Texas 2019 - 86th Regular

Texas House Bill HB2669 Compare Versions

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1	1	86R10533 ADM-F
2	2	By: Guillen H.B. No. 2669
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the authorization and regulation of social gaming
8	8	establishments and the duties of the Texas Department of Licensing
9	9	and Regulation; providing civil and administrative penalties;
10	10	authorizing a fee; requiring an occupational license.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Subtitle A, Title 13, Occupations Code, is
13	13	amended by adding Chapter 2005 to read as follows:
14	14	CHAPTER 2005. SOCIAL GAMING
15	15	SUBCHAPTER A. GENERAL PROVISIONS
16	16	Sec. 2005.001. SHORT TITLE. This chapter may be cited as
17	17	the Social Gaming Act of 2019.
18	18	Sec. 2005.002. DEFINITIONS. In this chapter:
19	19	(1) "Bet" means an agreement to win or lose money,
20	20	chips, tokens, or other consideration in a social game.
21	21	(2) "Buy-in" means the amount of consideration paid by
22	22	a player to enter a social game.
23	23	(3) "Commercial game" means a game conducted in a
24	24	manner that provides a mathematical or financial economic benefit
25	25	to any person other than a player or participant in the game.
26	26	(4) "Commission" means the Texas Commission of
27	27	Licensing and Regulation.
28	28	(5) "Communal pot" means the total amount of
29	29	considerations collected through all bets placed during one
30	30	instance of a social game.
31	31	(6) "Controlling person" means an individual who:
32	32	(A) controls 25 percent or more of the voting
33	33	securities of a corporation that offers or proposes to offer social
34	34	gaming as an operator;
35	35	(B) has final authority to set policy and direct
36	36	management of an entity that offers or proposes to offer social
37	37	gaming as an operator;
38	38	(C) is authorized by an entity that offers or
39	39	proposes to offer social gaming as an operator to contract with
40	40	another entity to conduct social gaming on behalf of the
41	41	contracting entity; or
42	42	(D) is an officer or director of a corporation or
43	43	a general partnership that offers social gaming as an operator.
44	44	(7) "Dealer" means a person who exchanges bets between
45	45	players, monitors activities, or conducts hands in a social game at
46	46	a licensed social gaming establishment.
47	47	(8) "Department" means the Texas Department of
48	48	Licensing and Regulation.
49	49	(9) "Executive director" means the executive director
50	50	of the department.
51	51	(10) "Operator" means a person that organizes,
52	52	operates, or promotes social games at a licensed social gaming
53	53	establishment.
54	54	(11) "Pay-out" means the amount of consideration paid
55	55	to a player on the player's exit from a social game.
56	56	(12) "Player" means an individual who is a registered
57	57	member of a social gaming establishment, is at least 21 years of
58	58	age, and participates in a social game while physically present on
59	59	the premises of the establishment.
60	60	(13) "Social game" means a card game:
61	61	(A) that is conducted with players placing bets
62	62	on predetermined outcomes in which no person receives an economic
63	63	benefit except for personal winnings;
64	64	(B) in which, except for the advantages of skill
65	65	or luck, the risk of losing and the chance of winning are the same
66	66	for all players; and
67	67	(C) that does not include any commercial game or
68	68	any video, mechanical, electronic, or online version of a game
69	69	described by Paragraphs (A) and (B).
70	70	(14) "Social gaming establishment" means an
71	71	establishment in which social gaming authorized by this chapter is
72	72	conducted.
73	73	Sec. 2005.003. APPLICABILITY. This chapter does not apply
74	74	to the conduct of bingo, charitable raffles, the state lottery, or
75	75	greyhound or horse racing.
76	76	Sec. 2005.004. OTHER GAMING NOT AUTHORIZED. This chapter
77	77	does not authorize the conduct of commercial games or gambling
78	78	otherwise prohibited by law.
79	79	Sec. 2005.005. PRIVATE PLACE. For purposes of this chapter
80	80	and other law, a social game conducted in a licensed social gaming
81	81	establishment is conducted in a private place.
82	82	Sec. 2005.006. ECONOMIC BENEFIT; SERVICE GRATUITY;
83	83	ENTRANCE FEE. (a) For purposes of this chapter and other law, a
84	84	social game is considered to be conducted in a manner that does not
85	85	provide to any person an economic benefit other than player
86	86	pay-outs if the social game is conducted in a licensed social gaming
87	87	establishment in which:
88	88	(1) total buy-ins equal total pay-outs;
89	89	(2) bets are placed only between players; and
90	90	(3) a fee or percentage of winnings is not collected
91	91	from any communal pot.
92	92	(b) A service gratuity may be accepted only if the gratuity:
93	93	(1) does not create a discrepancy in the equal balance
94	94	of buy-ins and pay-outs; and
95	95	(2) is offered in a manner that does not conflict with
96	96	Subsection (a).
97	97	(c) An operator may not receive any economic benefit from a
98	98	bet placed during a social game organized, operated, or promoted by
99	99	that operator.
100	100	(d) An operator may charge a player a fee to enter a social
101	101	game held at a licensed social gaming establishment.
102	102	Sec. 2005.007. PUBLIC POLICY: PREFERENCE FOR STATE
103	103	RESOURCES. It is the intent of this chapter, where possible, to use
104	104	the resources, goods, labor, and services of this state in the
105	105	operation of social gaming-related amenities to the extent
106	106	allowable by law.
107	107	SUBCHAPTER B. POWERS AND DUTIES OF COMMISSION AND DEPARTMENT
108	108	Sec. 2005.051. COMMISSION RULES ON REGULATION AND
109	109	LICENSING. (a) To protect the public health, safety, and welfare
110	110	and to ensure that social gaming authorized under this chapter is
111	111	conducted fairly at social gaming establishments, the commission
112	112	shall adopt rules providing for:
113	113	(1) fees in amounts reasonable and necessary to
114	114	administer this chapter;
115	115	(2) requirements for licensing and renewal of a
116	116	license issued under this chapter;
117	117	(3) standards of conduct for license holders under
118	118	this chapter; and
119	119	(4) the administration and enforcement of this
120	120	chapter.
121	121	(b) The executive director shall ensure that rules adopted
122	122	under this section are consistent with state and federal law.
123	123	Sec. 2005.052. EXECUTIVE DIRECTOR AND DEPARTMENT DUTIES;
124	124	APPLICABILITY OF OTHER LAW. (a) The executive director and
125	125	department shall administer this chapter and license and regulate
126	126	each social gaming establishment and operator in accordance with
127	127	this chapter and rules adopted under this chapter.
128	128	(b) Chapter 51 applies to licensing, regulation, and
129	129	enforcement under this chapter. The department shall assess
130	130	against a social gaming establishment a civil or administrative
131	131	penalty authorized under that chapter for a violation of that
132	132	chapter, this chapter, or a commission rule.
133	133	SUBCHAPTER C. SOCIAL GAMING LICENSING AND REGULATION
134	134	Sec. 2005.101. LICENSE REQUIRED. (a) A person may not own
135	135	or operate a social gaming establishment unless the person holds a
136	136	social gaming establishment license issued under this chapter for
137	137	the conduct of social games at the social gaming establishment.
138	138	(b) A person may not act as an operator at a social gaming
139	139	establishment unless the person holds a license issued under this
140	140	chapter.
141	141	Sec. 2005.102. GENERAL APPLICATION REQUIREMENTS; LICENSE
142	142	TERM. (a) An applicant for a license under this chapter shall:
143	143	(1) submit to the department a completed application
144	144	on a form prescribed by the department;
145	145	(2) pay the required fees; and
146	146	(3) provide any other information required by
147	147	commission rule.
148	148	(b) A license issued under this chapter expires on the first
149	149	anniversary of the date of issuance.
150	150	(c) An applicant for a social gaming establishment license
151	151	for a social gaming establishment in a county subject to Chapter
152	152	234, Local Government Code, must hold a game room permit issued
153	153	under that chapter and be in good standing with the issuing
154	154	authority.
155	155	Sec. 2005.103. OPERATOR LICENSE QUALIFICATIONS. (a) An
156	156	applicant for issuance or renewal of an operator license, or the
157	157	applicant's controlling person, if applicable, must:
158	158	(1) be 18 years of age or older;
159	159	(2) demonstrate honesty, trustworthiness, and
160	160	integrity; and
161	161	(3) complete an education course approved by the
162	162	commission under Section 2005.151.
163	163	(b) On receipt of an original application for a license
164	164	under this chapter, the department shall conduct a criminal history
165	165	check on each applicant and each controlling person of an applicant
166	166	to determine whether the applicant or controlling person is
167	167	qualified for issuance of a license under this chapter. The
168	168	department in accordance with commission rules may conduct a
169	169	criminal history check for renewal of a license issued under this
170	170	chapter.
171	171	(c) In conducting a criminal history check under Subsection
172	172	(b), the department may obtain from the Department of Public Safety
173	173	criminal history record information for the applicant, controlling
174	174	person, or license holder, as provided by Section 411.122,
175	175	Government Code.
176	176	(d) In conducting a criminal history check under Subsection
177	177	(b), the department must obtain fingerprints from the applicant,
178	178	controlling person, or license holder and submit the fingerprints
179	179	for processing through appropriate local, state, and federal law
180	180	enforcement agencies.
181	181	Sec. 2005.104. SURETY BOND FOR OPERATOR LICENSE. (a) An
182	182	applicant for issuance of, or a license holder applying for renewal
183	183	of, an operator license must provide a surety bond in the amount of
184	184	$50,000.
185	185	(b) The surety bond provided by an applicant or license
186	186	holder:
187	187	(1) must be issued by a company authorized to conduct
188	188	business in this state;
189	189	(2) must comply with all applicable provisions of the
190	190	Insurance Code;
191	191	(3) must be payable to the department for the purpose
192	192	of:
193	193	(A) satisfying a judgment awarded to this state
194	194	or a political subdivision of this state against the applicant or
195	195	license holder for actions engaged in as an operator conducting
196	196	social gaming activities;
197	197	(B) paying penalties assessed on the applicant or
198	198	license holder by this state or a political subdivision of this
199	199	state for actions engaged in as an operator conducting social
200	200	gaming activities; or
201	201	(C) settling a tax debt or other debt owed to this
202	202	state or a political subdivision of this state arising out of
203	203	actions engaged in by an operator conducting social gaming
204	204	activities; and
205	205	(4) may not be limited to one claim, provided that the
206	206	sum of all claims does not exceed the face value of the surety bond.
207	207	(c) An applicant or license holder required to file a surety
208	208	bond under this section must file a new bond with each application
209	209	for renewal of the license holder's operator license.
210	210	(d) A company that issues a surety bond for purposes of
211	211	satisfying this section shall notify the department in writing not
212	212	later than the 30th day before the date on which the company will
213	213	cancel the bond.
214	214	(e) An operator whose surety bond is canceled shall
215	215	immediately cease operating a social gaming establishment. The
216	216	operator may continue to operate the social gaming establishment
217	217	after providing to the department a surety bond that is an
218	218	acceptable replacement for the canceled bond.
219	219	Sec. 2005.105. DENIAL OF APPLICATION. The commission or
220	220	the executive director may deny an application for issuance or
221	221	renewal of a license if:
222	222	(1) the applicant or license holder does not meet the
223	223	qualifications for the license;
224	224	(2) after conducting an investigation and providing
225	225	notice and an opportunity for a hearing, the executive director
226	226	determines that the applicant or license holder has violated this
227	227	chapter or a rule adopted under this chapter; or
228	228	(3) the applicant or license holder engaged in fraud
229	229	or misrepresentation in applying for or obtaining a license under
230	230	this chapter.
231	231	Sec. 2005.106. LICENSE RENEWAL. (a) A license issued under
232	232	this chapter expires on the first or second anniversary of the date
233	233	of issuance, as determined by commission rule.
234	234	(b) The commission by rule shall establish the requirements
235	235	for renewal of a license issued under this chapter, including the
236	236	payment of applicable fees.
237	237	Sec. 2005.107. STATEWIDE VALIDITY; NONTRANSFERABLE. A
238	238	license issued under this chapter is valid throughout this state
239	239	and is not transferable.
240	240	SUBCHAPTER D. EDUCATION
241	241	Sec. 2005.151. RECOGNITION OF EDUCATION PROGRAMS AND
242	242	COURSES. The commission by rule shall develop criteria by which the
243	243	commission approves education programs and courses for operators
244	244	and dealers.
245	245	SUBCHAPTER E. INSPECTIONS AND INVESTIGATIONS
246	246	Sec. 2005.201. INSPECTIONS; INVESTIGATIONS. (a) The
247	247	department may conduct inspections and investigations of social
248	248	gaming establishments and persons suspected of being in violation
249	249	of or threatening to violate this chapter as necessary to enforce
250	250	this chapter or Chapter 51.
251	251	(b) The department may:
252	252	(1) enter the business premises of a license holder
253	253	regulated by the department or a person suspected of being in
254	254	violation of or threatening to violate this chapter or a rule or
255	255	order of the commission or an order of the executive director under
256	256	this chapter; and
257	257	(2) examine and copy records pertinent to the
258	258	inspection or investigation.
259	259	SUBCHAPTER F. ADMINISTRATIVE SANCTIONS; ENFORCEMENT
260	260	Sec. 2005.251. ADMINISTRATIVE SANCTIONS. (a) The
261	261	commission or the executive director may deny an application for a
262	262	license, revoke, suspend, or refuse to renew a license, or
263	263	reprimand a license holder for a violation of this chapter or a rule
264	264	or order of the commission or an order of the executive director.
265	265	(b) The commission or the executive director may impose an
266	266	administrative penalty on a person under Subchapter F, Chapter 51,
267	267	regardless of whether the person holds a license under this
268	268	chapter, if the person violates this chapter or a rule or order of
269	269	the commission or an order of the executive director.
270	270	Sec. 2005.252. CEASE AND DESIST ORDER; INJUNCTION; CIVIL
271	271	PENALTY. (a) The executive director may issue a cease and desist
272	272	order as necessary to enforce this chapter if the executive
273	273	director determines that the action is necessary to prevent a
274	274	violation of this chapter or to protect the health and safety of the
275	275	public.
276	276	(b) The attorney general or the executive director may bring
277	277	an action for an injunction or a civil penalty under this chapter,
278	278	as provided by Section 51.352.
279	279	SECTION 2. Section 47.02(c), Penal Code, as effective April
280	280	1, 2019, is amended to read as follows:
281	281	(c) It is a defense to prosecution under this section that
282	282	the actor reasonably believed that the conduct:
283	283	(1) was permitted under Chapter 2001, Occupations
284	284	Code;
285	285	(2) was permitted under Chapter 2002, Occupations
286	286	Code;
287	287	(3) was permitted under Chapter 2004, Occupations
288	288	Code;
289	289	(4) was permitted under Chapter 2005, Occupations
290	290	Code;
291	291	(5) consisted entirely of participation in the state
292	292	lottery authorized by the State Lottery Act (Chapter 466,
293	293	Government Code);
294	294	(6) [(5)] was permitted under Subtitle A-1, Title 13,
295	295	Occupations Code (Texas Racing Act); or
296	296	(7) [(6)] consisted entirely of participation in a
297	297	drawing for the opportunity to participate in a hunting, fishing,
298	298	or other recreational event conducted by the Parks and Wildlife
299	299	Department.
300	300	SECTION 3. Section 47.06, Penal Code, is amended by adding
301	301	Subsection (f-1) to read as follows:
302	302	(f-1) It is a defense to prosecution under Subsection (a) or
303	303	(c) that the person owned, manufactured, transferred, or possessed
304	304	the equipment or paraphernalia related to social gaming for the
305	305	sole purpose of shipping it to a social gaming establishment
306	306	licensed under Chapter 2005, Occupations Code.
307	307	SECTION 4. Section 47.09(a), Penal Code, as effective April
308	308	1, 2019, is amended to read as follows:
309	309	(a) It is a defense to prosecution under this chapter that
310	310	the conduct:
311	311	(1) was authorized under:
312	312	(A) Chapter 2001, Occupations Code;
313	313	(B) Chapter 2002, Occupations Code;
314	314	(C) Chapter 2004, Occupations Code;
315	315	(D) Chapter 2005, Occupations Code;
316	316	(E) Subtitle A-1, Title 13, Occupations Code
317	317	(Texas Racing Act); or
318	318	(F) [(E)] Chapter 280, Finance Code;
319	319	(2) consisted entirely of participation in the state
320	320	lottery authorized by Chapter 466, Government Code; or
321	321	(3) was a necessary incident to the operation of the
322	322	state lottery and was directly or indirectly authorized by:
323	323	(A) Chapter 466, Government Code;
324	324	(B) the lottery division of the Texas Lottery
325	325	Commission;
326	326	(C) the Texas Lottery Commission; or
327	327	(D) the director of the lottery division of the
328	328	Texas Lottery Commission.
329	329	SECTION 5. Not later than June 1, 2020, the Texas Commission
330	330	of Licensing and Regulation shall adopt the rules necessary and the
331	331	Texas Department of Licensing and Regulation shall develop the
332	332	applications and establish the procedures necessary to implement
333	333	Chapter 2005, Occupations Code, as added by this Act.
334	334	SECTION 6. This Act takes effect September 1, 2019.