89R12913 BEE-F
By: Bucy H.B. No. 3201
A BILL TO BE ENTITLED
AN ACT
relating to the licensing and regulation of lottery couriers by the
Texas Lottery Commission; requiring an occupational license;
authorizing a fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 411.108, Government Code, is amended by
adding Subsection (a-3) to read as follows:
(a-3) The Texas Lottery Commission is entitled to obtain
criminal history record information as provided by Subsection (a-2)
that relates to a person licensed under Subchapter K, Chapter 466.
SECTION 2. Section 466.002, Government Code, is amended by
adding Subdivision (5-a) to read as follows:
(5-a) "Lottery courier" means a person licensed under
this chapter to act as an agent for a player in purchasing a ticket.
SECTION 3. Section 466.201(a), Government Code, is amended
to read as follows:
(a) The commission is entitled to conduct an investigation
of and is entitled to obtain criminal history record information
maintained by the Department of Public Safety, the Federal Bureau
of Investigation Identification Division, or another law
enforcement agency to assist in the investigation of:
(1) a sales agent or an applicant for a sales agent
license;
(2) a person required to be named in a license
application;
(3) a lottery operator or prospective lottery
operator;
(4) an employee of a lottery operator or prospective
lottery operator, if the employee is or will be directly involved in
lottery operations;
(5) a person who manufactures or distributes lottery
equipment or supplies, or a representative of a person who
manufactures or distributes lottery equipment or supplies offered
to the lottery;
(6) a person who has submitted a written bid or
proposal to the commission in connection with the procurement of
goods or services by the commission, if the amount of the bid or
proposal exceeds $500;
(7) an employee or other person who works for or will
work for a sales agent or an applicant for a sales agent license;
(8) a person who proposes to enter into or who has a
contract with the commission to supply goods or services to the
commission; [or]
(9) a lottery courier or an applicant for a lottery
courier license; or
(10) if a person described in Subdivisions (1) through
(9) [(8)] is not an individual, an individual who:
(A) is an officer or director of the person;
(B) holds more than 10 percent of the stock in the
person;
(C) holds an equitable interest greater than 10
percent in the person;
(D) is a creditor of the person who holds more
than 10 percent of the person's outstanding debt;
(E) is the owner or lessee of a business that the
person conducts or through which the person will conduct
lottery-related activities;
(F) shares or will share in the profits, other
than stock dividends, of the person;
(G) participates in managing the affairs of the
person; or
(H) is an employee of the person who is or will be
involved in:
(i) selling tickets; or
(ii) handling money from the sale of
tickets.
SECTION 4. Section 466.204, Government Code, is amended to
read as follows:
Sec. 466.204. ACCESS TO INTERNAL REVENUE SERVICE
INFORMATION. The executive director may obtain information
relating to a person's qualification for licensing, employment, or
contracting under this chapter from the Internal Revenue Service
under a contract between the comptroller and the Internal Revenue
Service on:
(1) a sales agent or an applicant for a sales agent
license;
(2) an employee or prospective employee of the
commission;
(3) a person required to be named in a license
application;
(4) a lottery operator or prospective lottery
operator;
(5) an employee of a lottery operator or prospective
lottery operator, if the employee is or will be directly involved in
lottery operations;
(6) a person who manufactures or distributes lottery
equipment or supplies, or a representative of a person who
manufactures or distributes lottery equipment or supplies offered
to the lottery;
(7) a person who has submitted a written bid or
proposal to the commission in connection with the procurement of
goods or services by the commission;
(8) an employee or other person who works for or will
work for a sales agent or an applicant for a sales agent license;
[or]
(9) a person who proposes to enter into or who has a
contract with the commission to supply goods or services to the
commission;
(10) a lottery courier or an applicant for a lottery
courier license; or
(11) an employee or other person who works for or will
work for a lottery courier or an applicant for a lottery courier
license.
SECTION 5. Chapter 466, Government Code, is amended by
adding Subchapter K to read as follows:
SUBCHAPTER K. LICENSING AND OPERATION
OF LOTTERY COURIERS
Sec. 466.501. LICENSE REQUIRED; ISSUANCE. (a) A person may
not act as an agent for a player in purchasing a ticket unless the
person holds a lottery courier license issued under this
subchapter.
(b) The director may issue a lottery courier license only to
a person the director finds has the experience, character, and
general fitness to ensure the person's participation as a lottery
courier will not detract from the integrity, security, honesty, and
fairness of the operation of the lottery.
(c) As a condition to issuance of a lottery courier license,
a lottery courier shall implement, before offering a service as a
lottery courier, any independent testing required by commission
rule.
Sec. 466.502. LICENSE APPLICATION; FEE. (a) An applicant
for a license under this subchapter must:
(1) apply to the division under rules adopted by the
commission; and
(2) provide:
(A) information necessary to determine the
applicant's eligibility for a lottery courier license, including
whether the applicant demonstrates compliance with provisions of
this chapter regulating ticket purchases; and
(B) other information the commission considers
necessary.
(b) The applicant must include an application fee with each
application. The director shall set the application fee in an
amount at least sufficient to cover the costs incurred by the
commission and by the Department of Public Safety to process the
application.
Sec. 466.503. DENIAL OF APPLICATION OR SUSPENSION OR
REVOCATION OF LICENSE. (a) After a hearing, the director shall
deny an application for a lottery courier license or the commission
shall suspend or revoke a lottery courier license if the director or
commission, as applicable, finds the applicant or lottery courier:
(1) is an individual who:
(A) has been convicted of a felony, criminal
fraud, gambling or a gambling-related offense, or a misdemeanor
involving moral turpitude, if less than 10 years has elapsed since
the termination of the sentence, parole, mandatory supervision, or
probation served for the offense;
(B) is or has been a professional gambler;
(C) is married to an individual:
(i) described in Paragraph (A) or (B); or
(ii) who is currently delinquent in the
payment of any state tax;
(D) is an officer or employee of the commission
or a lottery operator; or
(E) is a spouse, child, brother, sister, or
parent residing as a member of the same household in the principal
place of residence of a person described by Paragraph (D);
(2) is not an individual, and an individual described
in Subdivision (1):
(A) is an officer or director of the applicant or
lottery courier;
(B) holds more than 10 percent of the stock in the
applicant or lottery courier;
(C) holds an equitable interest greater than 10
percent in the applicant or lottery courier;
(D) is a creditor of the applicant or lottery
courier who holds more than 10 percent of the applicant's or lottery
courier's outstanding debt;
(E) is the owner or lessee of a business the
applicant or lottery courier conducts or through which the
applicant will conduct a lottery courier business;
(F) shares or will share in the profits, other
than stock dividends, of the applicant or lottery courier; or
(G) participates in managing the affairs of the
applicant or lottery courier;
(3) has been finally determined to be delinquent in
the payment of a tax or other money collected by the comptroller,
the Texas Workforce Commission, or the Texas Alcoholic Beverage
Commission;
(4) is a person whose location for the lottery courier
business is:
(A) a location licensed for games of bingo under
Chapter 2001, Occupations Code;
(B) on land owned by:
(i) this state; or
(ii) a political subdivision of this state
and on which is located a public primary or secondary school, an
institution of higher education, or a state agency; or
(C) a location for which a person holds a wine and
malt beverage retailer's permit, mixed beverage permit, mixed
beverage permit with a retailer late hours certificate, private
club registration permit, or private club registration permit with
a retailer late hours certificate issued under Chapter 25, 28, 29,
or 32, Alcoholic Beverage Code, other than a location for which a
person holds a wine and malt beverage retailer's permit issued
under Chapter 25, Alcoholic Beverage Code, that derives less than
30 percent of the location's gross receipts from the sale or service
of alcoholic beverages; or
(5) has violated this chapter or a rule adopted under
this chapter.
(b) If the director proposes to deny an application for a
license or the commission proposes to suspend or revoke a license
under this section, the applicant or lottery courier is entitled to
written notice of the time and place of the hearing. A notice may be
served on an applicant or lottery courier personally or sent by
certified or registered mail, return receipt requested, to the
person's mailing address as it appears on the commission's records.
A notice must be served or mailed not later than the 20th day before
the hearing date. The commission shall provide for a formal
administrative hearings process.
Sec. 466.504. PROHIBITED TRANSACTIONS. A lottery courier
may not open an account or accept a request for lottery courier
services from a person who is:
(1) under 18 years of age;
(2) an employee, officer, director, or direct or
indirect owner of the lottery courier;
(3) related within the first degree by consanguinity
to an employee, officer, director, or direct or indirect owner of
the lottery courier; or
(4) identified on a restricted list, as prescribed by
commission rule.
Sec. 466.505. COMPLIANCE AUDITS; ANNUAL REPORTS. (a) At
the sole expense of the lottery courier, the lottery courier at
least annually shall contract with an independent auditor the
commission approves for an audit of the lottery courier. On
completion of the audit and the auditor's determination the lottery
courier is in compliance with this subchapter, the auditor shall
issue a certification of compliance to the lottery courier.
(b) A lottery courier shall provide to the commission, not
later than the 120th day after the last day of the lottery courier's
fiscal year:
(1) the lottery courier's financial statements audited
in accordance with generally accepted auditing standards and a copy
of the certificate of compliance issued as required under
Subsection (a);
(2) an evaluation of the lottery courier's management
in accordance with the Standards for Attestation Engagements 18
standard established by the American Institute of Certified Public
Accountants; and
(3) an anti-money laundering compliance statement on a
form the commission prescribes and executed by the lottery
courier's designated anti-money laundering compliance officer.
Sec. 466.506. INSURANCE. A lottery courier shall maintain,
with the limits, coverage requirements, and minimum insurer ratings
prescribed by commission rule:
(1) cyber liability insurance;
(2) errors and omissions insurance; and
(3) directors and officers liability insurance.
Sec. 466.507. RESPONSIBLE GAMING PROTECTIONS. A lottery
courier shall:
(1) maintain a self-exclusion list and provide a
mechanism for a player to register through the lottery courier to be
excluded from the lottery courier's services;
(2) ensure to the commission's satisfaction that any
player on the lottery courier's self-exclusion list is prevented
from requesting lottery courier services;
(3) establish a limit approved by the commission on
the number or amount of daily ticket purchases for all players using
the lottery courier's services;
(4) provide a system for an individual player to set a
lower personal daily ticket purchase limit;
(5) accept only the payment methods authorized for a
lottery customer purchasing a ticket directly from a sales agent;
and
(6) provide player support to respond to player
inquiries and disputes, as the commission prescribes.
Sec. 466.508. ADVERTISING AND MARKETING. A lottery courier
shall:
(1) display prominently on the lottery courier's
Internet website or mobile Internet application a problem gambling
assistance message;
(2) ensure the lottery courier's services are not
advertised to individuals who have registered for the lottery
courier's self-exclusion list; and
(3) comply with the advertising guidelines of the
North American Association of State and Provincial Lotteries.
Sec. 466.509. RULES. The commission shall adopt rules to
implement this subchapter, which must include rules prohibiting
ticket sales:
(1) on credit; or
(2) to individuals:
(A) under 18 years of age; or
(B) not physically located in this state at the
time of the sale.
SECTION 6. Not later than February 1, 2026, the Texas
Lottery Commission shall adopt the rules necessary to implement the
changes in law made by this Act.
SECTION 7. This Act takes effect September 1, 2025.