86R7306 ADM-D
By: Kolkhorst S.B. No. 731
A BILL TO BE ENTITLED
AN ACT
relating to fantasy sports contests.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle B, Title 13, Occupations Code, is
amended by adding Chapter 2053 to read as follows:
CHAPTER 2053. FANTASY SPORTS CONTESTS
Sec. 2053.001. DEFINITIONS. In this chapter:
(1) "Fantasy sports contest" means a competition in
which:
(A) a participant pays money or other
consideration for the opportunity to assemble a fictional team
composed of professional or amateur sports athletes selected by the
participant to compete against other fictional teams of sports
athletes assembled by other competition participants;
(B) the outcome of the competition reflects the
relative knowledge and skill of the participants and is based on the
actual statistical performance of the selected athletes in sports
competitions, or in a season or series of sports competitions;
(C) a prize is awarded to the competition winner;
(D) the outcome of the competition or the
redemption of the winnings is not displayed or represented in a
manner that mimics a slot machine or other form of casino gaming,
including a banked card game, poker, craps, roulette, keno, lotto,
and bingo; and
(E) the competition is not presented using any
depiction of a casino gaming graphic, theme, or title, including
any depiction of a slot machine-style symbol, a banked card game,
poker, craps, roulette, keno, lotto, and bingo.
(2) "Fantasy sports operator" means a person,
including an entity or a division of an entity, that offers fantasy
sports contests to the public.
(3) "Sports association" means a group of professional
or amateur teams or athletes that compete against one another in a
specific sport.
Sec. 2053.002. LEGISLATIVE FINDINGS. (a) The legislature
finds that a participant in a fantasy sports contest is an actual
contestant in a bona fide competition to determine the skill of the
participant in assembling a fictional team of sports athletes.
(b) An individual who pays money or other consideration to
participate in a fantasy sports contest is not placing a bet for
purposes of the application of an offense under Chapter 47, Penal
Code.
Sec. 2053.003. PARTICIPATION IN FANTASY SPORTS CONTEST. An
individual may pay money or other consideration to participate in a
fantasy sports contest.
Sec. 2053.004. OPERATION OF FANTASY SPORTS CONTEST. (a) A
person may offer fantasy sports contests as a fantasy sports
operator in this state in accordance with this chapter and any
applicable federal law and may participate in the earnings of a
business that offers fantasy sports contests.
(b) A fantasy sports operator may not:
(1) award a prize based:
(A) on the score, the point spread, or any
performance of a single professional or amateur sports team or any
combination of professional or amateur sports teams;
(B) solely on any single performance of an
individual athlete in a single professional or amateur sports
competition or other event; or
(C) on a fantasy sports contest based on a live
pari-mutuel racing performance regulated under Subtitle A-1 (Texas
Racing Act);
(2) offer a fantasy sports contest to the public
without disclosing before the contest all prizes offered to winning
participants of the contest; or
(3) offer a fantasy sports contest based on the
performance of athletes in a youth, high school, or collegiate
sports competition or athletic event.
Sec. 2053.005. CONSUMER PROTECTION. A fantasy sports
operator shall implement commercially reasonable procedures for
fantasy sports contests that:
(1) prevent an employee or agent of the operator, and
any relative living in the same household as the employee or agent,
from competing in a fantasy sports contest offered by the operator
to the public in which a cash prize is awarded;
(2) prevent an employee or agent of the operator from
sharing with third parties before the information is made publicly
available information relevant to a fantasy sports contest that is
obtained by the employee or agent because of the person's
employment or agency and that could affect fantasy sports contest
play;
(3) verify that fantasy sports contest participants
are 18 years of age or older;
(4) restrict an individual who is a player, a game
official, or another participant in a professional or amateur
sports competition from participating in a fantasy sports contest
that is determined, wholly or partly, on the performance of:
(A) that individual, the individual's
professional or amateur team, or the accumulated statistical
results of the sport or competition in which the individual is a
player, game official, or other participant; or
(B) another individual or team competing in the
same sports association in which the individual participates; and
(5) segregate contest participants' funds from the
operator's funds or maintain a reserve in the form of cash, cash
equivalents, an irrevocable letter of credit, a bond, payment
processor reserves, payment processor receivables, or any
combination of those forms, in an amount equal to or greater than
the total amount of funds in all contest participants' accounts,
for the benefit and protection of the funds held in those accounts.
Sec. 2053.006. INJUNCTIVE RELIEF. (a) The attorney
general may institute an action for injunctive relief to restrain a
violation by a person who appears to be in violation of or
threatening to violate this chapter.
(b) An action filed under this section by the attorney
general must be filed in a district court in Travis County or the
county in which the violation occurred.
(c) The attorney general may recover reasonable expenses
incurred in obtaining injunctive relief under this section,
including court costs, reasonable attorney's fees, investigative
costs, witness fees, and deposition expenses.
(d) In an injunction issued under this section, a court may
include reasonable requirements to prevent further violations of
this chapter.
SECTION 2. Section 47.02(c), Penal Code, as effective April
1, 2019, 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) was permitted under Chapter 2004, Occupations
Code;
(4) was permitted under Chapter 2053, Occupations
Code;
(5) consisted entirely of participation in the state
lottery authorized by the State Lottery Act (Chapter 466,
Government Code);
(6) [(5)] was permitted under Subtitle A-1, Title 13,
Occupations Code (Texas Racing Act); or
(7) [(6)] 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.
SECTION 3. Section 47.09(a), Penal Code, as effective April
1, 2019, 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;
(C) Chapter 2004, Occupations Code;
(D) Chapter 2053, Occupations Code;
(E) Subtitle A-1, Title 13, Occupations Code
(Texas Racing Act); or
(F) [(E)] Chapter 280, Finance 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 4. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2019.