Texas 2019 - 86th Regular

Texas Senate Bill SB889 Compare Versions

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

Old	New	Differences
1	1	86R527 GCB-F
2	2	By: Menéndez S.B. No. 889
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 or tournament event.
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 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 employed, appointed, or authorized by an
39	39	entity that offers or proposes to offer social gaming as an operator
40	40	to contract with another entity to conduct social gaming on behalf
41	41	of the 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	(15) "Tournament event" means an event at a social
74	74	gaming establishment in which two or more players pay a buy-in to
75	75	compete in a social game in which:
76	76	(A) the players place bets using chips that have
77	77	no monetary value and cannot be exchanged for money; and
78	78	(B) a player is awarded a pay-out based on the
79	79	total time the player remains in the game and the total amount of
80	80	chips the player acquires.
81	81	Sec. 2005.003. APPLICABILITY. This chapter does not apply
82	82	to the conduct of bingo, charitable raffles, the state lottery, or
83	83	greyhound or horse racing.
84	84	Sec. 2005.004. OTHER GAMING NOT AUTHORIZED. This chapter
85	85	does not authorize the conduct of commercial games or gambling
86	86	otherwise prohibited by law.
87	87	Sec. 2005.005. PRIVATE PLACE. For purposes of this chapter
88	88	and other law, a social game conducted in a licensed social gaming
89	89	establishment is conducted in a private place.
90	90	Sec. 2005.006. ECONOMIC BENEFIT; SERVICE GRATUITY;
91	91	ENTRANCE FEE. (a) For purposes of this chapter and other law, a
92	92	social game is considered to be conducted in a manner that does not
93	93	provide to any person an economic benefit other than player
94	94	pay-outs if the social game is conducted in a licensed social gaming
95	95	establishment in which:
96	96	(1) total buy-ins equal total pay-outs;
97	97	(2) bets are placed only between players; and
98	98	(3) a fee or percentage of winnings is not collected
99	99	from any communal pot.
100	100	(b) A service gratuity may be accepted only if the gratuity:
101	101	(1) does not create a discrepancy in the equal balance
102	102	of buy-ins and pay-outs; and
103	103	(2) is offered in a manner that does not conflict with
104	104	Subsection (a).
105	105	(c) An operator may not receive any economic benefit from a
106	106	bet placed during a social game organized, operated, or promoted by
107	107	that operator.
108	108	(d) An operator may charge a player a fee to enter a social
109	109	game held at a licensed social gaming establishment.
110	110	Sec. 2005.007. PUBLIC POLICY: PREFERENCE FOR STATE
111	111	RESOURCES. It is the intent of this chapter, where possible, to use
112	112	the resources, goods, labor, and services of this state in the
113	113	operation of social gaming-related amenities to the extent
114	114	allowable by law.
115	115	SUBCHAPTER B. POWERS AND DUTIES OF COMMISSION AND DEPARTMENT
116	116	Sec. 2005.051. COMMISSION RULES ON REGULATION AND
117	117	LICENSING. (a) To protect the public health, safety, and welfare
118	118	and to ensure that social gaming authorized under this chapter is
119	119	conducted fairly at social gaming establishments, the commission
120	120	shall adopt rules providing for:
121	121	(1) fees in amounts reasonable and necessary to
122	122	administer this chapter;
123	123	(2) requirements for licensing, renewal, and
124	124	reinstatement of a license issued under this chapter;
125	125	(3) standards of conduct for license holders under
126	126	this chapter; and
127	127	(4) the administration and enforcement of this
128	128	chapter.
129	129	(b) The executive director shall ensure that rules adopted
130	130	under this section are consistent with state and federal law.
131	131	Sec. 2005.052. DEPARTMENT DUTIES; APPLICABILITY OF OTHER
132	132	LAW. (a) The department shall license and regulate each social
133	133	gaming establishment, operator, and dealer in accordance with this
134	134	chapter and rules adopted under this chapter.
135	135	(b) Chapter 51 applies to licensing, regulation, and
136	136	enforcement under this chapter. The department shall assess
137	137	against a social gaming establishment a civil or administrative
138	138	penalty authorized under that chapter for a violation of that
139	139	chapter, this chapter, or a commission rule.
140	140	SUBCHAPTER C. SOCIAL GAMING LICENSING AND REGULATION
141	141	Sec. 2005.101. LICENSE REQUIRED. (a) A person may not own
142	142	or operate a social gaming establishment unless the person holds a
143	143	license issued under this chapter for the conduct of social games at
144	144	the social gaming establishment.
145	145	(b) A person may not act as an operator or dealer at a social
146	146	gaming establishment unless the person holds a license issued under
147	147	this chapter.
148	148	(c) A player may not participate in a social game at a social
149	149	gaming establishment that is not licensed under this chapter.
150	150	Sec. 2005.102. GENERAL APPLICATION REQUIREMENTS; LICENSE
151	151	TERM. (a) An applicant for a license under this chapter shall:
152	152	(1) submit to the department a completed application
153	153	on a form prescribed by the department;
154	154	(2) pay the required fees; and
155	155	(3) provide any other information required by
156	156	commission rule.
157	157	(b) A license issued under this chapter expires on the first
158	158	anniversary of the date of issuance.
159	159	Sec. 2005.103. SOCIAL GAMING ESTABLISHMENT LICENSE
160	160	REQUIREMENTS. An applicant for a social gaming establishment
161	161	license must hold a game room permit issued under Subchapter E,
162	162	Chapter 234, Local Government Code, and be in good standing with the
163	163	issuing authority.
164	164	Sec. 2005.104. OPERATOR LICENSE OR DEALER LICENSE
165	165	QUALIFICATIONS. (a) An applicant for issuance or renewal of an
166	166	operator license or a dealer license, or the applicant's
167	167	controlling person, if applicable, must:
168	168	(1) be 18 years of age or older;
169	169	(2) demonstrate honesty, trustworthiness, and
170	170	integrity; and
171	171	(3) complete an education course approved by the
172	172	commission under Section 2005.151.
173	173	(b) On receipt of an original application for a license
174	174	under this chapter, the department shall conduct a thorough
175	175	background and criminal history check on each applicant and each
176	176	controlling person of an applicant to determine whether the
177	177	applicant or controlling person is qualified for issuance of a
178	178	license under this chapter. The department in accordance with
179	179	commission rules may conduct a background and criminal history
180	180	check for renewal of a license issued under this chapter.
181	181	(c) In conducting a background and criminal history check
182	182	under Subsection (b), the department may obtain from the Department
183	183	of Public Safety criminal history record information for the
184	184	applicant, controlling person, or license holder, as provided by
185	185	Section 411.122, Government Code.
186	186	(d) In conducting a background and criminal history check
187	187	under Subsection (b), the department must obtain fingerprints from
188	188	the applicant, controlling person, or license holder and submit the
189	189	fingerprints for processing through appropriate local, state, and
190	190	federal law enforcement agencies.
191	191	Sec. 2005.105. SURETY BOND FOR OPERATOR LICENSE. (a) An
192	192	applicant for issuance of, or a license holder applying for renewal
193	193	of, an operator license must provide a surety bond in the amount of
194	194	$25,000.
195	195	(b) The surety bond provided by an applicant or license
196	196	holder:
197	197	(1) must be issued by a company authorized to conduct
198	198	business in this state;
199	199	(2) must comply with all applicable provisions of the
200	200	Insurance Code;
201	201	(3) must be payable to the department for the purpose
202	202	of:
203	203	(A) satisfying a judgment awarded to this state
204	204	or a political subdivision of this state against the applicant or
205	205	license holder for actions engaged in as an operator conducting
206	206	social gaming activities;
207	207	(B) paying penalties assessed on the applicant or
208	208	license holder by this state or a political subdivision of this
209	209	state for actions engaged in as an operator conducting social
210	210	gaming activities; or
211	211	(C) settling a tax debt or other debt owed to this
212	212	state or a political subdivision of this state arising out of
213	213	actions engaged in by an operator conducting social gaming
214	214	activities; and
215	215	(4) may not be limited to one claim, provided that the
216	216	sum of all claims does not exceed the face value of the surety bond.
217	217	(c) An applicant or license holder required to file a surety
218	218	bond under this section must file a new bond with each application
219	219	for renewal of the license holder's operator license.
220	220	(d) A company that issues a surety bond for purposes of
221	221	satisfying this section shall notify the department in writing not
222	222	later than the 30th day before the date on which the company will
223	223	cancel the bond.
224	224	(e) An operator whose surety bond is canceled shall
225	225	immediately cease operating a social gaming establishment. The
226	226	operator may continue to operate the social gaming establishment
227	227	after providing to the department a surety bond that is an
228	228	acceptable replacement for the canceled bond.
229	229	Sec. 2005.106. DENIAL OF APPLICATION. The commission or
230	230	the executive director may deny an application for issuance or
231	231	renewal of a license if:
232	232	(1) the applicant or license holder does not meet the
233	233	qualifications for the license;
234	234	(2) after conducting an investigation and providing
235	235	notice and an opportunity for a hearing, the executive director
236	236	determines that the applicant or license holder has violated this
237	237	chapter or a rule adopted under this chapter; or
238	238	(3) the applicant or license holder engaged in fraud
239	239	or misrepresentation in applying for or obtaining a license under
240	240	this chapter.
241	241	Sec. 2005.107. LICENSE RENEWAL. The commission shall adopt
242	242	rules regarding the annual renewal of licenses issued under this
243	243	chapter, including rules on required background and criminal
244	244	history checks.
245	245	Sec. 2005.108. STATEWIDE VALIDITY; NONTRANSFERABLE. A
246	246	license issued under this chapter is valid throughout this state
247	247	and is not transferable.
248	248	Sec. 2005.109. RESTRICTION ON TOURNAMENT EVENT. The
249	249	operator of a social gaming establishment may not conduct a
250	250	tournament event in which an amount less than the total amount of
251	251	buy-ins is collected and distributed as pay-outs to the players
252	252	participating in the event for which the buy-ins are collected.
253	253	SUBCHAPTER D. EDUCATION
254	254	Sec. 2005.151. RECOGNITION OF EDUCATION PROGRAMS AND
255	255	COURSES. The commission by rule shall develop criteria by which the
256	256	commission approves education programs and courses for operators
257	257	and dealers.
258	258	SUBCHAPTER E. INSPECTIONS AND INVESTIGATIONS
259	259	Sec. 2005.201. INSPECTIONS; INVESTIGATIONS. (a) The
260	260	department may conduct inspections of social gaming establishments
261	261	and investigate license holders under this chapter as necessary to
262	262	enforce this chapter or Chapter 51.
263	263	(b) The department may:
264	264	(1) enter the business premises of a license holder
265	265	regulated by the department or a person suspected of being in
266	266	violation of or threatening to violate this chapter or a rule or
267	267	order of the commission or an order of the executive director under
268	268	this chapter; and
269	269	(2) examine and copy records pertinent to the
270	270	inspection or investigation.
271	271	SUBCHAPTER F. ADMINISTRATIVE SANCTIONS; ENFORCEMENT
272	272	Sec. 2005.251. ADMINISTRATIVE SANCTIONS. (a) The
273	273	commission or the executive director may deny an application for a
274	274	license, revoke, suspend, or refuse to renew a license, or
275	275	reprimand a license holder for a violation of this chapter or a rule
276	276	or order of the commission or an order of the executive director.
277	277	(b) The commission or the executive director may impose an
278	278	administrative penalty on a person under Subchapter F, Chapter 51,
279	279	regardless of whether the person holds a license under this
280	280	chapter, if the person violates this chapter or a rule or order of
281	281	the commission or an order of the executive director.
282	282	Sec. 2005.252. CEASE AND DESIST ORDER; INJUNCTION; CIVIL
283	283	PENALTY. (a) The executive director may issue a cease and desist
284	284	order as necessary to enforce this chapter if the executive
285	285	director determines that the action is necessary to prevent a
286	286	violation of this chapter or to protect the health and safety of the
287	287	public.
288	288	(b) The attorney general or the executive director may bring
289	289	an action for an injunction or a civil penalty under this chapter,
290	290	as provided by Section 51.352.
291	291	SECTION 2. Section 47.02(c), Penal Code, as effective April
292	292	1, 2019, is amended to read as follows:
293	293	(c) It is a defense to prosecution under this section that
294	294	the actor reasonably believed that the conduct:
295	295	(1) was permitted under Chapter 2001, Occupations
296	296	Code;
297	297	(2) was permitted under Chapter 2002, Occupations
298	298	Code;
299	299	(3) was permitted under Chapter 2004, Occupations
300	300	Code;
301	301	(4) was permitted under Chapter 2005, Occupations
302	302	Code;
303	303	(5) consisted entirely of participation in the state
304	304	lottery authorized by the State Lottery Act (Chapter 466,
305	305	Government Code);
306	306	(6) [(5)] was permitted under Subtitle A-1, Title 13,
307	307	Occupations Code (Texas Racing Act); or
308	308	(7) [(6)] consisted entirely of participation in a
309	309	drawing for the opportunity to participate in a hunting, fishing,
310	310	or other recreational event conducted by the Parks and Wildlife
311	311	Department.
312	312	SECTION 3. Section 47.06, Penal Code, is amended by adding
313	313	Subsection (f-1) to read as follows:
314	314	(f-1) It is a defense to prosecution under Subsection (a) or
315	315	(c) that the person owned, manufactured, transferred, or possessed
316	316	the equipment or paraphernalia related to social gaming for the
317	317	sole purpose of shipping it to a social gaming establishment
318	318	licensed under Chapter 2005, Occupations Code.
319	319	SECTION 4. Section 47.09(a), Penal Code, as effective April
320	320	1, 2019, is amended to read as follows:
321	321	(a) It is a defense to prosecution under this chapter that
322	322	the conduct:
323	323	(1) was authorized under:
324	324	(A) Chapter 2001, Occupations Code;
325	325	(B) Chapter 2002, Occupations Code;
326	326	(C) Chapter 2004, Occupations Code;
327	327	(D) Chapter 2005, Occupations Code;
328	328	(E) Subtitle A-1, Title 13, Occupations Code
329	329	(Texas Racing Act); or
330	330	(F) [(E)] Chapter 280, Finance Code;
331	331	(2) consisted entirely of participation in the state
332	332	lottery authorized by Chapter 466, Government Code; or
333	333	(3) was a necessary incident to the operation of the
334	334	state lottery and was directly or indirectly authorized by:
335	335	(A) Chapter 466, Government Code;
336	336	(B) the lottery division of the Texas Lottery
337	337	Commission;
338	338	(C) the Texas Lottery Commission; or
339	339	(D) the director of the lottery division of the
340	340	Texas Lottery Commission.
341	341	SECTION 5. Not later than March 1, 2020, the Texas
342	342	Commission of Licensing and Regulation shall adopt the rules
343	343	necessary and the Texas Department of Licensing and Regulation
344	344	shall develop the applications and establish the procedures
345	345	necessary to implement Chapter 2005, Occupations Code, as added by
346	346	this Act.
347	347	SECTION 6. This Act takes effect September 1, 2019.