By: Kuempel H.B. No. 4237
A BILL TO BE ENTITLED
AN ACT
relating to the authorization, licensing, and regulation of casino
gaming in this state and the creation, powers, and duties of the
Texas Gaming Commission; imposing and authorizing administrative
and civil penalties; imposing a tax; imposing and authorizing fees;
requiring occupational licenses; creating criminal offenses;
making an appropriation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 13, Occupations Code, is amended by adding
Subtitle E to read as follows:
SUBTITLE E. CASINO GAMING REGULATED BY TEXAS GAMING COMMISSION
CHAPTER 2201. GENERAL PROVISIONS; TEXAS GAMING COMMISSION
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 2201.001. DEFINITIONS. In this subtitle:
(1) "Affiliate" means a person who, directly or
indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with another person. A
person is considered to control a company if the person
beneficially owns more than a five percent equity interest in the
company under the beneficial ownership rules adopted by the
commission.
(2) "Applicant" means a person who has applied for a
casino owner's license, a casino operator's license, an
occupational license, a manufacturer's license, a casino service
license, or a qualification to hold an equity interest in a casino
owner license holder who has applied for the approval of any act or
transaction for which approval is required or allowed under this
subtitle.
(3) "Associated equipment" means any equipment,
including a mechanical, electromechanical, or electronic
contrivance, component, or machine, used in connection with gaming
or with any game that would not otherwise be classified as a gaming
device. The term includes dice, playing cards, links connecting
progressive slot machines, equipment affecting the proper
reporting of gross gaming revenue, computerized systems or software
for monitoring slot machines, and devices for weighing or counting
money.
(4) "Casino" means a facility at which gambling games
are conducted for profit, as authorized by Chapters 2202 and 2203.
(5) "Casino gaming," "casino game," or "gambling
game":
(A) means any game or similar activity that
involves the making of a bet, as defined by Section 47.01, Penal
Code, for consideration and includes a banking or percentage game
played with cards, dice, or a mechanical, electromechanical, or
electronic device or machine for money, property, checks, credit,
or a representative of value, including table games such as
roulette, keno, twenty-one, blackjack, craps, poker, chuck-a-luck
(dai shu), wheel of fortune, chemin de fer, baccarat, pai gow, slot
machine, any other electronic game of chance, and any other table
game or device approved by the commission; and
(B) does not include:
(i) bingo authorized under Chapter 2001;
(ii) charitable raffles authorized under
Chapter 2002;
(iii) the state lottery conducted under
Chapter 466, Government Code; or
(iv) the making of a bet that:
(a) occurs in a private place, as
defined by Section 47.01, Penal Code;
(b) in connection with, no person
receives any economic benefit other than personal winnings; and
(c) except for the advantage of skill
or luck, involves risks of losing and chances of winning that are
the same for all participants.
(6) "Casino operator" means a person other than the
casino owner license holder who contractually agrees to provide
operational and managerial services for the operation of a casino
on behalf of the casino owner license holder in return for receiving
a payment based wholly or partly on profits or receipts from the
casino.
(7) "Casino operator's license" or "operator's
license" means a license issued under Section 2202.101.
(8) "Casino owner's license" or "owner's license"
means a license issued under Section 2202.052.
(9) "Casino service" means the provision of goods or
services, including security service and gaming schools, to a
person holding a casino owner's or operator's license under this
subtitle, other than a service requiring a manufacturer's license.
(10) "Casino service license" means a license issued
under Section 2202.152.
(11) "Commission" means the Texas Gaming Commission.
(12) "Company" means a corporation, partnership,
limited partnership, trust, association, joint stock company,
joint venture, limited liability company, or other form of business
organization. The term does not include a sole proprietorship or
natural person.
(13) "Destination resort" means a mixed-use
development consisting of a combination of various tourism
amenities and facilities, including hotels, restaurants, meeting
facilities, attractions, entertainment facilities, shopping
centers, and casino gaming facilities.
(14) "Director" means a member of the board of
directors of a corporation and a person performing similar
functions with respect to a company other than a corporation.
(15) "Equity interest" means a proprietary interest,
right, or claim allowing the holder to vote with respect to matters
of organizational governance or participate in the profits and
residual assets of a company, including common and preferred stock
in a corporation, a general or limited partnership interest in a
partnership, a similar interest in any other form of business
organization, and a warrant, right, or similar interest to
subscribe for a proprietary right or claim or that is convertible
into a proprietary right or claim, with or without the payment of
additional consideration.
(16) "Executive director" means the executive
director of the commission.
(17) "Gaming agreement" means an agreement authorized
under Chapter 2202 or 2203 between this state and a federally
recognized Indian tribe with Indian lands in this state under which
this state allows the tribe to conduct limited gaming activities
authorized under Chapter 2202 or 2203 or applicable federal law.
(18) "Gaming-related business" means any business
engaged in the service or support of gaming activities regulated
under this subtitle or commission rule.
(19) "Gaming device" means a mechanical,
electromechanical, or electronic contrivance, component, or
machine used in connection with casino gaming or a gambling game
that affects the result of a wager by determining win or loss. The
term includes a system for processing information that can alter
the normal criteria of random selection, affect the operation of a
game, or determine the outcome of a game.
(20) "Gaming employee":
(A) means an individual directly involved in the
operation or conduct of casino gaming in a casino performing a
service in a capacity that the commission finds appropriate for
occupational licensing under Section 2202.102 and includes:
(i) a boxman, a cashier, change personnel,
counting room personnel, a dealer, a floor person, a host empowered
to extend credit or complimentary services, a keno runner, a keno
writer, a machine mechanic, or security personnel;
(ii) a shift or pit boss or a supervisor or
manager involved in gaming activities;
(iii) accounting or internal auditing
personnel directly involved in recordkeeping or the examination of
records generated from gaming activities; and
(iv) a junketeer or other independent agent
whose compensation is based on the amount of money a patron wagers
or loses or who is paid per patron more than the price of admission;
and
(B) does not include bartenders, cocktail
waitresses, or other individuals engaged exclusively in preparing
or serving food or beverages or individuals providing nominal,
complimentary, or maintenance services.
(21) "Gaming position" means a designated place for a
person to engage in casino gaming at a table game or slot machine.
(22) "Gross gaming revenue":
(A) means the total amount of the following, less
the sum of all money paid as losses to patrons, the amounts paid to
purchase from independent financial institutions annuities to fund
losses paid to patrons, and the items made deductible as losses
under Section 2202.303:
(i) money paid to an owner license holder
from players of gambling games;
(ii) money received by an owner license
holder in payment for credit extended by the owner license holder to
a patron for the purposes of gaming; and
(iii) compensation received by an owner
license holder for conducting any gambling game in which the
license holder is not a party to a wager; and
(B) does not include:
(i) counterfeit money or tokens;
(ii) coins of other countries that are
received in slot machines or gaming devices;
(iii) cash taken in fraudulent acts
perpetrated against an owner's license holder for which the holder
is not reimbursed; or
(iv) cash received as entry fees for
contests or tournaments in which the patrons compete for prizes.
(23) "Hearing examiner" means a person authorized by
the commission to conduct hearings.
(24) "Indian lands" means land that was held in trust
by the United States on January 1, 1998, for the benefit of the
Indian tribe pursuant to the Ysleta del Sur Pueblo and Alabama and
Coushatta Indian Tribes of Texas Restoration Act (Pub. L.
No. 100-89) or on which gaming is permitted under the Indian Gaming
Regulatory Act (18 U.S.C. Section 1166 et seq. and 25 U.S.C. Section
2701 et seq.).
(25) "Institutional investor" means a person, other
than a state or federal government pension plan, that meets the
requirements of a qualified institutional buyer, as that term is
defined by 17 C.F.R. Section 230.144A and is:
(A) a bank as defined by Section 3(a)(6),
Securities Exchange Act of 1934 (15 U.S.C. Section 78c);
(B) an insurance company as defined by Section
2(a)(17), Investment Company Act of 1940 (15 U.S.C. Section 80a-2);
(C) an investment company registered under
Section 8, Investment Company Act of 1940 (15 U.S.C. Section
80a-8);
(D) an investment adviser registered under
Section 203, Investment Advisers Act of 1940 (15 U.S.C. Section
80b-3);
(E) a collective trust fund as defined by Section
3(c)(11), Investment Company Act of 1940 (15 U.S.C. Section 80a-3);
(F) an employee benefit plan or pension fund that
is subject to the Employee Retirement Income Security Act of 1974
(29 U.S.C. Section 1001 et seq.), excluding an employee benefit
plan or pension fund sponsored by a publicly traded corporation
registered with the commission;
(G) a state or federal government pension plan;
(H) a group composed entirely of persons
specified in Paragraphs (A)-(G); or
(I) any other person the commission determines
for reasons consistent with the policies expressed in Section
2202.001.
(26) "Key executive" means a corporation's directors
and executive officers, a partnership's general partners, a trust's
trustee, a joint venture's managing venturers, and each person
possessing similar responsibilities and authorities in any other
form of business organization.
(27) "License holder" means a person who holds a
license issued by the commission.
(28) "Limited casino gaming" means casino gaming in a
licensed facility such as a Class II or Class III casino that is
limited to not more than 1250 gaming positions, of which not more
than 25 percent may be at table games.
(29) "Manufacturer's license" means a license issued
under Section 2202.151.
(30) "Metropolitan statistical area" means a
metropolitan statistical area designated by the United States
Office of Management and Budget.
(31) "Credit instrument" means a writing that
evidences a gaming debt owed to a casino owner license holder at the
time the debt is created, and includes any writing taken in
consolidation, redemption, or payment of a previous credit
instrument.
(32) "Occupational license" means a license issued
under Section 2202.102.
(33) "Pari-mutuel wagering" has the meaning assigned
by Section 2021.003.
(34) "Player" means a person who contributes any part
of the consideration to play a gambling game. Consideration does
not include a separate fee payable in order to wager.
(35) "Principal manager" means a person who, as
determined under the rules of the commission, holds or exercises
managerial, supervisory, or policy-making authority over the
management or operation of a gaming activity or casino service that
in the judgment of the commission warrants the occupational
licensing as a principal manager for the protection of the public
interest. The term includes a key executive of a license holder that
is a company.
(36) "Slot machine" means a mechanical, electrical, or
other device or machine that, on insertion of a coin, token, or
similar object or on payment of consideration, is available to play
or operate, the play or operation of which, wholly or partly by the
element of chance, may entitle the player operating the machine to
receive or deliver to the player a payment for winnings in the form
of cash, premiums, merchandise, tokens, or any other thing of
value. The term does not include any electronic, electromechanical,
or mechanical contrivance designed, made, and adapted solely for
bona fide amusement purposes if the contrivance rewards the player
exclusively with noncash merchandise prizes, toys, or novelties, or
a representation of value redeemable for those items, that have a
wholesale value available from a single play of the game or device
of not more than 10 times the amount charged to play the game or
device once or $5, whichever is less.
(37) "Sports event" means:
(A) a football, basketball, baseball, or similar
game;
(B) a boxing or martial arts match;
(C) a horse or dog race on which pari-mutuel
wagering is authorized by law; or
(D) any other event designated by the commission.
Sec. 2201.002. APPLICATION OF SUNSET ACT. (a) The Texas
Gaming Commission is subject to Chapter 325, Government Code (Texas
Sunset Act). Unless continued in existence as provided by that
chapter, the commission is abolished September 1, 2031.
(b) On the date the commission is abolished under Subsection
(a), the following statutes are repealed:
(1) this chapter;
(2) Chapter 2202; and
(3) Chapter 2203.
Sec. 2201.003. REFERENCES TO LICENSE INCLUDE CERTIFICATE OF
REGISTRATION, FINDING OF SUITABILITY, OR OTHER APPROVAL. A
reference in this subtitle to a license applies to a certificate of
registration, finding of suitability, or other affirmative
regulatory approval provided under this subtitle, other law, or
commission rule, unless otherwise expressly provided by this
subtitle, another state or federal law, or commission rule.
Sec. 2201.004. EXEMPTION FROM TAXATION. A political
subdivision of this state may not impose:
(1) a tax on the payment of a prize under Chapter 2203;
(2) a tax, fee, or other assessment on consideration
paid to play a gambling game authorized by this subtitle; or
(3) a tax or fee on attendance at or admission to a
casino authorized by this subtitle unless specifically authorized
by statute.
SUBCHAPTER B. TEXAS GAMING COMMISSION
Sec. 2201.051. COMMISSION; MEMBERSHIP. (a) The Texas
Gaming Commission is composed of five members appointed by the
governor with the advice and consent of the senate.
(b) Appointments to the commission shall be made without
regard to race, color, disability, sex, religion, age, or national
origin.
Sec. 2201.052. QUALIFICATIONS OF COMMISSION MEMBERS. To be
eligible for appointment to the commission, a person:
(1) must be a citizen of the United States;
(2) must have resided in this state for the two years
preceding the date of the person's appointment;
(3) must submit a financial statement that contains
the information required by Chapter 572, Government Code;
(4) may not own a financial or other interest in an
entity engaged in the conduct of casino gaming or the provision of
casino services, or in a security issued by that entity, or be
related within the second degree by affinity or the third degree by
consanguinity, as determined under Chapter 573, Government Code, to
an individual who owns such a financial or other interest or
security;
(5) may not be an applicant for or holder of a license
under a law administered by the commission or hold an equity
interest in an owner license holder requiring qualification under
Section 2202.060;
(6) may not be a member of the governing body of a
political subdivision of this state; and
(7) may not hold an elective office or be an officer or
official of a political party.
Sec. 2201.053. MEMBERSHIP AND EMPLOYEE RESTRICTIONS. (a)
In this section, "Texas trade association" means a cooperative and
voluntarily joined association of business or professional
competitors in this state designed to assist its members and its
industry or profession in dealing with mutual business or
professional problems and in promoting their common interest.
(b) A person may not be a commission member or an employee of
the commission employed in a "bona fide executive, administrative,
or professional capacity," as that phrase is used for purposes of
establishing an exemption to the overtime provisions of the federal
Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.) if:
(1) the person is an officer, employee, manager, or
paid consultant of a Texas trade association in the field of gaming;
or
(2) the person's spouse is an officer, manager, or paid
consultant of a Texas trade association in the field of gaming.
(c) A person may not be a commission member or act as general
counsel to the commission if the person is required to register as a
lobbyist under Chapter 305, Government Code, because of the
person's activities for compensation on behalf of a profession
related to the operation of the commission.
Sec. 2201.054. TERMS; VACANCIES. (a) Members of the
commission serve staggered six-year terms, with the term or terms
of one or two members expiring February 1 of each odd-numbered year.
(b) The governor shall fill a vacancy in a position on the
commission for the remainder of the unexpired term.
Sec. 2201.055. PRESIDING OFFICER. The governor shall
designate a commission member as presiding officer of the
commission to serve in that capacity at the pleasure of the
governor.
Sec. 2201.056. MEETINGS; OFFICIAL RECORD. (a) The
commission shall meet not less than six times each year.
(b) The commission may meet at other times at the call of the
presiding officer or as provided by commission rule.
(c) The commission shall keep an official record of all
commission meetings and proceedings.
Sec. 2201.057. GROUNDS FOR REMOVAL. (a) It is a ground for
removal from the commission that a member:
(1) does not have at the time of taking office the
qualifications required by Section 2201.052;
(2) does not maintain during service on the commission
the qualifications required by Section 2201.052;
(3) is ineligible for membership under Section
2201.053;
(4) cannot, because of illness or disability,
discharge the member's duties for a substantial part of the member's
term; or
(5) is absent from more than half of the regularly
scheduled commission meetings that the member is eligible to attend
during a calendar year without an excuse approved by a majority vote
of the commission.
(b) The validity of an action of the commission is not
affected by the fact that it is taken when a ground for removal of a
commission member exists.
(c) If the executive director or any other commission member
has knowledge that a potential ground for removal of a commission
member exists, the executive director shall notify the presiding
officer of the commission of the potential ground for removal. The
presiding officer shall then notify the governor and the attorney
general that a potential ground for removal exists. If the
potential ground for removal involves the presiding officer, the
executive director shall notify the other commission members, the
governor, and the attorney general that a potential ground for
removal exists.
Sec. 2201.058. TRAINING. (a) A person who is appointed to
and qualifies for office as a commission member may not vote,
deliberate, or be counted as a member in attendance at a meeting of
the commission until the person completes a training program that
complies with this section.
(b) The training program must provide the person with
information regarding:
(1) this subtitle and other laws related to casino
gaming or gambling regulated by the commission;
(2) the commission's programs, functions, rules, and
budget;
(3) the results of the most recent formal audit of the
commission;
(4) the requirements of laws relating to open
meetings, public information, administrative procedure, and
conflict of interest; and
(5) any applicable ethics policies adopted by the
commission or the Texas Ethics Commission.
(c) A person appointed to the commission is entitled to
reimbursement, as provided by the General Appropriations Act, for
travel expenses incurred in attending the training program
regardless of whether the attendance at the program occurs before
or after the person qualifies for office.
Sec. 2201.059. QUALIFICATIONS AND STANDARDS OF CONDUCT
INFORMATION. The executive director or the executive director's
designee shall provide to commission members, as often as
necessary, information regarding their:
(1) qualifications for office under this chapter; and
(2) responsibilities under applicable laws relating
to standards of conduct for state officers.
Sec. 2201.060. BOND. (a) Before assuming the duties of
office, a commission member must execute a bond in the amount of
$25,000 payable to the state and conditioned on the member's
faithful performance of the member's duties of office.
(b) The bond must be approved by the governor.
(c) The cost of the bond shall be paid by the commission.
Sec. 2201.061. PROHIBITION OF CERTAIN ACTIVITIES. (a) A
commission member may not:
(1) use the member's official authority to affect the
result of an election or nomination for public office; or
(2) directly or indirectly coerce, attempt to coerce,
command, or advise a person to pay, lend, or contribute anything of
value to another person for political purposes.
(b) A commission member or the parent, spouse, or child of a
commission member may not solicit or accept employment from a
license holder under a law administered by the commission or from an
applicant for a license before the second anniversary of the date
the commission member's service on the commission ends.
Sec. 2201.062. APPLICATION OF FINANCIAL DISCLOSURE LAW.
For purposes of Chapter 572, Government Code, a commission member
and the executive director are appointed officers of a major state
agency.
Sec. 2201.063. PER DIEM; EXPENSES. (a) A commission member
is entitled to:
(1) a per diem in an amount prescribed by
appropriation for each day spent in performing the duties of the
member; and
(2) reimbursement for actual and necessary expenses
incurred in performing those duties.
(b) Reimbursement for expenses under this section is
subject to any applicable limitation in the General Appropriations
Act.
Sec. 2201.064. EXECUTIVE DIRECTOR. (a) The commission
shall appoint an executive director, who serves at the pleasure of
the commission.
(b) A person is not eligible for appointment as executive
director if the person:
(1) holds an elective office or is an officer or
official of a political party; or
(2) is required to register as a lobbyist under
Chapter 305, Government Code, because of the person's activities
for compensation on behalf of a profession related to the operation
of the commission.
(c) The executive director must have five or more years of
responsible administrative experience in public or business
administration or possess broad management skills.
(d) The executive director may not pursue any other business
or occupation or hold any other office for profit.
(e) The executive director must meet all eligibility
requirements relating to commission members, except the
requirement for prior residency in this state.
(f) The executive director is entitled to an annual salary
and other compensation specified by the commission.
(g) The executive director or the parent, spouse, or child
of the executive director may not, before the second anniversary of
the date the director's service to the commission ends, acquire a
direct or indirect interest in or be employed by an entity licensed
or registered by the commission in connection with the conduct of
gaming or the provision of casino services in this state.
Sec. 2201.065. OFFICES. The commission shall maintain its
primary office in Travis County and may maintain other offices
determined to be necessary by the commission.
Sec. 2201.066. AUTHORITY TO SUE OR BE SUED; VENUE FOR CIVIL
SUITS. (a) Subject to Section 2202.360, the commission may sue and
be sued.
(b) Service of process in a suit against the commission may
be secured by serving the executive director.
(c) A suit against the commission must be brought in Travis
County.
Sec. 2201.067. AUDIT. The transactions of the commission
are subject to audit by the state auditor under Chapter 321,
Government Code.
SUBCHAPTER C. POWERS AND DUTIES OF COMMISSION
Sec. 2201.101. GENERAL POWERS AND DUTIES. (a) The
commission has broad authority and shall exercise strict control
and close supervision over all activities authorized and conducted
in this state under a law administered by the commission.
(b) The commission shall ensure that all gambling games,
other casino gaming activities, and other gambling subject to the
oversight or regulatory authority of the commission are conducted
fairly and in compliance with the law.
(c) The commission also has the powers and duties granted
under Chapters 2202 and 2203.
(d) All aspects of this subtitle and other laws administered
by the commission, including those relating to licensing,
qualification, execution, and enforcement, shall be administered
by the executive director and the commission for the protection of
the public and in the public interest.
(e) The commission and the executive director have full
power and authority to hold hearings and, in connection with the
hearings, to issue subpoenas, to compel the attendance of witnesses
at any place in this state, to administer oaths, and to require
testimony under oath. Any process or notice relating to a hearing
may be served in the manner provided for service of process and
notices in civil actions. The commission and the executive
director may pay transportation and other expenses of witnesses as
they consider reasonable.
(f) The executive director and the executive director's
authorized employees may:
(1) inspect and examine a premises where casino gaming
or other gambling regulated by the commission is conducted or
equipment or supplies, including an electronic or other gaming
device, or associated equipment is manufactured, assembled,
produced, programmed, sold, leased, marketed, distributed,
repaired, or modified for use in gaming;
(2) for good cause, seize and remove from a premises
and impound equipment or supplies for the purpose of examination
and inspection; and
(3) demand access to, inspect, examine, photocopy, or
audit papers, books, and records of applicants and license and
certificate holders, on their premises or elsewhere as practicable,
in the presence of the applicant or license holder or the
applicant's or license holder's agent, that report the gross income
produced by a gaming-related business, verify the gross income, or
affect other matters on the enforcement of this subtitle or other
law administered by the commission.
(g) For the purpose of conducting audits after the cessation
of casino gaming by a license holder, a former license holder shall
furnish, on demand of the executive director or the executive
director's authorized employees, books, papers, and records as
necessary to conduct the audits. The former license holder shall
maintain all books, papers, and records necessary for audits for
three years after the date of the surrender or revocation of the
license and is responsible for the costs incurred by the commission
in the conduct of an audit under this section. If the former license
holder seeks judicial review of a deficiency determination or files
a petition for a redetermination, the former license holder must
maintain all books, papers, and records until a final order is
entered on the determination.
(h) The commission shall contract with at least one
independent testing laboratory to scientifically test and
technically evaluate gambling games, gaming devices, slot
machines, and associated equipment for compliance with this
subtitle. The independent testing laboratory must have a national
or international reputation of being demonstrably competent and
must be qualified to scientifically test and evaluate all
components of gambling games, gaming devices, slot machines, and
associated equipment for compliance with this subtitle and to
perform the functions assigned to it under this subtitle. An
independent testing laboratory may not be owned or controlled by a
person licensed to conduct gambling games or to manufacture gaming
equipment. The use of an independent testing laboratory for
purposes related to the conduct of casino gaming under this
subtitle must be made from a list of at least two laboratories
approved by the commission.
Sec. 2201.102. RULEMAKING AUTHORITY. (a) The commission
shall adopt rules the commission considers necessary or desirable
for the public interest in carrying out the policy and provisions of
this subtitle and the other laws administered by the commission.
(b) The rules must prescribe:
(1) the method and form of application that an
applicant for a license under this subtitle must follow and
complete before consideration of an application by the commission;
(2) the information to be furnished by an applicant or
license holder under Chapter 2202 concerning antecedents, habits,
character, associates, criminal history record information,
business activities, and financial affairs;
(3) the criteria to be used in the award, revocation,
and suspension of licenses under Chapter 2202;
(4) the information to be furnished by a license
holder under Chapter 2202 relating to the holder's employees;
(5) the manner and procedure of hearings conducted by
the commission or a hearing examiner of the commission;
(6) the payment of fees or costs an applicant or
license holder under Chapter 2202 must pay;
(7) the procedures for the issuance of temporary
licenses and temporary qualification to hold equity interests in a
casino owner license holder under Chapter 2202;
(8) the manner and method of collection and payment of
fees and the issuance of licenses;
(9) the definition of "unsuitable method of
operation";
(10) the conditions under which the nonpayment of a
gambling debt by a license holder constitutes grounds for
disciplinary action;
(11) the manner of approval of gambling games, slot
machines, and gaming devices;
(12) access to confidential information obtained
under this chapter, Chapter 2202, Chapter 2203, or other law and the
means to ensure that the confidentiality of the information is
maintained and protected;
(13) financial reporting and internal control
requirements for license holders;
(14) the manner in which money awarded to players of
gambling games, compensation from gambling games and slot machines,
and gross gaming revenue must be computed and reported under
Chapter 2202;
(15) requirements for the annual audit of the
financial statements of a license holder;
(16) requirements for periodic financial reports from
each license holder consistent with standards and intervals
prescribed by the commission;
(17) the procedures to be followed by a license holder
for excluding a person from a casino; and
(18) the procedures for exempting or waiving
institutional investors from the licensing requirements for
shareholders of publicly traded corporations.
Sec. 2201.103. AUTHORITY OF EXECUTIVE DIRECTOR. (a) With
commission approval, the executive director may create executive
positions as the director considers necessary to implement this
chapter, Chapter 2202, Chapter 2203, and any other law administered
by the commission.
(b) The executive director shall employ directors in the
areas of audit, investigation, and enforcement. The audit director
must be a certified public accountant, have five or more years of
progressively responsible experience in general accounting, and
have a comprehensive knowledge of the principles and practices of
corporate finance or must possess qualifications of an expert in
the field of corporate finance and auditing, general finance,
gaming, and economics. Other directors must possess five or more
years of training and experience in the fields of investigation,
law enforcement, law, or gaming.
(c) The executive director may investigate, for the purpose
of prosecution, a suspected criminal violation of this subtitle or
other laws related to casino gaming or gambling regulated by the
commission. For the purpose of the administration and enforcement
of this subtitle or another related law, the executive director and
employees designated as enforcement officers by the executive
director may be commissioned as peace officers.
(d) The executive director, to further the objectives and
purposes of this subtitle or other laws related to casino gaming or
gambling regulated by the commission, may:
(1) direct and supervise all administrative actions of
the commission;
(2) bring legal action in the name and on behalf of the
commission;
(3) make, execute, and effect an agreement or contract
authorized by the commission;
(4) employ the services of persons considered
necessary for consultation or investigation and set the salaries of
or contract for the services of legal, professional, technical, and
operational personnel and consultants, except that outside legal
assistance may be retained only with the approval of the attorney
general;
(5) acquire furnishings, equipment, supplies,
stationery, books, and all other things the executive director
considers necessary or desirable in carrying out the executive
director's functions; and
(6) perform other duties the executive director may
consider necessary to effect the purposes of this subtitle or other
laws related to casino gaming or gambling regulated by the
commission.
(e) Except as otherwise provided in this subtitle, the costs
of administration incurred by the executive director shall be paid
in the same manner as other claims against the state are paid.
Sec. 2201.104. OFFICE OF HEARING EXAMINERS. (a) The
commission shall create an office of hearing examiners to assist
the commission in carrying out its powers and duties.
(b) The office of hearing examiners shall:
(1) hold hearings under the authority of the
commission on matters relating to the commission's administration
of this subtitle and other laws related to casino gaming or gambling
regulated by the commission as the commission orders; and
(2) report after a hearing in the manner prescribed by
the commission.
(c) The commission shall refer any contested case arising
under this subtitle or other laws related to casino gaming or
gambling regulated by the commission to the office of hearing
examiners.
(d) The office of hearing examiners is independent of the
executive director and is under the exclusive control of the
commission.
(e) The office of hearing examiners is under the direction
of a chief hearing examiner appointed by the commission.
(f) The commission may authorize the chief hearing examiner
to delegate to one or more hearing examiners the authority to hold
any hearing called by the chief hearing examiner.
(g) The chief hearing examiner and each assistant hearing
examiner employed by the office of hearing examiners must be an
attorney licensed to practice law in this state.
(h) The chief hearing examiner and each assistant hearing
examiner may administer oaths, receive evidence, and issue
subpoenas to compel the attendance of witnesses and the production
of papers and documents in all matters delegated to the office of
hearing examiners by the commission.
(i) The chief hearing examiner and each assistant hearing
examiner is entitled to an annual salary and other compensation
specified by the commission.
(j) The office of hearing examiners may contract for
additional services it considers necessary to carry out its powers.
Sec. 2201.105. JUDICIAL REVIEW IN CONTESTED CASES. A final
ruling of the commission in a contested case is subject to judicial
review under Chapter 2001, Government Code. Judicial review is
under the substantial evidence rule, as provided by that chapter.
Sec. 2201.106. RECORDS; CONFIDENTIAL INFORMATION. (a) The
executive director shall maintain a file of all applications for
licenses under this subtitle, together with a record of all action
taken with respect to the applications.
(b) The commission and the executive director may maintain
other records they consider desirable.
(c) The information made confidential by this subsection
may be disclosed, wholly or partly, only:
(1) in the course of the necessary administration of
this subtitle or in the enforcement of other laws related to casino
gaming or other gambling regulated by the commission;
(2) under Section 2202.352;
(3) on the order of a court; or
(4) as authorized under commission rule, to an
authorized agent of any agency of the United States, another state,
or a political subdivision of this state.
(d) Notice of the content of any information furnished or
released under Subsection (c) may be given to any affected
applicant or license holder as prescribed by commission rule.
(e) The following information is confidential and may not be
disclosed:
(1) information requested by the commission or the
executive director under this subtitle or another applicable law
that may otherwise be obtained relating to the finances, earnings,
or revenue of an applicant or license holder;
(2) information pertaining to an applicant's criminal
history record information, antecedents, and background that has
been furnished to or obtained by the commission or the executive
director from any source;
(3) information provided to the commission or the
executive director or a commission employee by a governmental
agency or an informer or on the assurance that the information will
be held in confidence and treated as confidential;
(4) information obtained by the executive director or
the commission from a license holder, including a casino service
license holder, relating to the manufacturing, modification, or
repair of gaming devices;
(5) security plans and procedures of the commission
designed to ensure the integrity and security of the regulation and
operation of casino gaming or other gambling regulated by the
commission;
(6) the street address and telephone number of a prize
winner unless the prize winner has consented to the release of the
information;
(7) information relating to all system operations of
gambling games, including security related to gambling games, and
commission plans and procedures intended to ensure the integrity
and security of the operation of gambling games and other gambling
regulated by the commission; and
(8) reports and related information filed under
Section 2202.011.
Sec. 2201.107. REPRESENTATION BY ATTORNEY GENERAL. (a) The
attorney general shall represent the commission and the executive
director in any proceeding to which the commission or the executive
director is a party under this subtitle or another law administered
by the commission or in any suit filed against the commission or
executive director.
(b) The office of the attorney general on request shall
advise the commission and the executive director in all other
matters, including representing the commission when the commission
acts in its official capacity.
Sec. 2201.108. RULES RESTRICTING ADVERTISING OR
COMPETITIVE BIDDING. (a) The commission may not adopt rules
restricting advertising or competitive bidding by a person
regulated by the commission except to prohibit false, misleading,
or deceptive practices by that person.
(b) The commission may not include in its rules to prohibit
false, misleading, or deceptive practices by a person regulated by
the commission a rule that:
(1) restricts the use of any advertising medium;
(2) restricts the person's personal appearance or the
use of the person's voice in an advertisement;
(3) relates to the size or duration of an
advertisement by the person; or
(4) restricts the use of a trade name in advertising by
the person.
Sec. 2201.109. RULES ON CONSEQUENCES OF CRIMINAL
CONVICTION. (a) The commission shall adopt rules necessary to
comply with Chapter 53.
(b) In adopting rules under this section, the commission
shall list the specific offenses for which a conviction would
constitute grounds for the commission to take action under Section
53.021.
Sec. 2201.110. SUBPOENA. (a) The commission may request
and, if necessary, compel by subpoena:
(1) the attendance of a witness for examination under
oath; and
(2) the production for inspection and copying of
records and other evidence relevant to the investigation of an
alleged violation of this subtitle or other laws related to casino
gaming or other gambling regulated by the commission.
(b) If a person fails to comply with a subpoena issued under
this section, the commission, acting through the attorney general,
may file suit to enforce the subpoena in a district court in Travis
County or in the county in which a hearing conducted by the
commission may be held.
(c) The court shall order a person to comply with the
subpoena if the court determines that good cause exists for issuing
the subpoena.
Sec. 2201.111. DIVISION OF RESPONSIBILITIES. The
commission shall develop and implement policies that clearly
separate the policy-making responsibilities of the commission and
the management responsibilities of the executive director and the
staff of the commission.
Sec. 2201.112. USE OF TECHNOLOGY. The commission shall
implement a policy requiring the commission to use appropriate
technological solutions to improve the commission's ability to
perform its functions. The policy must ensure that the public is
able to interact with the commission through the commission's
Internet website.
Sec. 2201.113. NEGOTIATED RULEMAKING AND ALTERNATIVE
DISPUTE RESOLUTION POLICY. (a) The commission shall develop and
implement a policy to encourage the use of:
(1) negotiated rulemaking procedures under Chapter
2008, Government Code, for the adoption of commission rules; and
(2) appropriate alternative dispute resolution
procedures under Chapter 2009, Government Code, to assist in the
resolution of internal and external disputes under the commission's
jurisdiction.
(b) The commission's procedures relating to alternative
dispute resolution must conform, to the extent possible, to any
model guidelines issued by the State Office of Administrative
Hearings for the use of alternative dispute resolution by state
agencies.
(c) The commission shall designate an appropriately
qualified person to:
(1) coordinate the implementation of the policy
adopted under Subsection (a);
(2) serve as a resource for any training needed to
implement the procedures for negotiated rulemaking or alternative
dispute resolution; and
(3) collect data concerning the effectiveness of those
procedures, as implemented by the commission.
Sec. 2201.114. COMMITTEES. The commission may appoint
committees that it considers necessary to carry out its duties.
Sec. 2201.115. CONTRACT AUTHORITY. (a) The commission and
executive director have broad authority and shall exercise strict
control and close supervision over gambling games played in this
state to promote and ensure integrity, security, honesty, and
fairness in the operation and administration of gaming under this
subtitle.
(b) The executive director may contract with a third party
to perform a function, activity, or service in connection with the
operation of casino gaming under this subtitle, other than
investigative services, as prescribed by the executive director. A
contract relating to the operation of gaming must be consistent
with this subtitle.
(c) The executive director may award a contract for gaming
supplies, equipment, or services, including a contract under
Subsection (b), pending the completion of any investigation and
license required by this subtitle. A contract awarded under this
subsection must include a provision permitting the executive
director to terminate the contract without penalty if the
investigation reveals that the person to whom the contract is
awarded does not satisfy the applicable requirements for a license
under this subtitle.
(d) In the acquisition or provision of facilities,
supplies, equipment, materials, or services related to the
implementation of gaming under this subtitle, the commission must
comply with procurement procedures prescribed under Subtitle D,
Title 10, Government Code.
Sec. 2201.116. INVESTIGATIONS AND ENFORCEMENT. (a) A
violation or alleged violation of this subtitle or of the penal laws
of this state by the commission, its employees, or a person
regulated under this subtitle may be investigated by the attorney
general, the district attorney for Travis County, or a district
attorney, criminal district attorney, or county attorney for the
county in which violation or alleged violation occurred.
(b) The commission may investigate violations of this
subtitle, rules adopted under this subtitle, or other laws related
to casino gaming or other gambling regulated by the commission and
may file a complaint requesting that an investigation be conducted
in accordance with Subsection (a).
Sec. 2201.117. SECURITY. (a) The executive director shall
maintain a department of security in the commission. The executive
director shall appoint a deputy to administer the department. The
deputy must be qualified by training and experience in law
enforcement or security to supervise, direct, and administer the
activities of the department.
(b) The executive director may employ security officers or
investigators as the executive director considers necessary and may
commission investigators or security officers as peace officers.
The deputy and all investigators employed by the department of
security and commissioned as peace officers must meet the
requirements under Chapter 1701 for employment and commission as
peace officers.
(c) A security officer or investigator employed by the
department of security and commissioned as a peace officer, or a
peace officer who is working in conjunction with the commission or
the Department of Public Safety in the enforcement of this subtitle
may:
(1) without a search warrant, search and seize a
gaming device or other gaming equipment that is located on premises
for which a person holds a license issued under this subtitle; or
(2) seize a gaming device or other gaming equipment
that is being used or is in the possession of any person in
violation of this subtitle or other laws related to casino gaming or
other gambling regulated by the commission.
(d) The Department of Public Safety or any other state or
local law enforcement agency, at the commission's request and in
accordance with an interagency agreement, shall perform a full
criminal history record information and background investigation
of a prospective deputy or investigator of the department of
security of the commission. The commission shall reimburse the
agency for the actual costs of an investigation.
(e) At least once every two years, the executive director
shall employ an independent firm that is experienced in security,
including computer security and systems security, to conduct a
comprehensive study of all aspects of gaming security.
Sec. 2201.118. DEMOGRAPHIC STUDIES. (a) The executive
director shall, every two years, employ an independent firm
experienced in demographic analysis to conduct a demographic study
of players of gambling games. The study must include the income,
age, sex, race, education, and frequency of participation of
players of the games.
(b) The executive director shall report the results of the
demographic study to the commission, the governor, and the
legislature not later than January 1 of each odd-numbered year.
Sec. 2201.119. PROHIBITED GAMBLING GAMES. (a) Except as
provided by this subtitle or other law, the executive director or
any other person may not establish or operate a gambling game in
which the winner is chosen on the basis of the outcome of a sports
event.
(b) Except as provided by Chapter 2001 or this subtitle, the
operation of any game using a slot machine or other gambling device
is prohibited.
Sec. 2201.120. DEPARTMENT OF PUBLIC SAFETY RECORDS. (a)
Except as otherwise provided by this subtitle, all files, records,
information, compilations, documents, photographs, reports,
summaries, and reviews of information and related matters
collected, retained, or compiled by the Department of Public Safety
in the discharge of its duties under this subtitle are confidential
and are not subject to public disclosure. Each of those items is
subject to discovery by a person who is the subject of the item.
(b) An investigation report or other document submitted by
the Department of Public Safety to the commission becomes part of
the investigative files of the commission and is subject to
discovery by a person who is the subject of the investigation report
or other document.
(c) Information that is in a form available to the public is
not privileged or confidential under this section and is subject to
public disclosure.
Sec. 2201.121. CRIMINAL BACKGROUND INVESTIGATION FOR
CASINO GAMING. (a) The commission is entitled to conduct an
investigation of and is entitled to obtain criminal history record
information maintained by the Department of Public Safety, the
Federal Bureau of Investigation Identification Division, or
another law enforcement agency to assist in the criminal background
investigation of any person directly involved with casino gaming
regulated under this subtitle.
(b) Except as otherwise provided by this subtitle, a
criminal background investigation is governed by commission rules
adopted under this chapter.
(c) The Department of Public Safety or a state or local law
enforcement agency in this state, in accordance with an interagency
agreement with the commission, shall provide any assistance
requested by the commission in the administration and enforcement
of this subtitle, including conducting criminal background
investigations of a person seeking a license required under this
subtitle or of any person required to be named in an application for
a license under this subtitle.
(d) This section does not limit the commission's right to
obtain criminal history record information from any other local,
state, or federal agency. The commission may enter into a
confidentiality agreement with the agency as necessary and proper.
(e) Except as otherwise provided by this subtitle or other
law, criminal history record information obtained by the commission
under this section may be disclosed only:
(1) to another law enforcement agency to assist in or
further an investigation related to the commission's operation and
oversight of gaming; or
(2) under a court order.
Sec. 2201.122. PLAYER AGREEMENT TO ABIDE BY RULES AND
INSTRUCTIONS. By participating as a player in a gambling game, a
player agrees to abide by and be bound by the commission's rules and
instructions, including the rules or instructions applicable to the
particular gambling game involved. The player also agrees that the
determination of whether the player is a valid winner is subject to:
(1) the commission's rules, instructions, and claims
procedures, including those developed for the particular gambling
game involved;
(2) any validation tests established by the commission
for the particular gambling game involved; and
(3) the limitations and other provisions prescribed by
this subtitle.
Sec. 2201.123. VENUE FOR CRIMINAL PROCEEDING. Venue is
proper in Travis County or any county in which venue is proper under
Chapter 13, Code of Criminal Procedure, for:
(1) an offense under this subtitle;
(2) an offense under the Penal Code, if the accused:
(A) is regulated under this subtitle; and
(B) is alleged to have committed the offense
while engaged in gaming activities; or
(3) an offense under Title 7 or 11, Penal Code, that
involves property consisting of or including a gaming device or
gambling game prize.
SUBCHAPTER D. PUBLIC PARTICIPATION AND COMPLAINT PROCEDURES
Sec. 2201.151. PUBLIC INTEREST INFORMATION. (a) The
commission shall prepare and disseminate consumer information that
describes the regulatory functions of the commission and the
procedures by which consumer complaints are filed with and resolved
by the commission.
(b) The commission shall make the information available to
the public and appropriate state agencies.
Sec. 2201.152. COMPLAINTS. (a) The commission by rule
shall establish methods by which consumers and service recipients
are notified of the name, mailing address, and telephone number of
the commission for the purpose of directing complaints to the
commission. The commission may provide for that notice:
(1) on each form, application, or written contract for
services of a person regulated under a law administered by the
commission;
(2) on a sign prominently displayed in the place of
business of each person regulated under a law administered by the
commission; or
(3) in a bill for service provided by a person
regulated under this subtitle.
(b) The commission shall list with its regular telephone
number any toll-free telephone number established under other state
law that may be called to present a complaint about a person
regulated under this subtitle.
Sec. 2201.153. RECORDS OF COMPLAINTS. (a) The commission
shall maintain a system to promptly and efficiently act on
complaints filed with the commission. The commission shall
maintain:
(1) information about the parties to the complaint and
the subject matter of the complaint;
(2) a summary of the results of the review or
investigation of the complaint; and
(3) information about the disposition of the
complaint.
(b) The commission shall make information available
describing its procedures for complaint investigation and
resolution.
(c) The commission shall periodically notify the parties of
the status of the complaint until final disposition of the
complaint.
Sec. 2201.154. GENERAL RULES REGARDING COMPLAINT
INVESTIGATION AND DISPOSITION. The commission shall adopt rules
concerning the investigation of a complaint filed with the
commission. The rules must:
(1) distinguish between categories of complaints;
(2) ensure that complaints are not dismissed without
appropriate consideration;
(3) require that the commission be advised of a
complaint that is dismissed and that a letter be sent to the person
who filed the complaint explaining the action taken on the
dismissed complaint;
(4) ensure that the person who files a complaint has an
opportunity to explain the allegations made in the complaint; and
(5) prescribe guidelines concerning the categories of
complaints that require the use of a private investigator and the
procedures for the commission to obtain the services of a private
investigator.
Sec. 2201.155. DISPOSITION OF COMPLAINT. (a) The
commission shall:
(1) dispose of each complaint in a timely manner; and
(2) establish a schedule for conducting each phase of
a complaint that is under the control of the commission not later
than the 30th day after the date the commission receives the
complaint.
(b) Each party shall be notified of the projected time
requirements for pursuing the complaint. The commission shall
notify each party to the complaint of any change in the schedule
established under Subsection (a)(2) not later than the seventh day
after the date the change is made.
(c) The executive director shall notify the commission of a
complaint that is not resolved within the time prescribed by the
commission for resolving the complaint.
Sec. 2201.156. PUBLIC PARTICIPATION. (a) The commission
shall develop and implement policies that provide the public with a
reasonable opportunity to appear before the commission and to speak
on any issue under the commission's jurisdiction.
(b) The commission shall prepare and maintain a written plan
that describes how a person who does not speak English may be
provided reasonable access to the commission's programs.
Sec. 2201.157. INFORMAL SETTLEMENT CONFERENCE. The
commission by rule shall establish procedures for an informal
settlement conference related to a complaint filed with the
commission.
CHAPTER 2202. CASINO GAMING
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 2202.001. PUBLIC POLICY. (a) All casino gaming that
is conducted in this state and that is authorized by law shall be
regulated and licensed under this chapter, unless federal law or
another state law specifically provides otherwise.
(b) The legislature hereby finds, and declares it to be the
public policy of this state, that:
(1) the development of regulated casino gaming at a
limited number of locations in the state will benefit the general
welfare of the people of this state by enhancing investment,
economic development, and tourism in this state, resulting in
thousands of new jobs and significant new revenue to the state for
essential services;
(2) the conduct of regulated casino gaming in a
limited number of destination resorts and smaller casinos will not
harm the people of this state;
(3) the regulation of gaming in this state is
important to ensure that gaming is:
(A) conducted honestly and competitively; and
(B) free from criminal and corruptive elements;
(4) public confidence and trust can be maintained only
by strict regulation of all persons, locations, practices,
associations, and activities related to the conduct of casino
gaming and the casino service industry;
(5) persons owning any direct or indirect material
interest in a casino should be licensed and controlled to protect
the public health, safety, morals, good order, and general welfare
of the people of this state;
(6) certain operators and employees of casinos should
be regulated, licensed, and controlled to accomplish and promote
these public policies while protecting the public health, safety,
morals, good order, and general welfare of the people of this state;
(7) certain persons engaging in the casino service
industry should be regulated, licensed, and controlled to
accomplish and promote these public policies while protecting the
public health, safety, morals, good order, and general welfare of
the people of this state; and
(8) it is the intent of the legislature, where
possible, to use the resources, goods, labor, and services of the
people of this state in the operation and construction of
destination resorts, casinos, and related amenities to the extent
allowable by law.
Sec. 2202.002. EXEMPTION FROM FEDERAL STATUTE. (a) This
chapter provides an exemption to the application of 15 U.S.C.
Section 1172, in accordance with that section.
(b) All shipments of gaming devices into this state,
including slot machines, conducted in compliance with the
applicable provisions of 15 U.S.C. Sections 1173 and 1174 are legal
shipments of the devices into this state.
Sec. 2202.003. CONSTRUCTION; APPLICABILITY OF OTHER LAWS.
(a) Nothing in this chapter may be construed to implicitly repeal
or modify existing state laws with respect to gambling, except that
casino gaming is not prohibited by another law if conducted as
authorized under this chapter.
(b) To the extent of any conflict between Chapter 2003,
Government Code, and this chapter or a commission rule governing
gaming devices, this chapter or the commission rule prevails in all
matters related to gaming devices, including hearings before the
State Office of Administrative Hearings.
(c) This chapter prevails to the extent of any conflict
between this chapter and a provision of Subtitle A-1, Title 13
(Texas Racing Act).
Sec. 2202.004. AUTHORITY TO IMPLEMENT GAMING. (a) The
commission may implement casino gaming in accordance with this
subtitle.
(b) The commission shall allow the operation of limited
casino gaming pursuant to this subtitle at locations on Indian
lands in accordance with an effective gaming agreement and in
compliance with applicable federal law.
Sec. 2202.005. IMMUNITY FOR STATEMENT MADE IN PROCEEDING OR
INVESTIGATION. Any written or oral statement made in the course of
an official commission proceeding or investigative activities
related to an application for commission licensing under this
chapter, by any member or agent of the commission or any witness
testifying under oath, that is relevant to the purpose of the
proceeding is absolutely privileged and does not impose liability
for defamation or constitute a ground for recovery in any civil
action.
Sec. 2202.006. FINDING OF SUITABILITY. To promote the
integrity and security of casino gaming under this subtitle, the
commission in its discretion may require a finding of suitability
for any person conducting business with or in relation to the
operation of casino gaming who is not otherwise required to obtain a
license from the commission for the person's gaming-related
operations.
Sec. 2202.007. CONSENT TO COMMISSION DETERMINATION. (a)
An application for a license under this chapter constitutes a
request to the commission for a decision on the applicant's general
suitability, character, integrity, and ability to participate or
engage in or be associated with casino gaming under this chapter in
the manner or position sought.
(b) By filing an application with the commission, the
applicant specifically consents to the commission's determination
if the application, after filing, becomes moot for any reason other
than death.
Sec. 2202.008. ABSOLUTE AUTHORITY OF COMMISSION. To
protect the integrity of casino gaming under this subtitle or the
public health, welfare, or safety, or to prevent financial loss to
this state, the commission has full and absolute power and
authority to:
(1) deny any application or limit, condition,
restrict, revoke, or suspend any license; and
(2) fine any license holder for any cause considered
reasonable by the commission.
Sec. 2202.009. LICENSING AS REVOCABLE PERSONAL PRIVILEGES.
(a) An applicant for a license under this chapter does not have any
right to the license sought.
(b) Any license issued under this chapter is a revocable
privilege, and a holder of the privilege does not acquire any vested
right in or under the privilege.
(c) The courts of this state do not have jurisdiction to
review a decision to deny, limit, or condition the license unless
the judicial review is sought on the ground that the denial,
limitation, or condition is based on a suspect classification, such
as race, color, religion, sex, or national origin, in violation of
the Equal Protection Clause of the Fourteenth Amendment to the
United States Constitution. The state court must affirm the
commission's action unless the violation is proven by clear and
convincing evidence. If a state court has jurisdiction over a claim
under this section, then this state's sovereign immunity is waived
only to the extent expressly provided by Section 2202.360.
(d) A license issued or renewed under this chapter may not
be transferred or assigned to another person unless approved in
advance by the commission, and a license may not be pledged as
collateral. The purchaser or successor of a license holder must
independently qualify for a license required by this chapter.
(e) The following acts void the license unless approved in
advance by the commission:
(1) the transfer, sale, or other disposition of an
interest in the holder that results in a change in the identity of
an equity interest holder; or
(2) the sale of the assets of the holder, other than
assets bought and sold in the ordinary course of business, or any
interest in the assets, to any person not already determined to have
met the applicable qualifications of this chapter.
Sec. 2202.010. PRIZE RULES, PAYMENT, AND REDEMPTION. (a)
The payment of prizes is the sole and exclusive responsibility of
the casino owner or casino operator license holder. A prize may not
be paid by the commission or this state except as otherwise
authorized.
(b) Nothing in this chapter limits the ability of a casino
owner or casino operator license holder to provide promotional
prizes, including wide area progressive networks, in addition to
prize payouts regulated by the commission.
(c) The commission shall enact rules consistent with this
section governing the use and redemption of prizes and credits
recorded on player account records, such as players' club cards and
smart cards.
Sec. 2202.011. REPORT ON LITIGATION. (a) A casino owner or
casino operator license holder shall report to the commission any
litigation relating to casino operations, including a criminal
proceeding, a proceeding involving an issue related to pari-mutuel
activities that impact casino gaming operations, or a matter
related to character or reputation relevant to a person's
suitability under this chapter.
(b) The report required under Subsection (a) must be filed
not later than the 30th day after the date the owner or operator
acquires knowledge of the litigation.
Sec. 2202.012. COMMISSION APPROVAL REQUIRED FOR PROCEDURES
AND ADMINISTRATIVE AND ACCOUNTING CONTROLS. (a) The commission's
approval is required for all internal procedures and administrative
and accounting controls of a casino owner or casino operator
license holder.
(b) The commission by rule shall establish general
accounting and auditing requirements and internal control
standards for the conduct of casino gaming at casinos.
Sec. 2202.013. EMPLOYEE REPORTING. (a) In this section,
"employee" includes any person connected directly with or
compensated by an applicant or license holder as an agent, personal
representative, consultant, or independent contractor.
(b) On or before the 15th day of each month, a casino owner
or casino operator license holder shall submit to the commission an
employee report for the casino operated by the owner or operator.
For each gaming employee, the report must provide the employee's
name, job title, date of birth, and social security number.
(c) The employee report is confidential and may not be
disclosed except under commission order or in accordance with this
subtitle.
(d) The commission may conduct criminal history background
investigations of casino employees.
(e) The commission may prohibit an employee from performing
any act relating to gaming if the commission finds that an employee
has:
(1) committed, attempted, or conspired to commit any
act prohibited by this chapter;
(2) concealed or refused to disclose any material fact
in any commission investigation;
(3) committed, attempted, or conspired to commit an
offense involving or related to larceny or embezzlement;
(4) been convicted in any jurisdiction of an offense
involving or relating to gambling;
(5) accepted employment in a position for which
commission approval is required after commission approval was
denied for a reason involving personal unsuitability or after
failing to apply for approval on commission request;
(6) been prohibited under color of governmental
authority from being present on the premises of any casino or any
establishment where casino gaming or pari-mutuel wagering is
conducted for any reason relating to improper gambling activity or
other illegal acts;
(7) wilfully defied any legislative investigative
committee or other officially constituted body acting on behalf of
the United States or any state, county, or municipality that sought
to investigate alleged or potential crimes relating to gambling,
corruption of public officials, or any organized criminal
activities; or
(8) been convicted of any felony or any crime
involving moral turpitude.
(f) The commission may prohibit an employee from performing
any act relating to casino gaming based on a revocation or
suspension of any casino gaming or pari-mutuel wagering license or
for any other reason the commission finds appropriate, including a
refusal by a regulatory authority to issue a license for the
employee to engage in or be involved with casino gaming or with
other regulated gaming or pari-mutuel wagering in any jurisdiction.
Sec. 2202.014. REPORT OF VIOLATIONS. A person who holds a
license under this chapter shall immediately report a violation or
suspected violation of this chapter or a rule adopted under this
chapter by any license holder, by an employee of a license holder,
or by any person on the premises of a casino, whether or not
associated with the license holder.
Sec. 2202.015. INDEMNIFICATION, INSURANCE, AND BONDING
REQUIREMENTS. (a) A license holder shall indemnify and hold
harmless this state, the commission, and all officers and employees
of this state and the commission from any and all claims which may
be asserted against a license holder, the commission, this state,
and the members, officers, employees, and authorized agents of this
state or the commission arising from the license holder's
participation in casino gaming authorized under this subtitle.
(b) Surety and insurance required under this chapter may
only be issued by companies or financial institutions financially
rated "A-" or better as rated by AM Best Company or another rating
organization designated by the commission and duly licensed,
admitted, and authorized to conduct business in this state, or by
other surety approved by the commission.
(c) The commission shall be named as the obligee in each
required surety and as an additional insured in each required
insurance contract.
(d) A Class I casino owner or casino operator license holder
may not be self-insured with regard to gaming operations under this
section in excess of $50,000,000 per occurrence.
(e) A Class II or Class III casino owner or operator license
holder may not be self-insured with regard to gaming operations
under this section.
(f) The commission by rule shall establish minimum
insurance coverage requirements for license holders under this
chapter, including:
(1) insurance for performance;
(2) crime or fidelity insurance against losses caused
by fraudulent or dishonest acts by an officer or employee of the
license holder;
(3) commercial general liability insurance;
(4) property insurance;
(5) business auto liability insurance; and
(6) crime insurance for the location.
Sec. 2202.016. LIABILITY FOR CREDIT AWARDED OR DENIED;
PLAYER DISPUTE. This state and the commission are not liable for
any gaming device malfunction or error occurring at a casino that
causes credit to be wrongfully awarded or denied to players.
SUBCHAPTER B. CASINO OWNER'S LICENSE
Sec. 2202.051. CASINO OWNER'S LICENSE. (a) Casino gaming
may be lawfully conducted in a casino operating under a casino
owner's license.
(b) A person may not own an equity interest in a casino at
which casino gaming is conducted in this state unless the casino is
operating under a casino owner's license issued for the conduct of
casino gaming at that casino.
(c) A separate casino owner's license must be obtained for
each casino conducting casino gaming.
Sec. 2202.052. ALLOCATION AND ISSUANCE OF CASINO OWNER'S
LICENSES; TEMPORARY LICENSE. (a) The commission shall award
casino owner's licenses to applicants for destination resorts and
casinos as authorized by Section 47a(e), Article III, Texas
Constitution.
(b) The commission shall:
(1) issue not more than four Class I casino owner's
licenses to conduct casino gaming at destination resorts located in
metropolitan statistical areas of this state with a population
estimated at two million or more on July 1, 2019, provided that only
one Class I licensed destination resort is located within one
metropolitan statistical area;
(2) issue not more than three Class II casino owner's
licenses to conduct limited casino gaming at an existing location
to applicants who, on January 1, 2021, held and who continue to hold
an active license to conduct pari-mutuel wagering on horse races at
a racetrack located within a metropolitan statistical area with an
estimated population of two million or more on July 1, 2019, and who
comply with the requirements of this subtitle and commission rule;
and
(3) issue not more than two Class III casino owner's
licenses to conduct limited casino gaming to applicants who, on
January 1, 2021, held and who continue to hold an active license to
conduct pari-mutuel wagering on greyhound races at a racetrack
located within a metropolitan statistical area with an estimated
population of less than two million on July 1, 2019, and who comply
with the requirements of this subtitle and commission rule.
(c) The commission by rule shall ensure license applicants
who are issued a Class II casino owner's license under Subsection
(b)(2) continue to maintain significant live horse racing at the
applicant's racetrack and maintain the applicant's primary purpose
as a horse racetrack and that limited casino gaming is used as a
complementary amenity to promote and support horse racing in this
state.
(d) The commission shall allow license applicants who are
issued a Class III casino owner's license under Subsection (b)(3)
to offer limited casino gaming at any location within the same
metropolitan statistical area as the holder's licensed greyhound
racetrack.
(e) The commission shall establish additional restrictions
on Class II and Class III casino owner license holders, including
limits on total square footage, casino gaming square footage, and
overnight accommodations for the purposes of adequately
distinguishing between types of gaming activities the license
holder is authorized to conduct, as provided by Subsection (b), and
to limit the scope of casino gaming in certain metropolitan
statistical areas in this state.
(f) To ensure that a requisite level of economic development
benefiting the people of this state accompanies each destination
resort issued a Class I casino owner's license, the commission
shall require an applicant, as a condition to receiving and holding
the license, to commit to building a destination resort project
with total land and development investments of at least:
(1) $2 billion for a destination resort located in a
metropolitan statistical area with a population of five million or
more; or
(2) $1 billion for a destination resort located in a
metropolitan statistical area with a population of two million or
more but less than five million.
(g) In meeting the requirements of Subsection (f), total
land and development investments proposed as part of an application
to conduct casino gaming at a destination resort may not include
public money or facilities developed or built with public
assistance or tax incentives of any kind.
(h) Land and development investments included as part of a
destination resort in an application for a Class I casino owner's
license that have been made within five years before the
application is filed may be included in the calculation of new total
land and development investments required under Subsection (f).
(i) The commission shall issue a Class II or Class III
casino owner's license to conduct limited casino gaming to
applicants based on evidence demonstrating that the issuance of the
license to the applicant would have a significant positive economic
impact in the area of this state in which the casino would be
operated, and on the state as a whole.
(j) In addition to the casino owner's licenses issued under
this section, the commission may issue a Class II or Class III
casino owner's license to a federally recognized Indian tribe that
had land in this state held in trust by the United States on January
1, 1998. A license issued under this subsection authorizes the
tribe to operate not more than one casino on tribal lands held in
trust by the United States on January 1, 1998.
(k) A casino owner's license issued by the commission under
Subsection (j) to an Indian tribe constitutes an agreement between
this state and the tribe for purposes of the Indian Gaming
Regulatory Act (Pub. L. No. 100-497).
(l) Except for simulcast common pool wagering conducted in a
casino and except as otherwise authorized by the commission, the
casino operations and financial records of a casino owner license
holder under Subsection (b) who also holds a pari-mutuel license
under Subtitle A-1, Title 13 (Texas Racing Act) shall be kept
separate from the racing operations and records of the license
holder.
(m) An Indian tribe to which Subsection (j) applies may, in
lieu of a casino owner's license, operate a casino on Indian land
described by Subsection (j) under an agreement with this state. The
agreement is governed by this chapter and Chapter 2203.
(n) A casino owner's license may not be issued for a
location in an area in which casino gaming is prohibited under a
gaming agreement between an Indian tribe and this state.
(o) For purposes of determining the location of a casino, a
casino is considered to be located in the county in which the main
public entrance to the casino is located.
(p) The commission may issue a temporary license for one
year or less to authorize the casino owner license holder to
temporarily conduct casino gaming in accordance with commission
rules at a location within 20 miles of the site for which the casino
license was issued.
Sec. 2202.053. APPLICATION. (a) A person seeking a casino
owner's license shall submit an application in accordance with
commission rules containing information the commission finds
necessary to determine:
(1) the suitability and eligibility of the applicant;
(2) the eligibility of the proposed location; and
(3) the economic impact of the overall destination
resort or casino project.
(b) In addition to any other information the commission may
require, an application must include the following information
concerning the feasibility of the overall destination resort or
casino project:
(1) proof that casino gaming was approved by the
constitutional amendment proposed by the 87th Legislature, Regular
Session, 2021, creating the Texas Gaming Commission and authorizing
and regulating casino gaming at destination resorts;
(2) evidence that the applicant possesses, or has the
right to acquire, sufficient real property on which the proposed
destination resort or casino will be located that accommodates the
applicant's construction and operation of the destination resort or
casino project substantially as proposed;
(3) evidence that the applicant possesses, or
reasonably expects to obtain, all state, county, and municipal
permits and approvals necessary for the construction and operation
of the proposed destination resort or casino within the time
prescribed in this chapter; and
(4) evidence that the applicant is prepared to begin
construction of its proposed destination resort or casino within 18
months of receiving a casino owner's license and to proceed with the
construction of the destination resort or casino without
unnecessary delay.
(c) An applicant may apply for more than one casino owner's
license relating to more than one destination resort or casino but
must submit a separate application for each destination resort or
casino for which a casino owner's license is sought.
(d) An application for a casino owner's license must be
accompanied by the nonrefundable application fee in the amount
provided by Section 2202.202.
Sec. 2202.054. MANDATORY REQUIREMENTS. (a) A company is
eligible to apply for and hold a casino owner's license only if:
(1) the company is incorporated or organized and in
good standing in this state or organized under the laws of another
state of the United States and qualified to conduct business in this
state; and
(2) the company complies with all laws of this state.
(b) To be eligible to receive a casino owner's license to
own a casino, an applicant must submit an application to the
commission by the date established by the commission.
(c) An application may not be considered filed for purposes
of this chapter if the application does not include the information
prescribed by Section 2202.053(b) or is not accompanied by the
required application fee.
Sec. 2202.055. CASINO OWNER'S LICENSE ISSUANCE
CONSIDERATIONS. (a) The commission shall determine the initial and
continuing suitability of each applicant for or holder of a casino
owner's license based on suitability criteria the commission
prescribes to ensure that all casino owner license holders are of
good character, honesty, integrity, and financial stability, that a
casino owner license holder has sufficient business probity,
competence, and experience in casino gaming, and that a casino
owner license holder meets other applicable qualifications for the
issuance of the license.
(b) The commission shall give due consideration to the
protection of the public health, safety, morals, and general
welfare of the people of this state and for the reputation of the
state's gaming industry.
(c) The burden of proving suitability to receive or hold a
casino owner's license is on the applicant or license holder.
(d) In considering the initial and continuing suitability
of an applicant for or holder of a casino owner's license, the
commission may consider the suitability of:
(1) each person holding an equity interest in the
applicant or license holder;
(2) each person holding, or proposed to receive, a
casino operator's license, occupational license, or manufacturer's
license employed by or conducting business with the applicant or
holder; and
(3) each affiliate of the applicant or license holder.
(e) An applicant for or holder of a casino owner's license
may not receive or hold a casino owner's license if the person or an
officer or director:
(1) has been convicted of a felony in the past 20 years
under the laws of this state, any other state, or the United States;
(2) has ever knowingly or intentionally submitted an
application for a license under this chapter that contained false
information;
(3) served as a principal manager for an applicant or
license holder described by Subdivision (1) or (2);
(4) retains or employs another person described by
Subdivision (2);
(5) is subject to any material equity interest of an
applicant or license holder described by Subdivision (1) or (2);
(6) holds a manufacturer's license or casino service
license;
(7) is a commission member; or
(8) is a member of the judiciary or an elected official
of this state.
(f) The commission may adopt rules providing for a person's
reciprocal determination of suitability to hold a casino owner's
license based on a determination of suitability to own and operate a
casino in any other jurisdiction the commission considers
reasonable in light of the purpose of this chapter.
Sec. 2202.056. ECONOMIC IMPACT ANALYSIS. (a) In
determining to whom to grant a Class I casino owner's license, the
commission shall consider the following factors:
(1) the relevant financial investment to be made by
each competing applicant for their destination resort project;
(2) whether an applicant will seek state and local tax
breaks or incentives for their destination resort project;
(3) the relative prospective revenue to be collected
by this state from casino gaming and nongaming businesses
associated with each applicant's proposed destination resort
project;
(4) the relative number of residents of this state who
would be employed in each applicant's proposed destination resort
project and any proposed nongaming businesses and the relative
extent of each applicant's good faith plan to recruit, train, and
promote a workforce that reflects the diverse populations of this
state in all employment classifications;
(5) the relative extent to which an applicant's
proposed destination resort and any proposed associated hotel and
other nongaming businesses could be reasonably expected to
encourage interstate tourism to this state;
(6) whether entities operating or individuals
residing in this state are part of the application approval process
or are approved vendors;
(7) the relative extent to which the scope, design,
location, and construction of each applicant's destination resort
and any associated hotel and other nongaming businesses could be
reasonably expected to contribute to the local economy; and
(8) each applicant's experience in conducting licensed
casino gaming operations and the applicant's financial ability to
promptly construct and adequately maintain the destination resort
for which the license is sought, including the experience of
partners of the applicant, of affiliated companies of the applicant
or its partners, of key personnel of the applicant or its partners,
and of operating companies under contract with the applicant.
(b) In determining to whom to grant a Class II or Class III
casino owner's license, the commission shall consider the following
factors:
(1) the relevant financial investment previously made
or to be made by each competing applicant;
(2) whether each applicant will seek state and local
tax breaks or incentives for their casino project;
(3) the relative prospective revenue to be collected
by this state from casino gaming and non-gaming businesses
associated with each applicant's proposed casino project;
(4) the total number of residents of this state who
would be employed by each applicant's proposed casino project and
each applicant's commitment to a workforce that reflects the
diverse populations of this state in all employment
classifications; and
(5) each applicant's experience in conducting licensed
casino gaming operations and the applicant's financial ability to
promptly construct and adequately maintain the proposed casino
project.
Sec. 2202.057. REVIEW OF APPLICATION. (a) The commission
shall issue an order approving or denying an application for a
casino owner's license not later than 180 days after the date the
application is filed.
(b) The commission may adopt rules for issuing any temporary
or interim licenses the commission finds necessary to administer
this chapter.
Sec. 2202.058. TRANSFERABILITY. A casino owner's license
is not transferable and applies only to the specific site
identified in the license.
Sec. 2202.059. DENIAL, SUSPENSION, AND REVOCATION. (a)
The commission may deny an application or revoke a casino owner's
license for a reasonable cause.
(b) If the commission determines it has reasonable grounds
to believe that a casino owner license holder may be unsuitable to
continue to hold a casino owner's license, the commission shall
conduct an investigation and hearing under Section 2202.351 and
may, based on its determination, suspend, limit, or revoke the
license. On suspension or revocation of a casino owner's license,
the license holder must immediately cease all casino gaming
activities.
(c) If the holder of a casino owner's license fails to begin
construction of a casino within 18 months after the receipt of the
casino owner's license, or fails to begin casino gaming operations
within three years after the receipt of the license, the license is
forfeited, unless the commission, for good cause, has previously
granted an appropriate extension of time.
(d) The right to receive and hold a casino owner's license
is a revocable privilege, and not a right or property under the
United States Constitution or the Texas Constitution. An applicant
for or holder of a casino owner's license does not have a vested
interest or right in a license issued under this chapter.
Sec. 2202.060. REGISTRATION OF INTEREST IN APPLICANT OR
LICENSE HOLDER. (a) Except as provided by Subsection (b), a person
who directly or indirectly owns an equity interest in an applicant
for or holder of a casino owner's license shall register and qualify
with the commission under commission rules and shall provide
information the commission finds necessary to determine the
suitability and eligibility of the person to retain the interest.
(b) The following persons are not required to register or
qualify under this section:
(1) a key employee of the casino owner license holder
that is required to apply for an occupational license under Section
2202.102;
(2) an institutional investor that beneficially owns
25 percent or less of the total equity of the casino owner license
holder;
(3) a person that beneficially owns 10 percent or less
of the total equity of the casino owner license holder; and
(4) any other group or class of persons that the
commission by rule exempts from registration or qualification.
(c) A casino owner license holder shall provide to the
commission the name, address, and interest in the casino owner
license holder of each person who is exempt from registration or
qualification under Subsection (b).
(d) A registration filed under this section must be
accompanied by the application fee set out in Section 2202.202.
Sec. 2202.061. TRANSFERABILITY OF INTEREST. (a) Except as
provided by this subsection, a casino owner license holder may not
issue an equity interest to a person without the commission's
determination of the qualification of the proposed subscriber or
purchaser to hold the interest. A casino owner license holder that
is a publicly held company may issue equity interests of five
percent or less of its equity interest to any person without the
consent of the commission.
(b) A person beneficially owning more than five percent of
the equity interest of a casino owner license holder may not
transfer any portion of the interest in the license holder to any
person without the commission's determination of the qualification
of the proposed transferee to hold the interest.
(c) A subscriber or proposed transferee of an interest by a
casino owner license holder shall provide the commission with
information the commission considers necessary to determine the
qualification of the person. The commission, not later than 60 days
after the date of the application, shall determine the
qualification of a subscriber or proposed transferee and approve or
deny the issuance or transfer.
Sec. 2202.062. DETERMINATION OF QUALIFICATION. (a) The
commission shall determine the qualification of a person to acquire
or continue to hold an equity interest in an applicant for or holder
of a casino owner's license based on the qualification requirements
the commission adopts for the protection of the public interest to
ensure that persons holding securities issued by license holders
are of good character, honesty, integrity, and financial stability,
and are otherwise qualified to hold the interest.
(b) The burden of proving qualification to acquire or hold
an equity interest in a license holder is on the person acquiring or
holding the interest.
(c) A person is unsuitable to acquire or retain an equity
interest in an applicant for or holder of a casino owner's license
if the person would be unsuitable to receive a casino owner's
license under Section 2202.055(e).
(d) If the commission has reasonable grounds to believe that
a person holding an equity interest in an applicant for or holder of
a casino owner's license may be unqualified to retain the person's
interest, the commission shall conduct an investigation and hearing
under Section 2202.351 and may, based on its determination, issue
an unsuitability finding and divestiture order to the holder of the
interest and the issuer of the interest. On receipt of a divestiture
order, the person holding the interest shall tender the person's
entire interest for purchase to the issuer or a third party on terms
the commission approves.
(e) If the commission issues an unsuitability finding and
divestiture order to a holder of an equity interest, the person
subject to the order may not:
(1) receive, directly or indirectly, a dividend,
interest, payment, or distribution of any kind relating to the
security that is the subject of the order; or
(2) exercise, directly or indirectly, any voting power
or other right with respect to the security to which the order
relates.
(f) A person subject to an order may receive payment for the
sale of the person's interest on terms the commission approves.
Sec. 2202.063. TERM OF CASINO OWNER'S LICENSE. (a) Each
Class I casino owner's license issued under this subchapter expires
on the 50th anniversary of the date of issuance and may be renewed
for one or more terms of 50 years.
(b) Each Class II and Class III casino owner's license
issued under this subchapter expires on the 25th anniversary of the
date of issuance and may be renewed for one or more terms of 25
years.
Sec. 2202.064. LOCAL ZONING LAWS. Notwithstanding any
other law, destination resorts at which casino gaming is authorized
under Section 2202.052(b)(1) shall be subject to any applicable
local government zoning and land use regulations in place on
January 1, 2021. To the extent destination resorts could be
classified under multiple regulations or classifications, local
government zoning and land use authorities shall treat and classify
destination resorts under the most permissive classification so as
to ensure the maximum economic benefit to the state in the shortest
possible timeline.
SUBCHAPTER C. CASINO OPERATOR'S LICENSE AND OCCUPATIONAL LICENSE
Sec. 2202.101. CASINO OPERATOR'S LICENSE. (a) Except as
provided by Subsection (b), a person may not provide services as a
casino operator unless the person holds a casino operator's
license.
(b) A casino operator license holder must hold a separate
casino operator's license for each casino that the license holder
operates unless the license holder is also the owner of the casino
and holds a casino owner's license for the premises.
Sec. 2202.102. OCCUPATIONAL LICENSE. (a) Except as
provided by Subsection (b), a person may not be employed as a gaming
employee unless the person holds an occupational license.
(b) A casino owner license holder or casino operator license
holder is not required to obtain an additional occupational license
to provide services as a gaming employee in the casino to which the
license relates.
(c) A casino owner license holder shall designate not fewer
than one occupational license holder as a key employee having
responsibility over all gaming activities. Not fewer than one key
employee must be available at the casino at all times when gaming is
conducted on the owner's premises.
(d) A gaming employee designated by the casino owner license
holder or determined by the commission to be a key employee shall be
issued an occupational license designated as a key employee
occupational license. In determining whether an employee is a key
employee, the commission is not restricted by the title of the job
performed by the employee but may consider the functions and
responsibilities of the employee in making decisions.
(e) A person employed as a gaming employee must obtain an
occupational license designated as a support occupational license.
A person required to hold a support occupational license may not be
a gaming employee of or assist the casino owner license holder or
casino operator license holder until the employee obtains the
support occupational license. A person licensed as a key employee
is not required to obtain a support occupational license.
Sec. 2202.103. APPLICATION. (a) An application for a
casino operator's license or an occupational license shall be made
in compliance with commission rules and must contain information
the commission finds necessary to determine the suitability and
eligibility of the applicant to function as a casino operator or to
be employed or retained as a gaming employee.
(b) An application for a casino operator's license or an
occupational license must be accompanied by the required
application fee.
(c) The commission may issue a temporary casino operator's
license and a temporary occupational license.
Sec. 2202.104. RESIDENCY. A person is eligible to apply for
and hold a casino operator's license or occupational license
without regard to the residency of the applicant.
Sec. 2202.105. DETERMINATION OF SUITABILITY. (a) The
commission shall determine the suitability of an applicant for or
holder of a casino operator's license or occupational license based
on suitability criteria the commission adopts in order to ensure
that a license holder:
(1) is of good character, honesty, and integrity;
(2) has sufficient business probity, competence, and
training or experience in the gaming industry to perform the
function contemplated; and
(3) is otherwise qualified to be licensed.
(b) The burden of proving suitability to receive and hold a
casino operator's license or occupational license is on the
applicant or license holder.
(c) In considering the suitability of a company applying for
or holding a casino operator's license or occupational license to
receive and continue to hold the license, the commission shall
consider the suitability of each principal manager and each holder
of an equity interest of the company to individually receive and
hold an occupational license based on the suitability standards
that apply to the applicants for the license generally.
(d) A person may not be found suitable to receive or hold a
casino operator's license or occupational license if that person
would be found unsuitable to hold a casino owner's license under
Section 2202.055(e), except that an applicant for a casino
operator's license or occupational license who has been convicted
of a felony may be found suitable if the person is found to be
adequately rehabilitated under applicable rehabilitation
requirements adopted by the commission, and the applicant or
license holder is otherwise suitable for licensing.
Sec. 2202.106. DENIAL OR REVOCATION OF LICENSE. (a) The
commission may deny an application for or revoke a casino
operator's license or occupational license for any reasonable
cause.
(b) If the commission determines that it has reasonable
grounds to believe that a license holder may be unsuitable to
continue to hold the license, giving due consideration to the
protection of the health, safety, morals, and general welfare of
this state and to the reputation of the state's gaming industry, the
commission shall conduct an investigation and hearing under
Sections 2202.351 and 2202.356 and may, based on its determination,
suspend, limit, or revoke any license.
(c) On the suspension or revocation of a license, the
license holder shall cease the provision of all services in any
capacity requiring a license under Section 2202.101 or 2202.102.
(d) A holder of an occupational license that has been
revoked or suspended may not:
(1) receive, directly or indirectly, any
compensation, consideration, or payment of any kind relating to the
conduct of casino gaming in any capacity requiring a license under
Section 2202.101 or 2202.102, other than the payment for services
rendered before the suspension or revocation; or
(2) serve or function in a capacity that would require
a license under Section 2202.101 or 2202.102.
(e) The receipt and holding of a license is a privilege and
is not a right or property under the United States Constitution or
the Texas Constitution. An applicant for or holder of a casino
operator's license or occupational license does not have a vested
interest or right in a license issued under this chapter.
SUBCHAPTER D. MANUFACTURER'S AND OTHER SERVICE PROVIDERS' LICENSES
Sec. 2202.151. MANUFACTURER'S LICENSE. (a) A person may
not engage in any segment of the slot machine manufacturing
industry in this state for which a manufacturer's license is
required under this section without obtaining a manufacturer's
license covering that segment of the industry. This subsection
applies only to slot machines manufactured for use in this state.
(b) The commission shall adopt rules identifying segments
of the manufacturing industry directly involved in the design,
manufacture, assembly, production, programming, sale, lease,
marketing, distribution, repair, or modification of slot machines
or component parts of slot machines that the commission finds
appropriate for licensing under this section.
(c) A manufacturer's license is personal to the license
holder and allows the license holder to conduct business with any
destination resort or casino.
Sec. 2202.152. CASINO SERVICE LICENSE. (a) A person may
not engage in any segment of the casino service industry that
requires a license without obtaining a casino service license.
(b) The commission shall adopt rules identifying segments
of the casino service industry directly involved with providing
gaming-related services, equipment, and supplies that the
commission finds appropriate for licensing.
(c) A person is required to obtain a casino service license
if the person:
(1) operates, conducts, or maintains a gaming-related
business in a casino; or
(2) furnishes goods, property, or services to a casino
in exchange for:
(A) a payment based on a percentage of the
earnings, profits, or receipts from the casino; or
(B) a payment the commission finds to be grossly
disproportionate to the value of the goods, property, or service
provided.
(d) A utility company, a retail electric provider, a
municipality, or another political subdivision is not required to
obtain a casino service license under this section.
(e) A casino service license is personal to the license
holder and allows the license holder to conduct business with any
destination resort or casino.
(f) The holder of a casino owner's license or casino
operator's license is not required to obtain a casino service
license to provide services for which a casino service license
would otherwise be required, if the license holder provides those
services in the course of the license holder's operation or
management of the casino to which the casino owner's license or
casino operator's license relates.
Sec. 2202.153. APPLICATION. (a) A person seeking a
manufacturer's license or casino service license shall submit an
application in accordance with commission rules.
(b) The application must:
(1) contain information the commission finds
necessary to determine the suitability and eligibility of the
applicant; and
(2) be accompanied by the required application fee.
Sec. 2202.154. DETERMINATION OF SUITABILITY. (a) In
considering the suitability of a company applying for or holding a
manufacturer's license or casino service license to receive and
continue to hold the license, the commission shall consider the
suitability of each principal manager and each holder of an equity
interest in the company applicant to individually receive and hold
a manufacturer's license or casino service license based on the
suitability standards that apply to the company applicant. A
person may not be found suitable to receive or hold a manufacturer's
license or casino service license if that person would be found
unsuitable to hold a casino owner's license under Section
2202.055(e).
(b) If the commission has reasonable grounds to believe that
a license holder is unsuitable to hold a manufacturer's license or
casino service license, the commission:
(1) shall conduct an investigation and hearing under
Sections 2202.351 and 2202.356; and
(2) may, based on its determination, suspend, limit,
or revoke a license.
(c) On suspension or revocation of a license, the license
holder must cease the performance of manufacturing activity or
casino service requiring a license under this chapter. After the
revocation or suspension of the license, the affected license
holder may not receive, directly or indirectly, compensation,
consideration, or payment of any kind relating to manufacturing
activity or provision of casino services in any capacity requiring
a license under this chapter, other than the payment for goods or
services provided before the suspension or revocation.
(d) A casino owner license holder or a casino operator
license holder who has entered into a lease with a manufacturer's
license holder or casino services license holder whose license has
been revoked or suspended may continue to make payments on the lease
based on the original terms and conditions of the lease without
modification or may accelerate the lease and pay it off, at the sole
option of the casino owner license holder or casino operator
license holder.
(e) The burden of proving suitability to receive and hold a
manufacturer's license or casino service license is on the license
holder.
SUBCHAPTER E. LICENSE RENEWAL AND FEES
Sec. 2202.201. TERMS; RENEWAL. (a) Except as provided by
Section 2202.063, an original or renewal license expires on the
first anniversary of the date it is issued.
(b) The fee for a casino owner's license, casino operator's
license, occupational license, manufacturer's license, or casino
service license is in the amount provided by Section 2202.203 and
must be paid annually. A license holder may renew an unexpired
license by meeting the licensing requirements of the commission and
paying the annual fee.
Sec. 2202.202. APPLICATION FEES. (a) An application fee
received under this section must be:
(1) deposited in the Texas casino gaming fund; and
(2) used for the operation of the commission.
(b) An applicant for a Class I casino owner's license must
pay an application fee of $1,000,000.
(c) An applicant for a Class II or Class III casino owner's
license must pay an application fee of $500,000.
(d) An applicant for a manufacturer's license must pay an
application fee of $300,000.
(e) An applicant for an operator's license must pay an
application fee of $100,000.
(f) An applicant for a casino service license must pay an
application fee of $200.
(g) A person registering and applying to qualify to hold an
equity interest in a license holder must pay an application fee of
$200.
(h) An individual applying for an occupational license must
pay an application fee of $100.
(i) All application fees must be in the form of a money order
or cashier's check and be payable to the Texas Gaming Commission,
except that the commission may provide for the payment of the fees
by electronic funds transfer or similar method. Application fees
are nonrefundable.
(j) Application fees shall be applied toward the cost of
investigating applicants' suitability for licensing or
qualification under this chapter. Any costs of investigation
incurred in excess of the application fee shall be paid by the
applicant.
Sec. 2202.203. LICENSE FEES. (a) A holder of a Class I
casino owner's license must pay an initial license fee of
$50,000,000 and an annual license fee of $1,000,000. The initial
license fee for a casino owner's license must be paid not later than
the 30th day after the date the license is approved by the
commission.
(b) A holder of a Class II or Class III casino owner's
license must pay an initial license fee of $10,000,000 and an annual
license fee of $500,000.
(c) A holder of a manufacturer's license must pay an annual
license fee of $200,000.
(d) A holder of an operator's license must pay an annual
license fee of $100,000.
(e) A holder of a casino service license must pay an annual
license fee of $200.
(f) A holder of an equity interest in any license holder
that is required to qualify with the commission must pay an annual
fee of $200.
(g) A holder of an occupational license must pay an annual
license fee of $100.
SUBCHAPTER F. TEXAS CASINO GAMING FUND; TAXES ON GROSS GAMING
REVENUE
Sec. 2202.251. TEXAS CASINO GAMING FUND. (a) The Texas
casino gaming fund is a special fund in the state treasury.
(b) All application fees, investigation fees, and license
fees collected by the commission or on the commission's behalf
related to casino gaming shall be deposited to the credit of the
Texas casino gaming fund.
(c) The Texas casino gaming fund may be used only for the
operation of the commission and the administration of this chapter.
If the money in the fund exceeds the amount necessary for the
operation of the commission and the administration of this chapter,
the legislature may transfer any excess amount to the general
revenue fund.
(d) The operation of the commission and the administration
of this chapter shall be supported by fees generated under this
chapter and by a portion of the taxes imposed by Section 2202.252.
Sec. 2202.252. CASINO GAMING TAX; ALLOCATION OF TAX. (a) A
gaming tax is imposed on each holder of a casino owner's license in
an amount equal to:
(1) 10 percent of the gross gaming revenue of the
casino from all gambling games operated under the license except
slot machines; and
(2) 25 percent of the gross gaming revenue of the
casino from slot machines.
(b) The tax shall be computed and paid on a monthly basis in
accordance with the procedures established by commission rule.
(c) Except as provided by Subsections (d), (e), and (f), the
revenue from the taxes imposed by this section is allocated to the
general revenue fund.
(d) Of the revenue from the tax imposed by Subsection (a):
(1) one-thirtieth of the revenue is allocated to the
municipality in which the casino to which the license relates is
located, and one-thirtieth of the revenue is allocated to the
county in which the casino to which the license relates is located;
or
(2) if the casino is located in an unincorporated
area, one-fifteenth of the revenue is allocated to the county in
which the casino to which the license relates is located.
(e) The comptroller shall transfer the appropriate amount
allocated under Subsection (d) to the appropriate municipalities
and counties not less than monthly in the manner the comptroller
considers appropriate.
(f) Of the revenue from the tax imposed by Subsection (a):
(1) one-half of one percent shall be allocated to the
general revenue fund and may be appropriated only to fund a
compulsive gambling program established under Subchapter J; and
(2) $500,000 may be appropriated in each state fiscal
biennium to the Department of Public Safety to be used to provide
grants to prosecuting attorneys for the investigation and
prosecution of offenses related to the possession of gambling
devices.
(g) The taxes imposed by this section are due and payable on
or before the 20th day of the month following the month in which the
taxes are imposed.
(h) If the amount of gaming taxes required to be reported
and paid under this section is later determined to be greater or
less than the amount actually reported and paid by the license
holder, the commission shall:
(1) assess and collect the additional gaming taxes
determined to be due with interest until paid; or
(2) refund any overpayment, with interest, to the
license holder.
(i) Interest required to be refunded under Subsection
(h)(2) must be computed, until paid, at the rate of one percent per
month from the first day of the first month following the due date
of the additional gaming taxes.
Sec. 2202.253. DETERMINATION OF GROSS GAMING REVENUE. (a)
In calculating gross gaming revenue, a prize, premium, drawing,
benefit, or ticket that is redeemable for money, merchandise, or
other promotional allowance, except money, chips, or tokens paid at
face value directly to a patron as the result of a specific wager
and the amount of cash paid to purchase an annuity to fund winnings,
may not be deducted from gross gaming revenue as a loss at any game
except a slot machine or a table game with a progressive jackpot.
(b) In calculating gross gaming revenue from slot machines
at a casino, the actual cost to the license holder of any personal
property distributed to a patron as the result of a legitimate wager
may be deducted as a loss, but travel expenses, food, refreshments,
lodging, or services at the license holder's facility may not be
deducted. For the purposes of this subsection, personal property is
distributed as the result of a legitimate wager if a patron must
make a wager before receiving the personal property, regardless of
whether the receipt of the personal property is dependent on the
outcome of the wager.
(c) Cash or the value of noncash prizes awarded to patrons
in a contest or tournament are not losses for purposes of
determining gross gaming revenue under this section.
Sec. 2202.254. REFUND OF OVERPAYMENT. (a) Taxes imposed
under this subchapter that are erroneously collected may be
refunded, on approval of the commission, as other claims against
the state are paid.
(b) Not later than the 90th day after the date notice of the
commission's action on a claim for refund filed under this chapter
is sent by mail, the claimant may bring an action against the
commission on the grounds stated in the claim for the recovery of
any part of the amount of the claim that has been disallowed.
(c) Failure to bring an action within the time specified by
Subsection (b) constitutes a waiver of any demand against the state
on account of alleged overpayments.
(d) If the commission fails to mail its notice of action on a
claim within six months after the date the claim is filed, the
claimant may consider the claim disallowed and bring an action
against the commission on the grounds set forth in the claim for the
recovery of any part of the amount claimed as an overpayment.
(e) In a case where a refund is granted, interest is allowed
at the rates provided in Section 111.064, Tax Code.
(f) A claim for refund of taxes imposed under this
subchapter that are paid in excess of the amount required to be
reported and paid must be filed not later than two years after the
date of overpayment.
Sec. 2202.255. DETERMINATION OF DEFICIENCY. (a) If a
casino owner license holder fails to make a report of the taxes
imposed under this subchapter as required by this chapter, or if the
executive director is not satisfied with the license holder's
report of the taxes, the executive director may compute and
determine the amount required to be paid based on:
(1) any facts contained in the report;
(2) an audit conducted by the executive director;
(3) an estimate of the amount of taxes due;
(4) any information in the commission's possession or
that may come into the executive director's possession; or
(5) any combination of the methods described by
Subdivisions (1)-(4).
(b) In making a determination, the commission may offset
overpayments and interest due against underpayments and interest or
penalties due for the period of the audit.
(c) The executive director shall give prompt written notice
of a determination of a deficiency under this section to the casino
owner license holder. Except in the case of fraud or intent to evade
the payment of the tax, a notice of a determination of a deficiency
must be mailed not later than that later of the second anniversary
of the:
(1) last day of the calendar month following the
applicable reporting period in which the deficiency occurred; or
(2) date the report is filed by the license holder.
(d) If the reasons for the deficiency are not apparent, the
executive director shall include an explanation of those reasons in
the notice of a determination of a deficiency.
(e) If overpayments and interest exceed underpayments,
penalties, and interest, the excess amount shall be refunded to the
casino owner license holder.
Sec. 2202.256. PETITION FOR REVIEW. (a) A casino owner
license holder against whom a determination is made under Section
2202.255 may petition the commission for a redetermination not
later than the 30th day after the date of service of notice of the
determination. If a petition for redetermination satisfying the
requirements of Subsection (c) is not filed within the 30-day
period, the determination becomes final.
(b) If a petition for redetermination satisfying the
requirements of Subsection (c) is filed within the 30-day period,
the commission shall reconsider the determination and, if the
petitioner requests, shall grant a hearing.
(c) A petition for redetermination must:
(1) specify the contested portions of the
determination of deficiency;
(2) specify the grounds for redetermination;
(3) state whether a hearing is requested; and
(4) be accompanied by payment in full of the
uncontested portion of the determination, including any interest
and penalties.
(d) An order or decision of the commission on a petition for
redetermination is final 10 days after the date of service on the
petitioner.
(e) A petitioner against whom an order or decision of the
commission becomes final may, not later than the 60th day after the
date the decision is final, petition for judicial review in the
manner provided by Chapter 2001, Government Code. The executive
director may not petition for judicial review.
Sec. 2202.257. TAX ADMINISTRATION. (a) The commission
shall perform all functions incident to the administration,
collection, enforcement, and operation of a fee or tax imposed
under this chapter. The commission may adopt rules and prescribe
forms for the administration, collection, and enforcement of a fee
or tax and for the reporting of a fee or tax.
(b) Subtitle B, Title 2, Tax Code, applies to the
administration, collection, and enforcement of a tax imposed under
this subchapter, except that the powers and duties assigned to the
comptroller under that subtitle are assigned to the commission.
SUBCHAPTER G. REGULATION OF CASINO OPERATIONS
Sec. 2202.301. REGULATION OF CASINO OPERATIONS. (a) The
commission shall adopt rules applicable to the operation of casinos
as the commission finds necessary for the protection of the health,
safety, morals, and general welfare of this state and for the
reputation of the state's gaming industry.
(b) Casinos may operate 24 hours a day, seven days a week. A
license holder may elect other hours of operation.
(c) The commission by rule shall authorize and regulate
wagering at a casino on the outcome of a sports event. Rules adopted
under this subsection must be consistent with any rules adopted by
other state agencies regulating wagering on the outcome of a sports
event.
Sec. 2202.302. USE OF CHIPS OR TOKENS. All gaming must be
conducted with legal tender of the United States or with chips,
tokens, or other instrumentality approved by the commission for
that purpose.
Sec. 2202.303. REPORTING REQUIREMENTS. (a) A casino owner
license holder shall keep the license holder's books and records in
a manner that clearly shows the total amount of gross gaming
revenue, as applicable, and other revenues received.
(b) The books and records kept by a casino owner license
holder relating to gaming operations are not public records and the
publication and dissemination of the materials by the commission is
prohibited.
(c) A casino owner license holder shall file a report of
each change of the corporate officers and directors with the
commission. The commission shall, not later than the 90th day after
the date of the change, approve or disapprove the change. During
the 90-day period, the officer or director is entitled to exercise
the powers of the office to which the officer or director was
elected or appointed.
(d) A casino owner license holder shall report to the
executive director in writing a change in company employees who
have been designated as key employees.
(e) The commission may require that a company furnish the
commission with a copy of its federal income tax return not later
than the 30th day after the date the return is filed with the
federal government.
Sec. 2202.304. EXCLUSION OF PERSONS. (a) The commission by
rule shall provide for the establishment of a list of persons who
must be excluded or ejected from a casino. The list may include a
person whose presence in the casino or establishment is determined
by the commission to pose a threat to the interests of this state,
to licensed gaming, or to both interests.
(b) In making a determination under this section, the
commission may consider any:
(1) prior conviction of a crime that is a felony in
this state or under the laws of the United States or a crime
involving moral turpitude or a violation of the gaming laws of a
state; or
(2) violation of or conspiracy to violate this chapter
relating to:
(A) the failure to disclose an interest in a
casino for which the person must obtain a license;
(B) willful evasion of a fee or a tax;
(C) notorious or unsavory reputation that would
adversely affect public confidence and trust that the gaming
industry is free from criminal or corruptive elements; or
(D) a written order of a governmental agency that
authorizes the exclusion or ejection of the person from a casino
where casino gaming or pari-mutuel wagering is conducted.
Sec. 2202.305. INTERNAL AUDIT AND CONTROL SYSTEMS. (a) A
casino owner license holder shall adopt an internal control system
that provides for:
(1) the safeguarding of its assets and revenues,
especially the recording of cash and evidences of indebtedness; and
(2) the provision of reliable records, accounts, and
reports of transactions, operations, and events, including reports
to the executive director and the commission.
(b) The internal control system must be designed to
reasonably ensure that:
(1) assets are safeguarded;
(2) financial records are accurate and reliable;
(3) transactions are performed only in accordance with
management's general or specific authorization;
(4) transactions are recorded adequately to allow
proper reporting of gaming revenue and of fees and taxes and to
maintain accountability for assets;
(5) access to assets is allowed only in accordance
with management's specific authorization;
(6) recorded accountability for assets is compared
with actual assets at reasonable intervals and appropriate action
is taken with respect to any discrepancies; and
(7) functions, duties, and responsibilities are
appropriately segregated and performed in accordance with sound
practices by competent, qualified personnel.
(c) A casino owner license holder and an applicant for a
casino owner's license shall describe, in a manner approved or
required by the executive director, the license holder's or
applicant's administrative and accounting procedures in detail in a
written system of internal control. A casino owner license holder
and applicant for a casino owner's license shall submit a copy of
the license holder's or applicant's written system to the executive
director. A written system must include:
(1) an organizational chart depicting appropriate
segregation of functions and responsibilities;
(2) a description of the duties and responsibilities
of each position shown on the organizational chart;
(3) a detailed, narrative description of the
administrative and accounting procedures designed to satisfy the
requirements of Section 2202.303(a);
(4) a written statement signed by the license holder's
chief financial officer and either the license holder's chief
executive officer or the casino owner license holder attesting that
the system satisfies the requirements of this section;
(5) if the written system is submitted by an
applicant, a letter from an independent certified public accountant
stating that the applicant's written system has been reviewed by
the certified public accountant and complies with the requirements
of this section; and
(6) other items the executive director may require.
(d) The commission shall adopt minimum standards for
internal control procedures.
Sec. 2202.306. AGE REQUIREMENTS. A person under the age of
21 years may not:
(1) play, be allowed to play, place wagers, or collect
winnings, personally or through an agent, from any casino gaming
authorized under this chapter; or
(2) be employed as a gaming employee.
Sec. 2202.307. ACCEPTANCE OF CREDIT INSTRUMENTS. (a) A
credit instrument evidencing a gaming transaction may be enforced
by legal process.
(b) A license holder may accept an incomplete credit
instrument that is signed by a patron and states the amount of the
debt. The license holder may complete the instrument as is
necessary for the instrument to be presented for payment.
(c) A license holder:
(1) may not accept a credit instrument that is
incomplete, except as authorized by Subsection (b); and
(2) may accept a credit instrument that is payable to
an affiliate or may complete a credit instrument in the name of an
affiliate as payee if the credit instrument otherwise complies with
this section and the records of the affiliate pertaining to the
credit instrument are made available to the executive director on
request.
(d) This section does not prohibit the establishment of an
account by a deposit of cash, recognized traveler's check, or any
other instrument that is equivalent to cash.
(e) Any person, license holder, or the agents or employees
of the person or license holder who violate this section are subject
only to the penalties provided in this chapter relating to
disciplinary actions. The failure of a person to comply with this
section or commission rules does not invalidate a credit instrument
or affect the ability to enforce the credit instrument or the
transaction that the credit instrument represents.
Sec. 2202.308. GAMBLING DEBTS. (a) Except as otherwise
provided by this chapter, gambling debts not evidenced by a credit
instrument are void and unenforceable and do not give rise to any
administrative or civil cause of action.
(b) A claim by a patron of a license holder for payment of a
gambling debt not evidenced by a credit instrument may be resolved
by the executive director under commission rules.
(c) The executive director shall send a copy of the
director's ruling by first class mail to the attorneys of record and
shall keep an appropriate copy of the mailing. If a party is not
represented by an attorney of record, the executive director shall
send a copy of the ruling by first class mail to the party and shall
keep an appropriate record of the mailing.
(d) A party or attorney of record notified by mail under
this section is presumed to have been notified on the date on which
the notice is mailed.
(e) A party aggrieved by the executive director's ruling is
entitled to have the claim resolved by the commission in a contested
case under Chapter 2001, Government Code, if the party files a
written complaint with the commission challenging the executive
director's decision not later than the 20th day after the date on
which the party or the party's attorney of record is notified by
mail.
Sec. 2202.309. QUESTIONING AND DETENTION OF PERSONS. (a) A
casino owner license holder or the license holder's officer,
employee, or agent may question any person on the license holder's
premises suspected of violating this chapter. The casino owner
license holder or the license holder's officer, employee, or agent
is not criminally or civilly liable:
(1) as a result of the questioning; or
(2) for reporting the person suspected of the
violation to the executive director or law enforcement authorities.
(b) A casino owner license holder or the license holder's
officer, employee, or agent who has reasonable cause to believe
that there has been a violation of this chapter in the license
holder's casino by a person may take that person into custody and
detain the person in the casino in a reasonable manner and for a
reasonable length of time. The taking into custody and detention
does not render a license holder or the license holder's officer,
employee, or agent criminally or civilly liable unless it is
established by clear and convincing evidence that the taking into
custody and detention are unreasonable under all the circumstances.
(c) A casino owner license holder or the license holder's
officer, employee, or agent is not entitled to the immunity from
liability provided by Subsection (a) or (b) unless there is
displayed in a conspicuous place in the license holder's
establishment a notice in boldface type, clearly legible, and in
substantially this form:
A CASINO OWNER LICENSE HOLDER OR THE HOLDER'S
OFFICER, EMPLOYEE, OR AGENT WHO HAS A REASONABLE CAUSE
TO BELIEVE THAT A PERSON HAS VIOLATED A PROVISION OF
CHAPTER 2202, OCCUPATIONS CODE, MAY QUESTION OR DETAIN
THAT PERSON IN THIS ESTABLISHMENT.
Sec. 2202.310. SLOT MACHINE DISABLED. (a) The commission
may disable a slot machine operated by a license holder under this
chapter at the time:
(1) a proceeding to summarily suspend the license is
initiated;
(2) the commission discovers the license holder failed
to deposit money received from slot machine operations as required
if the license is being summarily suspended under this section; or
(3) an act or omission occurs that, under commission
rules, justifies the termination of slot machine operations to:
(A) protect the integrity of gaming or the public
health, welfare, or safety; or
(B) prevent financial loss to this state.
(b) The commission shall immediately disable a slot machine
if necessary to protect the public health, welfare, or safety.
Sec. 2202.311. SLOT MACHINE: DISTRIBUTION AND COMMISSION
APPROVAL. (a) A person may not distribute a slot machine or other
gaming or associated equipment for placement at a casino or
destination resort in this state unless the machine or equipment
has been approved by the commission.
(b) Only a person that holds a manufacturer's license issued
under this chapter may apply for approval of a slot machine or other
gaming or associated equipment.
Sec. 2202.312. TECHNICAL STANDARDS FOR GAMING EQUIPMENT.
The commission by rule shall establish minimum technical standards
for gaming equipment that may be operated in this state.
Sec. 2202.313. INCIDENT REPORTS. (a) A casino owner
license holder or casino operator license holder shall record all
potential criminal violations related to gaming activity in the
casino operated by the owner or operator.
(b) The casino owner license holder or casino operator
license holder for a casino shall assign each incident, without
regard to materiality, a sequential number and, at a minimum,
provide the following information in a permanent record prepared in
accordance with commission rules to ensure the integrity of the
record:
(1) the number assigned to the incident;
(2) the date and time of the incident;
(3) the nature of the incident;
(4) each person involved in the incident; and
(5) the name of the employee or other agent of the
owner or operator who investigated the incident.
Sec. 2202.314. SLOT MACHINE EVENTS. A casino owner license
holder or casino operator license holder of a casino shall keep a
database of slot machine events. The commission by rule shall
determine what constitutes a slot machine event for purposes of
this section.
Sec. 2202.315. SECURITY. (a) The casino owner license
holder or casino operator license holder of a casino shall:
(1) continuously monitor all slot machines through the
use of a closed-circuit television system that records activity for
a continuous 24-hour period, retain all videotapes or other media
used to store video images for not fewer than seven days, and make
the tapes or media available to the commission on request;
(2) submit for commission approval a security plan and
a floor plan of the area where slot machines are operated showing
slot machine locations and security camera mount locations; and
(3) employ at least the minimum number of private
security personnel the commission determines is necessary to
provide for safe and approved operation of the casino and the safety
and well-being of the players.
(b) Private security personnel must be present during all
hours of operation at each casino.
(c) An agent or employee of the commission or the Department
of Public Safety or other law enforcement personnel may be present
at a casino at any time.
(d) The commission may adopt rules to impose additional
surveillance and security requirements related to casinos and the
operation of slot machines.
Sec. 2202.316. COMMISSION RIGHT TO ENTER. The commission
or the commission's representative, after displaying appropriate
identification and credentials, has the free and unrestricted right
to:
(1) enter the premises of a casino;
(2) enter at all times any other locations involved in
operation or support of slot machines; and
(3) inspect and copy the records of the owner or
operator of a casino pertaining to the operation of slot machines.
Sec. 2202.317. APPOINTMENT OF SUPERVISOR. (a) The
commission by rule may provide for the appointment of a supervisor
to manage and operate a casino at the direction of the commission
and perform any act that a casino owner license holder or casino
operator license holder is entitled to perform in the event that:
(1) the owner's or operator's license or other license
required for operation of the casino is revoked or suspended,
lapses, or is surrendered;
(2) a casino has been conveyed or transferred to a
secured party receiver or trustee who does not hold the necessary
licenses to operate the casino; or
(3) any other event occurs that causes the casino to
cease the operation of slot machines.
(b) The rules may allow the commission to:
(1) take any action or adopt any procedure necessary
to operate a casino pending the licensing of an owner or operator or
a successor on the transfer or sale of the casino or property; and
(2) if necessary to continue the operation of the
casino, sell the casino to a person that holds or has applied for
the licenses required to operate the casino under this chapter and
make appropriate distributions of the proceeds of the sale.
Sec. 2202.318. OFFENSE: CONVEYANCE OF CASINO PROPERTY. (a)
A person commits an offense if during the pendency of any proceeding
before the commission that may result in the appointment of a
supervisor or during the period of supervision the person:
(1) sells, leases, or otherwise conveys for less than
full market value or pledges as security any property of a casino;
or
(2) removes from this state or secretes from the
commission or the supervisor any property, money, books, or records
of the casino, including evidences of debts owed to the casino.
(b) An offense under Subsection (a) is a felony of the third
degree.
SUBCHAPTER H. ENFORCEMENT
Sec. 2202.351. ENFORCEMENT. (a) The executive director
shall conduct an appropriate investigation to:
(1) determine whether there has been a violation of
this chapter or of a commission rule;
(2) determine facts, conditions, practices, or
matters that the director considers necessary or proper to aid in
the enforcement of a law or rule;
(3) aid in adopting rules;
(4) secure information as a basis for recommending
legislation relating to this chapter; and
(5) determine whether a license holder is able to meet
the license holder's financial obligations, including all
financial obligations imposed by this chapter, as they become due.
(b) If after an investigation the executive director is
satisfied that a license should be limited, conditioned, suspended,
or revoked, or that a fine should be levied, the executive director
shall initiate a hearing under Section 2202.356.
Sec. 2202.352. PRIVILEGED DOCUMENTS. (a) A communication
or document of an applicant or license holder that is required by
law or commission rule or by a subpoena issued by the commission and
that is to be made or transmitted to the commission or the executive
director is privileged and does not impose liability for defamation
or constitute a ground for recovery in a civil action by a person
other than the commission.
(b) If a document or communication contains information
that is privileged, the privilege is not waived or lost because the
document or communication is disclosed to the commission or the
executive director.
(c) Notwithstanding the powers granted to the commission
and the executive director by this chapter:
(1) the commission and the executive director may not
release or disclose privileged information, documents, or
communications provided by an applicant and required by a lawful
court order after timely notice of the proceedings has been given to
the applicant or license holder without the prior written consent
of the applicant or license holder;
(2) the commission and the executive director shall
maintain all privileged information, documents, and communications
in a secure place accessible only to members of the commission and
the executive director; and
(3) the commission shall adopt procedures to protect
the privileged nature of information, documents, and
communications provided by an applicant or license holder.
Sec. 2202.353. RELEASE OF CONFIDENTIAL INFORMATION. An
application to a court for an order requiring the commission or the
executive director to release any information declared by law to be
confidential shall be made only on a motion in writing delivered not
later than the 10th day before the date of application to the
commission, the attorney general, and all persons who may be
affected by the entry of the order. Copies of the motion and all
papers filed in support of the motion shall be served with the
notice by delivering a copy in person or by certified mail to the
last known address of the person to be served.
Sec. 2202.354. EMERGENCY ORDERS. (a) The commission may
issue an emergency order for suspension, limitation, or
conditioning of a license or may issue an emergency order requiring
a casino to keep an individual license holder from the premises of
the licensed establishment or to not pay the license holder any
remuneration for services or any profits, income, or accruals on
the license holder's investment in the casino.
(b) An emergency order may be issued only if the commission
determines that:
(1) a license holder has wilfully failed to report,
pay, or truthfully account for a fee imposed under this chapter or
wilfully attempted in any manner to evade or defeat a fee or
payment;
(2) a license holder or gaming employee has cheated at
a gambling game; or
(3) the action is necessary for the immediate
preservation of the public peace, health, safety, morals, good
order, or general welfare.
(c) The emergency order must state the grounds on which it
is issued, including a statement of facts constituting the alleged
emergency necessitating the action.
(d) An emergency order may be issued only with the approval
of and under the signature of four or more members of the
commission.
(e) An emergency order is effective immediately on issuance
and service on the license holder or resident agent of the license
holder, gaming employee, or, in cases involving registration, on
issuance and service on the person or entity involved or resident
agent of the entity involved. An emergency order may suspend,
limit, condition, or take other action in relation to the license of
one or more persons in an operation without affecting other
individual license holders or the casino. An emergency order
remains effective until further order of the commission or final
disposition of the case.
(f) Not later than the fifth day after the date of issuance
of an emergency order, the executive director shall file a
complaint and serve it on the person or entity involved. The person
or entity against whom the emergency order has been issued and
served is entitled to a hearing before the commission and to
judicial review of the decision and order of the commission under
Chapter 2001, Government Code. Judicial review is under the
substantial evidence rule, as provided by that chapter.
Sec. 2202.355. REVOCATION OF LICENSE. (a) The commission
shall revoke or suspend a license issued under this chapter if the
holder of the license at any time fails to meet the eligibility
requirements set forth in this chapter.
(b) Failure to timely remit gaming revenue generated by slot
machines to the commission or any tax or other fee owed to this
state as demonstrated by report from the applicable taxing
authority or to timely file any report or information required
under this chapter as a condition of any license issued under this
chapter may be grounds for suspension or revocation, or both, of a
license issued under this chapter.
Sec. 2202.356. DISCIPLINARY HEARING. (a) Before the
commission revokes or suspends a license or imposes monetary
penalties for a violation of this chapter, the commission shall
provide written notice to the license holder of the revocation, the
period of suspension, or the monetary penalty. The notice shall
include:
(1) the effective date of the revocation or the period
of suspension or the amount of the monetary penalty, as applicable;
(2) each reason for the revocation, suspension, or
penalty;
(3) an explanation of the evidence supporting the
reasons;
(4) an opportunity to present the license holder's
position in response on or before the 15th day after the effective
date of the revocation; and
(5) a statement explaining the person's right to an
administrative hearing to determine whether the revocation,
suspension, or penalty is warranted.
(b) The notice required under Subsection (a) must be made by
personal delivery or by mail to the person's mailing address as it
appears on the commission's records.
(c) To obtain an administrative hearing on a suspension,
revocation, or penalty under this section, a person must submit a
written request for a hearing to the commission not later than the
20th day after the date notice is delivered personally or is mailed.
(d) If the commission receives a timely request under
Subsection (c), the commission shall provide the person with an
opportunity for a hearing as soon as practicable. If the commission
does not receive a timely request under Subsection (c), the
commission may impose the penalty, revoke or suspend a license, or
sustain the revocation or suspension without a hearing.
(e) Except as provided by Subsection (f), the hearing must
be held not earlier than the 11th day after the date the written
request is submitted to the commission.
(f) The commission may provide that a revocation or
suspension takes effect on receipt of notice under Subsection (a)
if the commission finds that the action is necessary to prevent or
remedy a threat to public health, safety, or welfare. The
commission by rule shall establish a nonexclusive list of
violations that present a threat to the public health, safety, or
welfare.
(g) A hearing on a revocation or suspension that takes
effect on receipt of notice must be held not later than the 14th day
after the date the commission receives the request for hearing
under this section. The revocation or suspension continues in
effect until the hearing is completed. If the hearing is continued,
the revocation or suspension shall continue in effect beyond the
14-day period at the request of the license holder or on a finding
of good cause by the commission or administrative law judge.
(h) To prevail in an administrative hearing under this
section occurring after revocation or suspension, the license
holder must demonstrate by clear and convincing evidence that the
deprivation or imposition of a penalty was unwarranted or otherwise
unlawful. The post-deprivation hearing may be conducted by the
commission or referred to the State Office of Administrative
Hearings.
(i) The administrative record created by the hearing
conducted by the State Office of Administrative Hearings shall be
provided to the commission for review and determination on the
revocation or suspension.
(j) If an administrative law judge of the State Office of
Administrative Hearings conducts a hearing under this section and
the proposal for decision supports the commission's position, the
administrative law judge shall include in the proposal a finding of
the costs, fees, expenses, and reasonable and necessary attorney's
fees this state incurred in bringing the proceeding.
(k) The commission may adopt the findings for costs, fees,
and expenses and make the finding a part of the final order entered
in the proceeding. Proceeds collected from a finding made under
this section shall be paid to the commission.
Sec. 2202.357. JUDICIAL REVIEW OF REVOCATION, SUSPENSION,
OR PENALTY IMPOSITION. (a) A person aggrieved by a final decision
of the commission to revoke or suspend a license or to impose any
monetary penalty may obtain judicial review before a district court
in Travis County.
(b) The judicial review must be instituted by serving on the
commission and filing a petition not later than the 20th day after
the effective date of the final decision and must identify the order
appealed from and the grounds or reason why the petitioner contends
the decision of the commission should be reversed or modified.
(c) The review must be conducted by the court sitting
without jury, and must not be a trial de novo but is confined to the
record on review. The reviewing court may only affirm the decision,
remand the case for further proceedings, or reverse the decision if
the substantial rights of the petitioner have been violated.
(d) If any court of competent jurisdiction concludes on
judicial review limited to the administrative record before the
commission and subject to the substantial evidence standard that
the revocation, suspension, or penalty was unwarranted or otherwise
unlawful, the sole remedy available is invalidation of the penalty
or reinstatement of the license and the continued distribution,
manufacture, or operation of slot machines.
(e) The commission, this state, or the members, officers,
employees, and authorized agents of the commission or the state are
not under any circumstances subject to monetary damages, attorney's
fees, or court costs resulting from a penalty imposed or from the
revocation of a license.
Sec. 2202.358. EFFECT OF DENIAL OF LICENSE. (a) If a
person denied a license has previously been issued a temporary
license, the temporary license expires immediately on the issuance
of the denial.
(b) Except as otherwise authorized by the commission, a
person denied a license may not reapply for any license before the
second anniversary of the date of the denial.
Sec. 2202.359. AGREEMENT TO WAIVE ENFORCEABILITY. A
license holder by virtue of accepting the license agrees that the
privilege of holding a license under this chapter is conditioned on
the holder's agreement to Sections 2202.355, 2202.356, and 2202.357
and the holder waives any right to challenge or otherwise appeal the
enforceability of those sections.
Sec. 2202.360. LIMITED WAIVER OF SOVEREIGN IMMUNITY; NO
LIABILITY OF STATE FOR ENFORCEMENT. (a) This state does not waive
its sovereign immunity by negotiating gaming agreements with Indian
tribes or other persons for the operation of casino gaming or
gambling games under this subtitle. An actor or agent for this state
may not waive this state's sovereign immunity absent an express
legislative grant of that authority. The only waiver of sovereign
immunity relative to gaming operations is provided by this section.
(b) With regard to gaming operations on Indian lands, this
state consents to the jurisdiction of the District Court of the
United States with jurisdiction in the county where the Indian
lands are located, or if the federal court lacks jurisdiction, to
the jurisdiction of a district court in Travis County, solely for
the purpose of resolving disputes arising from a gaming agreement
authorized under this chapter or Chapter 2203 for declaratory or
injunctive relief or contract damages of $100,000 or more. Any
disputes relating to damages or other awards valued at less than
$100,000 shall be arbitrated under the rules of the American
Arbitration Association, provided, however, that application of
the rules may not be construed as a waiver of sovereign immunity.
(c) All financial obligations of the commission are payable
solely out of the income, revenues, and receipts of the commission
and are subject to statutory restrictions and appropriations.
(d) This state and the commission are not liable if
performance by the commission is compromised or terminated by acts
or omissions of the legislature or the state or federal judiciary.
(e) This state and the commission are not liable for acts or
omissions related to the enforcement of this subtitle.
Sec. 2202.361. ABSOLUTE PRIVILEGE OF REQUIRED
COMMUNICATIONS AND DOCUMENTS. (a) Any communication, document, or
record of an applicant for or holder of a license that is made or
transmitted to the commission or any of its employees to comply with
any law, including a commission rule, to comply with a subpoena
issued by the commission, or to assist the commission or its
designee in the performance of their respective duties is
absolutely privileged, does not impose liability for defamation,
and is not a ground for recovery in any civil action.
(b) If a communication, document, or record provided under
Subsection (a) contains any information that is privileged under
state law, that privilege is not waived or lost because the
communication, document, or record is disclosed to the commission
or any commission employees.
(c) The commission shall maintain all privileged
information, communications, documents, and records in a secure
place as determined in the commission's sole discretion that is
accessible only to commission members and authorized commission
employees.
SUBCHAPTER I. PENALTIES AND OFFENSES
Sec. 2202.401. FAILURE TO PAY FEES. (a) License fees and
other fees required by this chapter must be paid to the commission
on or before the dates provided by law for each fee.
(b) A person failing to timely pay a fee or tax when due
shall pay in addition a penalty of not less than $50 or 25 percent of
the amount due, whichever is the greater. The penalty may not
exceed $1,000 if the fee or tax is less than 10 days late and may not
exceed $5,000 under any circumstances. The commission shall
collect the penalty in the same manner as other charges, license
fees, and penalties are collected under this chapter.
Sec. 2202.402. FAILURE TO REPORT, PAY, OR ACCOUNT FOR FEE OR
TAX. (a) A person commits an offense if the person wilfully:
(1) fails to report, pay, or truthfully account for a
fee or tax imposed under this chapter; or
(2) attempts in any manner to evade or defeat a fee or
tax.
(b) An offense under this section is a Class A misdemeanor.
Sec. 2202.403. GAMING FRAUD. (a) A person commits an
offense if the person knowingly:
(1) alters or misrepresents the outcome of a game or
other event on which wagers have been made after the outcome is made
sure but before it is revealed to the players;
(2) places, increases, or decreases a bet or
determines the course of play after acquiring knowledge, not
available to all players, of the outcome of the game or an event
that affects the outcome of the game or that is the subject of the
bet or aids anyone in acquiring such knowledge for the purpose of
placing, increasing, or decreasing a bet or determining the course
of play contingent on that event or outcome;
(3) claims, collects, or takes, or attempts to claim,
collect, or take, money or anything of value in or from a gambling
game, with the intent to defraud, without having made a wager
contingent on the game;
(4) claims, collects, or takes an amount greater than
the amount won from a gambling game;
(5) entices or induces another to go to a place where a
gambling game is being conducted or operated in violation of this
subtitle, with the intent that the other person play or participate
in that gambling game;
(6) places or increases a bet after acquiring
knowledge of the outcome of the game or other event that is the
subject of the bet, including past posting and pressing bets;
(7) reduces the amount wagered or cancels the bet
after acquiring knowledge of the outcome of the game or other event
that is the subject of the bet, including pinching bets; or
(8) manipulates, with the intent to cheat, a component
of a gaming device in a manner contrary to the designed and normal
operational purpose for the component, including varying the pull
of the handle of a slot machine, with knowledge that the
manipulation affects the outcome of the game or with knowledge of an
event that affects the outcome of the game.
(b) An offense under this section is a felony of the third
degree.
Sec. 2202.404. USE OF PROHIBITED DEVICES. (a) A person
commits an offense if the person, at a casino, uses or possesses
with the intent to use a device, other than those customarily used
in the conduct of gaming to assist in:
(1) projecting the outcome of the game;
(2) keeping track of the cards played; or
(3) analyzing the probability of the occurrence of an
event relating to the game.
(b) An offense under this section is a felony of the third
degree.
Sec. 2202.405. USE OF COUNTERFEIT OR UNAUTHORIZED TOKEN,
CHIP, OR COIN. (a) A person commits an offense if the person
knowingly uses counterfeit tokens, chips, or coins in a gambling
game.
(b) A person commits an offense if the person, in playing
any gambling game designed to receive, be played with, or be
operated by lawful tender of the United States of America or by
tokens or chips approved by the executive director knowingly uses a
token, chip, or coin other than tokens, chips, or coins designed for
the game.
(c) A person, other than an authorized employee of an
owner's license holder acting in furtherance of the person's
employment within an establishment, commits an offense if the
person knowingly has on the person's body or in the person's
possession on or off the premises of a casino a device intended to
be used to violate the provisions of this chapter.
(d) A person, other than an authorized employee of a license
holder acting in furtherance of the person's employment within a
casino, commits an offense if the person knowingly has on the
person's body or in the person's possession on or off the premises
of a casino a key or device known to have been designed for the
purpose of and suitable for opening, entering, or affecting the
operation of a gambling game, a drop box, or an electronic or
mechanical device connected to the game or box or for removing money
or other contents from the game or box.
(e) A person commits an offense if the person, with the
intent to manufacture slugs for unauthorized use in gaming devices
located at a casino, knowingly has on the person's body or in the
person's possession paraphernalia for manufacturing slugs. In this
subsection, "paraphernalia for manufacturing slugs" means the
equipment, products, and materials that are intended for use or
designed for use in manufacturing, producing, fabricating,
preparing, testing, analyzing, packaging, storing, or concealing a
counterfeit facsimile of the chips or tokens approved by the
executive director or a lawful coin of the United States, the use of
which is an offense under Subsection (b). The term includes:
(1) lead or lead alloys;
(2) molds, forms, or similar equipment capable of
producing a likeness of a gaming token or United States coin;
(3) melting pots or other receptacles;
(4) torches; and
(5) tongs, trimming tools, or other similar equipment.
(f) Possession of more than one of the devices, equipment,
products, or materials described in this section permits a
rebuttable inference that the possessor intended to use them to
cheat. In this subsection, "cheat" has the meaning assigned by
Section 2202.406.
(g) An offense under this section is a felony of the third
degree.
Sec. 2202.406. CHEATING. (a) In this section, "cheat"
means to alter the elements of chance, method of selection, or
criteria that determine the result of a game or the amount or
frequency of payment in a game.
(b) A person commits an offense if the person knowingly
cheats at any gambling game.
(c) An offense under this section is a state jail felony.
Sec. 2202.407. POSSESSION OF UNLAWFUL GAMING DEVICES. (a)
A person commits an offense if the person possesses any slot machine
or other gaming device that the person knows has been manufactured,
sold, or distributed in violation of this chapter.
(b) An offense under this section is a Class A misdemeanor.
Sec. 2202.408. UNLAWFUL MANUFACTURE, SALE, OR DISTRIBUTION
OF GAMING EQUIPMENT. (a) In this section, "cheat" has the meaning
assigned by Section 2202.406.
(b) A person commits an offense if the person manufactures,
sells, or distributes cards, chips, dice, a game, or a device
intended to be used to violate this chapter.
(c) A person commits an offense if the person marks, alters,
or otherwise modifies any associated equipment or gaming device in
a manner that:
(1) affects the result of a wager by determining a win
or loss; or
(2) alters the normal criteria of random selection
that affect the operation of a game or determine the outcome of a
game.
(d) A person commits an offense if the person instructs
another person in cheating or in the use of a device for cheating at
any game authorized to be conducted at a casino, with the knowledge
or intent that the information or use may be employed to violate
this chapter.
(e) An offense under this section is a felony of the third
degree.
Sec. 2202.409. UNLAWFUL REPORTING. (a) A person commits an
offense if the person, in a license application, in a book or record
required to be maintained by this chapter or a rule adopted under
this chapter, or in a report required to be submitted by this
chapter or a rule adopted under this chapter:
(1) makes a statement or entry that the person knows to
be false or misleading; or
(2) knowingly fails to maintain or make an entry the
person knows is required to be maintained or made.
(b) A person commits an offense if the person knowingly
refuses to produce for inspection by the executive director a book,
record, or document required to be maintained or made by this
chapter or a rule adopted under this chapter.
(c) An offense under this section is a Class A misdemeanor.
Sec. 2202.410. OTHER UNLAWFUL VIOLATIONS. (a) A person
commits an offense if the person knowingly violates, attempts to
violate, or conspires to violate a provision of this chapter
specifying a prohibited act in a manner that is not otherwise
specified as an offense under this subchapter.
(b) An offense under this section is a Class A misdemeanor.
Sec. 2202.411. UNAUTHORIZED OPERATION, USE, OR POSSESSION
OF GAMING DEVICE. (a) A person may not operate, use, or possess a
gaming device unless the operation, use, or possession is expressly
authorized by this chapter or other law.
(b) Except for transport to or from a casino and as provided
by this chapter, a person commits an offense if the person operates,
uses, or possesses a gaming device that is not authorized under this
chapter or other law. An offense under this subsection is a felony
of the third degree.
(c) Notwithstanding Subsection (b), a casino owner or
operator, or a manufacturer may store a gaming device as authorized
by the commission for a period not to exceed 120 consecutive days,
and the commission may possess gaming devices for study and
evaluation.
(d) Nothing in this section shall be construed to prohibit
the operation, use, or possession of equipment, machines,
technological aids, or other devices allowed in connection with the
play of bingo under Chapter 2001.
Sec. 2202.412. SALE OF GAMBLING GAME TO OR PURCHASE OF
GAMBLING GAME BY PERSON YOUNGER THAN 21 YEARS OF AGE. (a) A person
licensed under this chapter or an employee of the person commits an
offense if the person intentionally or knowingly allows a person
younger than 21 years of age to play a gambling game.
(b) An individual who is younger than 21 years of age
commits an offense if the individual:
(1) plays a gambling game; or
(2) falsely represents the individual to be 21 years
of age or older by displaying evidence of age that is false or
fraudulent or misrepresents in any way the individual's age in
order to play a gambling game.
(c) It is a defense to prosecution under Subsection (b) that
the individual younger than 21 years of age is participating in an
inspection or investigation on behalf of the commission or other
appropriate governmental entity regarding compliance with this
section.
(d) An offense under Subsection (a) is a Class C
misdemeanor.
(e) An offense under Subsection (b) is a misdemeanor
punishable by a fine not to exceed $250.
Sec. 2202.413. PURCHASE OF GAMBLING GAME WITH PUBLIC
ASSISTANCE FUNDS. (a) A person commits an offense if the person
intentionally or knowingly plays a gambling game with public
assistance funds issued to the person under:
(1) Chapter 31, Human Resources Code; or
(2) Chapter 33, Human Resources Code, including funds
on electronic benefit transfer cards administered under Chapter 33,
Human Resources Code.
(b) An offense under this section is a Class C misdemeanor.
Sec. 2202.414. TAMPERING WITH GAMING OR ASSOCIATED
EQUIPMENT. (a) A person commits an offense if the person
intentionally or knowingly tampers with, damages, defaces, or
renders inoperable any vending machine, electronic computer
terminal, gaming device or other gaming or associated equipment, or
other mechanical device used in a gambling game.
(b) An offense under this section is a felony of the third
degree.
Sec. 2202.415. EFFECT ON OTHER LAWS. A person who is
subject to prosecution under an offense under this subchapter and
an offense under Chapter 47, Penal Code, may be prosecuted under
either or both laws.
SUBCHAPTER J. PROBLEM GAMBLING AND ADDICTION
Sec. 2202.451. PROBLEM GAMBLING AND ADDICTION GRANT FUND.
(a) The problem gambling and addiction grant fund is an account in
the general revenue fund.
(b) Money credited to the fund may be used only for awarding
grants under this subchapter. The fund shall be administered in
accordance with this subchapter.
(c) An expenditure from the problem gambling and addiction
grant fund shall be made in accordance with the General
Appropriations Act.
(d) Grants from money in the fund may be used only to:
(1) provide treatment for problem gambling, gambling
addiction, alcoholism, drug abuse, and other addictive behaviors;
and
(2) provide funding for research related to the impact
of gambling on state residents.
Sec. 2202.452. GRANT PROGRAM. (a) From funds appropriated
for the purpose, the commission shall administer a grant program to
provide assistance for the direct treatment of persons diagnosed as
suffering from pathological gambling and other addictive behaviors
and to provide funding for research regarding the impact of
gambling on residents of this state.
(b) Research grants awarded under this section may include
grants for determining the effectiveness of education and
prevention efforts on the prevalence of pathological gambling in
this state.
(c) A grant may be made only after open solicitation of
proposals and evaluation of proposals against criteria established
by commission rule.
(d) Public and private entities are eligible to apply for
and receive grants under this section.
(e) A grant made in accordance with this section shall be
made from funds appropriated to the commission from the problem
gambling and addiction grant fund and funds provided to the
commission in accordance with Section 2202.453.
Sec. 2202.453. GIFTS AND DONATIONS. The commission may
solicit and accept grants, gifts, contributions, or bequests made
for the purpose of funding grants under this subchapter and expend
the money for the purpose described by Section 2202.452, for which
the money was received.
Sec. 2202.454. RULES. (a) The commission shall administer
this subchapter and adopt rules establishing criteria for
qualification to receive grants and other matters considered
necessary by the commission for the administration of this
subchapter.
(b) The rules adopted by the commission must require that
each recipient of a grant report at least annually to the commission
the grantee's measurable achievement of specific outcome goals.
CHAPTER 2203. TRIBAL GAMING AGREEMENTS
Sec. 2203.001. DUTY OF GOVERNOR. The governor shall
execute, on behalf of this state, with a federally recognized
Indian tribe with Indian lands in this state a gaming agreement
containing the terms set forth in Section 2203.002, as a
ministerial act, without preconditions, not later than the 30th day
after the date the governor receives a request from the tribe,
accompanied by or in the form of a duly enacted resolution of the
tribe's governing body, to enter into the gaming agreement.
Sec. 2203.002. MODEL TRIBAL GAMING AGREEMENT. (a) A gaming
agreement executed under Section 2203.001 must be in the form and
contain the provisions as follows:
GAMING AGREEMENT GOVERNING GAMING OPERATIONS Between the [Name of
Tribe] and the STATE OF TEXAS
This agreement is made and entered into by and between the
[Name of Tribe], a federally recognized Indian Tribe ("Tribe"), and
the State of Texas ("State"), with respect to gaming on the Tribe's
Indian lands (as defined by Chapter 2201, Texas Occupations Code).
This agreement governs gambling on Indian lands held in trust
by the United States on January 1, 1998, for the Tribe.
Pursuant to express provisions of the Ysleta del Sur Pueblo
and Alabama and Coushatta Indian Tribes of Texas Restoration Act
(Pub. L. No. 100-89) addressing jurisdiction, the Tribe may engage
in any gaming activities that another person may be authorized to
engage in under Subtitle E, Title 13, Occupations Code.
The Tribe shall regulate the gaming activities authorized
under this agreement on the Tribe's Indian lands.
The Tribe shall adopt rules and procedures substantially
similar to the requirements of Subtitle E, Title 13, Occupations
Code, except that any regulatory oversight established under
Subtitle E for gaming conducted under a license shall be exercised
by the Tribe for gaming conducted under this agreement. The Tribe
may adopt the rules and procedures by reference to any provisions of
Subtitle E, Title 13, Occupations Code.
(b) A gaming agreement under Subsection (a) between this
state and a federally recognized Indian Tribe that is not subject to
the Ysleta del Sur Pueblo and Alabama and Coushatta Indian Tribes of
Texas Restoration Act (Pub. L. No. 100-89) may not include the
provision related to that Act.
Sec. 2203.003. NEGOTIATION FOR DIFFERENT TRIBAL GAMING
AGREEMENT TERMS. (a) This chapter does not limit the ability of a
federally recognized Indian tribe to request that a gaming
agreement be negotiated with this state on terms that are different
from those set forth in the gaming agreement under Section
2203.002, or the ability of this state to engage in negotiations and
to reach agreement under any applicable federal law.
(b) In offering to enter into a gaming agreement with Indian
tribes in this state under Section 2203.002, and, excluding
assessments by this state as provided in that section of the amounts
necessary to defray state costs of regulating activities as
provided under the gaming agreement, nothing in this chapter may be
construed to mean that:
(1) this state is imposing any tax, fee, charge, or
other assessment on an Indian tribe or on any other person or entity
authorized by an Indian tribe as a condition to engaging in a Class
III activity as defined in the Indian Gaming Regulatory Act (Pub. L.
No. 100-497); or
(2) this state is refusing to enter into gaming
agreement negotiations based on the lack of authority of this state
or a political subdivision of this state to impose the tax, fee,
charge, or other assessment.
(c) If any federally recognized tribe with jurisdiction
over Indian lands in this state requests that the governor enter
into negotiations for a gaming agreement under federal law
applicable to the tribe, including the Indian Gaming Regulatory Act
(Pub. L. No. 100-497), on terms different than those prescribed in
the gaming agreement set forth in Section 2203.002, the governor
shall enter into those negotiations under the federal law
applicable to the tribe and without preconditions and is authorized
to reach agreement and execute the agreement on behalf of this
state.
Sec. 2203.004. IMPLEMENTATION OF GAMING AGREEMENT. The
governor shall execute any documents necessary to implement a
gaming agreement authorized under this subchapter.
Sec. 2203.005. INCORPORATION INTO STATE LAW. The model
gaming agreement set out in Section 2203.002 is hereby incorporated
into state law, and the operation of gaming authorized under the
agreement is expressly authorized as a matter of state law for any
Indian tribe entering into the gaming agreement in accordance with
this subchapter.
Sec. 2203.006. REGULATORY MONEY RECEIVED UNDER GAMING
AGREEMENT. All money received by the commission under a gaming
agreement for regulatory costs incurred relative to tribal gaming
operations may be used only to defray expenses of the commission
incurred in the oversight, compliance with, and enforcement of
gaming operations conducted pursuant to a gaming agreement.
Sec. 2203.007. INJUNCTION; CIVIL PENALTY. (a) If the
commission, the appropriate governing body for an Indian tribe, or
the attorney general has reason to believe that this chapter has
been or is about to be violated, the attorney general may petition a
court for appropriate injunctive relief to restrain the violation.
Filing of the petition does not waive applicable sovereign
immunity.
(b) Venue for an action by this state seeking injunctive
relief is in a district court in Travis County.
(c) If the court finds that this chapter has been knowingly
violated, the court shall order all proceeds from any illegal
gambling to be forfeited to the appropriate governing body as a
civil penalty.
(d) The remedies provided by this section are not exclusive.
The commission may suspend or revoke a license, impose an
administrative penalty, or seek injunctive or civil penalties or
both, depending on the severity of the violation.
SECTION 2. Article 2.12, Code of Criminal Procedure, is
amended to read as follows:
Art. 2.12. WHO ARE PEACE OFFICERS. The following are peace
officers:
(1) sheriffs, their deputies, and those reserve
deputies who hold a permanent peace officer license issued under
Chapter 1701, Occupations Code;
(2) constables, deputy constables, and those reserve
deputy constables who hold a permanent peace officer license issued
under Chapter 1701, Occupations Code;
(3) marshals or police officers of an incorporated
city, town, or village, and those reserve municipal police officers
who hold a permanent peace officer license issued under Chapter
1701, Occupations Code;
(4) rangers, officers, and members of the reserve
officer corps commissioned by the Public Safety Commission and the
Director of the Department of Public Safety;
(5) investigators of the district attorneys', criminal
district attorneys', and county attorneys' offices;
(6) law enforcement agents of the Texas Alcoholic
Beverage Commission;
(7) each member of an arson investigating unit
commissioned by a city, a county, or the state;
(8) officers commissioned under Section 37.081,
Education Code, or Subchapter E, Chapter 51, Education Code;
(9) officers commissioned by the General Services
Commission;
(10) law enforcement officers commissioned by the
Parks and Wildlife Commission;
(11) airport police officers commissioned by a city
with a population of more than 1.18 million located primarily in a
county with a population of 2 million or more that operates an
airport that serves commercial air carriers;
(12) airport security personnel commissioned as peace
officers by the governing body of any political subdivision of this
state, other than a city described by Subdivision (11), that
operates an airport that serves commercial air carriers;
(13) municipal park and recreational patrolmen and
security officers;
(14) security officers and investigators commissioned
as peace officers by the comptroller;
(15) officers commissioned by a water control and
improvement district under Section 49.216, Water Code;
(16) officers commissioned by a board of trustees
under Chapter 54, Transportation Code;
(17) investigators commissioned by the Texas Medical
Board;
(18) officers commissioned by:
(A) the board of managers of the Dallas County
Hospital District, the Tarrant County Hospital District, the Bexar
County Hospital District, or the El Paso County Hospital District
under Section 281.057, Health and Safety Code;
(B) the board of directors of the Ector County
Hospital District under Section 1024.117, Special District Local
Laws Code;
(C) the board of directors of the Midland County
Hospital District of Midland County, Texas, under Section 1061.121,
Special District Local Laws Code; and
(D) the board of hospital managers of the Lubbock
County Hospital District of Lubbock County, Texas, under Section
1053.113, Special District Local Laws Code;
(19) county park rangers commissioned under
Subchapter E, Chapter 351, Local Government Code;
(20) investigators employed by the Texas Racing
Commission;
(21) officers commissioned under Chapter 554,
Occupations Code;
(22) officers commissioned by the governing body of a
metropolitan rapid transit authority under Section 451.108,
Transportation Code, or by a regional transportation authority
under Section 452.110, Transportation Code;
(23) investigators commissioned by the attorney
general under Section 402.009, Government Code;
(24) security officers and investigators commissioned
as peace officers under Chapter 466, Government Code;
(25) officers appointed by an appellate court under
Subchapter F, Chapter 53, Government Code;
(26) officers commissioned by the state fire marshal
under Chapter 417, Government Code;
(27) an investigator commissioned by the commissioner
of insurance under Section 701.104, Insurance Code;
(28) apprehension specialists and inspectors general
commissioned by the Texas Juvenile Justice Department as officers
under Sections 242.102 and 243.052, Human Resources Code;
(29) officers appointed by the inspector general of
the Texas Department of Criminal Justice under Section 493.019,
Government Code;
(30) investigators commissioned by the Texas
Commission on Law Enforcement under Section 1701.160, Occupations
Code;
(31) commission investigators commissioned by the
Texas Private Security Board under Section 1702.061, Occupations
Code;
(32) the fire marshal and any officers, inspectors, or
investigators commissioned by an emergency services district under
Chapter 775, Health and Safety Code;
(33) officers commissioned by the State Board of
Dental Examiners under Section 254.013, Occupations Code, subject
to the limitations imposed by that section;
(34) investigators commissioned by the Texas Juvenile
Justice Department as officers under Section 221.011, Human
Resources Code; [and]
(35) the fire marshal and any related officers,
inspectors, or investigators commissioned by a county under
Subchapter B, Chapter 352, Local Government Code; and
(36) investigators, security officers, and
enforcement officers commissioned by the Texas Gaming Commission
under Chapter 2201, Occupations Code.
SECTION 3. Subchapter F, Chapter 411, Government Code, is
amended by adding Section 411.1085 to read as follows:
Sec. 411.1085. ACCESS TO CRIMINAL HISTORY RECORD
INFORMATION: TEXAS GAMING COMMISSION. (a) The Texas Gaming
Commission is entitled to obtain from the department criminal
history record information maintained by the department that
relates to a person who, under Subtitle E, Title 13, Occupations
Code, is:
(1) a casino employee or an applicant for an
occupational license;
(2) a person required to hold a license or be named in
a license application under that subtitle;
(3) a casino owner or operator or prospective casino
owner or operator;
(4) a person who manufactures or distributes casino
equipment or supplies or a representative of a person who
manufactures or distributes casino equipment or supplies offered to
the casino;
(5) a person who has submitted a written bid or
proposal to the commission in connection with the procurement of
goods or services by the commission, if the amount of the bid or
proposal exceeds $500;
(6) a person who proposes to enter into or who has a
contract with the commission to supply goods or services to the
commission;
(7) if a person described in Subdivisions (4) through
(6) is not an individual, each individual who:
(A) is an officer or director of the person;
(B) holds more than 10 percent of the stock in the
person;
(C) holds an equitable interest greater than 10
percent in the person;
(D) shares or will share in the profits, other
than stock dividends, of the person;
(E) participates in managing the affairs of the
person; or
(F) is an employee of the person who:
(i) enters or will enter a casino in this
state to perform a business function; or
(ii) is or will be in close proximity to
money from casino gaming;
(8) an employee or prospective employee, including the
executive director or a prospective executive director, of the
commission; or
(9) a person described under Subdivisions (1)-(8)
whose license is renewed under that subtitle.
(b) Criminal history record information obtained by the
Texas Gaming Commission under Subsection (a) may not be released or
disclosed to any person except on court order or as provided by
Subsection (c).
(c) The Texas Gaming Commission is not prohibited from
disclosing to the person who is the subject of the criminal history
record information the dates and places of arrests, offenses, and
dispositions contained in the criminal history record information.
SECTION 4. Section 47.02(c), Penal Code, 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) consisted entirely of participation in the state
lottery authorized by the State Lottery Act (Chapter 466,
Government Code);
(5) was permitted under Subtitle A-1, Title 13,
Occupations Code (Texas Racing Act); [or]
(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;
or
(7) consisted entirely of participation in an
authorized gambling game in a casino authorized under an
appropriate license issued under Subtitle E, Title 13, Occupations
Code.
SECTION 5. Section 47.06(f), Penal Code, is amended to read
as follows:
(f) It is a defense to prosecution under Subsection (a) or
(c) that the person owned, manufactured, transferred, or possessed
the gambling device, equipment, or paraphernalia for the sole
purpose of shipping it:
(1) to a casino authorized under an appropriate
license issued under Subtitle E, Title 13, Occupations Code, for
casino gaming; or
(2) to another jurisdiction where the possession or
use of the device, equipment, or paraphernalia was legal.
SECTION 6. Section 47.09(a), Penal Code, 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) Subtitle A-1, Title 13, Occupations Code
(Texas Racing Act); [or]
(E) Chapter 280, Finance Code; or
(F) Subtitle E, Title 13, Occupations 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 7. (a) Funds in the Texas casino gaming fund may be
appropriated only to the Texas Gaming Commission for the operation
of the commission and the administration of Subtitle E, Title 13,
Occupations Code, as added by this Act, for the biennium ending
August 31, 2023.
(b) Not later than January 1, 2022, the initial members of
the Texas Gaming Commission shall be appointed in accordance with
Chapter 2201, Occupations Code, as added by this Act. In making the
initial appointments, the governor shall designate one member to a
term expiring February 1, 2024, two members to terms expiring
February 1, 2026, and two members to terms expiring February 1,
2028.
SECTION 8. (a) The Texas Gaming Commission Legislative
Oversight Committee is created to facilitate the creation of the
Texas Gaming Commission and the assignment of powers, duties,
functions, programs, and activities of the commission as provided
by this Act.
(b) The committee is composed of seven members as follows:
(1) two members of the senate, appointed by the
lieutenant governor not later than December 1, 2021;
(2) two members of the house of representatives,
appointed by the speaker of the house of representatives not later
than December 1, 2021; and
(3) three members of the public, appointed by the
governor not later than December 1, 2021.
(c) Once the members of the Texas Gaming Commission have
been appointed and have selected an executive director, the
executive director of the Texas Gaming Commission shall serve as an
ex officio member of the committee.
(d) A member of the committee serves at the pleasure of the
appointing official.
(e) The lieutenant governor and the speaker of the house of
representatives shall alternate designating a presiding officer
from among their respective appointments. The speaker of the house
of representatives shall make the first designation.
(f) A member of the committee may not receive compensation
for serving on the committee but is entitled to reimbursement for
travel expenses incurred by the member while conducting the
business of the committee as provided by the General Appropriations
Act.
(g) The committee shall:
(1) facilitate the assignment of powers, duties,
functions, programs, and activities of the Texas Gaming Commission
as provided by this Act;
(2) adopt an initial training program to meet the
requirements of Section 2201.058, Occupations Code, as added by
this Act, to train the initial appointees of the Texas Gaming
Commission;
(3) with assistance from the Texas Gaming Commission,
advise the executive director and members of the Texas Gaming
Commission concerning the powers, duties, functions, programs, and
activities established under this Act and the funds and obligations
that are related to the powers, duties, functions, programs, or
activities;
(4) meet at the call of the presiding officer;
(5) research, take public testimony, and issue reports
on other appropriate issues or specific issues requested by the
lieutenant governor, speaker of the house of representatives, or
governor; and
(6) review specific recommendations for legislation
proposed by the Texas Gaming Commission or the other agencies.
(h) The committee may request reports and other information
from the Texas Gaming Commission, other state agencies, and the
attorney general relating to gaming in this state and other
appropriate issues.
(i) The committee shall use existing staff of the senate,
the house of representatives, and the Texas Legislative Council to
assist the committee in performing its duties under this section.
(j) Chapter 551, Government Code, applies to the committee.
(k) The committee shall report to the governor, lieutenant
governor, and speaker of the house of representatives not later
than November 15 of each even-numbered year. The report must
include:
(1) identification of significant issues within
gaming regulation, with recommendations for action;
(2) an analysis of the effectiveness and efficiency of
gaming regulation, with recommendations for any necessary
research; and
(3) recommendations for legislative action.
SECTION 9. (a) The assignment of powers, duties,
functions, programs, and activities of the Texas Gaming Commission
must be accomplished in accordance with a schedule included in a
work plan developed by the executive director and members of the
Texas Gaming Commission and submitted to the governor and the
Legislative Budget Board not later than September 1, 2022. The
executive director and commission members shall provide to the
governor and the Legislative Budget Board work plan status reports
and updates on at least a quarterly basis following submission of
the initial work plan. The work plan must be made available to the
public.
(b) Not later than March 1, 2022, the Texas Gaming
Commission shall hold a public hearing and accept public comment
regarding the work plan required to be developed by the executive
director and members of the Texas Gaming Commission under this
section.
(c) In developing the work plan, the executive director and
members of the Texas Gaming Commission shall hold public hearings
in various geographic areas in this state before submitting the
plan to the governor and the Legislative Budget Board as required by
this section.
(d) The Texas Gaming Commission shall implement the powers,
duties, functions, programs, and activities assigned to the
commission under this Act in accordance with a work plan designed by
the commission to ensure that the implementation of gaming
regulation under this Act is accomplished in a careful and
deliberative manner.
(e) A work plan designed by the commission under this
section must include the following phases:
(1) a planning phase, during which the commission will
focus on and stabilize the organization of the agency's powers,
duties, functions, programs, and activities, and which must
include:
(A) initiation of recommendations made by the
Texas Gaming Commission Legislative Oversight Committee;
(B) creation of interagency and intra-agency
steering committees;
(C) development of global visions, goals, and
organizational strategies; and
(D) development of communications and risk
management plans;
(2) an integration phase, during which the commission
will identify opportunities and problems and design customized
solutions for those problems, and which must include:
(A) identification of key issues related to costs
or legal requirements for other commission activities;
(B) planning for daily operations; and
(C) validation of fiscal and program synergies;
(3) an optimization phase, during which the commission
will complete and expand on the initial transitions, and which must
include:
(A) optimization of initial implementation
initiatives;
(B) use of enterprise teaming operations;
(C) building infrastructures to support and
facilitate changes in gaming regulation and oversight; and
(D) identification and use of beneficial assets
management and facilities approaches; and
(4) a transformation phase, during which the
commission will continue implementing initial and additional
changes in gaming regulation and oversight, and which must include
implementation of changes in agency management activities.
SECTION 10. As soon as practicable after the constitutional
amendment to authorize casino gaming in this state proposed by the
87th Legislature, Regular Session, 2021, is approved by the voters
and becomes effective, the Texas Gaming Commission shall adopt the
rules necessary to implement that gaming in accordance with Chapter
2202, Occupations Code, as added by this Act.
SECTION 11. This Act takes effect on the date the amendment
proposed by the 87th Legislature, Regular Session, 2021, to foster
economic development and job growth and to provide tax relief and
funding for education and public safety by creating the Texas
Gaming Commission, authorizing casino gaming at a limited number of
destination resorts and facilities licensed by the commission, and
authorizing sports wagering is approved by the voters. If that
amendment is not approved by the voters, this Act has no effect.