Texas 2023 - 88th Regular

Texas Senate Bill SB715 Compare Versions

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1	1	88R6843 BEE-F
2	2	By: Kolkhorst S.B. No. 715
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; or
145	145	(C) a class 1 racetrack.
146	146	(20) "Sports entity designee" means any person, other
147	147	than an individual, that is designated and authorized by a sports
148	148	entity to receive an interactive sports wagering permit on behalf
149	149	of the sports entity.
150	150	(21) "Sports facility" means:
151	151	(A) a facility in this state that is the primary
152	152	host of:
153	153	(i) a Major League Baseball, National
154	154	Basketball Association, Women's National Basketball Association,
155	155	National Football League, Major League Soccer, or National Hockey
156	156	League professional sports franchise; or
157	157	(ii) a sanctioned annual professional golf
158	158	tournament that is part of a national tour of professional golfers;
159	159	or
160	160	(B) a class 1 racetrack.
161	161	(22) "Sports governing body" means the organization
162	162	that:
163	163	(A) prescribes final rules and enforces codes of
164	164	conduct with respect to a professional sporting event and
165	165	participants in the professional sporting event; and
166	166	(B) has corporate headquarters located in the
167	167	United States.
168	168	(23) "Sports team" means a Major League Baseball,
169	169	National Basketball Association, Women's National Basketball
170	170	Association, National Football League, Major League Soccer, or
171	171	National Hockey League professional sports franchise located in
172	172	this state that:
173	173	(A) leases, subleases, or exclusively or jointly
174	174	operates a sports facility; and
175	175	(B) existed on January 1, 2023.
176	176	(24) "Sports wagering" means a bet placed on sporting
177	177	events or portions of sporting events, or on the individual
178	178	performance statistics of athletes in a sporting event or
179	179	combination of sporting events. The term includes single-game
180	180	wagers, teaser wagers, parlays, over-unders, moneylines, pools,
181	181	exchange wagering, in-game wagering, in-play wagers, proposition
182	182	wagers, and straight wagers. The term does not include:
183	183	(A) fantasy sports contests; or
184	184	(B) horse racing or greyhound racing regulated
185	185	under Subtitle A-1 (Texas Racing Act).
186	186	(25) "Sports wagering brand" means the names, logos,
187	187	and brands by which an interactive sports wagering operator
188	188	advertises, promotes, or otherwise holds out to the public its
189	189	sports wagering platform.
190	190	(26) "Sports wagering platform" means an Internet
191	191	website, mobile application, or other interactive platform
192	192	accessible through or by means of the Internet, a mobile device, or
193	193	any other telecommunications service that sports wagering players
194	194	may use to place sports wagers and participate in sports wagering
195	195	authorized under this chapter.
196	196	(27) "Tier one sports wager" means any sports wager
197	197	other than a tier two sports wager.
198	198	(28) "Tier two sports wager" means a sports wager
199	199	placed after a sporting event begins.
200	200	(29) "Youth sports" means an athletic or sporting
201	201	event in which the majority of participants are under the age of 18
202	202	or are competing on behalf of or under the sponsorship of one or
203	203	more public or private preschools or public or private elementary,
204	204	middle or junior high, or high schools. The term does not include
205	205	professional sports or events that occur under the sponsorship or
206	206	oversight of national or international athletic bodies that are not
207	207	educational institutions and that include participants both over
208	208	and under the age of 18.
209	209	Sec. 2005.003. COMPLIANCE WITH FEDERAL AND STATE LAW. (a)
210	210	All sports wagering authorized under this chapter must be
211	211	initiated, received, and otherwise placed within the boundaries of
212	212	this state unless otherwise authorized by commission rule adopted
213	213	in accordance with applicable federal and state laws.
214	214	(b) The intermediate routing of electronic data relating to
215	215	Internet sports wagering authorized under this chapter, including
216	216	routing across state lines, does not determine the location in
217	217	which wagers are initiated, received, or otherwise placed,
218	218	consistent with the Unlawful Internet Gambling Enforcement Act of
219	219	2006 (31 U.S.C. Section 5361, et seq.).
220	220	Sec. 2005.004. INAPPLICABILITY OF CHAPTER TO CERTAIN
221	221	EVENTS. This chapter does not to apply to:
222	222	(1) fantasy sports contests; or
223	223	(2) pari-mutuel wagering on horse-racing or greyhound
224	224	racing under Subtitle A-1 (Texas Racing Act).
225	225	Sec. 2005.005. REVIEW OF COMMISSION ACTION. Except as
226	226	otherwise provided by this chapter, an action of the commission
227	227	under this chapter is subject to review under Chapter 2001,
228	228	Government Code.
229	229	Sec. 2005.006. ALLOCATION OF EXCESS FEE REVENUE. Any fees
230	230	collected by the commission under this chapter in amounts that
231	231	exceed the amount the commission requires to implement this chapter
232	232	shall be remitted to the comptroller to be deposited as prescribed
233	233	by Section 2005.258.
234	234	SUBCHAPTER B. COMMISSION POWERS AND DUTIES
235	235	Sec. 2005.051. SPORTS WAGERING PROGRAM. (a) The commission
236	236	shall by rule establish an interactive sports wagering program
237	237	under this chapter and issue permits to operate interactive sports
238	238	wagering on sporting events as authorized by this chapter and
239	239	commission rule.
240	240	(b) The commission may not authorize sports wagering
241	241	involving youth sports.
242	242	Sec. 2005.052. RULES. The commission shall adopt all
243	243	necessary rules to administer this chapter and regulate sports
244	244	wagering in this state.
245	245	Sec. 2005.053. ADMINISTRATION AND ENFORCEMENT. The
246	246	executive director under direction of the commission shall
247	247	administer and enforce this chapter.
248	248	Sec. 2005.054. CERTIFICATION OF REVENUES AND EXPENSES. The
249	249	commission shall:
250	250	(1) each month certify to the comptroller in the form
251	251	and manner required by the comptroller a full and complete
252	252	statement of sports wagering revenue and expenses for the preceding
253	253	month; and
254	254	(2) not later than September 30 of each year, provide
255	255	to the comptroller a full and complete statement of sports wagering
256	256	revenue and expenses for the preceding state fiscal year and any
257	257	recommendations for amendments to this chapter that may be
258	258	warranted and prudent to protect the public interest.
259	259	Sec. 2005.055. AUDITS. (a) To ensure a proper accounting
260	260	of all revenue due to this state, the commission and the comptroller
261	261	each independently shall have the right to audit the books and
262	262	records of interactive sports wagering operators and service
263	263	providers that are related to sports wagering activities authorized
264	264	under this chapter. The commission and comptroller shall
265	265	coordinate to ensure audits are not duplicative or overly
266	266	burdensome on the operators or providers.
267	267	(b) The comptroller may conduct an audit of any taxes or
268	268	fees imposed under this chapter in the same manner the comptroller
269	269	conducts an audit of taxes imposed under Title 2, Tax Code.
270	270	Sec. 2005.056. VOLUNTARY EXCLUSION PROGRAM. (a) The
271	271	commission by rule shall establish, implement, and administer a
272	272	voluntary exclusion program.
273	273	(b) The rules adopted under this section must require:
274	274	(1) the commission to establish and administer a
275	275	statewide self-exclusion list that allows an individual to register
276	276	on the commission's public Internet website for self-exclusion for
277	277	the period specified in the exclusion registration agreement and
278	278	requires the commission to regularly distribute the list to each
279	279	interactive sports wagering operator;
280	280	(2) each interactive sports wagering operator to
281	281	provide information on the procedures for individuals to request to
282	282	be added to the commission's self-exclusion list and for operators
283	283	to bar individuals on the self-exclusion list from any further
284	284	participation in sports wagering for the period the individuals are
285	285	included on the list;
286	286	(3) except as otherwise provided by commission rule,
287	287	an individual who participates in the voluntary exclusion program
288	288	to agree to refrain from participating in sports wagering for the
289	289	period specified in the exclusion registration agreement;
290	290	(4) except as otherwise provided by commission rule,
291	291	an individual who participates in the voluntary exclusion program
292	292	to agree not to petition the commission for removal from the program
293	293	for the period specified in the exclusion registration agreement;
294	294	and
295	295	(5) a permit holder to make all commercially
296	296	reasonable attempts and cause its sales agents and others operating
297	297	on its behalf to make reasonable efforts to cease all direct
298	298	marketing efforts to individuals participating in the voluntary
299	299	exclusion program.
300	300	(c) An individual's registration under the voluntary
301	301	exclusion program does not prevent a permit holder and its agents
302	302	and others operating on their behalf from seeking payment of a debt
303	303	accrued by the individual before the individual entered the
304	304	program.
305	305	Sec. 2005.057. RISK MANAGEMENT. (a) The commission shall
306	306	adopt rules allowing interactive sports wagering operators and
307	307	their service providers to use systems that offset loss or manage
308	308	risk in the operation of sports wagering under this chapter,
309	309	including through liquidity pools, exchanges, or similar
310	310	mechanisms in other approved jurisdictions in which the interactive
311	311	sports wagering operator, service provider, affiliate of either, or
312	312	other third party also holds an equivalent permit or license.
313	313	(b) Notwithstanding Subsection (a), the rules adopted under
314	314	this section must require that adequate protections be maintained
315	315	at all times to ensure sufficient funds are available to pay all
316	316	sports wagering players.
317	317	Sec. 2005.058. PLACES OF PUBLIC ACCOMMODATION. The
318	318	commission may not authorize or allow a person to:
319	319	(1) operate or to allow the operation of a place of
320	320	public accommodation, a club, or a similar establishment in which
321	321	computer terminals or similar access devices are intended or are
322	322	made available for the primary use of accessing a sports wagering
323	323	platform; or
324	324	(2) otherwise advertise to the general public that the
325	325	place of public accommodation, club, or similar establishment is
326	326	available to engage in sports wagering.
327	327	Sec. 2005.059. AUTHORITY TO SUSPEND WAGERING. The
328	328	commission, as necessary to protect the integrity of a competition
329	329	or its participants or as described in Section 2005.060, may
330	330	suspend wagering on any competition, category or type of
331	331	competition, or other aspect of a competition.
332	332	Sec. 2005.060. LIMITATIONS ON CERTAIN SPORTS WAGERING FOR
333	333	GOOD CAUSE. (a) If a sports governing body believes that the type,
334	334	form, or category of sports wagering on that sports governing
335	335	body's sporting events has the potential to undermine the integrity
336	336	or perceived integrity of the sports governing body or its sporting
337	337	events, the sports governing body may submit to the commission a
338	338	written request to restrict, limit, or exclude a certain type,
339	339	form, or category of sports wagering for that sports governing
340	340	body's sporting events. The sports governing body shall provide the
341	341	request in the form and manner prescribed by commission rule.
342	342	(b) The commission shall request comment from interactive
343	343	sports wagering operators on each request described by Subsection
344	344	(a) before granting the request.
345	345	(c) After giving due consideration to all comments received
346	346	under Subsection (b), the commission shall, on a demonstration of
347	347	good cause from the requestor that the type, form, or category of
348	348	sports wagering is likely to undermine the perceived integrity or
349	349	the integrity of the sports governing body or its sporting events,
350	350	grant the request.
351	351	(d) The commission shall:
352	352	(1) if feasible, respond to a request under Subsection
353	353	(a) concerning a particular event before the event begins; or
354	354	(2) if not feasible, respond not later than the
355	355	seventh day after the date the request is submitted.
356	356	(e) If the commission determines the requestor who
357	357	submitted a request under Subsection (a) is likely to prevail in
358	358	successfully demonstrating good cause for its request, the
359	359	commission may provisionally grant the request until the commission
360	360	issues a final determination on whether the requestor has
361	361	demonstrated good cause. Absent a provisional grant by the
362	362	commission, an interactive sports wagering operator may continue to
363	363	offer sports wagering on sporting events that are the subject of a
364	364	request under this section during the commission's consideration of
365	365	the request.
366	366	Sec. 2005.061. MONITORING PROGRAM. The commission by rule
367	367	shall adopt and administer a monitoring program sufficient to
368	368	protect the integrity of all sports wagering regulated under this
369	369	chapter. The program must provide for the sharing of suspicious
370	370	activities on wagering with operators and regulators in other
371	371	states.
372	372	SUBCHAPTER C. SPORTS WAGERING PERMITS
373	373	Sec. 2005.101. INTERACTIVE SPORTS WAGERING PERMIT
374	374	APPLICATION; FEE. (a) The commission shall issue not more than one
375	375	interactive sports wagering permit for each authorized sports
376	376	entity under this chapter. Each sports entity may designate only
377	377	one sports entity designee as an authorized sports entity.
378	378	(b) The commission shall issue an interactive sports
379	379	wagering permit to an authorized sports entity that:
380	380	(1) submits a completed application to the commission,
381	381	on a form prescribed by the commission, containing the information
382	382	required by this section; and
383	383	(2) pays to the commission a permitting fee in an
384	384	amount equal to $500,000, which the commission must refund if the
385	385	applicant's application is denied after deducting the commission's
386	386	expenses incurred in considering the application.
387	387	(c) The commission may issue an interactive sports wagering
388	388	permit to an authorized sports entity that is a sports entity
389	389	designee only if the designee is based in the United States.
390	390	(d) The commission shall prescribe an application form for
391	391	an interactive sports wagering permit that requires an applicant to
392	392	submit:
393	393	(1) the applicant's proposed initial business plan,
394	394	including the range of contemplated types and modes of sports
395	395	wagering;
396	396	(2) the applicant's proposed measures to address age
397	397	and identity verification and geolocation requirements;
398	398	(3) the applicant's proposed internal controls,
399	399	including controls to ensure that an ineligible person does not
400	400	participate in sports wagering;
401	401	(4) the applicant's history of preventing problem
402	402	gambling, including training programs for its employees;
403	403	(5) the applicant's written information security
404	404	program, including information security governance and the
405	405	designation of a chief security officer or equivalent;
406	406	(6) the single sports wagering brand under which an
407	407	interactive sports wagering operator plans to hold out its sports
408	408	wagering platform to the public;
409	409	(7) any personal information the commission by rule
410	410	may determine is required for the applicant's key persons; and
411	411	(8) any other information the commission considers
412	412	necessary.
413	413	Sec. 2005.102. SERVICE PROVIDER PERMIT APPLICATION; FEE.
414	414	(a) An applicant for a service provider permit shall:
415	415	(1) submit an application to the commission, on a form
416	416	prescribed by the commission, containing the information required
417	417	by this section; and
418	418	(2) pay to the commission an application fee in an
419	419	amount equal to $25,000.
420	420	(b) An application submitted under this section must
421	421	include:
422	422	(1) the applicant's background in sports wagering or a
423	423	covered service;
424	424	(2) the applicant's experience in connection with
425	425	sports wagering or other wagering activities in other
426	426	jurisdictions, including the applicant's history and reputation of
427	427	integrity and compliance, a list of all active or lapsed permits or
428	428	licenses for sports wagering or other wagering activities, and the
429	429	reason for any lapse;
430	430	(3) the applicant's written information security
431	431	program, including information security governance and the
432	432	designation of a chief security officer or equivalent;
433	433	(4) any personal information the commission by rule
434	434	determines should be required concerning the applicant's key
435	435	persons; and
436	436	(5) any other information the commission considers
437	437	necessary.
438	438	Sec. 2005.103. BACKGROUND CHECK. The commission shall
439	439	conduct a background check on each service provider applicant,
440	440	including any key persons of the applicant, as required by
441	441	commission rule. A background check conducted under this section
442	442	must include a credit history check, a tax record check, and a
443	443	criminal history record information check.
444	444	Sec. 2005.104. GRANT OR DENIAL. (a) The commission shall
445	445	grant or deny a completed application under this subchapter not
446	446	later than the 90th day after the date the commission receives the
447	447	application. The commission's decision is final and not
448	448	appealable, except as otherwise required under state law.
449	449	(b) The commission may accept a license, permit, or any
450	450	other authorization to operate sports wagering issued by another
451	451	jurisdiction that the commission specifically determines has
452	452	similar permitting requirements as evidence that the applicant
453	453	meets the interactive sports wagering operator requirements. The
454	454	commission may accept another jurisdiction's or an approved third
455	455	party's testing of the interactive sports wagering platform as
456	456	evidence that the platform meets any requirements mandated by
457	457	commission rule.
458	458	(c) The commission shall grant a permit to an applicant for
459	459	a service provider permit unless:
460	460	(1) the commission reasonably believes:
461	461	(A) the applicant will be unable to satisfy the
462	462	duties of a service provider under this chapter;
463	463	(B) the applicant or a key person of the
464	464	applicant is not of good character, honesty, or integrity; or
465	465	(C) the applicant's or a key person of the
466	466	applicant's prior activities, criminal record, reputation, or
467	467	associations are likely to:
468	468	(i) pose a threat to the public interest;
469	469	(ii) impede the regulation of sports
470	470	wagering; or
471	471	(iii) promote unfair or illegal activities
472	472	in the conduct of sports wagering;
473	473	(2) the applicant or a key person of the applicant
474	474	knowingly fails to comply with the provisions of this chapter or a
475	475	commission rule under this chapter;
476	476	(3) the applicant or a key person of the applicant has
477	477	been previously convicted of a felony, a crime of moral turpitude,
478	478	or any criminal offense involving dishonesty or breach of trust in
479	479	the 10 years preceding the date the application is submitted;
480	480	(4) the applicant's or a key person of the applicant's
481	481	license, registration, or permit to conduct sports wagering, other
482	482	forms of gambling activity, or a covered service issued by another
483	483	state has been revoked; or
484	484	(5) the applicant defaults in payment of any
485	485	obligation or debt due to this state.
486	486	Sec. 2005.105. CONFIDENTIAL INFORMATION. Notwithstanding
487	487	any other law, the information an applicant submits under this
488	488	subchapter is confidential and exempt from public disclosure.
489	489	Sec. 2005.106. PERMIT RENEWAL. (a) Except as provided by
490	490	Subsection (b), a permit issued under this chapter expires on the
491	491	third anniversary of the date of issuance.
492	492	(b) If the permit application is submitted by a designee of
493	493	a sports entity or the sports entity's affiliate, a permit under
494	494	this chapter expires on the earlier of:
495	495	(1) the third anniversary of the date of issuance; or
496	496	(2) the expiration date of any contract between the
497	497	sports entity or an affiliate of the sports entity and the designee
498	498	of the sports entity or affiliate authorizing the designee to
499	499	manage and operate the sports entity's or affiliate's sports
500	500	wagering activities.
501	501	(c) At least 60 days before the expiration date of a permit,
502	502	a permit holder may renew a permit by submitting a renewal
503	503	application on a form prescribed by the commission. The permit
504	504	holder must include a renewal fee in an amount equal to:
505	505	(1) $100,000 for renewal of an interactive sports
506	506	wagering permit; or
507	507	(2) $10,000 for renewal of a service provider permit.
508	508	(d) The commission may deny an application for permit
509	509	renewal if the commission finds grounds for denial as provided in
510	510	Section 2005.101 for an interactive sports wagering permit or
511	511	Section 2005.102 for a service provider permit.
512	512	SUBCHAPTER D. SPORTS WAGERING OPERATORS
513	513	Sec. 2005.151. INTERACTIVE SPORTS WAGERING OPERATOR. An
514	514	interactive sports wagering operator or a service provider on
515	515	behalf of an interactive sports wagering operator may conduct
516	516	statewide interactive sports wagering.
517	517	Sec. 2005.152. DUTIES OF INTERACTIVE SPORTS WAGERING
518	518	OPERATORS. (a) An interactive sports wagering operator and its
519	519	service provider shall implement reasonable measures to:
520	520	(1) ensure that only individuals physically located in
521	521	this state or as otherwise authorized by commission rule may place a
522	522	wager through its sports wagering platform;
523	523	(2) protect the confidential information of players
524	524	using its sports wagering platform;
525	525	(3) prevent wagering on events that are prohibited
526	526	events, as provided by this chapter or commission rule;
527	527	(4) prevent individuals from placing wagers as agents
528	528	or proxies for other individuals;
529	529	(5) allow individuals to restrict themselves from
530	530	placing wagers through the sports wagering platform under the
531	531	voluntary exclusion program established under Section 2005.056;
532	532	(6) establish procedures to detect suspicious or
533	533	illegal wagering activity, including measures to report suspicious
534	534	or illegal wagering activity to the commission; and
535	535	(7) provide for the withholding or reporting of income
536	536	tax of players as required by applicable state or federal law.
537	537	(b) An interactive sports wagering operator shall maintain
538	538	until the third anniversary of the date of a sporting event records
539	539	of:
540	540	(1) all sports wagers placed on the event, including:
541	541	(A) the identity of the player;
542	542	(B) the amount and type of wager;
543	543	(C) the time and location of the wager, including
544	544	an Internet Protocol address, if available; and
545	545	(D) the outcome of the wager; and
546	546	(2) suspicious or illegal wagering activity.
547	547	(c) An interactive sports wagering operator must disclose
548	548	the records described in Subsection (b) to the commission on
549	549	request.
550	550	(d) If a sports governing body notifies the commission that
551	551	real-time information sharing for wagers placed on its sporting
552	552	events is necessary and desirable, interactive sports wagering
553	553	operators must share with that sports governing body or its
554	554	designee in real time, at the account level:
555	555	(1) anonymized information regarding an individual
556	556	who places a wager;
557	557	(2) the amount and type of wager;
558	558	(3) the time the wager was placed;
559	559	(4) the location of the wager, including the Internet
560	560	Protocol address if applicable;
561	561	(5) the outcome of the wager; and
562	562	(6) records of abnormal wagering activity.
563	563	(e) A sports governing body may use the information
564	564	described by Subsection (d) solely for sports wagering integrity
565	565	purposes.
566	566	(f) In advertising its sports wagering platform, an
567	567	interactive sports wagering operator must ensure that its
568	568	advertisements:
569	569	(1) are not targeted to individuals under the age of
570	570	21;
571	571	(2) disclose the identity of the interactive sports
572	572	wagering operator's brand;
573	573	(3) provide information about or links to resources
574	574	related to problem gambling and prevention, including a toll-free
575	575	crisis help telephone number approved by the commission; and
576	576	(4) are not misleading to a reasonable individual.
577	577	(g) For purposes of Subsection (d), "real-time information
578	578	sharing" means the sharing of information at a commercially
579	579	reasonable periodic interval of not less than once every 72 hours.
580	580	Sec. 2005.153. ESTABLISHMENT OF INTERACTIVE ACCOUNTS. (a)
581	581	An interactive sports wagering operator:
582	582	(1) is responsible for verifying the identity of a
583	583	sports wagering player and ensuring that the player is at least 21
584	584	years of age; and
585	585	(2) may remotely verify the identity of a sports
586	586	wagering player in order to establish the player's interactive
587	587	sports wagering account.
588	588	(b) A sports wagering player may not establish more than one
589	589	account with any interactive sports wagering operator.
590	590	(c) The following individuals are prohibited from placing
591	591	sports wagers:
592	592	(1) any individual under 21 years of age;
593	593	(2) any individual who has requested and has not
594	594	revoked exclusion from sports wagering under the voluntary
595	595	exclusion program established under Section 2005.056, or who
596	596	otherwise has been adjudicated by law as prohibited from engaging
597	597	in sports wagering;
598	598	(3) any member, officer, or employee of the
599	599	commission;
600	600	(4) any employee or key person of a permit holder for
601	601	that permit holder's sports wagering platform;
602	602	(5) any participant, including an athlete, coach,
603	603	trainer, referee, or other official, and any employee or other
604	604	staff of a participant, in a competition that is the subject of
605	605	sports wagering under this chapter for the league with which the
606	606	participant is affiliated; and
607	607	(6) any employee or other staff of a sports governing
608	608	body or authorizing league or similar sponsoring organization for a
609	609	competition subject to sports wagering under this chapter for the
610	610	sports governing body, authorizing league, or similar sponsoring
611	611	organization with which the individual is employed or otherwise
612	612	affiliated.
613	613	(d) An interactive sports wagering operator and, as
614	614	applicable, the operator's service providers may not accept a
615	615	sports wager from an individual described by Subsection (c)(5) or
616	616	(6) if the interactive sports wagering operator or, as applicable,
617	617	the operator's service provider, has notice or actual knowledge
618	618	that the individual is prohibited from placing a sports wager under
619	619	those subsections.
620	620	(e) An interactive sports wagering account must:
621	621	(1) be established in the name or on behalf of a player
622	622	who is a natural person and may not be in the name of any
623	623	beneficiary, custodian, joint trust, corporation, partnership, or
624	624	any other entity;
625	625	(2) be established:
626	626	(A) through the interactive sports wagering
627	627	operator's sports wagering platform or a specialized Internet
628	628	website or other interface established for that purpose; or
629	629	(B) by any other means approved by the
630	630	commission; and
631	631	(3) include terms that:
632	632	(A) prohibit the transfer or sale of an account
633	633	or account balance to another registered player;
634	634	(B) prohibit the use of any virtual private
635	635	network or other technology that may obscure or falsify the
636	636	player's physical location;
637	637	(C) prohibit any form of collusion, cheating, or
638	638	other unlawful activity;
639	639	(D) affirm that the player meets all eligibility
640	640	requirements for registration; and
641	641	(E) authorize the provision of notices and other
642	642	required communications either through a designated mobile or other
643	643	interface or to an electronic mail address designated by the
644	644	player.
645	645	(f) The interactive sports wagering operator may allow for
646	646	the establishment, verification, and funding of an account
647	647	remotely, provided the operator has in place measures sufficient to
648	648	remotely verify the age and identity of the player.
649	649	(g) An interactive sports wagering operator may suspend or
650	650	terminate an account:
651	651	(1) if the operator determines the player has provided
652	652	any false or misleading information in connection with the opening
653	653	of the account or has engaged in cheating or other unlawful conduct;
654	654	(2) if the player is or has been barred from placing
655	655	sports wagers in this state;
656	656	(3) if the player is or otherwise becomes ineligible
657	657	under this chapter;
658	658	(4) if the interactive sports wagering operator
659	659	determines it lacks sufficient information to verify the age and
660	660	eligibility of the player; or
661	661	(5) for any other reason at the sole discretion of the
662	662	operator, provided that reason is not based on a player's actual or
663	663	believed sex, gender identity, race, religion, national origin,
664	664	sexual orientation, or other lawfully protected characteristic.
665	665	(h) On termination for any reason other than the reason
666	666	described in Subsection (g)(1), an interactive sports wagering
667	667	operator must provide the player sufficient time and access to
668	668	withdraw any funds remaining in the account.
669	669	Sec. 2005.154. BRAND LIMITATION. An interactive sports
670	670	wagering operator may hold out the operator's sports wagering
671	671	platform to the public under only one sports wagering brand.
672	672	Sec. 2005.155. ASSIGNMENT OF SPORTS WAGERING OPERATIONS TO
673	673	THIRD PARTY. (a) Subject to commission approval, an interactive
674	674	sports wagering operator may assign the operator's interactive
675	675	sports wagering operations to a third-party designee to manage and
676	676	operate the operator's sports wagering activities.
677	677	(b) A third-party designee described by Subsection (a) must
678	678	submit to the commission the information required for an applicant
679	679	under Subchapter C in accordance with procedures prescribed by
680	680	commission rule.
681	681	Sec. 2005.156. FANTASY SPORTS CONTESTS. An interactive
682	682	sports wagering operator may offer fantasy sports contests to the
683	683	extent those contests are authorized by law.
684	684	Sec. 2005.157. RISK MANAGEMENT MEASURES. An interactive
685	685	sports wagering operator may engage in risk management measures,
686	686	commonly known as layoff wagering, in the ordinary course of
687	687	business.
688	688	Sec. 2005.158. DATA SOURCES. (a) An interactive sports
689	689	wagering operator is not required to use official league data in
690	690	determining the result of a tier one sports wager.
691	691	(b) A sports governing body may notify the commission in
692	692	accordance with forms and procedures prescribed by the commission
693	693	of the governing body's determination that an interactive sports
694	694	wagering operator must use official league data to settle tier two
695	695	sports wagers. The commission shall notify each interactive sports
696	696	wagering operator of the sports governing body's notification not
697	697	later than the fifth day after the date the commission receives the
698	698	notification. If a sports governing body does not notify the
699	699	commission of its determination to provide official league data, an
700	700	operator is not required to use official league data in determining
701	701	the result of a tier two sports wager on a professional sports event
702	702	of the league governed by the sports governing body.
703	703	(c) Not later than the 60th day after the date the
704	704	commission notifies each interactive sports wagering operator as
705	705	required by Subsection (b), a permit holder may only use official
706	706	league data to determine the results of tier two sports wagers on
707	707	professional sports events of the league governed by the sports
708	708	governing body, unless:
709	709	(1) the sports governing body or its applicable
710	710	designee is unable to provide a feed, on commercially reasonable
711	711	terms, of official league data to determine the results of a tier
712	712	two sports wager, in which case an operator is not required to use
713	713	official league data in determining the results of tier two sports
714	714	wagers until the data feed becomes available on commercially
715	715	reasonable terms; or
716	716	(2) an operator demonstrates to the commission that
717	717	the sports governing body has not provided or offered to provide a
718	718	feed of official league data to the operator on commercially
719	719	reasonable terms.
720	720	(d) The commission may consider the following nonexclusive
721	721	factors in evaluating whether a sports governing body has provided
722	722	or offered to provide a feed of official league data on commercially
723	723	reasonable terms:
724	724	(1) the availability of a sports governing body's
725	725	official league data for tier two sports wagers from more than one
726	726	authorized source;
727	727	(2) market information, including price, terms, and
728	728	conditions, regarding the purchase, in this state and other states,
729	729	by interactive sports wagering operators of comparable data for the
730	730	purpose of settling sports wagers;
731	731	(3) the nature and quantity of the data, including the
732	732	quality and complexity of the process used for collecting the data;
733	733	and
734	734	(4) the extent to which sports governing bodies or
735	735	their designees have made data used to settle tier two sports wagers
736	736	available to sports wagering operators and any terms and conditions
737	737	relating to the use of that data.
738	738	(e) During any period in which the commission is determining
739	739	whether official league data is available on commercially
740	740	reasonable terms under Subsections (c) and (d), an interactive
741	741	sports wagering operator is not required to use official league
742	742	data in determining the results of any tier two sports wagers. The
743	743	commission shall make a determination under Subsections (c) and (d)
744	744	not later than the 60th day after the date an operator notifies the
745	745	commission that it desires to demonstrate that a sports governing
746	746	body has not provided or offered to provide a feed of official
747	747	league data to the operator on commercially reasonable terms. If
748	748	the commission determines that the requesting operator is likely to
749	749	fail in successfully making the demonstration under this
750	750	subsection, the commission may provisionally deny the request until
751	751	the commission makes a final determination as to whether the
752	752	requesting operator has made the demonstration.
753	753	Sec. 2005.159. COMMERCIAL AGREEMENTS. (a) Any sports
754	754	governing body may enter into a commercial agreement with an
755	755	interactive sports wagering operator under which the sports
756	756	governing body may share in the amounts wagered or revenues derived
757	757	from sports wagering on the sports governing body's sporting
758	758	events.
759	759	(b) A sports governing body is not required to obtain a
760	760	permit or other approval from the commission to lawfully accept
761	761	amounts or revenues described by Subsection (a).
762	762	SUBCHAPTER E. COMPETITION INTEGRITY: PROHIBITED EVENTS;
763	763	INVESTIGATIONS; PROMPT REPORTING
764	764	Sec. 2005.201. PROHIBITION ON YOUTH SPORTS WAGERING. A
765	765	person may not place or accept a sports wager on youth sports.
766	766	Sec. 2005.202. COOPERATION WITH INVESTIGATIONS. The
767	767	commission and interactive sports wagering operators shall
768	768	cooperate with investigations conducted by sports governing bodies
769	769	or law enforcement agencies, including by providing or facilitating
770	770	the provision of account-level wagering information and audio or
771	771	video files relating to individuals placing wagers.
772	772	Sec. 2005.203. REQUIRED REPORT TO COMMISSION. (a) An
773	773	interactive sports wagering operator must promptly report to the
774	774	commission any information relating to:
775	775	(1) criminal or disciplinary proceedings commenced
776	776	against the interactive sports wagering operator in connection with
777	777	its operations;
778	778	(2) abnormal wagering activity or patterns that may
779	779	indicate a concern with the integrity of a sporting event;
780	780	(3) any potential breach of the relevant sports
781	781	governing body's internal rules and codes of conduct pertaining to
782	782	sports wagering, to the extent the operator has actual knowledge of
783	783	the potential breach;
784	784	(4) any other conduct that corrupts a wagering outcome
785	785	of a sporting event for purposes of financial gain, including match
786	786	fixing; and
787	787	(5) suspicious or illegal wagering activities,
788	788	including the use of funds derived from illegal activity, the
789	789	placement of wagers to conceal or launder funds derived from
790	790	illegal activity, the use of agents to place wagers, and the use of
791	791	false identification in placing wagers.
792	792	(b) Interactive sports wagering operators must promptly
793	793	report information relating to conduct described in Subsections
794	794	(a)(2), (3), and (4) to the relevant sports governing body.
795	795	Sec. 2005.204. CONFIDENTIALITY OF CERTAIN REPORTED
796	796	INFORMATION. (a) An interactive sports wagering operator must
797	797	maintain the confidentiality of information provided by a sports
798	798	governing body to the operator unless disclosure is required by
799	799	this chapter, the commission, other law, or court order.
800	800	(b) The commission, sports governing bodies, and
801	801	interactive sports wagering operators must maintain the
802	802	confidentiality of all information relating to conduct described in
803	803	Sections 2005.203(a)(2), (3), and (4) unless disclosure is required
804	804	by this chapter, other law, or court order, or as authorized by the
805	805	relevant sports governing body.
806	806	(c) The commission must maintain the confidentiality of all
807	807	information provided by sports wagering operators for compliance
808	808	purposes unless disclosure is required by this chapter, other law,
809	809	or court order.
810	810	(d) The commission and an interactive sports wagering
811	811	operator may disclose confidential information to another
812	812	interactive sports wagering operator, a sports governing body, a
813	813	sports wagering regulating entity, a law enforcement entity, or
814	814	other party for the purpose of preventing or investigating conduct
815	815	that corrupts or could corrupt the outcome of a sporting event,
816	816	including match fixing.
817	817	SUBCHAPTER F. WAGERING REVENUE TAX
818	818	Sec. 2005.251. IMPOSITION OF TAX. A tax is imposed on the
819	819	adjusted gross wagering revenue of an interactive sports wagering
820	820	operator.
821	821	Sec. 2005.252. COMPUTATION OF ADJUSTED GROSS WAGERING
822	822	REVENUE; LOSS CARRYFORWARD. (a) For purposes of the tax imposed
823	823	under this subchapter, an interactive sports wagering operator
824	824	shall compute the operator's adjusted gross wagering revenue for a
825	825	reporting period by determining the total amount of wagering
826	826	revenue the operator received from all sports wagers authorized
827	827	under this chapter, excluding wagers placed using free bets or
828	828	promotional credits, during the period and subtracting the
829	829	following for the period:
830	830	(1) all cash or cash equivalents the operator paid as
831	831	winnings to players;
832	832	(2) the actual cost paid by the operator for any
833	833	personal property the operator distributed to a player as a result
834	834	of a sports wager authorized under this chapter;
835	835	(3) uncollectible receivables, not to exceed four
836	836	percent of the amount of gross wagering revenue except as provided
837	837	by Subsection (b);
838	838	(4) any federal excise tax payments on sports wagers
839	839	the operator remitted to the federal government; and
840	840	(5) amounts returned to an authorized participant due
841	841	to technical malfunction or due to concerns regarding the integrity
842	842	of the wager or the sporting event.
843	843	(b) The commission may increase the percentage of gross
844	844	wagering revenue that an interactive sports wagering operator may
845	845	deduct as uncollectible receivables under Subsection (a)(3) on a
846	846	showing that a greater percentage is reasonable and warranted.
847	847	(c) An interactive sports wagering operator that has an
848	848	adjusted gross wagering revenue for a reporting period computed
849	849	under Subsection (a) that is less than zero may carry that amount
850	850	forward and deduct the amount from the operator's adjusted gross
851	851	wagering revenue for one or more of the succeeding 12 reporting
852	852	periods before determining the amount of tax due under this
853	853	subchapter for the applicable reporting period.
854	854	Sec. 2005.253. RATE OF TAX. The rate of the tax imposed
855	855	under this subchapter is 10 percent of the adjusted gross wagering
856	856	revenue for a reporting period, subject to Section 2005.252(c).
857	857	Sec. 2005.254. PAYMENT OF TAX. The tax imposed under this
858	858	subchapter is due and payable to the comptroller on or before the
859	859	20th day of the month following the month in which the adjusted
860	860	gross wagering revenue on which the tax is based is received.
861	861	Sec. 2005.255. TAX REPORT. (a) A person required to pay a
862	862	tax under this subchapter shall file a tax report with the
863	863	comptroller on a form prescribed by the comptroller. The tax report
864	864	is due on the date the tax is due under Section 2005.254.
865	865	(b) The tax report must include separate statements of:
866	866	(1) the amount of the gross wagering revenue the
867	867	person received from all sports wagers authorized under this
868	868	chapter during the reporting period;
869	869	(2) the total amount of cash or cash equivalents the
870	870	person paid as winnings to players during the reporting period;
871	871	(3) the amount of the actual cost the person paid
872	872	during the reporting period for any personal property the person
873	873	distributed to a player as a result of a sports wager authorized
874	874	under this chapter;
875	875	(4) the cash value of any bonuses or promotional
876	876	credits provided to players that are returned to the person in the
877	877	form of a deposit or wager during the reporting period;
878	878	(5) the person's total amount of uncollectible
879	879	receivables during the reporting period as determined under Section
880	880	2005.252;
881	881	(6) the amount of any federal excise tax payments on
882	882	sports wagers the person remitted to the federal government during
883	883	the reporting period; and
884	884	(7) the total negative amount of adjusted gross
885	885	wagering revenue that is eligible to be deducted under Section
886	886	2005.252(c), the amount of that revenue the person actually
887	887	deducted for the report in determining the tax due, and the
888	888	remaining amount of that revenue that is eligible to be deducted on
889	889	a subsequent report.
890	890	Sec. 2005.256. RECORDS. A person required to pay a tax
891	891	under this subchapter shall keep a record of:
892	892	(1) the amounts the person is required to report under
893	893	Section 2005.255; and
894	894	(2) any other information the comptroller requires.
895	895	Sec. 2005.257. ADMINISTRATION AND ENFORCEMENT; RULES. (a)
896	896	The comptroller shall administer, collect, and enforce the tax
897	897	imposed under this subchapter in the manner the comptroller
898	898	administers, collects, and enforces taxes imposed under Title 2,
899	899	Tax Code, except as otherwise provided by this subchapter.
900	900	(b) The comptroller shall adopt rules providing for the
901	901	manner in which a person required to pay a tax under this subchapter
902	902	may file an amended tax report for a reporting period or otherwise
903	903	account for errors or omissions in a tax report filed under this
904	904	subchapter. The comptroller may adopt other rules as necessary to
905	905	implement this subchapter.
906	906	Sec. 2005.258. ALLOCATION OF TAX REVENUE AND EXCESS FEE
907	907	REVENUE. The comptroller shall deposit the net revenue from the tax
908	908	collected under this subchapter and the excess fee revenue
909	909	collected under Section 2005.006 as follows:
910	910	(1) two percent to the problem gambling and addiction
911	911	grant fund established under Section 2005.259; and
912	912	(2) the remainder to the general revenue fund to be
913	913	appropriated to the Texas Education Agency for use in providing
914	914	property tax relief through the reduction of the state compression
915	915	percentage, as defined by Section 48.255, Education Code.
916	916	Sec. 2005.259. PROBLEM GAMBLING AND ADDICTION GRANT FUND.
917	917	(a) The problem gambling and addiction grant fund is established as
918	918	an account in the general revenue fund.
919	919	(b) Money credited to the fund may be used only for awarding
920	920	grants under this section. The fund shall be administered in
921	921	accordance with this section.
922	922	(c) An expenditure from the problem gambling and addiction
923	923	grant fund shall be made in accordance with the General
924	924	Appropriations Act.
925	925	(d) From funds appropriated as described by Subsection (c),
926	926	the commission shall administer a grant program to provide:
927	927	(1) assistance for the direct treatment of persons
928	928	diagnosed as suffering from pathological gambling and other
929	929	addictive behaviors; and
930	930	(2) funding for research regarding the impact of
931	931	gambling on residents of this state.
932	932	(e) Research grants awarded under Subsection (d)(2) may
933	933	include grants for determining the effectiveness of education and
934	934	prevention efforts on the prevalence of pathological gambling in
935	935	this state.
936	936	Sec. 2005.260. INAPPLICABILITY OF OTHER TAXES.
937	937	Notwithstanding any other law, except this chapter, an interactive
938	938	sports wagering operator is exempt from all excise taxes, license
939	939	taxes, permit taxes, privilege taxes, amusement taxes, and
940	940	occupation taxes imposed by this state or any political subdivision
941	941	of this state.
942	942	SUBCHAPTER G. PENALTIES
943	943	Sec. 2005.301. CRIMINAL PENALTIES. (a) A person commits an
944	944	offense if the person knowingly offers or engages in sports
945	945	wagering in violation of this chapter. An offense under this
946	946	subsection is a Class B misdemeanor.
947	947	(b) A person commits an offense if the person knowingly
948	948	attempts to suborn, collude, or otherwise conspire to impermissibly
949	949	influence the outcome of any competition or aspect of any
950	950	competition that is the subject of sports wagering under this
951	951	chapter. An offense under this subsection is a state jail felony.
952	952	(c) A person commits an offense if the person knowingly or
953	953	wilfully falsifies, conceals, or misrepresents a material fact or
954	954	knowingly or wilfully makes a false, fictitious, or fraudulent
955	955	statement or representation in an application submitted under this
956	956	chapter. An offense under this subsection is a state jail felony.
957	957	(d) If conduct constituting an offense under this chapter
958	958	also constitutes an offense under Chapter 47, Penal Code, the actor
959	959	may be prosecuted under either chapter or under both chapters.
960	960	Sec. 2005.302. CIVIL PENALTIES. If the commission
961	961	determines that a permit holder has intentionally violated any
962	962	material provision of this chapter or a rule adopted by the
963	963	commission under this chapter, the commission, after providing at
964	964	least 15 days' notice and a hearing, may:
965	965	(1) suspend or revoke the permit holder's permit; and
966	966	(2) impose a monetary penalty not to exceed $10,000
967	967	for each violation.
968	968	SECTION 3. Section 47.01, Penal Code, is amended by
969	969	amending Subdivision (1) and adding Subdivision (2-a) to read as
970	970	follows:
971	971	(1) "Bet" means an agreement to win or lose something
972	972	of value solely or partially by chance. A bet does not include:
973	973	(A) contracts of indemnity or guaranty, or life,
974	974	health, property, or accident insurance;
975	975	(B) an offer of a prize, award, or compensation
976	976	to the actual contestants or participants in a bona fide contest for
977	977	the determination of skill, speed, strength, or endurance or to the
978	978	owners of animals, vehicles, watercraft, or aircraft entered in a
979	979	contest; [or]
980	980	(C) an offer of merchandise, with a value not
981	981	greater than $25, made by the proprietor of a bona fide carnival
982	982	contest conducted at a carnival sponsored by a nonprofit religious,
983	983	fraternal, school, law enforcement, youth, agricultural, or civic
984	984	group, including any nonprofit agricultural or civic group
985	985	incorporated by the state before 1955, if the person to receive the
986	986	merchandise from the proprietor is the person who performs the
987	987	carnival contest; or
988	988	(D) an offer of a prize, award, or compensation
989	989	to the participants in a fantasy sports contest.
990	990	(2-a) "Fantasy sports contest" means a bona fide
991	991	contest, reflecting the relative knowledge and skill of the
992	992	participants, in which:
993	993	(A) participants assemble a fictional sports
994	994	team composed of actual professional or amateur athletes to compete
995	995	against other fictional sports teams assembled by other
996	996	participants for a prize, award, or compensation;
997	997	(B) the value of any prize, award, or
998	998	compensation is established in advance of the beginning of the game
999	999	or contest;
1000	1000	(C) the outcome of the game or contest is
1001	1001	determined by the accumulated statistical performances of the
1002	1002	individual athletes on a participant's fictional sports team; and
1003	1003	(D) the outcome of the game or contest is not
1004	1004	based solely on the score, point spread, or performance of a single
1005	1005	professional or amateur team or athlete.
1006	1006	SECTION 4. Section 47.02(c), Penal Code, is amended to read
1007	1007	as follows:
1008	1008	(c) It is a defense to prosecution under this section that
1009	1009	the actor reasonably believed that the conduct:
1010	1010	(1) was permitted under Chapter 2001, Occupations
1011	1011	Code;
1012	1012	(2) was permitted under Chapter 2002, Occupations
1013	1013	Code;
1014	1014	(3) was permitted under Chapter 2004, Occupations
1015	1015	Code;
1016	1016	(4) was permitted under Chapter 2005, Occupations
1017	1017	Code;
1018	1018	(5) consisted entirely of participation in the state
1019	1019	lottery authorized by the State Lottery Act (Chapter 466,
1020	1020	Government Code);
1021	1021	(6) [(5)] was permitted under Subtitle A-1, Title 13,
1022	1022	Occupations Code (Texas Racing Act); or
1023	1023	(7) [(6)] consisted entirely of participation in a
1024	1024	drawing for the opportunity to participate in a hunting, fishing,
1025	1025	or other recreational event conducted by the Parks and Wildlife
1026	1026	Department.
1027	1027	SECTION 5. Section 47.09(a), Penal Code, is amended to read
1028	1028	as follows:
1029	1029	(a) It is a defense to prosecution under this chapter that
1030	1030	the conduct:
1031	1031	(1) was authorized under:
1032	1032	(A) Chapter 2001, Occupations Code;
1033	1033	(B) Chapter 2002, Occupations Code;
1034	1034	(C) Chapter 2004, Occupations Code;
1035	1035	(D) Chapter 2005, Occupations Code;
1036	1036	(E) Subtitle A-1, Title 13, Occupations Code
1037	1037	(Texas Racing Act); or
1038	1038	(F) [(E)] Chapter 280, Finance Code;
1039	1039	(2) consisted entirely of participation in the state
1040	1040	lottery authorized by Chapter 466, Government Code; or
1041	1041	(3) was a necessary incident to the operation of the
1042	1042	state lottery and was directly or indirectly authorized by:
1043	1043	(A) Chapter 466, Government Code;
1044	1044	(B) the lottery division of the Texas Lottery
1045	1045	Commission;
1046	1046	(C) the Texas Lottery Commission; or
1047	1047	(D) the director of the lottery division of the
1048	1048	Texas Lottery Commission.
1049	1049	SECTION 6. (a) Not later than the 90th day after the
1050	1050	effective date of this Act, the Texas Lottery Commission shall post
1051	1051	on the commission's Internet website the application forms and
1052	1052	adopt rules allowing for the submission of applications for
1053	1053	interactive sports wagering permits and service provider permits,
1054	1054	as required by Chapter 2005, Occupations Code, as added by this Act.
1055	1055	(b) Not later than the 45th day after the date the
1056	1056	application forms are posted and rules are adopted as required by
1057	1057	Subsection (a) of this section, the Texas Lottery Commission shall
1058	1058	open an initial application period for issuance of permits under
1059	1059	Chapter 2005, Occupations Code, as added by this Act.
1060	1060	(c) Not later than the 30th day after the date the initial
1061	1061	application period described by Subsection (b) of this section
1062	1062	commences, the Texas Lottery Commission shall complete the review
1063	1063	of all applications received during the initial application period
1064	1064	and award interactive sports wagering permits in accordance with
1065	1065	Chapter 2005, Occupations Code, as added by this Act.
1066	1066	(d) Following the close of the initial application period
1067	1067	described by Subsection (c) of this section, the Texas Lottery
1068	1068	Commission shall issue additional available permits on a rolling
1069	1069	basis.
1070	1070	SECTION 7. The changes in law made by this Act to Chapter
1071	1071	47, Penal Code, apply only to an offense committed on or after the
1072	1072	effective date of this Act. An offense committed before the
1073	1073	effective date of this Act is governed by the law in effect on the
1074	1074	date the offense was committed, and the former law is continued in
1075	1075	effect for that purpose. For purposes of this section, an offense
1076	1076	was committed before the effective date of this Act if any element
1077	1077	of the offense occurred before that date.
1078	1078	SECTION 8. This Act takes effect January 1, 2024, but only
1079	1079	if the constitutional amendment authorizing the legislature to
1080	1080	legalize wagering in this state on certain sporting events is
1081	1081	approved by the voters. If that amendment is not approved by the
1082	1082	voters, this Act has no effect.