| 1 | 1 | | 86R7306 ADM-D |
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| 2 | 2 | | By: Kolkhorst S.B. No. 731 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to fantasy sports contests. |
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| 8 | 8 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 9 | 9 | | SECTION 1. Subtitle B, Title 13, Occupations Code, is |
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| 10 | 10 | | amended by adding Chapter 2053 to read as follows: |
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| 11 | 11 | | CHAPTER 2053. FANTASY SPORTS CONTESTS |
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| 12 | 12 | | Sec. 2053.001. DEFINITIONS. In this chapter: |
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| 13 | 13 | | (1) "Fantasy sports contest" means a competition in |
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| 14 | 14 | | which: |
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| 15 | 15 | | (A) a participant pays money or other |
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| 16 | 16 | | consideration for the opportunity to assemble a fictional team |
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| 17 | 17 | | composed of professional or amateur sports athletes selected by the |
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| 18 | 18 | | participant to compete against other fictional teams of sports |
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| 19 | 19 | | athletes assembled by other competition participants; |
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| 20 | 20 | | (B) the outcome of the competition reflects the |
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| 21 | 21 | | relative knowledge and skill of the participants and is based on the |
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| 22 | 22 | | actual statistical performance of the selected athletes in sports |
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| 23 | 23 | | competitions, or in a season or series of sports competitions; |
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| 24 | 24 | | (C) a prize is awarded to the competition winner; |
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| 25 | 25 | | (D) the outcome of the competition or the |
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| 26 | 26 | | redemption of the winnings is not displayed or represented in a |
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| 27 | 27 | | manner that mimics a slot machine or other form of casino gaming, |
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| 28 | 28 | | including a banked card game, poker, craps, roulette, keno, lotto, |
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| 29 | 29 | | and bingo; and |
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| 30 | 30 | | (E) the competition is not presented using any |
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| 31 | 31 | | depiction of a casino gaming graphic, theme, or title, including |
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| 32 | 32 | | any depiction of a slot machine-style symbol, a banked card game, |
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| 33 | 33 | | poker, craps, roulette, keno, lotto, and bingo. |
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| 34 | 34 | | (2) "Fantasy sports operator" means a person, |
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| 35 | 35 | | including an entity or a division of an entity, that offers fantasy |
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| 36 | 36 | | sports contests to the public. |
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| 37 | 37 | | (3) "Sports association" means a group of professional |
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| 38 | 38 | | or amateur teams or athletes that compete against one another in a |
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| 39 | 39 | | specific sport. |
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| 40 | 40 | | Sec. 2053.002. LEGISLATIVE FINDINGS. (a) The legislature |
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| 41 | 41 | | finds that a participant in a fantasy sports contest is an actual |
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| 42 | 42 | | contestant in a bona fide competition to determine the skill of the |
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| 43 | 43 | | participant in assembling a fictional team of sports athletes. |
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| 44 | 44 | | (b) An individual who pays money or other consideration to |
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| 45 | 45 | | participate in a fantasy sports contest is not placing a bet for |
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| 46 | 46 | | purposes of the application of an offense under Chapter 47, Penal |
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| 47 | 47 | | Code. |
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| 48 | 48 | | Sec. 2053.003. PARTICIPATION IN FANTASY SPORTS CONTEST. An |
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| 49 | 49 | | individual may pay money or other consideration to participate in a |
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| 50 | 50 | | fantasy sports contest. |
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| 51 | 51 | | Sec. 2053.004. OPERATION OF FANTASY SPORTS CONTEST. (a) A |
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| 52 | 52 | | person may offer fantasy sports contests as a fantasy sports |
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| 53 | 53 | | operator in this state in accordance with this chapter and any |
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| 54 | 54 | | applicable federal law and may participate in the earnings of a |
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| 55 | 55 | | business that offers fantasy sports contests. |
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| 56 | 56 | | (b) A fantasy sports operator may not: |
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| 57 | 57 | | (1) award a prize based: |
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| 58 | 58 | | (A) on the score, the point spread, or any |
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| 59 | 59 | | performance of a single professional or amateur sports team or any |
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| 60 | 60 | | combination of professional or amateur sports teams; |
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| 61 | 61 | | (B) solely on any single performance of an |
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| 62 | 62 | | individual athlete in a single professional or amateur sports |
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| 63 | 63 | | competition or other event; or |
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| 64 | 64 | | (C) on a fantasy sports contest based on a live |
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| 65 | 65 | | pari-mutuel racing performance regulated under Subtitle A-1 (Texas |
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| 66 | 66 | | Racing Act); |
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| 67 | 67 | | (2) offer a fantasy sports contest to the public |
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| 68 | 68 | | without disclosing before the contest all prizes offered to winning |
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| 69 | 69 | | participants of the contest; or |
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| 70 | 70 | | (3) offer a fantasy sports contest based on the |
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| 71 | 71 | | performance of athletes in a youth, high school, or collegiate |
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| 72 | 72 | | sports competition or athletic event. |
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| 73 | 73 | | Sec. 2053.005. CONSUMER PROTECTION. A fantasy sports |
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| 74 | 74 | | operator shall implement commercially reasonable procedures for |
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| 75 | 75 | | fantasy sports contests that: |
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| 76 | 76 | | (1) prevent an employee or agent of the operator, and |
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| 77 | 77 | | any relative living in the same household as the employee or agent, |
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| 78 | 78 | | from competing in a fantasy sports contest offered by the operator |
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| 79 | 79 | | to the public in which a cash prize is awarded; |
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| 80 | 80 | | (2) prevent an employee or agent of the operator from |
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| 81 | 81 | | sharing with third parties before the information is made publicly |
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| 82 | 82 | | available information relevant to a fantasy sports contest that is |
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| 83 | 83 | | obtained by the employee or agent because of the person's |
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| 84 | 84 | | employment or agency and that could affect fantasy sports contest |
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| 85 | 85 | | play; |
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| 86 | 86 | | (3) verify that fantasy sports contest participants |
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| 87 | 87 | | are 18 years of age or older; |
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| 88 | 88 | | (4) restrict an individual who is a player, a game |
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| 89 | 89 | | official, or another participant in a professional or amateur |
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| 90 | 90 | | sports competition from participating in a fantasy sports contest |
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| 91 | 91 | | that is determined, wholly or partly, on the performance of: |
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| 92 | 92 | | (A) that individual, the individual's |
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| 93 | 93 | | professional or amateur team, or the accumulated statistical |
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| 94 | 94 | | results of the sport or competition in which the individual is a |
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| 95 | 95 | | player, game official, or other participant; or |
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| 96 | 96 | | (B) another individual or team competing in the |
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| 97 | 97 | | same sports association in which the individual participates; and |
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| 98 | 98 | | (5) segregate contest participants' funds from the |
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| 99 | 99 | | operator's funds or maintain a reserve in the form of cash, cash |
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| 100 | 100 | | equivalents, an irrevocable letter of credit, a bond, payment |
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| 101 | 101 | | processor reserves, payment processor receivables, or any |
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| 102 | 102 | | combination of those forms, in an amount equal to or greater than |
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| 103 | 103 | | the total amount of funds in all contest participants' accounts, |
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| 104 | 104 | | for the benefit and protection of the funds held in those accounts. |
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| 105 | 105 | | Sec. 2053.006. INJUNCTIVE RELIEF. (a) The attorney |
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| 106 | 106 | | general may institute an action for injunctive relief to restrain a |
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| 107 | 107 | | violation by a person who appears to be in violation of or |
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| 108 | 108 | | threatening to violate this chapter. |
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| 109 | 109 | | (b) An action filed under this section by the attorney |
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| 110 | 110 | | general must be filed in a district court in Travis County or the |
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| 111 | 111 | | county in which the violation occurred. |
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| 112 | 112 | | (c) The attorney general may recover reasonable expenses |
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| 113 | 113 | | incurred in obtaining injunctive relief under this section, |
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| 114 | 114 | | including court costs, reasonable attorney's fees, investigative |
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| 115 | 115 | | costs, witness fees, and deposition expenses. |
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| 116 | 116 | | (d) In an injunction issued under this section, a court may |
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| 117 | 117 | | include reasonable requirements to prevent further violations of |
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| 118 | 118 | | this chapter. |
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| 119 | 119 | | SECTION 2. Section 47.02(c), Penal Code, as effective April |
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| 120 | 120 | | 1, 2019, is amended to read as follows: |
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| 121 | 121 | | (c) It is a defense to prosecution under this section that |
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| 122 | 122 | | the actor reasonably believed that the conduct: |
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| 123 | 123 | | (1) was permitted under Chapter 2001, Occupations |
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| 124 | 124 | | Code; |
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| 125 | 125 | | (2) was permitted under Chapter 2002, Occupations |
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| 126 | 126 | | Code; |
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| 127 | 127 | | (3) was permitted under Chapter 2004, Occupations |
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| 128 | 128 | | Code; |
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| 129 | 129 | | (4) was permitted under Chapter 2053, Occupations |
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| 130 | 130 | | Code; |
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| 131 | 131 | | (5) consisted entirely of participation in the state |
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| 132 | 132 | | lottery authorized by the State Lottery Act (Chapter 466, |
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| 133 | 133 | | Government Code); |
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| 134 | 134 | | (6) [(5)] was permitted under Subtitle A-1, Title 13, |
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| 135 | 135 | | Occupations Code (Texas Racing Act); or |
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| 136 | 136 | | (7) [(6)] consisted entirely of participation in a |
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| 137 | 137 | | drawing for the opportunity to participate in a hunting, fishing, |
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| 138 | 138 | | or other recreational event conducted by the Parks and Wildlife |
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| 139 | 139 | | Department. |
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| 140 | 140 | | SECTION 3. Section 47.09(a), Penal Code, as effective April |
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| 141 | 141 | | 1, 2019, is amended to read as follows: |
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| 142 | 142 | | (a) It is a defense to prosecution under this chapter that |
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| 143 | 143 | | the conduct: |
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| 144 | 144 | | (1) was authorized under: |
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| 145 | 145 | | (A) Chapter 2001, Occupations Code; |
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| 146 | 146 | | (B) Chapter 2002, Occupations Code; |
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| 147 | 147 | | (C) Chapter 2004, Occupations Code; |
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| 148 | 148 | | (D) Chapter 2053, Occupations Code; |
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| 149 | 149 | | (E) Subtitle A-1, Title 13, Occupations Code |
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| 150 | 150 | | (Texas Racing Act); or |
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| 151 | 151 | | (F) [(E)] Chapter 280, Finance Code; |
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| 152 | 152 | | (2) consisted entirely of participation in the state |
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| 153 | 153 | | lottery authorized by Chapter 466, Government Code; or |
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| 154 | 154 | | (3) was a necessary incident to the operation of the |
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| 155 | 155 | | state lottery and was directly or indirectly authorized by: |
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| 156 | 156 | | (A) Chapter 466, Government Code; |
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| 157 | 157 | | (B) the lottery division of the Texas Lottery |
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| 158 | 158 | | Commission; |
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| 159 | 159 | | (C) the Texas Lottery Commission; or |
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| 160 | 160 | | (D) the director of the lottery division of the |
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| 161 | 161 | | Texas Lottery Commission. |
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| 162 | 162 | | SECTION 4. This Act takes effect immediately if it receives |
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| 163 | 163 | | a vote of two-thirds of all the members elected to each house, as |
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| 164 | 164 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 165 | 165 | | Act does not receive the vote necessary for immediate effect, this |
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| 166 | 166 | | Act takes effect September 1, 2019. |
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