suspension,
revocation, or penalty under this section, a person must submit a
written request for a hearing to the commission not later than the
20th day after the date notice is delivered personally or is mailed.
(d) If the commission receives a timely request under
Subsection (c), the commission shall provide the person with an
opportunity for a hearing as soon as practicable. If the commission
does not receive a timely request under Subsection (c), the
commission may impose the penalty, revoke or suspend a license,
certificate, finding of suitability, or approval, or sustain the
revocation or suspension without a hearing.
(e) Except as provided by Subsection (f), the hearing must
be held not earlier than the 11th day after the date the written
request is submitted to the commission.
(f) The commission may provide that a revocation or
suspension takes effect on receipt of notice under Subsection (a)
if the commission finds that the action is necessary to prevent or
remedy a threat to public health, safety, or welfare. The
commission by rule shall establish a nonexclusive list of
violations that present a threat to the public health, safety, or
welfare.
(g) A hearing on a revocation or suspension that takes
effect on receipt of notice must be held not later than the 14th day
after the date the commission receives the request for hearing
under this section. The revocation or suspension continues in
effect until the hearing is completed. If the hearing is continued,
the revocation or suspension shall continue in effect beyond the
14-day period at the request of the license, certificate, finding
of suitability, or approval holder or on a finding of good cause by
the commission or administrative law judge.
(h) To prevail in a post-deprivation administrative hearing
under this section, the license, certificate, finding of
suitability, or approval holder must demonstrate by clear and
convincing evidence that the deprivation or imposition of a penalty
was unwarranted or otherwise unlawful. The post-deprivation
hearing may be conducted by the commission or referred to the State
Office of Administrative Hearings.
(i) The administrative record created by the hearing
conducted by the State Office of Administrative Hearings shall be
provided to the commission for review and determination on the
revocation or suspension.
(j) If an administrative law judge of the State Office of
Administrative Hearings conducts a hearing under this section and
the proposal for decision supports the commission's position, the
administrative law judge shall include in the proposal a finding of
the costs, fees, expenses, and reasonable and necessary attorney's
fees this state incurred in bringing the proceeding.
(k) The commission may adopt the findings for costs, fees,
and expenses and make the finding a part of the final order entered
in the proceeding. Proceeds collected from a finding made under
this section shall be paid to the commission.
Sec. 2022.407. JUDICIAL REVIEW OF REVOCATION, SUSPENSION,
OR PENALTY IMPOSITION. (a) A person aggrieved by a final decision
of the commission to revoke or suspend a license, certificate of
registration, finding of suitability, or approval or to impose any
monetary penalty may obtain judicial review before a district court
in Travis County.
(b) The judicial review must be instituted by serving on the
commission and filing a petition not later than the 20th day after
the effective date of the final decision and must identify the order
appealed from and the grounds or reason why the petitioner contends
the decision of the commission should be reversed or modified.
(c) The review must be conducted by the court sitting
without jury, and must not be a trial de novo but is confined to the
record on review. The reviewing court may only affirm the decision,
remand the case for further proceedings, or reverse the decision if
the substantial rights of the petitioner have been violated.
(d) If any court of competent jurisdiction concludes on
judicial review limited to the administrative record before the
commission and subject to the substantial evidence standard that
the deprivation or penalty was unwarranted or otherwise unlawful,
the sole remedy available is invalidation of the penalty or
reinstatement of the license, certificate of registration, finding
of suitability, or approval and the continued distribution,
manufacture, or operation of slot machines.
(e) The commission, this state, or the members, officers,
employees, and authorized agents of either are not under any
circumstances subject to monetary damages, attorney's fees, or
court costs resulting from the penalty or license, certificate,
finding of suitability, or approval revocation.
Sec. 2022.408. EFFECT OF DENIAL OF LICENSE, REGISTRATION,
FINDING OF SUITABILITY, OR APPROVAL. (a) A person whose
application for a license, certificate of registration, finding of
suitability, or other affirmative regulatory approval has been
denied may not have any interest in or association with a slot
establishment owner or operator or any other business conducted in
connection with slot machines under this chapter without prior
approval of the commission.
(b) Any contract related to the operation of slot machines
in this state between a person holding a license, certificate of
registration, finding of suitability, or other affirmative
regulatory approval and a person denied a license, certificate of
registration, finding of suitability, or other affirmative
regulatory approval must be terminated immediately. If the person
denied a license, certificate, finding of suitability, or approval
has previously been granted a temporary license, certificate,
finding of suitability, or approval, the temporary license,
certificate, finding of suitability, or approval expires
immediately on denial of the permanent license, certificate,
finding of suitability, or approval.
(c) Except as otherwise authorized by the commission, a
person denied a license, certificate of registration, finding of
suitability, or other affirmative regulatory approval may not
reapply for any license, certificate, finding of suitability, or
approval before the second anniversary of the date of the denial.
Sec. 2022.409. AGREEMENT TO WAIVE ENFORCEABILITY. A
license, certificate, finding of suitability, or approval holder by
virtue of accepting the license, certificate, finding of
suitability, or approval agrees that the privilege of holding a
license, certificate, finding of suitability, or approval under
this chapter is conditioned on the holder's agreement to Sections
2022.405-2022.407 and waives any right to challenge or otherwise
appeal the enforceability of those sections.
Sec. 2022.410. LIMITED WAIVER OF SOVEREIGN IMMUNITY; NO
LIABILITY OF STATE FOR ENFORCEMENT. (a) This state does not waive
its sovereign immunity by negotiating gaming agreements with Indian
tribes or other persons for the operation of gaming or gambling
games under this subtitle. An actor or agent for this state may not
waive this state's sovereign immunity absent an express legislative
grant of the authority. The only waiver of sovereign immunity
relative to gaming operations is that expressly provided for in
this section.
(b) With regard to gaming operations on Indian lands, this
state consents to the jurisdiction of the District Court of the
United States with jurisdiction in the county where the Indian
lands are located, or if the federal court lacks jurisdiction, to
the jurisdiction of a district court in Travis County, solely for
the purpose of resolving disputes arising from a gaming agreement
authorized under this chapter or Chapter 2023 for declaratory or
injunctive relief or contract damages of $100,000 or more. Any
disputes relating to damages or other awards valued at less than
$100,000 shall be arbitrated under the rules of the American
Arbitration Association, provided, however, that application of
the rules may not be construed as a waiver of sovereign immunity.
(c) All financial obligations of the commission are payable
solely out of the income, revenues, and receipts of the commission
and are subject to statutory restrictions and appropriations.
(d) This state and the commission are not liable if
performance by the commission is compromised or terminated by acts
or omissions of the legislature or the state or federal judiciary.
(e) This state and the commission are not liable related to
enforcement of this chapter.
Sec. 2022.411. ABSOLUTE PRIVILEGE OF REQUIRED
COMMUNICATIONS AND DOCUMENTS. (a) Any communication, document, or
record of an applicant for or holder of a license, certificate,
finding of suitability, or regulatory approval that is made or
transmitted to the commission or any of its employees to comply with
any law, including a rule of the commission, to comply with a
subpoena issued by the commission, or to assist the commission or
its designee in the performance of their respective duties is
absolutely privileged, does not impose liability for defamation,
and is not a ground for recovery in any civil action.
(b) If a communication, document, or record provided under
Subsection (a) contains any information that is privileged under
state law, that privilege is not waived or lost because the
communication, document, or record is disclosed to the commission
or any commission employees.
(c) The commission shall maintain all privileged
information, communications, documents, and records in a secure
place as determined in the commission's sole discretion that is
accessible only to commission members and authorized commission
employees.
[Sections 2022.412-2022.450 reserved for expansion]
SUBCHAPTER J. PENALTIES AND OFFENSES
Sec. 2022.451. FAILURE TO PAY FEES. (a) License fees and
other fees required by this chapter must be paid to the commission
on or before the dates provided by law for each fee.
(b) A person failing to timely pay a fee or tax when due
shall pay in addition a penalty of not less than $50 or 25 percent of
the amount due, whichever is the greater. The penalty may not
exceed $1,000 if the fee or tax is less than 10 days late and may not
exceed $5,000 under any circumstances. The penalty shall be
collected as are other charges, license fees, and penalties under
this chapter.
Sec. 2022.452. FAILURE TO REPORT, PAY, OR ACCOUNT FOR FEE OR
TAX. (a) A person commits an offense if the person willfully fails
to report, pay, or truthfully account for a fee or tax imposed under
this chapter or willfully attempts in any manner to evade or defeat
a fee or tax.
(b) An offense under this section is a Class A misdemeanor.
Sec. 2022.453. GAMING FRAUD. (a) A person commits an
offense if the person knowingly:
(1) alters or misrepresents the outcome of a game or
other event on which wagers have been made after the outcome is made
sure but before it is revealed to the players;
(2) places, increases, or decreases a bet or
determines the course of play after acquiring knowledge, not
available to all players, of the outcome of the game or an event
that affects the outcome of the game or that is the subject of the
bet or aids anyone in acquiring such knowledge for the purpose of
placing, increasing, or decreasing a bet or determining the course
of play contingent on that event or outcome;
(3) claims, collects, or takes, or attempts to claim,
collect, or take, money or anything of value in or from a gambling
game, with intent to defraud, without having made a wager
contingent on the game, or claims, collects, or takes an amount
greater than the amount won;
(4) entices or induces another to go to a place where a
gambling game is being conducted or operated in violation of this
subtitle, with the intent that the other person play or participate
in that gambling game;
(5) places or increases a bet after acquiring
knowledge of the outcome of the game or other event that is the
subject of the bet, including past posting and pressing bets;
(6) reduces the amount wagered or cancels the bet
after acquiring knowledge of the outcome of the game or other event
that is the subject of the bet, including pinching bets; or
(7) manipulates, with the intent to cheat, a component
of a gaming device in a manner contrary to the designed and normal
operational purpose for the component, including varying the pull
of the handle of a slot machine, with knowledge that the
manipulation affects the outcome of the game or with knowledge of an
event that affects the outcome of the game.
(b) An offense under this section is a felony of the third
degree.
Sec. 2022.454. USE OF PROHIBITED DEVICES. (a) A person
commits an offense if the person, at a casino or slot establishment,
uses or possesses with the intent to use a device, other than those
customarily used in the conduct of gaming to assist in:
(1) projecting the outcome of the game;
(2) keeping track of the cards played;
(3) analyzing the probability of the occurrence of an
event relating to the game; or
(4) analyzing the strategy for playing or betting to
be used in the game.
(b) An offense under this section is a felony of the third
degree.
Sec. 2022.455. USE OF COUNTERFEIT OR UNAUTHORIZED TOKEN,
CHIP, OR COIN. (a) A person commits an offense if the person
knowingly uses counterfeit chips or tokens in a gambling game.
(b) A person commits an offense if the person, in playing
any gambling game designed to receive, be played with, or be
operated by chips or tokens approved by the executive director or by
lawful coin of the United States of America:
(1) knowingly uses a chip, token, or coin other than
chips or tokens approved by the commission or lawful coin of the
United States of America, or uses a coin not of the same
denomination as the coin intended to be used in that gambling game;
or
(2) uses any device or means to violate the provisions
of this chapter.
(c) A person, other than an authorized employee of an
owner's license holder acting in furtherance of the person's
employment within an establishment, commits an offense if the
person knowingly has on the person's body or in the person's
possession on or off the premises of a casino a device intended to
be used to violate the provisions of this chapter.
(d) A person, other than an authorized employee of a license
holder acting in furtherance of the person's employment within a
casino or slot establishment, commits an offense if the person
knowingly has on the person's body or in the person's possession on
or off the premises of a casino or slot establishment a key or
device known to have been designed for the purpose of and suitable
for opening, entering, or affecting the operation of a gambling
game, a drop box, or an electronic or mechanical device connected to
the game or box or for removing money or other contents from the
game or box.
(e) A person commits an offense if the person, with the
intent to manufacture slugs for unauthorized use in gaming devices
located at a casino or slot establishment, knowingly has on the
person's body or in the person's possession paraphernalia for
manufacturing slugs. In this subsection, "paraphernalia for
manufacturing slugs" means the equipment, products, and materials
that are intended for use or designed for use in manufacturing,
producing, fabricating, preparing, testing, analyzing, packaging,
storing, or concealing a counterfeit facsimile of the chips or
tokens approved by the executive director or a lawful coin of the
United States, the use of which is an offense under Subsection (b).
The term includes:
(1) lead or lead alloys;
(2) molds, forms, or similar equipment capable of
producing a likeness of a gaming token or United States coin;
(3) melting pots or other receptacles;
(4) torches; and
(5) tongs, trimming tools, or other similar equipment.
(f) Possession of more than one of the devices, equipment,
products, or materials described in this section permits a
rebuttable inference that the possessor intended to use them for
cheating.
(g) An offense under this section is a felony of the third
degree.
Sec. 2022.456. CHEATING. (a) In this section, "cheat"
means to alter the elements of chance, method of selection, or
criteria that determine the result of a game or the amount or
frequency of payment in a game.
(b) A person commits an offense if the person knowingly
cheats at any gambling game.
(c) An offense under this section is a state jail felony.
Sec. 2022.457. POSSESSION OF UNLAWFUL DEVICES. (a) A
person commits an offense if the person knowingly possesses any
slot machine or other gaming device that has been manufactured,
sold, or distributed in violation of this chapter.
(b) An offense under this section is a Class A misdemeanor.
Sec. 2022.458. UNLAWFUL MANUFACTURE, SALE, OR DISTRIBUTION
OF GAMING EQUIPMENT. (a) In this section, "cheat" has the meaning
assigned by Section 2022.456.
(b) A person commits an offense if the person manufactures,
sells, or distributes cards, chips, dice, a game, or a device
intended to be used to violate this chapter.
(c) A person commits an offense if the person marks, alters,
or otherwise modifies any associated equipment or gaming device in
a manner that:
(1) affects the result of a wager by determining win or
loss; or
(2) alters the normal criteria of random selection
that affect the operation of a game or determine the outcome of a
game.
(d) A person commits an offense if the person instructs
another person in cheating or in the use of a device for cheating at
any game authorized to be conducted at a casino or slot
establishment, with the knowledge or intent that the information or
use may be employed to violate this chapter.
(e) An offense under this section is a felony of the third
degree.
Sec. 2022.459. REPORTING PENALTIES. (a) A person commits
an offense if the person, in a license application, in a book or
record required to be maintained by this chapter or a rule adopted
under this chapter, or in a report required to be submitted by this
chapter or a rule adopted under this chapter:
(1) makes a statement or entry that the person knows to
be false or misleading; or
(2) knowingly fails to maintain or make an entry the
person knows is required to be maintained or made.
(b) A person commits an offense if the person knowingly
refuses to produce for inspection by the executive director a book,
record, or document required to be maintained or made by this
chapter or a rule adopted under this chapter.
(c) An offense under this section is a Class A misdemeanor.
Sec. 2022.460. GENERAL PENALTY. (a) A person commits an
offense if the person knowingly or wilfully violates, attempts to
violate, or conspires to violate a provision of this chapter
specifying a prohibited act.
(b) Unless another penalty is specified for the violation,
an offense under this section is a Class A misdemeanor.
Sec. 2022.461. UNAUTHORIZED OPERATION, USE, OR POSSESSION
OF GAMING DEVICE. (a) A person may not operate, use, or possess a
gaming device unless the operation, use, or possession is expressly
authorized by this chapter or other law.
(b) Except for transport to or from a casino or slot
establishment and as provided by this chapter, a person commits an
offense if the person operates, uses, or possesses a gaming device
that is not authorized under this chapter or other law. An offense
under this subsection is a felony of the third degree.
(c) Notwithstanding Subsection (b), a casino owner or
operator, slot establishment owner or operator, or a manufacturer
may store a gaming device as authorized by the commission for a
period not to exceed 120 consecutive days, and the commission may
possess gaming devices for study and evaluation.
(d) Nothing in this section shall be construed to prohibit
the operation, use, or possession of equipment, machines,
technological aids, or other devices allowed in connection with the
play of bingo under Chapter 2001.
Sec. 2022.462. PLAY OF GAME ON CREDIT. (a) A person
licensed under this chapter or an employee of a person licensed
under this chapter commits an offense if the person intentionally
or knowingly allows a person to play or conduct a game on a gaming
device by extending credit or lending money to the person to enable
the person to play the game.
(b) An offense under this section is a Class C misdemeanor.
Sec. 2022.463. SALE OF GAMBLING GAME TO OR PURCHASE OF
GAMBLING GAME BY PERSON YOUNGER THAN 21 YEARS OF AGE. (a) A person
licensed under this chapter or an employee of the person commits an
offense if the person intentionally or knowingly allows a person
younger than 21 years of age to play a gambling game.
(b) An individual who is younger than 21 years of age
commits an offense if the individual:
(1) plays a gambling game; or
(2) falsely represents the individual to be 21 years
of age or older by displaying evidence of age that is false or
fraudulent or misrepresents in any way the individual's age in
order to play a gambling game.
(c) It is a defense to prosecution under Subsection (b) that
the individual younger than 21 years of age is participating in an
inspection or investigation on behalf of the commission or other
appropriate governmental entity regarding compliance with this
section.
(d) An offense under Subsection (a) is a Class C
misdemeanor.
(e) An offense under Subsection (b) is a misdemeanor
punishable by a fine not to exceed $250.
Sec. 2022.464. PURCHASE OF GAMBLING GAME WITH PROCEEDS OF
AFDC CHECK OR FOOD STAMPS. (a) A person commits an offense if the
person intentionally or knowingly plays a gambling game with:
(1) the proceeds of a check issued as a payment under
the Aid to Families with Dependent Children program administered
under Chapter 31, Human Resources Code; or
(2) a food stamp coupon issued under the food stamp
program administered under Chapter 33, Human Resources Code.
(b) An offense under this section is a Class C misdemeanor.
Sec. 2022.465. TAMPERING WITH GAMING OR ASSOCIATED
EQUIPMENT. (a) A person commits an offense if the person
intentionally or knowingly tampers with, damages, defaces, or
renders inoperable any vending machine, electronic computer
terminal, gaming device or other gaming or associated equipment, or
other mechanical device used in a gambling game.
(b) An offense under this section is a felony of the third
degree.
[Sections 2022.466-2022.500 reserved for expansion]
SUBCHAPTER K. LOCAL OPTION ELECTIONS
Sec. 2022.501. ORDERING LOCAL OPTION ELECTION. The
commissioners court of a county may at any time order an election to
legalize casino gaming under this chapter in that county. The
commissioners court shall order and hold an election to legalize
gaming under this chapter in the county if the commissioners court
is presented with a petition that meets the requirements of Section
2022.502 and is certified as valid under Section 2022.503.
Sec. 2022.502. PETITION REQUIREMENTS. (a) A petition for a
legalization election must include a statement substantially as
follows before the space reserved for signatures on each page:
"This petition is to require that an election be held in (name of
county) to legalize casino gaming in (name of county)."
(b) A petition is valid only if it is signed by registered
voters of the county in a number that is not less than three percent
of the total number of votes cast for governor by qualified voters
of the county in the most recent gubernatorial general election.
(c) Each voter must enter beside the voter's signature the
date the voter signs the petition. A signature may not be counted
as valid if the date of signing is earlier than the 90th day before
the date the petition is submitted to the commissioners court.
(d) Each voter must provide on the petition the voter's
current voter registration number, printed name, and residence
address, including zip code.
Sec. 2022.503. VERIFICATION. (a) Not later than the fifth
day after the date a petition for an election under this chapter is
received in the office of the commissioners court, the
commissioners court shall submit the petition for verification to
the county clerk.
(b) The county clerk shall determine whether the petition is
signed by the required number of registered voters of the county.
Not later than the 30th day after the date the petition is submitted
to the clerk for verification, the clerk shall certify in writing to
the commissioners court whether the petition is valid or invalid.
If the clerk determines that the petition is invalid, the clerk
shall state the reasons for that determination.
Sec. 2022.504. ORDERING ELECTION. If the county clerk
certifies that a petition is valid, not later than the 30th day
after the date of certification, the commissioners court shall
order that an election be held in the county on the next uniform
election date under Section 41.001, Election Code, that allows
sufficient time to comply with applicable provisions of law,
including Section 3.005, Election Code. The commissioners court
shall state in the order the issue to be voted on. The county clerk
shall notify the commission by certified mail, return receipt
requested, that an election has been ordered.
Sec. 2022.505. BALLOT PROPOSITION. The ballot in a
legalization election shall be printed to provide for voting for or
against the proposition: "Legalizing casino gaming within (name of
county)."
Sec. 2022.506. ELECTION RESULTS. (a) If the majority of
the votes cast in a legalization election favor the legalization of
casino gaming, casino gaming authorized under this chapter is
permitted within the county holding the election effective on the
10th day after the date of the election.
(b) The commissioners court of a county in which a
legalization election has been held shall give written notice of
the results of the election to the commission not later than the
third day after the date the election is canvassed.
(c) If less than a majority of the votes cast in a
legalization election in any county are cast in favor of the
legalization of casino gaming, casino gaming is not permitted in
the county, and a subsequent election on the issue may not be held
in the county before the corresponding uniform election date one
year after the date of the election.
(d) If less than a majority of the votes cast in two
consecutive legalization elections within any county are cast in
favor of the legalization of casino gaming, casino gaming is not
permitted in the county, and a subsequent election on the issue may
not be held in the county before the corresponding uniform election
date five years after the date of the second election.
[Sections 2022.507-2022.550 reserved for expansion]
SUBCHAPTER L. PROBLEM GAMBLING AND ADDICTION
Sec. 2022.551. PROBLEM GAMBLING AND ADDICTION GRANT FUND.
(a) The problem gambling and addiction grant fund is an account in
the general revenue fund.
(b) Money credited to the fund may be used only for awarding
grants under this subchapter. The fund shall be administered in
accordance with this subchapter.
(c) An expenditure from the problem gambling and addiction
grant fund shall be made in accordance with the General
Appropriations Act on warrants of the comptroller.
(d) Grants from money in the fund may be used only to:
(1) provide treatment for problem gaming and gambling
addiction, alcoholism, drug abuse, and other addictive behaviors;
and
(2) provide funding for research related to the impact
of gambling on state residents.
Sec. 2022.552. GRANT PROGRAM. (a) The commission shall
administer a grant program to provide assistance for the direct
treatment of persons diagnosed as suffering from pathological
gambling and other addictive behaviors and to provide funding for
research regarding the impact of gambling on residents of this
state.
(b) Research grants awarded under this section may include
grants for determining the effectiveness of education and
prevention efforts on the prevalence of pathological gambling in
this state.
(c) A grant may be made only after open solicitation of
proposals and evaluation of proposals against criteria established
by commission rule.
(d) Public and private entities are eligible to apply for
and receive grants under this section.
(e) A grant made in accordance with this section shall be
made from the problem gambling and addiction grant fund.
Sec. 2022.553. GIFTS AND DONATIONS. The commission may
solicit and accept grants, gifts, contributions, or bequests made
for the purpose of funding grants under this subchapter and expend
the money for the purpose for which it was received.
Sec. 2022.554. RULES. (a) The commission shall administer
this subchapter and adopt rules establishing criteria for
qualification to receive grants and other matters considered
necessary by the commission for the administration of this
subchapter.
(b) The rules adopted by the commission must require that
each recipient of a grant report at least annually to the commission
the grantee's measurable achievement of specific outcome goals.
CHAPTER 2023. TRIBAL GAMING AGREEMENTS
Sec. 2023.001. DUTY OF GOVERNOR. The governor shall
execute, on behalf of this state, with a federally recognized
Indian tribe with Indian lands in this state a gaming agreement
containing the terms set forth in Section 2023.002, as a
ministerial act, without preconditions, not later than the 30th day
after the date the governor receives a request from the tribe,
accompanied by or in the form of a duly enacted resolution of the
tribe's governing body, to enter into the gaming agreement.
Sec. 2023.002. MODEL TRIBAL GAMING AGREEMENT. (a) A gaming
agreement executed under Section 2023.001 must be in the form and
contain the provisions as follows:
GAMING AGREEMENT GOVERNING GAMING OPERATIONS Between the [Name of
Tribe] and the STATE OF TEXAS
This agreement is made and entered into by and between the
[Name of Tribe], a federally recognized Indian Tribe ("Tribe"), and
the State of Texas ("State"), with respect to gaming on the Tribe's
Indian lands (as defined by Chapter 2022, Texas Occupations Code).
This agreement governs gambling on Indian lands held in trust
by the United States on January 1, 1998, for the Tribe.
Pursuant to express provisions of the Restoration Acts (Pub.
L. No. 100-89) addressing jurisdiction, the Tribe may engage in any
gaming activities that another person may be authorized to engage
in under Subtitle A-1, Title 13, Occupations Code.
The Tribe shall regulate the gaming activities authorized
under this agreement on the Tribe's Indian lands.
The Tribe shall adopt rules and procedures substantially
similar to the requirements of Subtitle A-1, Title 13, Occupations
Code, except that any regulatory oversight established under
Subtitle A-1 for gaming conducted under a license shall be
exercised by the Tribe for gaming conducted under this agreement.
The Tribe may adopt the rules and procedures by reference to any
provisions of Subtitle A-1, Title 13, Occupations Code.
(b) A gaming agreement under Subsection (a) between this
state and a federally recognized Indian Tribe that is not subject to
the Restoration Acts (Pub. L. No. 100-89) may not include the
provision related to the Restoration Acts.
Sec. 2023.003. NEGOTIATION FOR DIFFERENT TRIBAL GAMING
AGREEMENT TERMS. (a) Nothing in this subchapter may be construed
to limit the ability of a federally recognized Indian tribe to
request that a gaming agreement be negotiated with this state on
terms that are different from those set forth in the gaming
agreement under Section 2023.002, or the ability of this state to
engage in negotiations and to reach agreement under any applicable
federal law.
(b) In offering to enter into a gaming agreement with Indian
tribes in this state under Section 2023.002, and, except for
assessments by this state as provided in that section of the amounts
necessary to defray state costs of regulating activities as
provided under the gaming agreement, nothing in this chapter may be
construed to mean that:
(1) this state is imposing any tax, fee, charge, or
other assessment on an Indian tribe or on any other person or entity
authorized by an Indian tribe as a condition to engaging in a Class
III activity; or
(2) this state is refusing to enter into gaming
agreement negotiations based on the lack of authority of this state
or a political subdivision of this state to impose the tax, fee,
charge, or other assessment.
(c) If any federally recognized tribe with jurisdiction
over Indian lands in this state requests that the governor enter
into negotiations for a gaming agreement under federal law
applicable to the tribe, including the Indian Gaming Regulatory Act
(18 U.S.C. Section 1166 and 25 U.S.C. Section 2701 et seq.), on
terms different than those prescribed in the gaming agreement set
forth in Section 2023.002, the governor shall enter into those
negotiations under the federal law applicable to the tribe and
without preconditions and is authorized to reach agreement and
execute the agreement on behalf of this state.
Sec. 2023.004. IMPLEMENTATION OF GAMING AGREEMENT. The
governor shall execute any documents necessary to implement a
gaming agreement authorized under this subchapter.
Sec. 2023.005. INCORPORATION INTO STATE LAW. The model
gaming agreement set out in Section 2023.002 is hereby incorporated
into state law, and the operation of gaming authorized under the
agreement is expressly authorized as a matter of state law for any
Indian tribe entering into the gaming agreement in accordance with
this subchapter.
Sec. 2023.006. REGULATORY MONEY RECEIVED UNDER GAMING
AGREEMENT. All money received by the commission under a gaming
agreement for regulatory costs incurred relative to tribal gaming
operations may be used only to defray expenses of the commission
incurred in the oversight, compliance with, and enforcement of
gaming operations conducted pursuant to a gaming agreement.
Sec. 2023.007. INJUNCTION; CIVIL PENALTY. (a) If the
commission, the appropriate governing body for an Indian tribe, or
the attorney general has reason to believe that this chapter has
been or is about to be violated, the attorney general may petition a
court for appropriate injunctive relief to restrain the violation.
Filing of the petition does not waive applicable sovereign
immunity.
(b) Venue for an action by this state seeking injunctive
relief is in a district court in Travis County.
(c) If the court finds that this chapter has been knowingly
violated, the court shall order all proceeds from any illegal
gambling to be forfeited to the appropriate governing body as a
civil penalty.
(d) The remedies provided by this section are not exclusive.
The commission may suspend or revoke a license, registration,
finding of suitability, or other affirmative regulatory approval,
impose an administrative penalty, or seek injunctive or civil
penalties or both, depending on the severity of the violation.
SECTION 2. Article 4, Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended by adding Sections 4.07,
4.08, and 4.09 to read as follows:
Sec. 4.07. NATIONAL LEADERSHIP IN EQUINE PURSES. (a) In
this section:
(1) "Equine industry development fund" means a fund
dedicated to any nonpurse expenditures that support or promote the
industry of breeding, training, racing, riding, and competing with
horses in this state.
(2) "Equine racing purse trust fund" means the trust
fund established by Subsection (b) of this section.
(3) "Optimal Texas purse amount" means the annual
amount of purse money determined by the comptroller under
Subsection (d) of this section.
(4) "Target balance" means the amount of money needed
in total purse funds for a particular calendar month that will be
sufficient to aggregate, when combined with all other monthly
target balances for the calendar year, to the optimal Texas purse
amount for that calendar year.
(5) "Total purse funds" means the sum of the
unallocated cash balance of pari-mutuel purse funds and the
unallocated cash balance of the equine racing purse trust fund.
(b) The equine racing purse trust fund is established
outside the state treasury and is held in trust by the comptroller
for administration of this Act. Money in the trust fund may be
disbursed by the comptroller without appropriation as directed by
the commission to carry out this Act.
(c) Each pari-mutuel license holder authorized to operate
slot machines under Chapter 2022, Occupations Code, shall remit 15
percent of the gross gaming revenues from the license holder's slot
machines to the equine racing purse trust fund. Payments made
pursuant to this subsection shall occur as directed by the
commission but not less than twice per month. If a person makes a
payment under this subsection more than two days after the deadline
set by the commission, the person shall pay a penalty at the rate of
25 percent of the amount due per day for each day after the deadline
until the payment is received.
(d) The commission shall determine the optimal Texas purse
amount in accordance with this section. The commission shall
determine the annual total purse amount for all thoroughbred races
in each of the three states that allow pari-mutuel racing, other
than Texas, with the highest annual total purse amounts. In
evaluating the purse amounts of other states, the commission shall
include all breed development programs and all other supplemental
purse payments. In determining the amounts of thoroughbred purses
in other states, the commission shall use special care not to omit,
undervalue, or unnecessarily discount any portion of the purse
funds in those states. To calculate the optimal Texas purse amount,
the commission shall take the average of the annual total purse
amounts for the three states and multiply that amount by 1.05. The
commission shall update the optimal Texas purse amount at least
quarterly. The commission shall publish the list of the three
states used to determine the optimal Texas purse amount, the total
purse amounts for each of those states, and the optimal Texas purse
amount.
(e) Based on the current projected optimal Texas purse
amount, the commission shall establish a target balance of total
purse funds for each calendar month. The target balance shall vary
from month to month in order to fully support the seasonal nature of
horse racing.
Sec. 4.08. DEDUCTIONS FROM SLOT MACHINE INCOME AT GREYHOUND
RACETRACKS. (a) The greyhound racing purse trust fund is
established outside the state treasury and is held in trust by the
comptroller for the administration of this Act. Money in the trust
fund may be disbursed by the comptroller without appropriation as
directed by the commission to carry out this Act.
(b) A pari-mutuel license holder that owns or operates a
greyhound racetrack at which slot machine games are conducted under
Chapter 2022, Occupations Code, shall allocate 15 percent of the
net slot income generated from the operation of slot machines at the
slot establishment at the racetrack to purses.
(c) A state breed registry that receives a disbursement
under this section may allocate up to 50 percent of the amount
received for Texas breeder awards.
Sec. 4.09. ADMINISTRATION OF SLOT MACHINE ALLOCATIONS FOR
PURSES. The comptroller and commission shall jointly adopt rules
to administer Sections 4.07 and 4.08 of this Act. A matter
considered by the comptroller or commission under either section is
a contested case under Chapter 2001, Government Code, and requires
a public hearing.
SECTION 3. Section 47.02(c), Penal Code, is amended to read
as follows:
(c) It is a defense to prosecution under this section that
the actor reasonably believed that the conduct:
(1) was permitted under Chapter 2001, Occupations
Code;
(2) was permitted under Chapter 2002, Occupations
Code;
(3) consisted entirely of participation in the state
lottery authorized by the State Lottery Act (Chapter 466,
Government Code);
(4) was permitted under the Texas Racing Act (Article
179e, Vernon's Texas Civil Statutes); [or]
(5) consisted entirely of participation in a drawing
for the opportunity to participate in a hunting, fishing, or other
recreational event conducted by the Parks and Wildlife Department;
or
(6) consisted entirely of participation in authorized
games in a casino or slot establishment licensed or authorized
under Chapter 2022 or 2023, Occupations Code.
SECTION 4. Section 47.06(f), Penal Code, is amended to read
as follows:
(f) It is a defense to prosecution under Subsection (a) or
(c) that the person owned, manufactured, transferred, or possessed
the gambling device, equipment, or paraphernalia for the sole
purpose of shipping it:
(1) to a casino or slot establishment licensed or
authorized under Chapter 2022 or 2023, Occupations Code, for
gaming; or
(2) to another jurisdiction where the possession or
use of the device, equipment, or paraphernalia was legal.
SECTION 5. Section 47.09(a), Penal Code, is amended to read
as follows:
(a) It is a defense to prosecution under this chapter that
the conduct:
(1) was authorized under:
(A) Chapter 2001, Occupations Code;
(B) Chapter 2002, Occupations Code; [or]
(C) the Texas Racing Act (Article 179e, Vernon's
Texas Civil Statutes);
(D) Chapter 2022, Occupations Code; or
(E) Chapter 2023, Occupations Code;
(2) consisted entirely of participation in the state
lottery authorized by Chapter 466, Government Code; or
(3) was a necessary incident to the operation of the
state lottery and was directly or indirectly authorized by:
(A) Chapter 466, Government Code;
(B) the lottery division of the Texas Lottery
Commission;
(C) the Texas Lottery Commission; or
(D) the director of the lottery division of the
Texas Lottery Commission.
SECTION 6. Subchapter H, Chapter 151, Tax Code, is amended
by adding Section 151.356 to read as follows:
Sec. 151.356. GAMING DEVICES. The sale or use of a gaming
device permitted under Chapter 2022 or 2023, Occupations Code, is
exempt from the tax imposed by this chapter and from the other
provisions of this chapter.
SECTION 7. Sections 1.03(3) and (5), Texas Racing Act
(Article 179e, Vernon's Texas Civil Statutes), are amended to read
as follows:
(3) "Commission" means the Texas Gaming [Racing]
Commission.
(5) "Executive secretary" means the executive
director [secretary] of the Texas Gaming [Racing] Commission.
SECTION 8. The heading to Article 2, Texas Racing Act
(Article 179e, Vernon's Texas Civil Statutes), is amended to read
as follows:
ARTICLE 2. ADMINISTRATION BY TEXAS GAMING [RACING] COMMISSION
SECTION 9. Section 3.09(b), Texas Racing Act (Article 179e,
Vernon's Texas Civil Statutes), is amended to read as follows:
(b) The commission shall deposit the money it collects under
this Act in the State Treasury to the credit of a special fund to be
known as the Texas Racing [Commission] fund. The Texas Racing
[Commission] fund may be appropriated only for the administration
and enforcement of this Act. Any unappropriated money remaining in
that special fund at the close of each fiscal biennium shall be
transferred to the General Revenue Fund and may be appropriated for
any legal purpose. The legislature may also appropriate money from
the General Revenue Fund for the administration and enforcement of
this Act. Any amount of general revenue appropriated for the
administration and enforcement of this Act in excess of the
cumulative amount deposited in the Texas Racing [Commission] fund
shall be reimbursed from the Texas Racing [Commission] fund not
later than one year after the date on which the general revenue
funds are appropriated, with 12 percent interest per year until
August 31, 1993, and 6-3/4 percent interest thereafter with all
payments first attributable to interest.
SECTION 10. The following laws are repealed:
(1) Sections 2.01, 2.02, 2.03, 2.04, and 2.05, Texas
Racing Act (Article 179e, Vernon's Texas Civil Statutes);
(2) Sections 2.073, 2.074, 2.08, 2.09, 2.10, and 2.11,
Texas Racing Act (Article 179e, Vernon's Texas Civil Statutes); and
(3) Sections 6.093(a) and 18.01(a), Texas Racing Act
(Article 179e, Vernon's Texas Civil Statutes).
SECTION 11. (a) All funds in the Texas casino and slot
gaming fund are appropriated to the Texas Gaming Commission for the
operation of the commission and the administration of Subtitle A-1,
Title 13, Occupations Code, as added by this Act, for the biennium
ending August 31, 2011.
(b) Not later than January 1, 2010, the initial members of
the Texas Gaming Commission shall be appointed in accordance with
Chapter 2021, Occupations Code, as added by this Act. In making the
initial appointments, the governor shall designate one member to a
term expiring February 1, 2012, two members to terms expiring
February 1, 2014, and two members to terms expiring February 1,
2016.
(c) On September 1, 2010, or an earlier date specified in
the transition plan required under Section 13 of this Act, all
powers, duties, functions, programs, and activities related to
administrative support services, such as strategic planning and
evaluation, audit, legal, human resources, information resources,
accounting, purchasing, financial management, and contract
management services, of a state agency or entity abolished by
Section 16 of this Act are transferred to the Texas Gaming
Commission.
(d) On the date specified by Subsection (c) of this section
for the transfer described by that subsection:
(1) all obligations and contracts of a state agency or
entity that are related to a power, duty, function, program, or
activity transferred from the agency or entity under Subsection (c)
of this section are transferred to the Texas Gaming Commission;
(2) all property and records in the custody of a state
agency or entity that are related to a power, duty, function,
program, or activity transferred from the agency or entity under
Subsection (c) of this section and all funds appropriated by the
legislature for the power, duty, function, program, or activity
shall be transferred to the Texas Gaming Commission; and
(3) all complaints, investigations, or contested
cases that are pending before a state agency or entity or the
governing body of the agency or entity and that are related to a
power, duty, function, program, or activity transferred from the
agency or entity under Subsection (c) of this section are
transferred without change in status to the Texas Gaming
Commission.
(e) A rule or form adopted by a state agency or entity that
relates to a power, duty, function, program, or activity
transferred from the agency or entity under Subsection (c) of this
section is a rule or form of the Texas Gaming Commission and remains
in effect until altered by the commission.
(f) A reference in law to a state agency or entity abolished
by Section 16 of this Act, or to the governing body of the agency or
entity, that relates to a power, duty, function, program, or
activity transferred under Subsection (c) of this section means the
Texas Gaming Commission.
(g) A license, permit, or certification in effect that was
issued by a state agency or entity abolished by Section 16 of this
Act and that relates to a power, duty, function, program, or
activity transferred under Subsection (c) of this section is
continued in effect as a license, permit, or certification of the
Texas Gaming Commission.
SECTION 12. (a) The Texas Gaming Commission Transition
Legislative Oversight Committee is created to facilitate the
transfer of powers, duties, functions, programs, and activities
between the agency abolished by Section 16 of this Act and the Texas
Gaming Commission as provided by this Act with a minimal negative
effect on the operation of those regulated activities in this
state.
(b) The committee is composed of seven members as follows:
(1) two members of the senate, appointed by the
lieutenant governor not later than December 1, 2009;
(2) two members of the house of representatives,
appointed by the speaker of the house of representatives not later
than December 1, 2009; and
(3) three members of the public, appointed by the
governor not later than December 1, 2009.
(c) Once the other members of the committee have been
appointed, the executive director of the Texas Gaming Commission
serves as an ex officio member of the committee.
(d) A member of the committee serves at the pleasure of the
appointing official.
(e) The lieutenant governor and the speaker of the house of
representatives shall alternate designating a presiding officer
from among their respective appointments. The speaker of the house
of representatives shall make the first appointment after the
effective date of this section.
(f) A member of the committee may not receive compensation
for serving on the committee but is entitled to reimbursement for
travel expenses incurred by the member while conducting the
business of the committee as provided by the General Appropriations
Act.
(g) The committee shall:
(1) facilitate the transfer of powers, duties,
functions, programs, and activities between the agencies abolished
by Section 16 of this Act and the Texas Gaming Commission as
provided by this Act with a minimal negative effect on the gaming
activities regulated in this state;
(2) with assistance from the Texas Gaming Commission
and the agency abolished by Section 16 of this Act, advise the
executive commissioner of the Texas Gaming Commission concerning:
(A) the powers, duties, functions, programs, and
activities transferred under this Act and the funds and obligations
that are related to the powers, duties, functions, programs, or
activities; and
(B) the transfer of the powers, duties,
functions, programs, activities, records, property, funds,
obligations, and employees by the entities as required by Section
11 of this Act;
(3) meet at the call of the presiding officer;
(4) research, take public testimony, and issue reports
on other appropriate issues or specific issues requested by the
lieutenant governor, speaker, or governor; and
(5) review specific recommendations for legislation
proposed by the Texas Gaming Commission or the other agencies.
(h) The committee may request reports and other information
from the Texas Gaming Commission, other state agencies, and the
attorney general relating to gaming in this state and other
appropriate issues.
(i) The committee shall use existing staff of the senate,
the house of representatives, and the Texas Legislative Council to
assist the committee in performing its duties under this section.
(j) Chapter 551, Government Code, applies to the committee.
(k) The committee shall report to the governor, lieutenant
governor, and speaker of the house of representatives not later
than November 15 of each even-numbered year. The report must
include:
(1) identification of significant issues within
gaming regulation, with recommendations for action;
(2) an analysis of the effectiveness and efficiency of
gaming regulation, with recommendations for any necessary
research; and
(3) recommendations for legislative action.
SECTION 13. (a) The transfer of powers, duties, functions,
programs, and activities under Section 11 of this Act to the Texas
Gaming Commission must be accomplished in accordance with a
schedule included in a transition plan developed by the executive
commissioner of the Texas Gaming Commission and submitted to the
governor and the Legislative Budget Board not later than September
1, 2010. The executive commissioner shall provide to the governor
and the Legislative Budget Board transition plan status reports and
updates on at least a quarterly basis following submission of the
initial transition plan. The transition plan must be made
available to the public.
(b) Not later than March 1, 2010, the Texas Gaming
Commission shall hold a public hearing and accept public comment
regarding the transition plan required to be developed by the
executive commissioner of the Texas Gaming Commission under this
section.
(c) In developing the transition plan, the executive
commissioner of the Texas Gaming Commission shall hold public
hearings in various geographic areas in this state before
submitting the plan to the governor and the Legislative Budget
Board as required by this section.
SECTION 14. An action brought or proceeding commenced
before the date of a transfer prescribed by this Act in accordance
with the transition plan required under Section 13 of this Act,
including a contested case or a remand of an action or proceeding by
a reviewing court, is governed by the laws and rules applicable to
the action or proceeding before the transfer.
SECTION 15. (a) The Texas Gaming Commission shall
implement the powers, duties, functions, programs, and activities
assigned to the commission under this Act in accordance with a work
plan designed by the commission to ensure that the transfer of
gaming regulation under this Act is accomplished in a careful and
deliberative manner.
(b) A work plan designed by the commission under this
section must include the following phases:
(1) a planning phase, during which the commission will
focus on and stabilize the organization of the agency's powers,
duties, functions, programs, and activities, and which must
include:
(A) initiation of recommendations made by the
Texas Gaming Commission Transition Legislative Oversight
Committee;
(B) creation of interagency and intra-agency
steering committees;
(C) development of global visions, goals, and
organizational strategies; and
(D) development of communications and risk
management plans;
(2) an integration phase, during which the commission
will identify opportunities and problems and design customized
solutions for those problems, and which must include:
(A) identification of key issues related to costs
or legal requirements for other commission activities;
(B) planning for daily operations; and
(C) validation of fiscal and program synergies;
(3) an optimization phase, during which the commission
will complete and expand on the initial transitions, and which must
include:
(A) optimization of initial implementation
initiatives;
(B) use of enterprise teaming operations;
(C) building infrastructures to support and
facilitate changes in gaming regulation and oversight; and
(D) identification and use of beneficial assets
management and facilities approaches; and
(4) a transformation phase, during which the
commission will continue implementing initial and additional
changes in gaming regulation and oversight, and which must include
implementation of changes in agency management activities.
SECTION 16. (a) The Texas Racing Commission is abolished on
the date on which the powers, duties, functions, programs, and
activities are transferred under Section 11 of this Act, and after
that date a reference in any law to the Texas Racing Commission
means the Texas Gaming Commission.
(b) The abolition of a state agency or entity under
Subsection (a) of this section and the transfer of its powers,
duties, functions, programs, activities, obligations, rights,
contracts, records, property, funds, and employees as provided by
this Act do not affect or impair an act done, any obligation, right,
order, permit, certificate, rule, criterion, standard, or
requirement existing, or any penalty accrued under former law, and
that law remains in effect for any action concerning those matters.
SECTION 17. As soon as practicable after the constitutional
amendment to authorize casino gaming and slot machine gaming in
this state proposed by the 81st Legislature, Regular Session, 2009,
is approved by the voters and becomes effective, the Texas Gaming
Commission shall adopt the rules necessary to implement that gaming
in accordance with Chapter 2022, Occupations Code, as added by this
Act.
SECTION 18. (a) Sections 7 through 10 of this Act take
effect on the date the Texas Racing Commission is abolished under
Section 16 of this Act.
(b) Sections 1 through 6 and 11 through 17 of this Act and
this section take effect on the date the amendment adding Section
47-a, Article III, Texas Constitution, authorizing and regulating
slot machines and casino games by licensed operators and certain
Indian tribes to provide additional money to fund transportation in
this state and to provide additional financial aid for higher
education students proposed by the 81st Legislature, Regular
Session, 2009, becomes effective. If that amendment is not
approved by the voters, this Act has no effect.