Texas 2023 - 88th Regular

Texas House Bill HB1942 Compare Versions

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1	1	By: Leach, Meyer, Patterson, Moody, Rose, H.B. No. 1942
2	2	et al.
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the regulation of sports wagering; requiring
8	8	occupational permits; authorizing fees; imposing a tax;
9	9	decriminalizing wagering on certain sports events; creating
10	10	criminal offenses; providing administrative penalties.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. The Legislature finds the following:
13	13	(1) consistent with a 2018 United States Supreme Court
14	14	decision authorizing states to exercise their lawful prerogative to
15	15	license and regulate sports wagering activity, it is in the
16	16	interest of this state to authorize a strict regulatory model for
17	17	sports wagering;
18	18	(2) a legal, regulated sports wagering market will
19	19	help to deter unlawful sports wagering and provide for more
20	20	regulatory and law enforcement oversight over sports wagering,
21	21	while generating state revenue;
22	22	(3) any sports wagering enforcement and regulatory
23	23	structure must begin from the bedrock premise that participation in
24	24	a lawful and licensed sports wagering industry is a privilege and
25	25	not a right and that strict regulatory oversight is intended to
26	26	safeguard the integrity of wagering on sporting events and to
27	27	ensure accountability and the public trust;
28	28	(4) the most expeditious way to legalize sports
29	29	wagering in this state and to strictly regulate this activity is to
30	30	utilize the resources of the Texas Lottery Commission; and
31	31	(5) sports wagering within this state will be vested
32	32	in operators acting under authority of state law and will promote
33	33	trust and integrity in all sports wagering operations.
34	34	SECTION 2. Subtitle A, Title 13, Occupations Code, is
35	35	amended by adding Chapter 2005 to read as follows:
36	36	CHAPTER 2005. SPORTS WAGERING
37	37	SUBCHAPTER A. GENERAL PROVISIONS
38	38	Sec. 2005.001. SHORT TITLE. This chapter may be cited as the
39	39	Texas Sports and Entertainment Recovery Act.
40	40	Sec. 2005.002. DEFINITIONS. In this chapter:
41	41	(1) "Authorized sports entity" means:
42	42	(A) a sports entity; or
43	43	(B) a sports entity designee.
44	44	(2) "Cash equivalent" means an asset that is
45	45	convertible to cash and approved for use in connection with
46	46	authorized sports wagering, including the following approved cash
47	47	equivalents:
48	48	(A) traveler's checks;
49	49	(B) foreign currency;
50	50	(C) certified checks, cashier's checks, and
51	51	money orders;
52	52	(D) personal checks and drafts;
53	53	(E) digital and virtual currencies and
54	54	cryptocurrencies;
55	55	(F) online and mobile payment systems that
56	56	support online money transfers;
57	57	(G) credit cards and debit cards;
58	58	(H) electronic devices with prepaid access, as
59	59	defined by 31 C.F.R. Section 1010.100(ww); and
60	60	(I) any other form approved by the commission.
61	61	(3) "Class 1 racetrack" means a class 1 racetrack
62	62	described by Section 2026.102 that was in existence on January 1,
63	63	2023. The term includes an entity that operates a class 1
64	64	racetrack.
65	65	(4) "College sport" means an athletic or sporting
66	66	event in which at least one participant is a team or contestant
67	67	competing on behalf or under the sponsorship of a public or private
68	68	institution of higher education, regardless of where the
69	69	institution is located.
70	70	(5) "Commission" means the Texas Lottery Commission.
71	71	(6) "Covered service" means any service that involves
72	72	the operation, management, or control of wagers authorized by this
73	73	chapter, including the development or operation of sports wagering
74	74	platforms and the provision of sports wagering odds and line
75	75	information and sports wagering risk management information. The
76	76	term does not include:
77	77	(A) payment processing and similar financial
78	78	services;
79	79	(B) customer identity, age verification, and
80	80	geolocation services;
81	81	(C) streaming or other video and data that do not
82	82	include sports wagering odds or line information;
83	83	(D) telecommunications, Internet service
84	84	providers, and other similar services not specifically designed for
85	85	use in connection with sports wagering;
86	86	(E) other goods or services designed to support
87	87	the operation, management, or control of a sports wagering
88	88	platform; and
89	89	(F) other goods or services not specifically
90	90	designed for use in connection with sports wagering.
91	91	(7) "Executive director" means the executive director
92	92	of the commission.
93	93	(8) "Fantasy sports contest" has the meaning assigned
94	94	by Section 47.01, Penal Code.
95	95	(9) "Interactive sports wagering" means the conduct of
96	96	sports wagering through or by means of the Internet, a mobile
97	97	device, or any other telecommunications service.
98	98	(10) "Interactive sports wagering operator" means the
99	99	holder of an interactive sports wagering permit.
100	100	(11) "Interactive sports wagering permit" means a
101	101	permit issued by the commission that authorizes the operation of
102	102	interactive sports wagering under this chapter.
103	103	(12) "Key person" means an officer or director of an
104	104	interactive sports wagering operator who:
105	105	(A) is directly involved in the operation,
106	106	management, or control of the conduct of sports wagering under this
107	107	chapter; or
108	108	(B) exercises substantial influence or control
109	109	over the interactive sports wagering operator's wagering
110	110	activities.
111	111	(13) "Official league data" means statistics,
112	112	results, outcomes, and other sporting event data obtained for
113	113	determining the outcome of tier two sports wagers under an
114	114	agreement between an interactive sports wagering operator and:
115	115	(A) the relevant sports governing body that
116	116	authorizes the use of the data for determining the outcome of tier
117	117	two sports wagers; or
118	118	(B) an entity expressly authorized by the sports
119	119	governing body to provide the information described by this
120	120	subdivision to interactive sports wagering operators.
121	121	(14) "Permit holder" means a person who holds an
122	122	interactive sports wagering permit or service provider permit
123	123	issued under this chapter.
124	124	(15) "Professional sports" means an athletic or
125	125	sporting event involving at least two competitors, at least one of
126	126	whom receives compensation for participating in the event.
127	127	(16) "Service provider" means the holder of a service
128	128	provider permit.
129	129	(17) "Service provider permit" means a permit issued
130	130	by the commission that authorizes the provision of covered
131	131	services.
132	132	(18) "Sporting event" or "sports event" means a
133	133	professional sports or athletic event, college sports or athletic
134	134	event, amateur sports or athletic event, motor race event,
135	135	electronic sports event, competitive video game event, or any other
136	136	event approved by the commission.
137	137	(19) "Sports entity" means:
138	138	(A) a sports team;
139	139	(B) a sports organization that:
140	140	(i) holds in this state sanctioned annual
141	141	professional golf tournaments as part of a national tour of
142	142	professional golfers; and
143	143	(ii) held events described by Subparagraph
144	144	(i) before January 1, 2023;
145	145	(C) a class 1 racetrack that was in operation on
146	146	January 1, 2023; or
147	147	(D) a racetrack that:
148	148	(i) existed and operated before January 1,
149	149	2000, and annually hosted National Association for Stock Car Auto
150	150	Racing Cup Series events for at least 20 years preceding May 1,
151	151	2023; or
152	152	(ii) existed and operated before January 1,
153	153	2015, and annually hosted the Formula One United States Grand Prix
154	154	in each year that the race occurred for at least five years
155	155	preceding May 1, 2023.
156	156	(20) "Sports entity designee" means any person, other
157	157	than an individual, that is designated and authorized by a sports
158	158	entity to receive an interactive sports wagering permit on behalf
159	159	of the sports entity.
160	160	(21) "Sports facility" means:
161	161	(A) a facility in this state that is the primary
162	162	host of:
163	163	(i) a Major League Baseball, National
164	164	Basketball Association, Women's National Basketball Association,
165	165	National Football League, Major League Soccer, National Lacrosse
166	166	League, or National Hockey League professional sports franchise; or
167	167	(ii) a sanctioned annual professional golf
168	168	tournament that is part of a national tour of professional golfers;
169	169	(B) a class 1 racetrack that was in operation on
170	170	January 1, 2023; or
171	171	(C) a racetrack that:
172	172	(i) existed and operated before January 1,
173	173	2000, and annually hosted National Association for Stock Car Auto
174	174	Racing Cup Series events for at least 20 years preceding May 1,
175	175	2023; or
176	176	(ii) existed and operated before January 1,
177	177	2015, and annually hosted the Formula One United States Grand Prix
178	178	in each year that the race occurred for at least five years
179	179	preceding May 1, 2023.
180	180	(22) "Sports governing body" means the organization
181	181	that:
182	182	(A) prescribes final rules and enforces codes of
183	183	conduct with respect to a professional sporting event and
184	184	participants in the professional sporting event; and
185	185	(B) has corporate headquarters located in the
186	186	United States.
187	187	(23) "Sports team" means a Major League Baseball,
188	188	National Basketball Association, Women's National Basketball
189	189	Association, National Football League, Major League Soccer,
190	190	National Lacrosse League, or National Hockey League professional
191	191	sports franchise located in this state that:
192	192	(A) leases, subleases, or exclusively or jointly
193	193	operates a sports facility; and
194	194	(B) existed on January 1, 2023.
195	195	(24) "Sports wagering" means a bet placed on sporting
196	196	events or portions of sporting events, or on the individual
197	197	performance statistics of athletes in a sporting event or
198	198	combination of sporting events. The term includes single-game
199	199	wagers, teaser wagers, parlays, over-unders, moneylines, pools,
200	200	exchange wagering, in-game wagering, in-play wagers, proposition
201	201	wagers, and straight wagers. The term does not include:
202	202	(A) fantasy sports contests; or
203	203	(B) horse racing or greyhound racing regulated
204	204	under Subtitle A-1 (Texas Racing Act).
205	205	(25) "Sports wagering brand" means the names, logos,
206	206	and brands by which an interactive sports wagering operator
207	207	advertises, promotes, or otherwise holds out to the public its
208	208	sports wagering platform.
209	209	(26) "Sports wagering platform" means an Internet
210	210	website, mobile application, or other interactive platform
211	211	accessible through or by means of the Internet, a mobile device, or
212	212	any other telecommunications service that sports wagering players
213	213	may use to place sports wagers and participate in sports wagering
214	214	authorized under this chapter.
215	215	(27) "Tier one sports wager" means any sports wager
216	216	other than a tier two sports wager.
217	217	(28) "Tier two sports wager" means a sports wager
218	218	placed after a sporting event begins.
219	219	(29) "Youth sports" means an athletic or sporting
220	220	event in which the majority of participants are under the age of 18
221	221	or are competing on behalf of or under the sponsorship of one or
222	222	more public or private preschools or public or private elementary,
223	223	middle or junior high, or high schools. The term does not include
224	224	professional sports or events that occur under the sponsorship or
225	225	oversight of national or international athletic bodies that are not
226	226	educational institutions and that include participants both over
227	227	and under the age of 18.
228	228	Sec. 2005.003. COMPLIANCE WITH FEDERAL AND STATE LAW. (a)
229	229	All sports wagering authorized under this chapter must be
230	230	initiated, received, and otherwise placed within the boundaries of
231	231	this state unless otherwise authorized by commission rule adopted
232	232	in accordance with applicable federal and state laws.
233	233	(b) The intermediate routing of electronic data relating to
234	234	Internet sports wagering authorized under this chapter, including
235	235	routing across state lines, does not determine the location in
236	236	which wagers are initiated, received, or otherwise placed,
237	237	consistent with the Unlawful Internet Gambling Enforcement Act of
238	238	2006 (31 U.S.C. Section 5361, et seq.).
239	239	Sec. 2005.004. INAPPLICABILITY OF CHAPTER TO CERTAIN
240	240	EVENTS. This chapter does not to apply to:
241	241	(1) fantasy sports contests; or
242	242	(2) pari-mutuel wagering on horse-racing or greyhound
243	243	racing under Subtitle A-1 (Texas Racing Act).
244	244	Sec. 2005.005. REVIEW OF COMMISSION ACTION. Except as
245	245	otherwise provided by this chapter, an action of the commission
246	246	under this chapter is subject to review under Chapter 2001,
247	247	Government Code.
248	248	Sec. 2005.006. ALLOCATION OF EXCESS FEE REVENUE. Any fees
249	249	collected by the commission under this chapter in amounts that
250	250	exceed the amount the commission requires to implement this chapter
251	251	shall be remitted to the comptroller to be deposited as prescribed
252	252	by Section 2005.258.
253	253	SUBCHAPTER B. COMMISSION POWERS AND DUTIES
254	254	Sec. 2005.051. SPORTS WAGERING PROGRAM. (a) The commission
255	255	shall by rule establish an interactive sports wagering program
256	256	under this chapter and issue permits to operate interactive sports
257	257	wagering on sporting events as authorized by this chapter and
258	258	commission rule.
259	259	(b) The commission may not authorize sports wagering
260	260	involving youth sports.
261	261	Sec. 2005.052. RULES. The commission shall adopt all
262	262	necessary rules to administer this chapter and regulate sports
263	263	wagering in this state.
264	264	Sec. 2005.053. ADMINISTRATION AND ENFORCEMENT. The
265	265	executive director under direction of the commission shall
266	266	administer and enforce this chapter.
267	267	Sec. 2005.054. CERTIFICATION OF REVENUES AND EXPENSES. The
268	268	commission shall:
269	269	(1) each month certify to the comptroller in the form
270	270	and manner required by the comptroller a full and complete
271	271	statement of sports wagering revenue and expenses for the preceding
272	272	month; and
273	273	(2) not later than September 30 of each year, provide
274	274	to the comptroller a full and complete statement of sports wagering
275	275	revenue and expenses for the preceding state fiscal year and any
276	276	recommendations for amendments to this chapter that may be
277	277	warranted and prudent to protect the public interest.
278	278	Sec. 2005.055. AUDITS. (a) To ensure a proper accounting
279	279	of all revenue due to this state, the commission and the comptroller
280	280	each independently shall have the right to audit the books and
281	281	records of interactive sports wagering operators and service
282	282	providers that are related to sports wagering activities authorized
283	283	under this chapter. The commission and comptroller shall
284	284	coordinate to ensure audits are not duplicative or overly
285	285	burdensome on the operators or providers.
286	286	(b) The comptroller may conduct an audit of any taxes or
287	287	fees imposed under this chapter in the same manner the comptroller
288	288	conducts an audit of taxes imposed under Title 2, Tax Code.
289	289	Sec. 2005.056. VOLUNTARY EXCLUSION PROGRAM. (a) The
290	290	commission by rule shall establish, implement, and administer a
291	291	voluntary exclusion program.
292	292	(b) The rules adopted under this section must require:
293	293	(1) the commission to establish and administer a
294	294	statewide self-exclusion list that allows an individual to register
295	295	on the commission's public Internet website for self-exclusion for
296	296	the period specified in the exclusion registration agreement and
297	297	requires the commission to regularly distribute the list to each
298	298	interactive sports wagering operator;
299	299	(2) each interactive sports wagering operator to
300	300	provide information on the procedures for individuals to request to
301	301	be added to the commission's self-exclusion list and for operators
302	302	to bar individuals on the self-exclusion list from any further
303	303	participation in sports wagering for the period the individuals are
304	304	included on the list;
305	305	(3) except as otherwise provided by commission rule,
306	306	an individual who participates in the voluntary exclusion program
307	307	to agree to refrain from participating in sports wagering for the
308	308	period specified in the exclusion registration agreement;
309	309	(4) except as otherwise provided by commission rule,
310	310	an individual who participates in the voluntary exclusion program
311	311	to agree not to petition the commission for removal from the program
312	312	for the period specified in the exclusion registration agreement;
313	313	and
314	314	(5) a permit holder to make all commercially
315	315	reasonable attempts and cause its sales agents and others operating
316	316	on its behalf to make reasonable efforts to cease all direct
317	317	marketing efforts to individuals participating in the voluntary
318	318	exclusion program.
319	319	(c) An individual's registration under the voluntary
320	320	exclusion program does not prevent a permit holder and its agents
321	321	and others operating on their behalf from seeking payment of a debt
322	322	accrued by the individual before the individual entered the
323	323	program.
324	324	Sec. 2005.057. RISK MANAGEMENT. (a) The commission shall
325	325	adopt rules allowing interactive sports wagering operators and
326	326	their service providers to use systems that offset loss or manage
327	327	risk in the operation of sports wagering under this chapter,
328	328	including through liquidity pools, exchanges, or similar
329	329	mechanisms in other approved jurisdictions in which the interactive
330	330	sports wagering operator, service provider, affiliate of either, or
331	331	other third party also holds an equivalent permit or license.
332	332	(b) Notwithstanding Subsection (a), the rules adopted under
333	333	this section must require that adequate protections be maintained
334	334	at all times to ensure sufficient funds are available to pay all
335	335	sports wagering players.
336	336	Sec. 2005.058. PLACES OF PUBLIC ACCOMMODATION. The
337	337	commission may not authorize or allow a person to:
338	338	(1) operate or to allow the operation of a place of
339	339	public accommodation, a club, or a similar establishment in which
340	340	computer terminals or similar access devices are intended or are
341	341	made available for the primary use of accessing a sports wagering
342	342	platform; or
343	343	(2) otherwise advertise to the general public that the
344	344	place of public accommodation, club, or similar establishment is
345	345	available to engage in sports wagering.
346	346	Sec. 2005.059. AUTHORITY TO SUSPEND WAGERING. The
347	347	commission, as necessary to protect the integrity of a competition
348	348	or its participants or as described in Section 2005.060, may
349	349	suspend wagering on any competition, category or type of
350	350	competition, or other aspect of a competition.
351	351	Sec. 2005.060. LIMITATIONS ON CERTAIN SPORTS WAGERING FOR
352	352	GOOD CAUSE. (a) If a sports governing body believes that the type,
353	353	form, or category of sports wagering on that sports governing
354	354	body's sporting events has the potential to undermine the integrity
355	355	or perceived integrity of the sports governing body or its sporting
356	356	events, the sports governing body may submit to the commission a
357	357	written request to restrict, limit, or exclude a certain type,
358	358	form, or category of sports wagering for that sports governing
359	359	body's sporting events. The sports governing body shall provide the
360	360	request in the form and manner prescribed by commission rule.
361	361	(b) The commission shall request comment from interactive
362	362	sports wagering operators on each request described by Subsection
363	363	(a) before granting the request.
364	364	(c) After giving due consideration to all comments received
365	365	under Subsection (b), the commission shall, on a demonstration of
366	366	good cause from the requestor that the type, form, or category of
367	367	sports wagering is likely to undermine the perceived integrity or
368	368	the integrity of the sports governing body or its sporting events,
369	369	grant the request.
370	370	(d) The commission shall:
371	371	(1) if feasible, respond to a request under Subsection
372	372	(a) concerning a particular event before the event begins; or
373	373	(2) if not feasible, respond not later than the
374	374	seventh day after the date the request is submitted.
375	375	(e) If the commission determines the requestor who
376	376	submitted a request under Subsection (a) is likely to prevail in
377	377	successfully demonstrating good cause for its request, the
378	378	commission may provisionally grant the request until the commission
379	379	issues a final determination on whether the requestor has
380	380	demonstrated good cause. Absent a provisional grant by the
381	381	commission, an interactive sports wagering operator may continue to
382	382	offer sports wagering on sporting events that are the subject of a
383	383	request under this section during the commission's consideration of
384	384	the request.
385	385	Sec. 2005.061. MONITORING PROGRAM. The commission by rule
386	386	shall adopt and administer a monitoring program sufficient to
387	387	protect the integrity of all sports wagering regulated under this
388	388	chapter. The program must provide for the sharing of suspicious
389	389	activities on wagering with operators and regulators in other
390	390	states.
391	391	SUBCHAPTER C. SPORTS WAGERING PERMITS
392	392	Sec. 2005.101. INTERACTIVE SPORTS WAGERING PERMIT
393	393	APPLICATION; FEE. (a) The commission shall issue not more than one
394	394	interactive sports wagering permit for each authorized sports
395	395	entity under this chapter. Each sports entity may designate only
396	396	one sports entity designee as an authorized sports entity.
397	397	(b) The commission shall issue an interactive sports
398	398	wagering permit to an authorized sports entity that:
399	399	(1) submits a completed application to the commission,
400	400	on a form prescribed by the commission, containing the information
401	401	required by this section; and
402	402	(2) pays to the commission a permitting fee in an
403	403	amount equal to $2 million, which the commission must refund if the
404	404	applicant's application is denied after deducting the commission's
405	405	expenses incurred in considering the application.
406	406	(c) The commission may issue an interactive sports wagering
407	407	permit to an authorized sports entity that is a sports entity
408	408	designee only if the designee is based in the United States.
409	409	(d) The commission shall prescribe an application form for
410	410	an interactive sports wagering permit that requires an applicant to
411	411	submit:
412	412	(1) the applicant's proposed initial business plan,
413	413	including the range of contemplated types and modes of sports
414	414	wagering;
415	415	(2) the applicant's proposed measures to address age
416	416	and identity verification and geolocation requirements;
417	417	(3) the applicant's proposed internal controls,
418	418	including controls to ensure that an ineligible person does not
419	419	participate in sports wagering;
420	420	(4) the applicant's history of preventing problem
421	421	gambling, including training programs for its employees;
422	422	(5) the applicant's written information security
423	423	program, including information security governance and the
424	424	designation of a chief security officer or equivalent;
425	425	(6) the single sports wagering brand under which an
426	426	interactive sports wagering operator plans to hold out its sports
427	427	wagering platform to the public;
428	428	(7) any personal information the commission by rule
429	429	may determine is required for the applicant's key persons; and
430	430	(8) any other information the commission considers
431	431	necessary.
432	432	Sec. 2005.102. SERVICE PROVIDER PERMIT APPLICATION; FEE.
433	433	(a) An applicant for a service provider permit shall:
434	434	(1) submit an application to the commission, on a form
435	435	prescribed by the commission, containing the information required
436	436	by this section; and
437	437	(2) pay to the commission an application fee in an
438	438	amount equal to $25,000.
439	439	(b) An application submitted under this section must
440	440	include:
441	441	(1) the applicant's background in sports wagering or a
442	442	covered service;
443	443	(2) the applicant's experience in connection with
444	444	sports wagering or other wagering activities in other
445	445	jurisdictions, including the applicant's history and reputation of
446	446	integrity and compliance, a list of all active or lapsed permits or
447	447	licenses for sports wagering or other wagering activities, and the
448	448	reason for any lapse;
449	449	(3) the applicant's written information security
450	450	program, including information security governance and the
451	451	designation of a chief security officer or equivalent;
452	452	(4) any personal information the commission by rule
453	453	determines should be required concerning the applicant's key
454	454	persons; and
455	455	(5) any other information the commission considers
456	456	necessary.
457	457	Sec. 2005.103. BACKGROUND CHECK. The commission shall
458	458	conduct a background check on each service provider applicant,
459	459	including any key persons of the applicant, as required by
460	460	commission rule. A background check conducted under this section
461	461	must include a credit history check, a tax record check, and a
462	462	criminal history record information check.
463	463	Sec. 2005.104. GRANT OR DENIAL. (a) The commission shall
464	464	grant or deny a completed application under this subchapter not
465	465	later than the 90th day after the date the commission receives the
466	466	application. The commission's decision is final and not
467	467	appealable, except as otherwise required under state law.
468	468	(b) The commission may accept a license, permit, or any
469	469	other authorization to operate sports wagering issued by another
470	470	jurisdiction that the commission specifically determines has
471	471	similar permitting requirements as evidence that the applicant
472	472	meets the interactive sports wagering operator requirements. The
473	473	commission may accept another jurisdiction's or an approved third
474	474	party's testing of the interactive sports wagering platform as
475	475	evidence that the platform meets any requirements mandated by
476	476	commission rule.
477	477	(c) The commission shall grant a permit to an applicant for
478	478	a service provider permit unless:
479	479	(1) the commission reasonably believes:
480	480	(A) the applicant will be unable to satisfy the
481	481	duties of a service provider under this chapter;
482	482	(B) the applicant or a key person of the
483	483	applicant is not of good character, honesty, or integrity; or
484	484	(C) the applicant's or a key person of the
485	485	applicant's prior activities, criminal record, reputation, or
486	486	associations are likely to:
487	487	(i) pose a threat to the public interest;
488	488	(ii) impede the regulation of sports
489	489	wagering; or
490	490	(iii) promote unfair or illegal activities
491	491	in the conduct of sports wagering;
492	492	(2) the applicant or a key person of the applicant
493	493	knowingly fails to comply with the provisions of this chapter or a
494	494	commission rule under this chapter;
495	495	(3) the applicant or a key person of the applicant has
496	496	been previously convicted of a felony, a crime of moral turpitude,
497	497	or any criminal offense involving dishonesty or breach of trust in
498	498	the 10 years preceding the date the application is submitted;
499	499	(4) the applicant's or a key person of the applicant's
500	500	license, registration, or permit to conduct sports wagering, other
501	501	forms of gambling activity, or a covered service issued by another
502	502	state has been revoked; or
503	503	(5) the applicant defaults in payment of any
504	504	obligation or debt due to this state.
505	505	Sec. 2005.105. CONFIDENTIAL INFORMATION. Notwithstanding
506	506	any other law, the information an applicant submits under this
507	507	subchapter is confidential and exempt from public disclosure.
508	508	Sec. 2005.106. PERMIT RENEWAL. (a) Except as provided by
509	509	Subsection (b), a permit issued under this chapter expires on the
510	510	third anniversary of the date of issuance.
511	511	(b) If the permit application is submitted by a designee of
512	512	a sports entity or the sports entity's affiliate, a permit under
513	513	this chapter expires on the earlier of:
514	514	(1) the third anniversary of the date of issuance; or
515	515	(2) the expiration date of any contract between the
516	516	sports entity or an affiliate of the sports entity and the designee
517	517	of the sports entity or affiliate authorizing the designee to
518	518	manage and operate the sports entity's or affiliate's sports
519	519	wagering activities.
520	520	(c) At least 60 days before the expiration date of a permit,
521	521	a permit holder may renew a permit by submitting a renewal
522	522	application on a form prescribed by the commission. The permit
523	523	holder must include a renewal fee in an amount equal to:
524	524	(1) $400,000 for renewal of an interactive sports
525	525	wagering permit; or
526	526	(2) $10,000 for renewal of a service provider permit.
527	527	(d) The commission may deny an application for permit
528	528	renewal if the commission finds grounds for denial as provided in
529	529	Section 2005.101 for an interactive sports wagering permit or
530	530	Section 2005.102 for a service provider permit.
531	531	SUBCHAPTER D. SPORTS WAGERING OPERATORS
532	532	Sec. 2005.151. INTERACTIVE SPORTS WAGERING OPERATOR. An
533	533	interactive sports wagering operator or a service provider on
534	534	behalf of an interactive sports wagering operator may conduct
535	535	statewide interactive sports wagering.
536	536	Sec. 2005.152. DUTIES OF INTERACTIVE SPORTS WAGERING
537	537	OPERATORS. (a) An interactive sports wagering operator and its
538	538	service provider shall implement reasonable measures to:
539	539	(1) ensure that only individuals physically located in
540	540	this state or as otherwise authorized by commission rule may place a
541	541	wager through its sports wagering platform;
542	542	(2) protect the confidential information of players
543	543	using its sports wagering platform;
544	544	(3) prevent wagering on events that are prohibited
545	545	events, as provided by this chapter or commission rule;
546	546	(4) prevent individuals from placing wagers as agents
547	547	or proxies for other individuals;
548	548	(5) allow individuals to restrict themselves from
549	549	placing wagers through the sports wagering platform under the
550	550	voluntary exclusion program established under Section 2005.056;
551	551	(6) establish procedures to detect suspicious or
552	552	illegal wagering activity, including measures to report suspicious
553	553	or illegal wagering activity to the commission; and
554	554	(7) provide for the withholding or reporting of income
555	555	tax of players as required by applicable state or federal law.
556	556	(b) An interactive sports wagering operator shall maintain
557	557	until the third anniversary of the date of a sporting event records
558	558	of:
559	559	(1) all sports wagers placed on the event, including:
560	560	(A) the identity of the player;
561	561	(B) the amount and type of wager;
562	562	(C) the time and location of the wager, including
563	563	an Internet Protocol address, if available; and
564	564	(D) the outcome of the wager; and
565	565	(2) suspicious or illegal wagering activity.
566	566	(c) An interactive sports wagering operator must disclose
567	567	the records described in Subsection (b) to the commission on
568	568	request.
569	569	(d) If a sports governing body notifies the commission that
570	570	real-time information sharing for wagers placed on its sporting
571	571	events is necessary and desirable, interactive sports wagering
572	572	operators must share with that sports governing body or its
573	573	designee in real time, at the account level:
574	574	(1) anonymized information regarding an individual
575	575	who places a wager;
576	576	(2) the amount and type of wager;
577	577	(3) the time the wager was placed;
578	578	(4) the location of the wager, including the Internet
579	579	Protocol address if applicable;
580	580	(5) the outcome of the wager; and
581	581	(6) records of abnormal wagering activity.
582	582	(e) A sports governing body may use the information
583	583	described by Subsection (d) solely for sports wagering integrity
584	584	purposes.
585	585	(f) In advertising its sports wagering platform, an
586	586	interactive sports wagering operator must ensure that its
587	587	advertisements:
588	588	(1) are not targeted to individuals under the age of
589	589	21;
590	590	(2) disclose the identity of the interactive sports
591	591	wagering operator's brand;
592	592	(3) provide information about or links to resources
593	593	related to problem gambling and prevention, including a toll-free
594	594	crisis help telephone number approved by the commission; and
595	595	(4) are not misleading to a reasonable individual.
596	596	(g) For purposes of Subsection (d), "real-time information
597	597	sharing" means the sharing of information at a commercially
598	598	reasonable periodic interval of not less than once every 72 hours.
599	599	Sec. 2005.153. ESTABLISHMENT OF INTERACTIVE ACCOUNTS. (a)
600	600	An interactive sports wagering operator:
601	601	(1) is responsible for verifying the identity of a
602	602	sports wagering player and ensuring that the player is at least 21
603	603	years of age; and
604	604	(2) may remotely verify the identity of a sports
605	605	wagering player in order to establish the player's interactive
606	606	sports wagering account.
607	607	(b) A sports wagering player may not establish more than one
608	608	account with any interactive sports wagering operator.
609	609	(c) The following individuals are prohibited from placing
610	610	sports wagers:
611	611	(1) any individual under 21 years of age;
612	612	(2) any individual who has requested and has not
613	613	revoked exclusion from sports wagering under the voluntary
614	614	exclusion program established under Section 2005.056, or who
615	615	otherwise has been adjudicated by law as prohibited from engaging
616	616	in sports wagering;
617	617	(3) any member, officer, or employee of the
618	618	commission;
619	619	(4) any employee or key person of a permit holder for
620	620	that permit holder's sports wagering platform;
621	621	(5) any participant, including an athlete, coach,
622	622	trainer, referee, or other official, and any employee or other
623	623	staff of a participant, in a competition that is the subject of
624	624	sports wagering under this chapter for the league with which the
625	625	participant is affiliated; and
626	626	(6) any employee or other staff of a sports governing
627	627	body or authorizing league or similar sponsoring organization for a
628	628	competition subject to sports wagering under this chapter for the
629	629	sports governing body, authorizing league, or similar sponsoring
630	630	organization with which the individual is employed or otherwise
631	631	affiliated.
632	632	(d) An interactive sports wagering operator and, as
633	633	applicable, the operator's service providers may not accept a
634	634	sports wager from an individual described by Subsection (c)(5) or
635	635	(6) if the interactive sports wagering operator or, as applicable,
636	636	the operator's service provider, has notice or actual knowledge
637	637	that the individual is prohibited from placing a sports wager under
638	638	those subsections.
639	639	(e) An interactive sports wagering account must:
640	640	(1) be established in the name or on behalf of a player
641	641	who is a natural person and may not be in the name of any
642	642	beneficiary, custodian, joint trust, corporation, partnership, or
643	643	any other entity;
644	644	(2) be established:
645	645	(A) through the interactive sports wagering
646	646	operator's sports wagering platform or a specialized Internet
647	647	website or other interface established for that purpose; or
648	648	(B) by any other means approved by the
649	649	commission; and
650	650	(3) include terms that:
651	651	(A) prohibit the transfer or sale of an account
652	652	or account balance to another registered player;
653	653	(B) prohibit the use of any virtual private
654	654	network or other technology that may obscure or falsify the
655	655	player's physical location;
656	656	(C) prohibit any form of collusion, cheating, or
657	657	other unlawful activity;
658	658	(D) affirm that the player meets all eligibility
659	659	requirements for registration; and
660	660	(E) authorize the provision of notices and other
661	661	required communications either through a designated mobile or other
662	662	interface or to an electronic mail address designated by the
663	663	player.
664	664	(f) The interactive sports wagering operator may allow for
665	665	the establishment, verification, and funding of an account
666	666	remotely, provided the operator has in place measures sufficient to
667	667	remotely verify the age and identity of the player.
668	668	(g) An interactive sports wagering operator may suspend or
669	669	terminate an account:
670	670	(1) if the operator determines the player has provided
671	671	any false or misleading information in connection with the opening
672	672	of the account or has engaged in cheating or other unlawful conduct;
673	673	(2) if the player is or has been barred from placing
674	674	sports wagers in this state;
675	675	(3) if the player is or otherwise becomes ineligible
676	676	under this chapter;
677	677	(4) if the interactive sports wagering operator
678	678	determines it lacks sufficient information to verify the age and
679	679	eligibility of the player; or
680	680	(5) for any other reason at the sole discretion of the
681	681	operator, provided that reason is not based on a player's actual or
682	682	believed sex, gender identity, race, religion, national origin,
683	683	sexual orientation, or other lawfully protected characteristic.
684	684	(h) On termination for any reason other than the reason
685	685	described in Subsection (g)(1), an interactive sports wagering
686	686	operator must provide the player sufficient time and access to
687	687	withdraw any funds remaining in the account.
688	688	Sec. 2005.154. BRAND LIMITATION. An interactive sports
689	689	wagering operator may hold out the operator's sports wagering
690	690	platform to the public under only one sports wagering brand.
691	691	Sec. 2005.155. ASSIGNMENT OF SPORTS WAGERING OPERATIONS TO
692	692	THIRD PARTY. (a) Subject to commission approval, an interactive
693	693	sports wagering operator may assign the operator's interactive
694	694	sports wagering operations to a third-party designee to manage and
695	695	operate the operator's sports wagering activities.
696	696	(b) A third-party designee described by Subsection (a) must
697	697	submit to the commission the information required for an applicant
698	698	under Subchapter C in accordance with procedures prescribed by
699	699	commission rule.
700	700	Sec. 2005.156. FANTASY SPORTS CONTESTS. An interactive
701	701	sports wagering operator may offer fantasy sports contests to the
702	702	extent those contests are authorized by law.
703	703	Sec. 2005.157. RISK MANAGEMENT MEASURES. An interactive
704	704	sports wagering operator may engage in risk management measures,
705	705	commonly known as layoff wagering, in the ordinary course of
706	706	business.
707	707	Sec. 2005.158. DATA SOURCES. (a) An interactive sports
708	708	wagering operator is not required to use official league data in
709	709	determining the result of a tier one sports wager.
710	710	(b) A sports governing body may notify the commission in
711	711	accordance with forms and procedures prescribed by the commission
712	712	of the governing body's determination that an interactive sports
713	713	wagering operator must use official league data to settle tier two
714	714	sports wagers. The commission shall notify each interactive sports
715	715	wagering operator of the sports governing body's notification not
716	716	later than the fifth day after the date the commission receives the
717	717	notification. If a sports governing body does not notify the
718	718	commission of its determination to provide official league data, an
719	719	operator is not required to use official league data in determining
720	720	the result of a tier two sports wager on a professional sports event
721	721	of the league governed by the sports governing body.
722	722	(c) Not later than the 60th day after the date the
723	723	commission notifies each interactive sports wagering operator as
724	724	required by Subsection (b), a permit holder may only use official
725	725	league data to determine the results of tier two sports wagers on
726	726	professional sports events of the league governed by the sports
727	727	governing body, unless:
728	728	(1) the sports governing body or its applicable
729	729	designee is unable to provide a feed, on commercially reasonable
730	730	terms, of official league data to determine the results of a tier
731	731	two sports wager, in which case an operator is not required to use
732	732	official league data in determining the results of tier two sports
733	733	wagers until the data feed becomes available on commercially
734	734	reasonable terms; or
735	735	(2) an operator demonstrates to the commission that
736	736	the sports governing body has not provided or offered to provide a
737	737	feed of official league data to the operator on commercially
738	738	reasonable terms.
739	739	(d) The commission may consider the following nonexclusive
740	740	factors in evaluating whether a sports governing body has provided
741	741	or offered to provide a feed of official league data on commercially
742	742	reasonable terms:
743	743	(1) the availability of a sports governing body's
744	744	official league data for tier two sports wagers from more than one
745	745	authorized source;
746	746	(2) market information, including price, terms, and
747	747	conditions, regarding the purchase, in this state and other states,
748	748	by interactive sports wagering operators of comparable data for the
749	749	purpose of settling sports wagers;
750	750	(3) the nature and quantity of the data, including the
751	751	quality and complexity of the process used for collecting the data;
752	752	and
753	753	(4) the extent to which sports governing bodies or
754	754	their designees have made data used to settle tier two sports wagers
755	755	available to sports wagering operators and any terms and conditions
756	756	relating to the use of that data.
757	757	(e) During any period in which the commission is determining
758	758	whether official league data is available on commercially
759	759	reasonable terms under Subsections (c) and (d), an interactive
760	760	sports wagering operator is not required to use official league
761	761	data in determining the results of any tier two sports wagers. The
762	762	commission shall make a determination under Subsections (c) and (d)
763	763	not later than the 60th day after the date an operator notifies the
764	764	commission that it desires to demonstrate that a sports governing
765	765	body has not provided or offered to provide a feed of official
766	766	league data to the operator on commercially reasonable terms. If
767	767	the commission determines that the requesting operator is likely to
768	768	fail in successfully making the demonstration under this
769	769	subsection, the commission may provisionally deny the request until
770	770	the commission makes a final determination as to whether the
771	771	requesting operator has made the demonstration.
772	772	Sec. 2005.159. COMMERCIAL AGREEMENTS. (a) Any sports
773	773	governing body may enter into a commercial agreement with an
774	774	interactive sports wagering operator under which the sports
775	775	governing body may share in the amounts wagered or revenues derived
776	776	from sports wagering on the sports governing body's sporting
777	777	events.
778	778	(b) A sports governing body is not required to obtain a
779	779	permit or other approval from the commission to lawfully accept
780	780	amounts or revenues described by Subsection (a).
781	781	SUBCHAPTER E. COMPETITION INTEGRITY: PROHIBITED EVENTS;
782	782	INVESTIGATIONS; PROMPT REPORTING
783	783	Sec. 2005.201. PROHIBITION ON YOUTH SPORTS WAGERING. A
784	784	person may not place or accept a sports wager on youth sports.
785	785	Sec. 2005.202. COOPERATION WITH INVESTIGATIONS. The
786	786	commission and interactive sports wagering operators shall
787	787	cooperate with investigations conducted by sports governing bodies
788	788	or law enforcement agencies, including by providing or facilitating
789	789	the provision of account-level wagering information and audio or
790	790	video files relating to individuals placing wagers.
791	791	Sec. 2005.203. REQUIRED REPORT TO COMMISSION. (a) An
792	792	interactive sports wagering operator must promptly report to the
793	793	commission any information relating to:
794	794	(1) criminal or disciplinary proceedings commenced
795	795	against the interactive sports wagering operator in connection with
796	796	its operations;
797	797	(2) abnormal wagering activity or patterns that may
798	798	indicate a concern with the integrity of a sporting event;
799	799	(3) any potential breach of the relevant sports
800	800	governing body's internal rules and codes of conduct pertaining to
801	801	sports wagering, to the extent the operator has actual knowledge of
802	802	the potential breach;
803	803	(4) any other conduct that corrupts a wagering outcome
804	804	of a sporting event for purposes of financial gain, including match
805	805	fixing; and
806	806	(5) suspicious or illegal wagering activities,
807	807	including the use of funds derived from illegal activity, the
808	808	placement of wagers to conceal or launder funds derived from
809	809	illegal activity, the use of agents to place wagers, and the use of
810	810	false identification in placing wagers.
811	811	(b) Interactive sports wagering operators must promptly
812	812	report information relating to conduct described in Subsections
813	813	(a)(2), (3), and (4) to the relevant sports governing body.
814	814	Sec. 2005.204. CONFIDENTIALITY OF CERTAIN REPORTED
815	815	INFORMATION. (a) An interactive sports wagering operator must
816	816	maintain the confidentiality of information provided by a sports
817	817	governing body to the operator unless disclosure is required by
818	818	this chapter, the commission, other law, or court order.
819	819	(b) The commission, sports governing bodies, and
820	820	interactive sports wagering operators must maintain the
821	821	confidentiality of all information relating to conduct described in
822	822	Sections 2005.203(a)(2), (3), and (4) unless disclosure is required
823	823	by this chapter, other law, or court order, or as authorized by the
824	824	relevant sports governing body.
825	825	(c) The commission must maintain the confidentiality of all
826	826	information provided by sports wagering operators for compliance
827	827	purposes unless disclosure is required by this chapter, other law,
828	828	or court order.
829	829	(d) The commission and an interactive sports wagering
830	830	operator may disclose confidential information to another
831	831	interactive sports wagering operator, a sports governing body, a
832	832	sports wagering regulating entity, a law enforcement entity, or
833	833	other party for the purpose of preventing or investigating conduct
834	834	that corrupts or could corrupt the outcome of a sporting event,
835	835	including match fixing.
836	836	SUBCHAPTER F. WAGERING REVENUE TAX
837	837	Sec. 2005.251. IMPOSITION OF TAX. A tax is imposed on the
838	838	adjusted gross wagering revenue of an interactive sports wagering
839	839	operator.
840	840	Sec. 2005.252. COMPUTATION OF ADJUSTED GROSS WAGERING
841	841	REVENUE; LOSS CARRYFORWARD. (a) For purposes of the tax imposed
842	842	under this subchapter, an interactive sports wagering operator
843	843	shall compute the operator's adjusted gross wagering revenue for a
844	844	reporting period by determining the total amount of wagering
845	845	revenue the operator received from all sports wagers authorized
846	846	under this chapter during the period and subtracting the following
847	847	for the period:
848	848	(1) all cash or cash equivalents the operator paid as
849	849	winnings to players;
850	850	(2) the actual cost paid by the operator for any
851	851	personal property the operator distributed to a player as a result
852	852	of a sports wager authorized under this chapter;
853	853	(3) uncollectible receivables, not to exceed four
854	854	percent of the amount of gross wagering revenue except as provided
855	855	by Subsection (b);
856	856	(4) any federal excise tax payments on sports wagers
857	857	the operator remitted to the federal government; and
858	858	(5) amounts returned to an authorized participant due
859	859	to technical malfunction or due to concerns regarding the integrity
860	860	of the wager or the sporting event.
861	861	(b) The commission may increase the percentage of gross
862	862	wagering revenue that an interactive sports wagering operator may
863	863	deduct as uncollectible receivables under Subsection (a)(3) on a
864	864	showing that a greater percentage is reasonable and warranted.
865	865	(c) An interactive sports wagering operator that has an
866	866	adjusted gross wagering revenue for a reporting period computed
867	867	under Subsection (a) that is less than zero may carry that amount
868	868	forward and deduct the amount from the operator's adjusted gross
869	869	wagering revenue for one or more of the succeeding 12 reporting
870	870	periods before determining the amount of tax due under this
871	871	subchapter for the applicable reporting period.
872	872	(d) Notwithstanding Subsection (a), an interactive sports
873	873	wagering operator may, before the first anniversary of the date the
874	874	operator is initially issued an interactive sports wagering permit
875	875	under this chapter, exclude wagers placed using free bets or
876	876	promotional credits from the computation of the operator's adjusted
877	877	gross wagering revenue for a reporting period.
878	878	Sec. 2005.253. RATE OF TAX. The rate of the tax imposed
879	879	under this subchapter is 15 percent of the adjusted gross wagering
880	880	revenue for a reporting period, subject to Section 2005.252(c).
881	881	Sec. 2005.254. PAYMENT OF TAX. The tax imposed under this
882	882	subchapter is due and payable to the comptroller on or before the
883	883	20th day of the month following the month in which the adjusted
884	884	gross wagering revenue on which the tax is based is received.
885	885	Sec. 2005.255. TAX REPORT. (a) A person required to pay a
886	886	tax under this subchapter shall file a tax report with the
887	887	comptroller on a form prescribed by the comptroller. The tax report
888	888	is due on the date the tax is due under Section 2005.254.
889	889	(b) The tax report must include separate statements of:
890	890	(1) the amount of the gross wagering revenue the
891	891	person received from all sports wagers authorized under this
892	892	chapter during the reporting period;
893	893	(2) the total amount of cash or cash equivalents the
894	894	person paid as winnings to players during the reporting period;
895	895	(3) the amount of the actual cost the person paid
896	896	during the reporting period for any personal property the person
897	897	distributed to a player as a result of a sports wager authorized
898	898	under this chapter;
899	899	(4) the cash value of any bonuses or promotional
900	900	credits provided to players that are returned to the person in the
901	901	form of a deposit or wager during the reporting period;
902	902	(5) the person's total amount of uncollectible
903	903	receivables during the reporting period as determined under Section
904	904	2005.252;
905	905	(6) the amount of any federal excise tax payments on
906	906	sports wagers the person remitted to the federal government during
907	907	the reporting period; and
908	908	(7) the total negative amount of adjusted gross
909	909	wagering revenue that is eligible to be deducted under Section
910	910	2005.252(c), the amount of that revenue the person actually
911	911	deducted for the report in determining the tax due, and the
912	912	remaining amount of that revenue that is eligible to be deducted on
913	913	a subsequent report.
914	914	Sec. 2005.256. RECORDS. A person required to pay a tax
915	915	under this subchapter shall keep a record of:
916	916	(1) the amounts the person is required to report under
917	917	Section 2005.255; and
918	918	(2) any other information the comptroller requires.
919	919	Sec. 2005.257. ADMINISTRATION AND ENFORCEMENT; RULES. (a)
920	920	The comptroller shall administer, collect, and enforce the tax
921	921	imposed under this subchapter in the manner the comptroller
922	922	administers, collects, and enforces taxes imposed under Title 2,
923	923	Tax Code, except as otherwise provided by this subchapter.
924	924	(b) The comptroller shall adopt rules providing for the
925	925	manner in which a person required to pay a tax under this subchapter
926	926	may file an amended tax report for a reporting period or otherwise
927	927	account for errors or omissions in a tax report filed under this
928	928	subchapter. The comptroller may adopt other rules as necessary to
929	929	implement this subchapter.
930	930	Sec. 2005.258. ALLOCATION OF TAX REVENUE AND EXCESS FEE
931	931	REVENUE. The comptroller shall deposit the net revenue from the tax
932	932	collected under this subchapter and the excess fee revenue
933	933	collected under Section 2005.006 as follows:
934	934	(1) two percent to the problem gambling and addiction
935	935	grant fund established under Section 2005.259; and
936	936	(2) the remainder to the general revenue fund to be
937	937	appropriated to the Texas Education Agency for use in providing
938	938	property tax relief through the reduction of the state compression
939	939	percentage, as defined by Section 48.255, Education Code.
940	940	Sec. 2005.259. PROBLEM GAMBLING AND ADDICTION GRANT FUND.
941	941	(a) The problem gambling and addiction grant fund is established as
942	942	an account in the general revenue fund.
943	943	(b) Money credited to the fund may be used only for awarding
944	944	grants under this section. The fund shall be administered in
945	945	accordance with this section.
946	946	(c) An expenditure from the problem gambling and addiction
947	947	grant fund shall be made in accordance with the General
948	948	Appropriations Act.
949	949	(d) From funds appropriated as described by Subsection (c),
950	950	the commission shall administer a grant program to provide:
951	951	(1) assistance for the direct treatment of persons
952	952	diagnosed as suffering from pathological gambling and other
953	953	addictive behaviors; and
954	954	(2) funding for research regarding the impact of
955	955	gambling on residents of this state.
956	956	(e) Research grants awarded under Subsection (d)(2) may
957	957	include grants for determining the effectiveness of education and
958	958	prevention efforts on the prevalence of pathological gambling in
959	959	this state.
960	960	Sec. 2005.260. INAPPLICABILITY OF OTHER TAXES.
961	961	Notwithstanding any other law, except this chapter, an interactive
962	962	sports wagering operator is exempt from all excise taxes, license
963	963	taxes, permit taxes, privilege taxes, amusement taxes, and
964	964	occupation taxes imposed by this state or any political subdivision
965	965	of this state.
966	966	SUBCHAPTER G. PENALTIES
967	967	Sec. 2005.301. CRIMINAL PENALTIES. (a) A person commits an
968	968	offense if the person knowingly offers or engages in sports
969	969	wagering in violation of this chapter. An offense under this
970	970	subsection is a Class B misdemeanor.
971	971	(b) A person commits an offense if the person knowingly
972	972	attempts to suborn, collude, or otherwise conspire to impermissibly
973	973	influence the outcome of any competition or aspect of any
974	974	competition that is the subject of sports wagering under this
975	975	chapter. An offense under this subsection is a state jail felony.
976	976	(c) A person commits an offense if the person knowingly or
977	977	wilfully falsifies, conceals, or misrepresents a material fact or
978	978	knowingly or wilfully makes a false, fictitious, or fraudulent
979	979	statement or representation in an application submitted under this
980	980	chapter. An offense under this subsection is a state jail felony.
981	981	(d) If conduct constituting an offense under this chapter
982	982	also constitutes an offense under Chapter 47, Penal Code, the actor
983	983	may be prosecuted under either chapter or under both chapters.
984	984	Sec. 2005.302. CIVIL PENALTIES. If the commission
985	985	determines that a permit holder has intentionally violated any
986	986	material provision of this chapter or a rule adopted by the
987	987	commission under this chapter, the commission, after providing at
988	988	least 15 days' notice and a hearing, may:
989	989	(1) suspend or revoke the permit holder's permit; and
990	990	(2) impose a monetary penalty not to exceed $10,000
991	991	for each violation.
992	992	SECTION 3. Section 47.01, Penal Code, is amended by
993	993	amending Subdivision (1) and adding Subdivision (2-a) to read as
994	994	follows:
995	995	(1) "Bet" means an agreement to win or lose something
996	996	of value solely or partially by chance. A bet does not include:
997	997	(A) contracts of indemnity or guaranty, or life,
998	998	health, property, or accident insurance;
999	999	(B) an offer of a prize, award, or compensation
1000	1000	to the actual contestants or participants in a bona fide contest for
1001	1001	the determination of skill, speed, strength, or endurance or to the
1002	1002	owners of animals, vehicles, watercraft, or aircraft entered in a
1003	1003	contest; [or]
1004	1004	(C) an offer of merchandise, with a value not
1005	1005	greater than $25, made by the proprietor of a bona fide carnival
1006	1006	contest conducted at a carnival sponsored by a nonprofit religious,
1007	1007	fraternal, school, law enforcement, youth, agricultural, or civic
1008	1008	group, including any nonprofit agricultural or civic group
1009	1009	incorporated by the state before 1955, if the person to receive the
1010	1010	merchandise from the proprietor is the person who performs the
1011	1011	carnival contest; or
1012	1012	(D) an offer of a prize, award, or compensation
1013	1013	to the participants in a fantasy sports contest.
1014	1014	(2-a) "Fantasy sports contest" means a bona fide
1015	1015	contest, reflecting the relative knowledge and skill of the
1016	1016	participants, in which:
1017	1017	(A) participants assemble a fictional sports
1018	1018	team composed of actual professional or amateur athletes to compete
1019	1019	against other fictional sports teams assembled by other
1020	1020	participants for a prize, award, or compensation;
1021	1021	(B) the value of any prize, award, or
1022	1022	compensation is established in advance of the beginning of the game
1023	1023	or contest;
1024	1024	(C) the outcome of the game or contest is
1025	1025	determined by the accumulated statistical performances of the
1026	1026	individual athletes on a participant's fictional sports team; and
1027	1027	(D) the outcome of the game or contest is not
1028	1028	based solely on the score, point spread, or performance of a single
1029	1029	professional or amateur team or athlete.
1030	1030	SECTION 4. Section 47.02(c), Penal Code, is amended to read
1031	1031	as follows:
1032	1032	(c) It is a defense to prosecution under this section that
1033	1033	the actor reasonably believed that the conduct:
1034	1034	(1) was permitted under Chapter 2001, Occupations
1035	1035	Code;
1036	1036	(2) was permitted under Chapter 2002, Occupations
1037	1037	Code;
1038	1038	(3) was permitted under Chapter 2004, Occupations
1039	1039	Code;
1040	1040	(4) was permitted under Chapter 2005, Occupations
1041	1041	Code;
1042	1042	(5) consisted entirely of participation in the state
1043	1043	lottery authorized by the State Lottery Act (Chapter 466,
1044	1044	Government Code);
1045	1045	(6) [(5)] was permitted under Subtitle A-1, Title 13,
1046	1046	Occupations Code (Texas Racing Act); or
1047	1047	(7) [(6)] consisted entirely of participation in a
1048	1048	drawing for the opportunity to participate in a hunting, fishing,
1049	1049	or other recreational event conducted by the Parks and Wildlife
1050	1050	Department.
1051	1051	SECTION 5. Section 47.09(a), Penal Code, is amended to read
1052	1052	as follows:
1053	1053	(a) It is a defense to prosecution under this chapter that
1054	1054	the conduct:
1055	1055	(1) was authorized under:
1056	1056	(A) Chapter 2001, Occupations Code;
1057	1057	(B) Chapter 2002, Occupations Code;
1058	1058	(C) Chapter 2004, Occupations Code;
1059	1059	(D) Chapter 2005, Occupations Code;
1060	1060	(E) Subtitle A-1, Title 13, Occupations Code
1061	1061	(Texas Racing Act); or
1062	1062	(F) [(E)] Chapter 280, Finance Code;
1063	1063	(2) consisted entirely of participation in the state
1064	1064	lottery authorized by Chapter 466, Government Code; or
1065	1065	(3) was a necessary incident to the operation of the
1066	1066	state lottery and was directly or indirectly authorized by:
1067	1067	(A) Chapter 466, Government Code;
1068	1068	(B) the lottery division of the Texas Lottery
1069	1069	Commission;
1070	1070	(C) the Texas Lottery Commission; or
1071	1071	(D) the director of the lottery division of the
1072	1072	Texas Lottery Commission.
1073	1073	SECTION 6. (a) Not later than the 90th day after the
1074	1074	effective date of this Act, the Texas Lottery Commission shall post
1075	1075	on the commission's Internet website the application forms and
1076	1076	adopt rules allowing for the submission of applications for
1077	1077	interactive sports wagering permits and service provider permits,
1078	1078	as required by Chapter 2005, Occupations Code, as added by this Act.
1079	1079	(b) Not later than the 45th day after the date the
1080	1080	application forms are posted and rules are adopted as required by
1081	1081	Subsection (a) of this section, the Texas Lottery Commission shall
1082	1082	open an initial application period for issuance of permits under
1083	1083	Chapter 2005, Occupations Code, as added by this Act.
1084	1084	(c) Not later than the 30th day after the date the initial
1085	1085	application period described by Subsection (b) of this section
1086	1086	commences, the Texas Lottery Commission shall complete the review
1087	1087	of all applications received during the initial application period
1088	1088	and award interactive sports wagering permits in accordance with
1089	1089	Chapter 2005, Occupations Code, as added by this Act.
1090	1090	(d) Following the close of the initial application period
1091	1091	described by Subsection (c) of this section, the Texas Lottery
1092	1092	Commission shall issue additional available permits on a rolling
1093	1093	basis.
1094	1094	SECTION 7. The changes in law made by this Act to Chapter
1095	1095	47, Penal Code, apply only to an offense committed on or after the
1096	1096	effective date of this Act. An offense committed before the
1097	1097	effective date of this Act is governed by the law in effect on the
1098	1098	date the offense was committed, and the former law is continued in
1099	1099	effect for that purpose. For purposes of this section, an offense
1100	1100	was committed before the effective date of this Act if any element
1101	1101	of the offense occurred before that date.
1102	1102	SECTION 8. This Act takes effect January 1, 2024, but only
1103	1103	if the constitutional amendment authorizing the legislature to
1104	1104	legalize wagering in this state on certain sporting events is
1105	1105	approved by the voters. If that amendment is not approved by the
1106	1106	voters, this Act has no effect.