Texas 2017 - 85th Regular

Texas House Bill HB1422 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	85R4906 GCB-F
2	2	By: Raymond H.B. No. 1422
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the regulation of fantasy games; authorizing a civil
8	8	penalty; requiring a fee.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Title 13, Business & Commerce Code, is amended by
11	11	adding Chapter 623 to read as follows:
12	12	CHAPTER 623. FANTASY GAMES
13	13	Sec. 623.001. DEFINITIONS. In this chapter:
14	14	(1) "Confidential information" means information
15	15	related to the play of a fantasy game by a fantasy game participant
16	16	that is obtained solely by virtue of a person's employment.
17	17	(2) "Fantasy game" means any fantasy or simulation
18	18	game or contest that meets the following conditions:
19	19	(A) the values of all prizes and awards offered
20	20	to winning fantasy game participants are established and made known
21	21	to the fantasy game participants in advance of the game or contest;
22	22	(B) all winning outcomes reflect the relative
23	23	knowledge and skill of the fantasy game participants and are
24	24	determined predominantly by accumulated statistical results of the
25	25	performance of individuals, including athletes in fantasy or
26	26	simulation games or contests based on real sporting events;
27	27	(C) no winning outcome is based on the score,
28	28	point spread, or performance or performances of any single team or
29	29	combination of teams, or solely on any single performance of an
30	30	individual athlete or player in any single event; and
31	31	(D) the outcomes of the fantasy or simulation
32	32	game or contest are not based on the statistical results of the
33	33	performance of athletes playing college or high school sports.
34	34	(3) "Fantasy game operator" means a person who:
35	35	(A) is engaged in the business of professionally
36	36	conducting fantasy games for cash prizes for members of the general
37	37	public; and
38	38	(B) charges a member of the general public who
39	39	participates in a fantasy game as a fantasy game participant an
40	40	entry fee of cash or a cash equivalent.
41	41	(4) "Fantasy game participant" means an individual who
42	42	participates in a fantasy game offered by a fantasy game operator.
43	43	Sec. 623.002. POWERS AND DUTIES OF SECRETARY OF STATE;
44	44	CIVIL PENALTY; ENFORCEMENT. (a) The secretary of state may
45	45	promulgate rules under this chapter only as necessary to enforce
46	46	the provisions of this chapter.
47	47	(b) The secretary of state may impose on a fantasy game
48	48	operator for a violation of this chapter a civil penalty in an
49	49	amount not to exceed $1,000 for any particular violation.
50	50	(c) The secretary of state may take appropriate enforcement
51	51	or disciplinary action against a person who violates this chapter,
52	52	including the suspension or revocation of a registration issued
53	53	under Section 623.003.
54	54	(d) Chapter 2001, Government Code, applies to a proceeding
55	55	for an enforcement or disciplinary action under this section.
56	56	Sec. 623.003. REGISTRATION OF FANTASY GAME OPERATORS. (a)
57	57	A person may not offer a fantasy game as a fantasy game operator in
58	58	this state unless the person is registered with the secretary of
59	59	state under this section, except that the person may offer fantasy
60	60	games in this state during the time the person's application for
61	61	registration under this section is pending before the secretary of
62	62	state. A person may apply for registration under this section on
63	63	forms prescribed by the secretary of state.
64	64	(b) A person may be registered as a fantasy game operator
65	65	under this section only if the person:
66	66	(1) is authorized to transact business in this state;
67	67	and
68	68	(2) pays to the secretary of state the annual fee
69	69	imposed under Subsection (c).
70	70	(c) A fantasy game operator shall pay to the secretary of
71	71	state:
72	72	(1) an annual registration fee of $5,000 to obtain
73	73	initial registration under this section; and
74	74	(2) an annual registration renewal fee of $5,000 on
75	75	the anniversary of the date the operator obtains the initial
76	76	registration.
77	77	Sec. 623.004. CONSUMER PROTECTION PROVISIONS. (a) A
78	78	fantasy game operator shall implement procedures intended to:
79	79	(1) prevent the fantasy game operator, an employee of
80	80	the operator, or a relative of the operator who is living in the
81	81	same household as the operator from competing in any fantasy game
82	82	offered by the operator that awards a cash prize;
83	83	(2) prevent the sharing with third parties of
84	84	confidential information that could affect fantasy game play until
85	85	the information is made publicly available;
86	86	(3) verify that a fantasy game participant is 18 years
87	87	of age or older;
88	88	(4) ensure that an individual who is a player in a real
89	89	game or competition is restricted from participating in a fantasy
90	90	game that is determined, wholly or partly, on the accumulated
91	91	statistical results of that player, the player's real team, or the
92	92	game or contest in which the individual is a player;
93	93	(5) allow individuals on request to restrict
94	94	themselves from entering a fantasy game and take reasonable steps
95	95	to prevent those individuals from entering the fantasy game
96	96	operator's fantasy game;
97	97	(6) disclose the maximum number of entries a fantasy
98	98	game participant may submit to each fantasy game and take
99	99	reasonable steps to prevent fantasy game participants from
100	100	submitting a number of entries that exceeds that allowable number;
101	101	(7) segregate fantasy game participant funds from
102	102	operational funds of the fantasy game operator or maintain a
103	103	reserve in the form of cash, cash equivalents, credit card and
104	104	payment processor reserves and receivables, an irrevocable letter
105	105	of credit, a bond, or any combination of these forms in an amount
106	106	equal to the deposits made to the accounts of fantasy game
107	107	participants for the benefit and protection of the funds held in
108	108	those accounts;
109	109	(8) provide fantasy game participants with access to
110	110	information on responsible play; and
111	111	(9) provide fantasy game participants with access to
112	112	the participant's play history and account details.
113	113	(b) A fantasy game operator offering fantasy games may not
114	114	target minors or other excluded players in any advertising of the
115	115	operator's fantasy games.
116	116	Sec. 623.005. ANNUAL AUDIT. A fantasy game operator must
117	117	contract annually with a certified public accountant to perform an
118	118	independent financial audit of the operator's fantasy game
119	119	operations under this chapter to ensure compliance with this
120	120	chapter. The operator must annually submit the results of the audit
121	121	to the secretary of state.
122	122	Sec. 623.006. CLASSIFICATION OF FANTASY GAMES. A fantasy
123	123	game operator or fantasy game participant that owns, operates,
124	124	provides, or participates in fantasy games in a manner consistent
125	125	with this chapter is not subject to prosecution for an offense under
126	126	the Penal Code that prohibits gaming or related activities.
127	127	SECTION 2. This Act takes effect September 1, 2017.