Texas 2021 - 87th Regular

Texas House Bill HB2070 Compare Versions

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1	1	By: Huberty H.B. No. 2070
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the regulation of sports wagering; requiring an
7	7	occupational permit; authorizing a fee; imposing a tax; creating
8	8	criminal offenses; decriminalizing wagering on sports events.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. LEGISLATIVE FINDINGS. The Legislature finds the
11	11	following:
12	12	(1) Consistent with a 2018 United States Supreme Court
13	13	decision authorizing states to exercise their lawful prerogative to
14	14	license and regulate sports wagering activity, it is in this
15	15	state's interest to authorize a strict regulatory model for sports
16	16	wagering.
17	17	(2) A legal, regulated sports wagering market will
18	18	help to deter unlawful sports wagering and provide for more
19	19	regulatory and law enforcement oversight over sports wagering,
20	20	while generating revenue to this state;
21	21	(3) Any sports wagering enforcement and regulatory
22	22	structure must begin from the bedrock premise that participation in
23	23	a lawful and licensed sports-wagering industry is a privilege and
24	24	not a right and that strict regulatory oversight is intended to
25	25	safeguard the integrity of wagering on sporting events and to
26	26	ensure accountability and the public trust;
27	27	(4) The most expeditious way to legalize sports
28	28	wagering in this state and to strictly regulate this activity is to
29	29	utilize the resources of the Texas Department of Licensing and
30	30	Regulation, which has experience regulating business activities in
31	31	this state; and
32	32	(5) Sports wagering within this state will be vested
33	33	in sports wagering operators acting under authority of state law
34	34	and will promote trust and integrity in all sports wagering
35	35	operations.
36	36	SECTION 2. Subtitle A, Tile 13, Occupations Code, is
37	37	amended by adding Chapter 2005 to read as follows:
38	38	CHAPTER 2005. SPORTS WAGERING
39	39	SUBCHAPTER A. GENERAL PROVISIONS
40	40	Sec. 2005.001. SHORT TITLE. This chapter may be cited as
41	41	the Texas Sports and Entertainment Recovery Act.
42	42	Sec. 2005.002. DEFINITIONS. In this chapter:
43	43	(1) "Adjusted gross revenue" means gross wagering
44	44	revenue received by a sports wagering operator from all sports
45	45	wagers authorized under this chapter, minus:
46	46	(A) all cash or cash equivalents paid out as
47	47	winnings to players;
48	48	(B) the actual cost paid by a sports wagering
49	49	operator for any personal property distributed to a player as a
50	50	result of a sports wager authorized under this chapter;
51	51	(C) the cash value of any bonuses or promotional
52	52	credits provided to players that are then returned to a sports
53	53	wagering operator;
54	54	(D) Uncollectible receivables, not to exceed
55	55	four percent of gross revenue, except that the commission may
56	56	increase that percentage upon a showing of that a higher amount is
57	57	reasonable and warranted; and
58	58	(E) excise tax payments on sports wagers remitted
59	59	to the federal government.
60	60	(F) Amounts returned to an authorized
61	61	participant:
62	62	(i) because of game, platform, or system
63	63	malfunction; or
64	64	(ii) because the sports bet must be voided
65	65	due to concerns regarding the integrity of the wager or game.
66	66	(2) "Authorized sports entity" means:
67	67	(A) a sports team or a sports team designee;
68	68	(B) a Class 1 racetrack, as defined by Section
69	69	2026.102; or
70	70	(C) a greyhound racetrack, as described by
71	71	Subchapter D, Chapter 2025
72	72	(3) "Cash equivalent" means an asset that is
73	73	convertible to cash and approved for use in connection with
74	74	authorized sports wagering. Approved cash equivalents include:
75	75	(A) travelers checks;
76	76	(B) foreign currency and coin;
77	77	(C) certified checks, cashier's checks, and
78	78	money orders;
79	79	(D) personal checks and drafts;
80	80	(E) digital, crypto, and virtual currencies;
81	81	(F) online and mobile payment systems that
82	82	support online money transfers;
83	83	(G) credit cards and debit cards;
84	84	(H) prepaid access instruments; and
85	85	(I) any other form approved by the commission.
86	86	(4) "College sport" means an athletic or sporting
87	87	event in which at least one participant is a team or contestant
88	88	competing on behalf or under the sponsorship of a public or private
89	89	institution of higher education, regardless of where the
90	90	institution is located.
91	91	(5) "Commission" means the Texas Commission of
92	92	Licensing and Regulation.
93	93	(6) "Comptroller" means the Comptroller of Public
94	94	Accounts of the State of Texas.
95	95	(7) "Covered service" means the operation,
96	96	management, or control of wagers authorized by this chapter,
97	97	including the development or operation of sports wagering platforms
98	98	and the provision of odds lines and risk management information.
99	99	The term excludes:
100	100	(A) payment processing and similar financial
101	101	services;
102	102	(B) customer identity, age verification, and
103	103	geolocation services;
104	104	(C) streaming or other video and data that do not
105	105	include odds or line information;
106	106	(D) telecommunications, internet service
107	107	providers, and other similar services not specifically designed for
108	108	use in connection with sports wagering;
109	109	(E) other goods or services designed to support
110	110	the operation, management, or control of a sports wagering
111	111	platform; and
112	112	(F) other goods or services not specifically
113	113	designed for use in connection with sports wagering.
114	114	(8) "Department" means the Texas Department of
115	115	Licensing and Regulation.
116	116	(9) "Executive director" means the executive director
117	117	of the department.
118	118	(10) "Interactive sports wagering" means engaging in
119	119	sports wagering via the internet, on a mobile device, or any other
120	120	telecommunications service.
121	121	(11) "Interactive sports wagering permit" means a
122	122	permit issued by the commission that authorizes the operation of
123	123	interactive sports wagering under this chapter;
124	124	(12) "Interactive sports wagering operator" means the
125	125	holder of an interactive sports wagering permit.
126	126	(13) "Key person" means an officer or director of a
127	127	sports wagering operator who:
128	128	(A) is directly involved in the operation,
129	129	management, or control of the conduct of sports wagering under this
130	130	chapter; and
131	131	(B) exercises substantial influence or control
132	132	over the sports wagering operator's sports wagering activities.
133	133	(14) "Official league data" means statistics,
134	134	results, outcomes, and other data relating to a sporting event
135	135	obtained for determining the outcome of tier two sports wagers
136	136	under an agreement wager between a sports wagering operator and:
137	137	(A) the relevant sports governing body that
138	138	authorizes the use of the data for determining the outcome of tier
139	139	two sports wagers; or
140	140	(B) an entity expressly authorized by the sports
141	141	governing body to provide the information described by this
142	142	subdivision to sports wagering operators.
143	143	(15) "Permit holder" means a person who holds a permit
144	144	issued under this chapter.
145	145	(16) "Professional sports" means an athletic or
146	146	sporting event at which two or more competitors participate and one
147	147	or more competitors receive compensation.
148	148	(17) "Retail permit" means a permit issued by the
149	149	commission to an entity included in Section 2005.103 that
150	150	authorizes the operation of sports wagering at a location
151	151	authorized by the commission, but with the operation limited to
152	152	accepting in-person sports wagering only from individuals who are
153	153	physically present in the location.
154	154	(18) "Retail permit holder" means the holder of a
155	155	retail permit.
156	156	(19) "Retail sports wagering" means engaging in sports
157	157	wagering at authorized locations in person.
158	158	(20) "Service provider" means the holder of a service
159	159	provider permit.
160	160	(21) "Service provider permit" means a permit issued
161	161	by the commission that authorizes the provision of covered
162	162	services.
163	163	(22) "Sporting event" or "sports event" means
164	164	professional sports and athletic events, college sports and
165	165	athletic events, amateur sports and athletic events, motor race
166	166	events, electronic sports events, competitive video game events, or
167	167	any other event approved by the commission.
168	168	(23) "Sports wagering brand" means the names, logos,
169	169	and brands by which a sports wagering operator advertises,
170	170	promotes, or otherwise holds out to the public its sports wagering
171	171	platform or retail sports wagering operations.
172	172	(24) "Sports wagering operator" means:
173	173	(A) an interactive sports wagering permit
174	174	holder;
175	175	(B) a service provider permit holder operating
176	176	sports wagering on behalf of an interactive sports wagering permit
177	177	holder;
178	178	(C) a retail permit holder; or
179	179	(D) a service provider permit holder operating
180	180	sports wagering on behalf of a retail permit holder.
181	181	(25) "Sports wagering platform" means a website,
182	182	mobile application, or other interactive platform accessible via
183	183	the internet or mobile, wireless, or similar communications
184	184	technology that players may use to place sports wagers authorized
185	185	under this chapter.
186	186	(26) "Sports entertainment district" means a public
187	187	entertainment facility, as that term is defined in Section
188	188	108.73(2), Alcoholic Beverages Code that is related infrastructure
189	189	to an approved venue project, as those terms are defined in Section
190	190	334.001, Local Government Code.
191	191	(27) "Sports facility" means:
192	192	(A) a facility that is the primary host of a Major
193	193	League Baseball, National Basketball Association, National
194	194	Football League, Major League Soccer, or National Hockey League,
195	195	professional sports franchise in this state and that has a seating
196	196	capacity of at least 5,000 people; or
197	197	(B) a Class 1 racetrack as defined by Section
198	198	2026.102.
199	199	(28) "Sports governing body" means the organization
200	200	that prescribes final rules and enforces codes of conduct with
201	201	respect to a professional sporting event and participants in the
202	202	professional sporting event and whose corporate headquarters is
203	203	located in the United States.
204	204	(29) "Sports wagering" means accepting wagers on
205	205	sporting events or portions of sporting events, or on the
206	206	individual performance statistics of participants in a sporting
207	207	event or combination of sporting events, by any system or method of
208	208	wagering, including in-person or over the internet through a
209	209	website or on mobile devices. The term includes but is not limited
210	210	to single-game wagers, teaser wagers, parlays, over-unders,
211	211	moneylines, pools, exchange wagering, in-game wagering, in-play
212	212	wagers, proposition wagers, and straight wagers. The term does not
213	213	include:
214	214	(A) fantasy or simulated games or contests as
215	215	that term is defined in Section 47.01(2-a), Penal Code ; or
216	216	(B) greyhound racing or horse racing regulated
217	217	under Subtitle A-1 (Texas Racing Act).
218	218	(30) "Sports team" means a Major League Baseball,
219	219	National Basketball Association, National Football League, Major
220	220	League Soccer, or National Hockey League professional sports
221	221	franchise located in this state that leases, subleases, or
222	222	exclusively or by a joint venture with another sports team operates
223	223	a sports facility.
224	224	(31) "Sports team designee" means any person
225	225	designated by a sports team as being authorized to receive an
226	226	interactive sports wagering license in lieu of the sports team.
227	227	(32) "Tier one sports wager" means a sports wager that
228	228	is not a tier two sports wager.
229	229	(33) "Tier two sports wager" means a sports wager that
230	230	is placed after the event it concerns has started.
231	231	(34) "Youth sports" means an athletic or sporting
232	232	event in which the majority of participants are under the age of 18
233	233	or are competing on behalf or under the sponsorship of one or more
234	234	public or private preschools or elementary, middle, or secondary
235	235	schools. The term does not include professional sports or events
236	236	that occur under the sponsorship or oversight of national or
237	237	international athletic bodies that are not educational
238	238	institutions and that include participants both over and under the
239	239	age of 18.
240	240	Sec. 2005.002. COMPLIANCE WITH FEDERAL AND STATE LAW. (a)
241	241	All sports wagering authorized under this chapter must be
242	242	initiated, received, and otherwise made within this state unless
243	243	otherwise determined by the commission in accordance with
244	244	applicable federal and state laws.
245	245	(b) Consistent with the intent of the United States Congress
246	246	in the Unlawful Internet Gambling Enforcement Act of 2006 (31
247	247	U.S.C. § 5361, et seq.), the intermediate routing of electronic
248	248	data relating to internet sports wagering authorized under this
249	249	chapter, including routing across state lines, does not determine
250	250	the location in which such wagers are initiated, received, or
251	251	otherwise made.
252	252	Sec. 2005.003. REVIEW OF AGENCY ACTIONS. Except as
253	253	otherwise provided by this chapter, all actions of the commission
254	254	or department are subject to review under the Administrative
255	255	Procedure Act.
256	256	SUBCHAPTER B. POWERS AND DUTIES
257	257	Sec. 2005.051. SPORTS WAGERING PROGRAM. (a) Subject to the
258	258	requirements set forth in this chapter, the commission shall
259	259	authorize an authorized sports entity to become an interactive
260	260	sports wagering operator for the purpose of offering and accepting
261	261	sports wagers to and from players on sporting events.
262	262	(b) The department under the direction of the commission and
263	263	executive director shall administer this chapter.
264	264	(c) The commission may not authorize sports wagers
265	265	involving youth sports.
266	266	(d) Nothing in this chapter may be construed to apply to
267	267	pari-mutuel wagering on horse-racing or greyhound racing as
268	268	authorized by Subtitle A-1 or fantasy or simulated games or
269	269	contests.
270	270	Sec. 2005.052. RULES. The commission shall adopt rules for
271	271	the administration of this chapter and to regulate sports wagering
272	272	in this state.
273	273	Sec. 2005.053. CERTIFICATION OF REVENUES AND EXPENSES. The
274	274	commission shall:
275	275	(1) certify monthly to the comptroller a full and
276	276	complete statement of sports wagering revenues and expenses for the
277	277	previous month; and
278	278	(2) within thirty days of the end of the fiscal year,
279	279	provide to the comptroller a full and complete statement of sports
280	280	wagering revenues and expenses for that fiscal year, along with any
281	281	recommendations for changes to this chapter that may be warranted
282	282	and prudent to protect the public interest.
283	283	Sec. 2005.054. AUDITS. (a) To ensure a proper accounting
284	284	of all revenues due to the state, the commission and the comptroller
285	285	each independently shall have the right to audit the books and
286	286	records of a sports wagering operator that are related to sports
287	287	wagering activities conducted in this state and authorized under
288	288	the chapter. The commission and the comptroller shall coordinate
289	289	to ensure that such requests are not duplicative or overly
290	290	burdensome on the sports wagering operator.
291	291	(b) The comptroller may perform audits of any taxes or fees
292	292	paid under this chapter.
293	293	Sec. 2005.055. VOLUNTARY EXCLUSION PROGRAM. (a) The
294	294	commission shall adopt rules to establish and implement a statewide
295	295	voluntary exclusion program administered by the commission.
296	296	(b) The rules must include:
297	297	(1) a requirement that the commission will establish
298	298	and administer a statewide self-exclusion list, hosting a website
299	299	that sport wagering operators may link to in order to allow
300	300	individuals to register for self-exclusion, and that the commission
301	301	shall regularly distribute such list to sport wagering operators;
302	302	(2) a requirement that each sports wagering operator
303	303	implement a procedure by which individuals may access the
304	304	commission's website form to ask to be excluded from participation
305	305	in sports wagering and under which the sports wagering operator
306	306	will bar individuals on the self-exclusion list from any further
307	307	participation in sports wagering for the period that they are
308	308	self-excluded;
309	309	(3) except as otherwise provided by commission rule, a
310	310	requirement that an individual who participates in the voluntary
311	311	exclusion program agrees to refrain from participating in sports
312	312	wagering for the period of time specified at self-exclusion;
313	313	(3) except as otherwise provided by commission rule, a
314	314	requirement that a person who participates in the voluntary
315	315	exclusion program may not petition the commission for removal from
316	316	the program; and
317	317	(4) a requirement that the sports wagering operator
318	318	must make all commercially reasonable attempts and cause its sales
319	319	agents and others operating on its behalf to make commercially
320	320	reasonable efforts to cease all direct marketing efforts to persons
321	321	participating in the program.
322	322	(c) The voluntary exclusion program may not preclude a
323	323	sports wagering operator and its agents and others operating on
324	324	their behalf from seeking the payment of a debt accrued by a person
325	325	before entering the program.
326	326	Sec. 2005.056. RISK MANAGEMENT. The commission shall adopt
327	327	rules permitting sports wagering operators to use systems that
328	328	offset loss or manage or lay off risk in the operation of sports
329	329	wagering under this chapter, including through liquidity pools,
330	330	exchanges, or similar mechanisms in other approved jurisdiction in
331	331	which the sports wagering operator or an affiliate of either or
332	332	other third party also holds a license or the equivalent.
333	333	(b) Notwithstanding Subsection (a), the rules adopted under
334	334	this section must require that at all times adequate protections
335	335	are maintained to ensure sufficient funds are available to pay all
336	336	players.
337	337	Sec. 2005.057. PLACES OF PUBLIC ACCOMODATION. (a) Except
338	338	as provided by Subsection (b), and other than an authorized retail
339	339	sports wagering location, the commission may not authorize or allow
340	340	a person to:
341	341	(1) operate or to allow the operation of a place of
342	342	public accommodation, a club (including a club or association
343	343	limited to dues-paying members or similar restricted groups), or a
344	344	similar establishment in which computer terminals or similar access
345	345	devices are intended or are made available to be used principally
346	346	for the purpose of accessing a sports wagering platform; or
347	347	(2) otherwise advertise to the general public that the
348	348	place of public accommodation, club, or similar establishment is
349	349	available to engage in sports wagering.
350	350	(b) The commission may authorize:
351	351	(1) an interactive sports wagering operator or a
352	352	service provider operating sports wagering on behalf of an
353	353	interactive sports wagering permit holder to establish a place of
354	354	public accommodation for the purpose of accessing a sports wagering
355	355	platform if it is located within an interactive sports wagering
356	356	operator's sports facility or sports entertainment district; and
357	357	(2) the advertisement of an activity described by
358	358	Subsection (b)(1) at the location.
359	359	(c) The commission shall adopt rules governing the
360	360	establishment of a sports wagering public accommodation at a sports
361	361	facility or sports entertainment district.
362	362	(d) Places of public accommodation, clubs, or similar
363	363	establishments that are allowed under this section are subject to
364	364	all applicable state, local, criminal, zoning, or other regulatory
365	365	powers that are not intended to be limited in any way by this
366	366	chapter.
367	367	(e) This section does not apply to operations and
368	368	advertisement conducted by a retail permit holder or a service
369	369	provider operating sports wagering on behalf of a retail permit
370	370	holder.
371	371	SUBCHAPTER C. SPORTS WAGERING PERMITS
372	372	Sec. 2005.101. INTERACTIVE SPORTS WAGERING PERMIT. (a)
373	373	The commission shall issue an interactive sports wagering permit to
374	374	a qualified authorized sports entity under this chapter if the
375	375	applicant:
376	376	(1) submits a completed application to the commission
377	377	on a form prescribed by the commission, containing the information
378	378	required by this section; and
379	379	(2) pays to the commission a permitting fee of
380	380	$500,000, which must be refunded in the event the applicant's
381	381	application is denied, after deduction of the commission's expenses
382	382	in considering the application.
383	383	(b) The commission may only award an interactive sports
384	384	wagering permit to an authorized sports entity as defined by this
385	385	chapter. The interactive sports wagering operator or a service
386	386	provider on behalf of an interactive sports wagering operator may:
387	387	(1) offer retail sports wagering in a place of public
388	388	accommodation located at its sports facility or the sports
389	389	entertainment district created in connection with the sports
390	390	facility;
391	391	(2) conduct state-wide interactive sports wagering;
392	392	and
393	393	(3) operate kiosks for interactive sports wagering.
394	394	(c) The commission may only award an interactive sports
395	395	wagering permit to an authorized sports entity that is based in the
396	396	United States.
397	397	(d) The commission shall only award one interactive sports
398	398	wagering permit per authorized sports entity, except that if a
399	399	person owns more than one authorized sports entity, that person may
400	400	only obtain one interactive sports wagering permit.
401	401	(e) The interactive sports wagering operator shall only be
402	402	permitted to hold out its sports wagering platform to the public
403	403	under one brand.
404	404	(f) The commission shall evaluate and then grant or deny
405	405	each application submitted under this section in its discretion in
406	406	the same manner and based on the same considerations that it uses to
407	407	consider applications for service provider permits. The
408	408	commission's decision is final and not appealable, except as
409	409	otherwise may be required under state law.
410	410	(g) The commission shall prescribe an application form for
411	411	an interactive sports wagering permit that includes:
412	412	(1) the applicant's proposed initial business plan,
413	413	which must include the range of contemplated types and modes of
414	414	sports wagering;
415	415	(2) the applicant's proposed measures to address age
416	416	and identity verification and geolocation requirements;
417	417	(3) the applicant's proposed internal controls,
418	418	including controls to ensure that no ineligible person will be able
419	419	to participate in sports wagering;
420	420	(4) the applicant's history of working to prevent
421	421	compulsive gambling, including training programs for its
422	422	employees;
423	423	(5) the applicant's written information security
424	424	program, including information security governance and the
425	425	designation of a chief security officer of equivalent (which
426	426	designation shall be a requirement for issuance of a license);
427	427	(6) the sports wagering brand (which shall be limited
428	428	to a maximum of one brand and may be different from the brand
429	429	offered by a retail permit holder) under which an interactive
430	430	sports wagering operator plans to hold out its sports wagering
431	431	platform to the public;
432	432	(7) any personal information the commission may
433	433	determine by rule should be required concerning the applicant's key
434	434	persons; and
435	435	(8) any other information the commission considers
436	436	necessary.
437	437	(h) The commission may accept permitting or authorization
438	438	to operate by another jurisdiction that is specifically determined
439	439	by the commission to have similar permitting requirements, as
440	440	evidence that the applicant meets the interactive sports wagering
441	441	operator requirements. The commission may accept another
442	442	jurisdiction's or an approved third party's testing of the
443	443	interactive sports wagering platform as evidence that the platform
444	444	meets any requirements mandated by commission rule.
445	445	(i) Notwithstanding any other law, the information an
446	446	applicant submits under this section shall be considered
447	447	confidential and exempt from public disclosure.
448	448	(j) An authorized applicant may elect to assign its
449	449	interactive sports wagering permit to a third-party designee to
450	450	handle all of the applicant's sports wagering management and
451	451	operations. If the applicant makes this election, the application
452	452	and disclosure requirements described by this section should be
453	453	made by the designee rather than the applicant, in accordance with
454	454	procedures determined by the commission.
455	455	Sec. 2005.102. SERVICE PROVIDER PERMIT. (a) An applicant
456	456	for a service provider permit shall:
457	457	(1) submit an application to the commission on a form
458	458	prescribed by the commission, containing the information required
459	459	under this section; and
460	460	(2) pay to the commission an application fee of
461	461	$25,000.
462	462	(b) An application submitted under this section must
463	463	include:
464	464	(1) the applicant's background in sports wagering or
465	465	the covered service;
466	466	(2) the applicant's experience in connection with
467	467	sports wagering or other wagering activities in other
468	468	jurisdictions, including the applicant's history and reputation of
469	469	integrity and compliance, as well as a list of all active or lapsed
470	470	permits or licenses for sports wagering or other wagering
471	471	activities (including the reason for any lapse);
472	472	(3) the applicant's written information security
473	473	program, including information concerning information security
474	474	governance and the designation of a chief security officer or
475	475	equivalent (which designation shall be a requirement for issuance
476	476	of a permit);
477	477	(4) any personal information the commission
478	478	determines by rule should be required concerning the applicant's
479	479	key persons; and
480	480	(5) any other information the commission considers
481	481	necessary.
482	482	(c) The commission shall conduct a background investigation
483	483	on the applicant and key persons as considered necessary by the
484	484	commission. The background investigation must include a credit
485	485	history check, a tax record check, and a criminal history records
486	486	check.
487	487	(d) The commission shall grant or deny a service provider
488	488	permit within 90 days of receipt of a completed application. The
489	489	commission's decision is final and not appealable, except as
490	490	otherwise may be required under state law.
491	491	(e) Notwithstanding any other provision of law, the
492	492	information an applicant submits under this section is considered
493	493	confidential and exempt from public disclosure.
494	494	(f) The following shall constitute the sole grounds for
495	495	denial of a service provider permit:
496	496	(1) the commission reasonably believes the applicant
497	497	will be unable to satisfy the duties of a permittee described by
498	498	this chapter;
499	499	(2) the commission reasonably believes that the
500	500	applicant or any of its key persons are not of good character,
501	501	honesty, or integrity;
502	502	(3) the commission reasonably believes that the
503	503	applicant's or any of its key person's prior activities, criminal
504	504	record, reputation, or associations are likely to:
505	505	(A) pose a threat to the public interest;
506	506	(B) impede the regulation of sports wagering; or
507	507	(C) promote unfair or illegal activities in the
508	508	conduct of sports wagering;
509	509	(4) the applicant or a key person knowingly fails to
510	510	comply with the provisions of this chapter or any of the
511	511	commission's requirements;
512	512	(5) the applicant or a key person knowingly fails to
513	513	comply with the provisions of this chapter or any of the
514	514	commission's requirements;
515	515	(6) the applicant or a key person was convicted of a
516	516	felony, a crime of moral turpitude, or any criminal offense
517	517	involving dishonesty or breach of trust within the 10 years before
518	518	the submission date of the application;
519	519	(7) the applicant's or a key person's license,
520	520	registration, or permit to conduct sports wagering, other forms of
521	521	gambling activity, or a covered service issued by any other state
522	522	has been revoked; or
523	523	(8) the applicant defaults in payment of any
524	524	obligation or debt due to the state.
525	525	Sec. 2005.103. RETAIL PERMIT. (a) The commission may award
526	526	a retail permit to:
527	527	(1) an authorized sports entity;
528	528	(2) a sports facility that is the primary host of a
529	529	Minor League Baseball, Basketball, Hockey, or Soccer professional
530	530	sports franchise in this state that is affiliated with a sports team
531	531	or a related sports entertainment district;
532	532	(3) a racetrack that is not a Class 1 racetrack as
533	533	defined by Section 2026.102;
534	534	(4) a motorsports racetrack that has a seating
535	535	capacity of at least 5,000 people; or
536	536	(5) a facility operated by the PGA TOUR that is the
537	537	primary host of a PGA TOUR professional golf tournament.
538	538	(b) A person eligible to receive a retail permit under
539	539	Subsection (a) may only hold a retail permit for offering retail
540	540	sports wagering at any approved location by the Commission,
541	541	including:
542	542	(1) the sports facility that the sports team or its
543	543	affiliate leases, subleases, or exclusively or by a joint venture
544	544	with another sports team operates;
545	545	(2) the sports entertainment district related to the
546	546	sports facility;
547	547	(3) a facility owned or exclusively leased by an
548	548	authorized sports entity and approved by the commission; or
549	549	(4) in the case of a facility described by Subsection
550	550	(a)(5), the golf facility or entertainment or resort complex
551	551	related to the golf facility.
552	552	(c) A retail permit holder that is not also an interactive
553	553	sports wagering operator may only conduct sports wagering with
554	554	individuals who are physically present at the location authorized
555	555	by the commission for retail sports wagering. A retail permit
556	556	holder may operate kiosks for sports wagering at locations approved
557	557	by the commission.
558	558	(d) The retail permit holder shall only be permitted to hold
559	559	out its sports wagering platform to the public under one brand. If
560	560	an interactive sports wagering operator permit holder also holds a
561	561	retail permit, the brand offered under the retail permit may be
562	562	different from the brand offered under the interactive sports
563	563	wagering operator permit.
564	564	(e) An applicant for a retail permit shall:
565	565	(1) submit an application to the commission on a form
566	566	prescribed by the commission, containing the information required
567	567	under this section; and
568	568	(2) pay to the commission an application fee of
569	569	$50,000.
570	570	(f) An application submitted under this section must
571	571	include:
572	572	(1) the applicant's background in sports wagering or
573	573	the covered service;
574	574	(2) the applicant's experience in connection with
575	575	sports wagering or other wagering activities in other
576	576	jurisdictions, including the applicant's history and reputation of
577	577	integrity and compliance, as well as a list of all active or lapsed
578	578	permits or licenses for sports wagering or other wagering
579	579	activities (including the reason for any lapse);
580	580	(3) the applicant's written information security
581	581	program, including information concerning information security
582	582	governance and the designation of a chief security officer or
583	583	equivalent (which designation shall be a requirement for issuance
584	584	of a permit);
585	585	(4) the sports wagering brand (maximum of one) under
586	586	which the retail permit holders plans to offer retail sports
587	587	wagering to the public;
588	588	(5) any personal information the commission
589	589	determines by rule should be required concerning the applicant's
590	590	key persons; and
591	591	(6) any other information the commission considers
592	592	necessary.
593	593	(f) The commission shall conduct a background investigation
594	594	on the applicant and key persons as considered necessary by the
595	595	commission. The background investigation must include a credit
596	596	history check, a tax record check, and a criminal history records
597	597	check.
598	598	(g) The commission shall grant or deny a service provider
599	599	permit within 90 days of receipt of a completed application. The
600	600	commission's decision is final and not appealable, except as
601	601	otherwise may be required under state law.
602	602	(h) Notwithstanding any other provision of law, the
603	603	information an applicant submits under this section is considered
604	604	confidential and exempt from public disclosure.
605	605	(i) The following shall constitute the sole grounds for
606	606	denial of a retail permit:
607	607	(1) the commission reasonably believes the applicant
608	608	will be unable to satisfy the duties of a permittee described by
609	609	this chapter;
610	610	(2) the commission reasonably believes that the
611	611	applicant or any of its key persons are not of good character,
612	612	honesty, or integrity;
613	613	(3) the commission reasonably believes that the
614	614	applicant's or any of its key person's prior activities, criminal
615	615	record, reputation, or associations are likely to:
616	616	(A) pose a threat to the public interest;
617	617	(B) impede the regulation of sports wagering; or
618	618	(C) promote unfair or illegal activities in the
619	619	conduct of sports wagering;
620	620	(4) the applicant or a key person knowingly fails to
621	621	comply with the provisions of this chapter or any of the
622	622	commission's requirements;
623	623	(5) the applicant or a key person was convicted of a
624	624	felony, a crime of moral turpitude, or any criminal offense
625	625	involving dishonesty or breach of trust within the 10 years before
626	626	the submission date of the application;
627	627	(6) the applicant's or a key person's license,
628	628	registration, or permit to conduct sports wagering, other forms of
629	629	gambling activity, or a covered service issued by any other state
630	630	has been revoked; or
631	631	(7) the applicant defaults in payment of any
632	632	obligation or debt due to the state.
633	633	(j) An authorized applicant may elect to assign its retail
634	634	permit to a third-party designee to handle all of the applicant's
635	635	sports wagering management and operations. If the applicant makes
636	636	this election, the application and disclosure requirements
637	637	described by this section should be made by the designee rather than
638	638	the applicant, in accordance with procedures determined by the
639	639	commission.
640	640	Sec. 2005.104. PERMIT RENEWAL. (a) A permit issued under
641	641	this chapter shall be valid for:
642	642	(1) if the permit application is submitted by a Class 1
643	643	Racetrack, as defined by Section 2026.102, a sports team or
644	644	affiliate of the sports team, three years after the date of
645	645	issuance; or
646	646	(2) if the permit application is submitted by a
647	647	designee of the sports team or the sports team's affiliate, the
648	648	earlier of:
649	649	(A) three years after the date of issuance; or
650	650	(B) the date of the expiration of any contract
651	651	wager between the sports teams or an affiliate of the sports team
652	652	and the designee of the sports team or affiliate authorizing the
653	653	designee to handle the sports team's or affiliate's sports wagering
654	654	management and operations.
655	655	(b) At least 60 days before the expiration of a permit, the
656	656	permit holder shall submit a renewal application on a form
657	657	prescribed by the commission. The permit holder must include a
658	658	renewal fee of:
659	659	(1) $100,000 for renewal of an interactive sports
660	660	wagering permit;
661	661	(2) $25,000 for renewal of a retail permit; and
662	662	(3) $10,000 for renewal of a service provider permit.
663	663	(c) The commission may deny an application for permit
664	664	renewal if the commission finds grounds for denial set forth in
665	665	Section 2005.101 for an interactive sports wagering permit, Section
666	666	2005.102 for a service provider permit, or Section 2005.103 for a
667	667	retail permit holder.
668	668	SUBCHAPTER D. REQUIREMENTS FOR PERMIT HOLDERS AND OPERATORS
669	669	Sec. 2005.151. DUTIES OF SPORTS WAGERING OPERATORS. (a) A
670	670	sports wagering operator shall ensure that it implement reasonable
671	671	measures:
672	672	(1) to ensure that only persons physically located in
673	673	the state or as otherwise may be authorized by the commission are
674	674	able to place a wager through its sports wagering platform;
675	675	(2) to protect the confidential information of players
676	676	using its sports wagering platform;
677	677	(3) to prevent wagering on prohibited events as set
678	678	forth in this chapter or as otherwise determined by the commission;
679	679	(4) to prevent persons from placing wagers as agents
680	680	or proxies for others;
681	681	(5) to allow persons to restrict themselves from
682	682	placing wagers through its sports wagering platform as set forth in
683	683	this chapter, including sharing, at the person's request, that
684	684	person's request for self-exclusion with the commission for the
685	685	sole purpose of disseminating the request to other sports wagering
686	686	operators;
687	687	(6) to establish procedures to detect suspicious or
688	688	illegal wagering activity, including measures to report suspicious
689	689	or illegal activity to the commission; and
690	690	(7) to provide for the withholding or reporting of
691	691	income tax of players where required by applicable state or federal
692	692	law.
693	693	(b) For three years after a sporting event occurs,
694	694	interactive sports wagering operators must maintain records on:
695	695	(1) all wagers, including the identity of the player,
696	696	the amount and type of wager, the time and location of the wager
697	697	(including IP address if available), and the outcome of the wager;
698	698	and
699	699	(2) suspicious or illegal wagering activity.
700	700	(c) An interactive sports wagering operator must disclose
701	701	the records described in Subsection (b) to the commission upon
702	702	request.
703	703	(d) If a sports governing body has notified the commission
704	704	that real-time information sharing for wagers placed on its
705	705	sporting events is necessary and desirable, sports wagering
706	706	operators must share with that sports governing body or its
707	707	designee in real time, at the account level:
708	708	(1) anonymized information regarding a wager;
709	709	(2) the amount and type of wager;
710	710	(3) the time the wager was place;
711	711	(4) the location of the wager, including the IP
712	712	address if applicable;
713	713	(5) the outcome of the wager; and
714	714	(6) records of abnormal wagering activity.
715	715	(e) A sports governing body may use the information
716	716	described by Subsection (d) solely for integrity purposes. For
717	717	purposes of Subsection (d), "real time" means on a commercially
718	718	reasonable periodic interval, but in any event not less than once
719	719	every 72 hours.
720	720	(f) In advertising its sports wagering operation, a sports
721	721	wagering operator must ensure that its advertisements:
722	722	(1) do not target persons under the age of 21;
723	723	(2) disclose the identity of the sports wagering
724	724	operator;
725	725	(3) provide information about or links to resources
726	726	related to gambling addiction and prevention; and
727	727	(4) are not misleading to a reasonable person.
728	728	Sec. 2005.152. ESTABLISHMENT OF INTERACTIVE ACCOUNTS. (a)
729	729	The sports wagering operator is responsible for verifying the
730	730	identity of a player and ensuring that the player is at least 21
731	731	years of age. This section does not mean that a patron is required
732	732	to have an account to wager with a retail permit holder at the
733	733	retail permit holder's facility.
734	734	(b) A player may not have more than one account with each
735	735	sports wagering operator.
736	736	(c) The following persons are prohibited from the placement
737	737	of sports wagers:
738	738	(1) any person under the age of 21;
739	739	(2) any person who has requested and not revoked
740	740	exclusion from sports wagering under this chapter or who otherwise
741	741	has been adjudicated by law as prohibited from engaging in sports
742	742	wagering;
743	743	(3) any member, officer, or employee of the department
744	744	or the commission;
745	745	(4) any employee or key person of a permit holder, only
746	746	as to the affiliated permittee's sports wagering platform; and
747	747	(5) any participant, including athlete, coach,
748	748	trainer, referee, or other official, and any employee or other
749	749	staff of a participant, in a competition that is the subject of
750	750	sports wagering under this chapter (but only as to the league with
751	751	which the individual is affiliated);
752	752	(6) any employee or other staff of a governing or
753	753	authorizing league or similar sponsoring organization for a
754	754	competition that is the subject of sports wagering under this
755	755	chapter (but only as to the league with which the individual is
756	756	affiliated).
757	757	(d) A sports wagering operator may not be charged with
758	758	violation of Subsection (c)(5) or (6) absent notice or actual
759	759	knowledge that a player is within the scope of those provisions.
760	760	(d) In determining which persons are excluded from placing
761	761	wagers under Subsection (c)(5) or (6), a sports wagering operator
762	762	shall use any list of persons that is provided by the commission.
763	763	(e) A sports wagering account:
764	764	(1) must be established in the name or on behalf of the
765	765	player who is a natural person and may not be in the name of any
766	766	beneficiary, custodian, joint trust, corporation, partnership, or
767	767	any other entity;
768	768	(2) must be established through the sports wagering
769	769	operator's sports wagering platform or a specialized website or
770	770	interface established for that purpose;
771	771	(3) must include terms that:
772	772	(A) prohibit the transfer or sale of an account
773	773	or account balance to another registered player;
774	774	(B) prohibit the use of any virtual private
775	775	network or other technology that may obscure or falsify the
776	776	players' physical location;
777	777	(C) prohibit any form of collusion, cheating, or
778	778	other unlawful activity;
779	779	(D) affirm that the player meets all eligibility
780	780	requirements for registration; and
781	781	(E) authorize the provision of notices and other
782	782	required communications either through a designated mobile or other
783	783	interface or to an electronic mail address designated by the
784	784	player.
785	785	(f) The sports wagering operator may allow for the
786	786	establishment of sports wagering accounts remotely, provided that
787	787	it has in place measures sufficient to verify the age and identity
788	788	of the player.
789	789	(g) A sports wagering operator may suspend or terminate a
790	790	sports wagering account if:
791	791	(1) it is determined that the player has provided any
792	792	false or misleading information in connection with the opening of
793	793	the account or has engaged in cheating or other unlawful conduct;
794	794	(2) the player is or has been barred from placing
795	795	wagers in this state;
796	796	(3) the player is or otherwise becomes ineligible
797	797	under this chapter;
798	798	(4) the sports wagering operator determines that it
799	799	lacks sufficient information to verify the age and eligibility of
800	800	the player; or
801	801	(5) for any other reason at the sole discretion of the
802	802	sports wagering operator, provided that it is not on the basis of a
803	803	player's actual or believed sex, gender identity, race, religion,
804	804	national origin, sexual orientation, or other lawfully protected
805	805	characteristic.
806	806	(h) In the event of termination for any reason other than
807	807	set forth in Subsection (g)(1), the player shall be provided a
808	808	timely ability to access and withdraw any funds remaining in the
809	809	sports wagering account.
810	810	Sec. 2005.152. "LAYOFF" WAGERING. Nothing in this
811	811	subchapter is intended to prohibit sports wagering operators from
812	812	engaging in risk management measures commonly known as "layoff"
813	813	wagering in the ordinary course of business.
814	814	SUBCHAPTER E. COMPETITION INTEGRITY; PROHIBITED EVENTS
815	815	Sec. 2005.201. PROHIBITION ON YOUTH SPORTS WAGERING. No
816	816	person shall place or accept a wager on youth sports.
817	817	Sec. 2005.202. MONITORING PROGRAM. Before the commencement
818	818	of sports wagering under this chapter, the commission shall adopt
819	819	rules and a monitoring program sufficient to protect the integrity
820	820	of all sports wagering under this chapter and that provides for a
821	821	sharing of suspicious activities on wagering with sports wagering
822	822	operators and regulators in other states.
823	823	Sec. 2005.203. AUTHORITY TO SUSPEND WAGERING. The
824	824	commission, as necessary to protect the integrity of a competition
825	825	or its participants or as set forth in Section 2005.204, shall have
826	826	the authority to suspend wagering on any competition, category or
827	827	type of competition, any other aspect of a competition.
828	828	Sec. 2005.204. LIMITATIONS ON CERTAIN SPORTS WAGERING FOR
829	829	GOOD CAUSE. (a) If a sports governing body believes that the type,
830	830	form, or category of sports wagering on that sports governing
831	831	body's sporting events has the potential to undermine the integrity
832	832	or perceived integrity of the sports governing body or its sporting
833	833	events, the sports governing body may submit to the commission in
834	834	writing a request to restrict, limit, or exclude a certain type,
835	835	form, or category of sports wagering for that sports governing
836	836	body's sporting events. The sports governing body shall provide the
837	837	request in a form and manner as the commission may reasonably
838	838	require.
839	839	(b) The commission may request comment from sports wagering
840	840	operators on all requests described by Subsection (a) before
841	841	granting the request.
842	842	(c) After giving due consideration to all comments received
843	843	under Subsection (b), the commission shall, upon a demonstration of
844	844	good cause from the requestor that the type, form, or category of
845	845	sports wagering is likely to undermine the perceived integrity or
846	846	the integrity of sports governing body or its sporting events,
847	847	grant the request.
848	848	(d) If feasible, the commission must respond to a request
849	849	under Subsection (a) concerning a particular event before the start
850	850	of the event. If it is not feasible to respond before the start of
851	851	the event, the commission must respond no later than seven days
852	852	after the request is made.
853	853	(e) If the commission determines that the requestor under
854	854	Subsection (a) is more likely than not to prevail in successfully
855	855	demonstrating good cause for its request, the commission may
856	856	provisionally grant the request until the commission makes a final
857	857	determination as to whether the requestor has demonstrated good
858	858	cause. Absent a provisional grant by the commission, a sports
859	859	wagering operator may continue to offer sports wagering on sporting
860	860	events that are the subject of a request under this section during
861	861	the pendency of the commission's consideration of the request.
862	862	Sec. 2005.205. COOPERATION WITH INVESTIGATIONS. The
863	863	commission and sports wagering operators shall cooperate with
864	864	investigations conducted by sports governing bodies or law
865	865	enforcement agencies, including by providing or facilitating the
866	866	provision of account-level wagering information and audio or video
867	867	files relating to persons placing wagers.
868	868	Sec. 2005.206. PROMPT REPORTING TO COMMISSION. (a) A
869	869	sports wagering operator must promptly report to the commission any
870	870	information relating to:
871	871	(1) criminal or disciplinary proceedings commenced
872	872	against the sports wagering operator in connection with its
873	873	operations;
874	874	(2) abnormal wagering activity or patterns that may
875	875	indicate a concern with the integrity of a sporting event;
876	876	(3) any potential breach of the relevant sports
877	877	governing body's internal rules and codes of conduct pertaining to
878	878	sports wagering;
879	879	(4) any other conduct that corrupts a wagering outcome
880	880	of a sporting event for purposes of financial gain, including match
881	881	fixing; and
882	882	(5) suspicious or illegal wagering activities,
883	883	including use of funds derived from illegal activity, wagers to
884	884	conceal or launder funds derived from illegal activity, using
885	885	agents to place wagers, and using false identification.
886	886	(b) Sports wagering operators must promptly report
887	887	information relating to conduct described in Subsections (a)(2),
888	888	(3), and (4) to the relevant sports governing body.
889	889	Sec. 2005.207. CONFIDENTIALITY OF INFORMATION. (a) A
890	890	sports wagering operator must maintain the confidentiality of
891	891	information provided by a sports governing body to the operator,
892	892	unless disclosure is required by this chapter, the commission,
893	893	other law, or court order.
894	894	(b) The commission, and sports wagering operators must
895	895	maintain the confidentiality of all information relating to conduct
896	896	described in Section 2005.206(a)(2), (3), and (4), unless
897	897	disclosure is required by this chapter, other law, or court order,
898	898	or as authorized by the relevant sports governing body.
899	899	(c) Nothing in this chapter prohibits the commission or a
900	900	sports wagering operator from making a confidential disclosure to
901	901	another sports wagering operator, a sports governing body, a sports
902	902	wagering regulating entity, a law enforcement entity, or other
903	903	party for the purpose of preventing or investigating conduct that
904	904	corrupts or could corrupt the outcome of a sporting event,
905	905	including match fixing.
906	906	Sec. 2005.208. DATA SOURCES. (a) Except as provided by
907	907	Subsection (c), a sports wagering operator may use any data source
908	908	to determine the results of sports wagers, provided that the data is
909	909	not obtained directly or indirectly from live event attendees who
910	910	collect the data in violation of the terms of admittance to an event
911	911	or through automated computer programs that compile data from the
912	912	internet in violation of the terms of service of the relevant
913	913	website or other internet platform.
914	914	(b) A sports wagering operator may use any data source for
915	915	determining the result of a tier one sports wager.
916	916	(c) A sports governing body may notify the commission that
917	917	it desires sports wagering operators to use official league data to
918	918	settle tier two sports wagers. A notification under this subsection
919	919	must be made in accordance with forms and procedures prescribed by
920	920	the commission. The commission shall notify each sports wagering
921	921	operator of the sports governing body's notification not later than
922	922	the fifth day after the department's receipt of the notification.
923	923	If a sports governing body does not notify the commission of its
924	924	desire to supply official league data, a sports wagering operator
925	925	may use any data source for determining the result of a tier two
926	926	sports wager on a professional sporting event of the league
927	927	governed by the sports governing body subject to the limitations of
928	928	Subsection (a).
929	929	(d) Not later than the sixtieth day after the commission
930	930	notifies each sports wagering operator as required by Subsection
931	931	(c), a sports wagering operator must use only official league data
932	932	to determine the results of tier two sports wagers on professional
933	933	sports events of the league governed by the sports governing body,
934	934	unless any of the following apply:
935	935	(1) the sports governing body or its applicable
936	936	designee is unable to provide a feed, on commercially reasonable
937	937	terms, of official league data to determine the results of a tier
938	938	two sports wager, in which case sports wagering operators may use
939	939	any data source for determining the results of tier two sports
940	940	wagers until the data feed becomes available on commercial
941	941	reasonable terms; or
942	942	(2) a sports wagering operator demonstrates to the
943	943	commission that the sports governing body has not provided or
944	944	offered to provide a feed of official league data to the sports
945	945	wagering operator on commercially reasonable terms, according to
946	946	criteria described in Subsection (e).
947	947	(e) The commission may consider the following information
948	948	in determining whether a sports governing body has provided or
949	949	offered to provide a feed of official league data on commercially
950	950	reasonable terms, provided that no single factor on its own will be
951	951	deemed conclusive evidence that official league data is being
952	952	offered on terms that are not commercially reasonable:
953	953	(1) the availability of a sports governing body's
954	954	official league data for tier two sports wagers from one or more
955	955	authorized source;
956	956	(2) market information regarding the purchase, in
957	957	Texas and in other states, by sports wagering operators of data for
958	958	all sports from all authorized sources;
959	959	(3) the nature and quantity of the data, including the
960	960	quality and complexity of the process used for collecting the data;
961	961	and
962	962	(4) any other information the commission considers
963	963	relevant.
964	964	(f) During any time period in which the commission is
965	965	determining whether official league data is available on
966	966	commercially reasonable terms under Subsections (d) and (e), a
967	967	sports wagering operator may use any data source for determining
968	968	the results of any tier two sports wagers subject to the limitations
969	969	of Subsection (a). The commissioner shall make a determination
970	970	under Subsections (d) and (e) not later than the 60th day after a
971	971	sports wagering operator notifies the commission that it desires to
972	972	demonstrate that a sports governing body has not provided or
973	973	offered to provide a feed of official league data to the sports
974	974	wagering operator on commercially reasonable terms. If the
975	975	commission determines that the requestor is more likely than not to
976	976	fail in successfully making the demonstration under this
977	977	subsection, the commission may provisionally deny the request until
978	978	the commission makes a final determination as to whether the
979	979	requestor has made the demonstration.
980	980	Sec. 2005.209. COMMERCIAL AGREEMENTS. Any sports governing
981	981	body may enter into a commercial agreement with a sports wagering
982	982	operator under which the sports governing body may share in the
983	983	amount wager or revenues derived from sports wagering on the sports
984	984	governing body's sporting events. A sports governing body is not
985	985	required to obtain a permit or other approval from the commission to
986	986	lawfully accept these amounts or revenues.
987	987	SUBCHAPTER F. TAXES
988	988	Sec. 2005.251. IMPOSITION OF TAX. (a) A sports wagering
989	989	operator shall pay a tax of ten percent on the sports wagering
990	990	operator's adjusted gross revenue.
991	991	(b) The tax imposed under this section is due monthly to the
992	992	comptroller and shall be remitted on or before the 20th day of the
993	993	next succeeding calendar month. If the sports wagering operator's
994	994	account necessitates corrections to a previously remitted tax, it
995	995	shall document the corrections when it pays the following month's
996	996	taxes.
997	997	(c) If the sports wagering operator's adjusted gross
998	998	revenue for a month is a negative amount, the sports wagering
999	999	operator may carry over the negative amount to a return filed for a
1000	1000	subsequent month and deduct this amount from its tax liability for
1001	1001	the subsequent month, provided that the amount may not be carried
1002	1002	over and deducted against tax liability in any month that is more
1003	1003	than 12 months after the month in which the amount was accrued.
1004	1004	(d) Any taxes collected under this section and any fees
1005	1005	collected by the commission under this chapter that are in excess of
1006	1006	what the department and commission need to implement this chapter
1007	1007	shall be dedicated to providing special education and related
1008	1008	services to eligible students in addition to and as a supplement to
1009	1009	the funding provided under the Texas Education Code, Section
1010	1010	48.102. The special education allotment advisory committee
1011	1011	established under the Texas Education Code, Section 48.1021, shall
1012	1012	make recommendations for the use of these supplemental fees, and
1013	1013	the commissioner by rule shall determine the use of these
1014	1014	supplemental funds based on the advisory committee's
1015	1015	recommendation.
1016	1016	Sec. 2005.252. NO OTHER TAXATION PERMITTED. A sports
1017	1017	wagering operator may not be subjected to an excise tax, license
1018	1018	tax, permit tax, privilege tax, amusement tax, sales tax, or
1019	1019	occupation tax that is imposed upon licensees by the state or any
1020	1020	political subdivision of the state, except as provided by this
1021	1021	chapter.
1022	1022	SUBCHAPTER G. PENALTIES
1023	1023	Sec. 2005.301. CRIMINAL PENALTIES. (a) A person commits an
1024	1024	offense if the person knowingly offers or engages in sports
1025	1025	wagering in violation of this chapter. An offense under this
1026	1026	subsection is a Class B misdemeanor.
1027	1027	(b) A person commits an offense if the person knowingly
1028	1028	attempts to suborn, collude, or otherwise conspire to impermissibly
1029	1029	influence the outcome of any competition or aspect of any
1030	1030	competition that is the subject of sports wagering under this
1031	1031	chapter. An offense under this subsection is a state jail felony.
1032	1032	(c) A person commits an offense if the person knowingly or
1033	1033	willfully falsifies, conceals, or misrepresents a material fact or
1034	1034	knowingly or willfully makes a false, fictitious, or fraudulent
1035	1035	statement or representation in any application under Section
1036	1036	2005.101 or Section 2005.102. An offense under this section is a
1037	1037	state jail felony.
1038	1038	Sec. 2005.302. CIVIL PENALTIES. If the commission
1039	1039	determines that a permit holder has intentionally violated any
1040	1040	material provision of this chapter or a rule adopted by the
1041	1041	commission under this chapter, the commission, after providing at
1042	1042	least 15 days notice and a hearing, may:
1043	1043	(1) suspend or revoke the permit holder's permit; and
1044	1044	(2) impose a monetary penalty not to exceed $10,000
1045	1045	for each violation.
1046	1046	SECTION 3. Section 47.01, Penal Code, is amended by
1047	1047	amending Subdivision (1) and adding Subdivision (2-a) to read as
1048	1048	follows:
1049	1049	(1) "Bet" means an agreement to win or lose something
1050	1050	of value solely or partially by chance. A bet does not include:
1051	1051	(A) contracts of indemnity or guaranty, or life,
1052	1052	health, property, or accident insurance;
1053	1053	(B) an offer of a prize, award, or compensation
1054	1054	to the actual contestants or participants in a bona fide contest for
1055	1055	the determination of skill, speed, strength, or endurance or to the
1056	1056	owners of animals, vehicles, watercraft, or aircraft entered in a
1057	1057	contest; [or]
1058	1058	(C) an offer of merchandise, with a value not
1059	1059	greater than $25, made by the proprietor of a bona fide carnival
1060	1060	contest conducted at a carnival sponsored by a nonprofit religious,
1061	1061	fraternal, school, law enforcement, youth, agricultural, or civic
1062	1062	group, including any nonprofit agricultural or civic group
1063	1063	incorporated by the state before 1955, if the person to receive the
1064	1064	merchandise from the proprietor is the person who performs the
1065	1065	carnival contest; or
1066	1066	(D) an offer of a prize, award, or compensation
1067	1067	to the participants in a fantasy or simulated sports game or
1068	1068	contest.
1069	1069	(2-a) "Fantasy or simulated sports game or contest"
1070	1070	means a bona fide contest, reflecting the knowledge and skill of the
1071	1071	participants, in which:
1072	1072	(A) participants assemble a fictional sports
1073	1073	team composed of actual professional or amateur athletes to compete
1074	1074	against other fictional sports teams assembled by other
1075	1075	participants for a prize, award, or compensation;
1076	1076	(B) the value of any prize, award, or
1077	1077	compensation is established in advance of the beginning of the game
1078	1078	or contest;
1079	1079	(C) the outcome of the game or contest is
1080	1080	determined by the accumulated statistical performances of the
1081	1081	individual athletes on a participant's fictional sports team; and
1082	1082	(D) the outcome of the game or contest is not
1083	1083	based solely on the score, point spread, or performance of a single
1084	1084	professional or amateur team or athlete.
1085	1085	SECTION 4. Section 47.02(c), Penal Code, is amended to read
1086	1086	as follows:
1087	1087	(c) It is a defense to prosecution under this section that
1088	1088	the actor reasonably believed that the conduct:
1089	1089	(1) was permitted under Chapter 2001, Occupations
1090	1090	Code;
1091	1091	(2) was permitted under Chapter 2002, Occupations
1092	1092	Code;
1093	1093	(3) was permitted under Chapter 2004, Occupations
1094	1094	Code;
1095	1095	(4) was permitted under Chapter 2005, Occupations
1096	1096	Code;
1097	1097	(5) consisted entirely of participation in the state
1098	1098	lottery authorized by the State Lottery Act (Chapter 466,
1099	1099	Government Code);
1100	1100	(6) [(5)] was permitted under Subtitle A-1, Title 13,
1101	1101	Occupations Code (Texas Racing Act); or
1102	1102	(7) [(6)] consisted entirely of participation in a
1103	1103	drawing for the opportunity to participate in a hunting, fishing,
1104	1104	or other recreational event conducted by the Parks and Wildlife
1105	1105	Department.
1106	1106	SECTION 5. Section 47.09(a), Penal Code, is amended to read
1107	1107	as follows:
1108	1108	(a) It is a defense to prosecution under this chapter that
1109	1109	the conduct:
1110	1110	(1) was authorized under:
1111	1111	(A) Chapter 2001, Occupations Code;
1112	1112	(B) Chapter 2002, Occupations Code;
1113	1113	(C) Chapter 2004, Occupations Code;
1114	1114	(D) Chapter 2005, Occupations Code;
1115	1115	(E) Subtitle A-1, Title 13, Occupations Code
1116	1116	(Texas Racing Act); or
1117	1117	(F) [(E)] Chapter 280, Finance Code;
1118	1118	(2) consisted entirely of participation in the state
1119	1119	lottery authorized by Chapter 466, Government Code; or
1120	1120	(3) was a necessary incident to the operation of the
1121	1121	state lottery and was directly or indirectly authorized by:
1122	1122	(A) Chapter 466, Government Code;
1123	1123	(B) the lottery division of the Texas Lottery
1124	1124	Commission;
1125	1125	(C) the Texas Lottery Commission; or
1126	1126	(D) the director of the lottery division of the
1127	1127	Texas Lottery Commission.
1128	1128	SECTION 6. Not later than the 90th day after the effective
1129	1129	date of this Act, the Texas Commission on Licensing and Regulation
1130	1130	shall publish applications and adopt rules allowing for the
1131	1131	submission of applications for interactive sports wagering
1132	1132	permits, service provider permits, and retail permits. The initial
1133	1133	application period shall close 45 days after the publication of the
1134	1134	application and adoption of rules. The commission shall complete
1135	1135	the review of all applications received and award interactive
1136	1136	sports wagering permits, service provider permits, and retail
1137	1137	permits not later than the 30th day after the close of the initial
1138	1138	application period. Additional available permits may be issued on a
1139	1139	rolling basis thereafter.
1140	1140	SECTION 7. The change in law made by this Act applies only
1141	1141	to an offense committed on or after the effective date of this Act.
1142	1142	An offense committed before the effective date of this Act is
1143	1143	governed by the law in effect on the date the offense was committed,
1144	1144	and the former law is continued in effect for that purpose. For
1145	1145	purposes of this section, an offense was committed before the
1146	1146	effective date of this Act if any element of the offense occurred
1147	1147	before that date.
1148	1148	SECTION 8. This Act takes effect January 1, 2022, but only
1149	1149	if the constitutional amendment authorizing the legislature to
1150	1150	legalize sports wagering in this state is approved by the voters. If
1151	1151	that amendment is not approved by the voters, this Act has no
1152	1152	effect.