Bill Text: TX HB1422 | 2017-2018 | 85th Legislature | Introduced
Bill Title: Relating to the regulation of fantasy games; authorizing a civil penalty; requiring a fee.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2017-02-28 - Referred to Licensing & Administrative Procedures [HB1422 Detail]
Download: Texas-2017-HB1422-Introduced.html
85R4906 GCB-F | ||
By: Raymond | H.B. No. 1422 |
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relating to the regulation of fantasy games; authorizing a civil | ||
penalty; requiring a fee. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Title 13, Business & Commerce Code, is amended by | ||
adding Chapter 623 to read as follows: | ||
CHAPTER 623. FANTASY GAMES | ||
Sec. 623.001. DEFINITIONS. In this chapter: | ||
(1) "Confidential information" means information | ||
related to the play of a fantasy game by a fantasy game participant | ||
that is obtained solely by virtue of a person's employment. | ||
(2) "Fantasy game" means any fantasy or simulation | ||
game or contest that meets the following conditions: | ||
(A) the values of all prizes and awards offered | ||
to winning fantasy game participants are established and made known | ||
to the fantasy game participants in advance of the game or contest; | ||
(B) all winning outcomes reflect the relative | ||
knowledge and skill of the fantasy game participants and are | ||
determined predominantly by accumulated statistical results of the | ||
performance of individuals, including athletes in fantasy or | ||
simulation games or contests based on real sporting events; | ||
(C) no winning outcome is based on the score, | ||
point spread, or performance or performances of any single team or | ||
combination of teams, or solely on any single performance of an | ||
individual athlete or player in any single event; and | ||
(D) the outcomes of the fantasy or simulation | ||
game or contest are not based on the statistical results of the | ||
performance of athletes playing college or high school sports. | ||
(3) "Fantasy game operator" means a person who: | ||
(A) is engaged in the business of professionally | ||
conducting fantasy games for cash prizes for members of the general | ||
public; and | ||
(B) charges a member of the general public who | ||
participates in a fantasy game as a fantasy game participant an | ||
entry fee of cash or a cash equivalent. | ||
(4) "Fantasy game participant" means an individual who | ||
participates in a fantasy game offered by a fantasy game operator. | ||
Sec. 623.002. POWERS AND DUTIES OF SECRETARY OF STATE; | ||
CIVIL PENALTY; ENFORCEMENT. (a) The secretary of state may | ||
promulgate rules under this chapter only as necessary to enforce | ||
the provisions of this chapter. | ||
(b) The secretary of state may impose on a fantasy game | ||
operator for a violation of this chapter a civil penalty in an | ||
amount not to exceed $1,000 for any particular violation. | ||
(c) The secretary of state may take appropriate enforcement | ||
or disciplinary action against a person who violates this chapter, | ||
including the suspension or revocation of a registration issued | ||
under Section 623.003. | ||
(d) Chapter 2001, Government Code, applies to a proceeding | ||
for an enforcement or disciplinary action under this section. | ||
Sec. 623.003. REGISTRATION OF FANTASY GAME OPERATORS. (a) | ||
A person may not offer a fantasy game as a fantasy game operator in | ||
this state unless the person is registered with the secretary of | ||
state under this section, except that the person may offer fantasy | ||
games in this state during the time the person's application for | ||
registration under this section is pending before the secretary of | ||
state. A person may apply for registration under this section on | ||
forms prescribed by the secretary of state. | ||
(b) A person may be registered as a fantasy game operator | ||
under this section only if the person: | ||
(1) is authorized to transact business in this state; | ||
and | ||
(2) pays to the secretary of state the annual fee | ||
imposed under Subsection (c). | ||
(c) A fantasy game operator shall pay to the secretary of | ||
state: | ||
(1) an annual registration fee of $5,000 to obtain | ||
initial registration under this section; and | ||
(2) an annual registration renewal fee of $5,000 on | ||
the anniversary of the date the operator obtains the initial | ||
registration. | ||
Sec. 623.004. CONSUMER PROTECTION PROVISIONS. (a) A | ||
fantasy game operator shall implement procedures intended to: | ||
(1) prevent the fantasy game operator, an employee of | ||
the operator, or a relative of the operator who is living in the | ||
same household as the operator from competing in any fantasy game | ||
offered by the operator that awards a cash prize; | ||
(2) prevent the sharing with third parties of | ||
confidential information that could affect fantasy game play until | ||
the information is made publicly available; | ||
(3) verify that a fantasy game participant is 18 years | ||
of age or older; | ||
(4) ensure that an individual who is a player in a real | ||
game or competition is restricted from participating in a fantasy | ||
game that is determined, wholly or partly, on the accumulated | ||
statistical results of that player, the player's real team, or the | ||
game or contest in which the individual is a player; | ||
(5) allow individuals on request to restrict | ||
themselves from entering a fantasy game and take reasonable steps | ||
to prevent those individuals from entering the fantasy game | ||
operator's fantasy game; | ||
(6) disclose the maximum number of entries a fantasy | ||
game participant may submit to each fantasy game and take | ||
reasonable steps to prevent fantasy game participants from | ||
submitting a number of entries that exceeds that allowable number; | ||
(7) segregate fantasy game participant funds from | ||
operational funds of the fantasy game operator or maintain a | ||
reserve in the form of cash, cash equivalents, credit card and | ||
payment processor reserves and receivables, an irrevocable letter | ||
of credit, a bond, or any combination of these forms in an amount | ||
equal to the deposits made to the accounts of fantasy game | ||
participants for the benefit and protection of the funds held in | ||
those accounts; | ||
(8) provide fantasy game participants with access to | ||
information on responsible play; and | ||
(9) provide fantasy game participants with access to | ||
the participant's play history and account details. | ||
(b) A fantasy game operator offering fantasy games may not | ||
target minors or other excluded players in any advertising of the | ||
operator's fantasy games. | ||
Sec. 623.005. ANNUAL AUDIT. A fantasy game operator must | ||
contract annually with a certified public accountant to perform an | ||
independent financial audit of the operator's fantasy game | ||
operations under this chapter to ensure compliance with this | ||
chapter. The operator must annually submit the results of the audit | ||
to the secretary of state. | ||
Sec. 623.006. CLASSIFICATION OF FANTASY GAMES. A fantasy | ||
game operator or fantasy game participant that owns, operates, | ||
provides, or participates in fantasy games in a manner consistent | ||
with this chapter is not subject to prosecution for an offense under | ||
the Penal Code that prohibits gaming or related activities. | ||
SECTION 2. This Act takes effect September 1, 2017. |