Bill Text: TX HB2669 | 2019-2020 | 86th Legislature | Introduced
Bill Title: Relating to the authorization and regulation of social gaming establishments and the duties of the Texas Department of Licensing and Regulation; providing civil and administrative penalties; authorizing a fee; requiring an occupational license.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2019-04-30 - Left pending in committee [HB2669 Detail]
Download: Texas-2019-HB2669-Introduced.html
86R10533 ADM-F | ||
By: Guillen | H.B. No. 2669 |
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relating to the authorization and regulation of social gaming | ||
establishments and the duties of the Texas Department of Licensing | ||
and Regulation; providing civil and administrative penalties; | ||
authorizing a fee; requiring an occupational license. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Subtitle A, Title 13, Occupations Code, is | ||
amended by adding Chapter 2005 to read as follows: | ||
CHAPTER 2005. SOCIAL GAMING | ||
SUBCHAPTER A. GENERAL PROVISIONS | ||
Sec. 2005.001. SHORT TITLE. This chapter may be cited as | ||
the Social Gaming Act of 2019. | ||
Sec. 2005.002. DEFINITIONS. In this chapter: | ||
(1) "Bet" means an agreement to win or lose money, | ||
chips, tokens, or other consideration in a social game. | ||
(2) "Buy-in" means the amount of consideration paid by | ||
a player to enter a social game. | ||
(3) "Commercial game" means a game conducted in a | ||
manner that provides a mathematical or financial economic benefit | ||
to any person other than a player or participant in the game. | ||
(4) "Commission" means the Texas Commission of | ||
Licensing and Regulation. | ||
(5) "Communal pot" means the total amount of | ||
considerations collected through all bets placed during one | ||
instance of a social game. | ||
(6) "Controlling person" means an individual who: | ||
(A) controls 25 percent or more of the voting | ||
securities of a corporation that offers or proposes to offer social | ||
gaming as an operator; | ||
(B) has final authority to set policy and direct | ||
management of an entity that offers or proposes to offer social | ||
gaming as an operator; | ||
(C) is authorized by an entity that offers or | ||
proposes to offer social gaming as an operator to contract with | ||
another entity to conduct social gaming on behalf of the | ||
contracting entity; or | ||
(D) is an officer or director of a corporation or | ||
a general partnership that offers social gaming as an operator. | ||
(7) "Dealer" means a person who exchanges bets between | ||
players, monitors activities, or conducts hands in a social game at | ||
a licensed social gaming establishment. | ||
(8) "Department" means the Texas Department of | ||
Licensing and Regulation. | ||
(9) "Executive director" means the executive director | ||
of the department. | ||
(10) "Operator" means a person that organizes, | ||
operates, or promotes social games at a licensed social gaming | ||
establishment. | ||
(11) "Pay-out" means the amount of consideration paid | ||
to a player on the player's exit from a social game. | ||
(12) "Player" means an individual who is a registered | ||
member of a social gaming establishment, is at least 21 years of | ||
age, and participates in a social game while physically present on | ||
the premises of the establishment. | ||
(13) "Social game" means a card game: | ||
(A) that is conducted with players placing bets | ||
on predetermined outcomes in which no person receives an economic | ||
benefit except for personal winnings; | ||
(B) in which, except for the advantages of skill | ||
or luck, the risk of losing and the chance of winning are the same | ||
for all players; and | ||
(C) that does not include any commercial game or | ||
any video, mechanical, electronic, or online version of a game | ||
described by Paragraphs (A) and (B). | ||
(14) "Social gaming establishment" means an | ||
establishment in which social gaming authorized by this chapter is | ||
conducted. | ||
Sec. 2005.003. APPLICABILITY. This chapter does not apply | ||
to the conduct of bingo, charitable raffles, the state lottery, or | ||
greyhound or horse racing. | ||
Sec. 2005.004. OTHER GAMING NOT AUTHORIZED. This chapter | ||
does not authorize the conduct of commercial games or gambling | ||
otherwise prohibited by law. | ||
Sec. 2005.005. PRIVATE PLACE. For purposes of this chapter | ||
and other law, a social game conducted in a licensed social gaming | ||
establishment is conducted in a private place. | ||
Sec. 2005.006. ECONOMIC BENEFIT; SERVICE GRATUITY; | ||
ENTRANCE FEE. (a) For purposes of this chapter and other law, a | ||
social game is considered to be conducted in a manner that does not | ||
provide to any person an economic benefit other than player | ||
pay-outs if the social game is conducted in a licensed social gaming | ||
establishment in which: | ||
(1) total buy-ins equal total pay-outs; | ||
(2) bets are placed only between players; and | ||
(3) a fee or percentage of winnings is not collected | ||
from any communal pot. | ||
(b) A service gratuity may be accepted only if the gratuity: | ||
(1) does not create a discrepancy in the equal balance | ||
of buy-ins and pay-outs; and | ||
(2) is offered in a manner that does not conflict with | ||
Subsection (a). | ||
(c) An operator may not receive any economic benefit from a | ||
bet placed during a social game organized, operated, or promoted by | ||
that operator. | ||
(d) An operator may charge a player a fee to enter a social | ||
game held at a licensed social gaming establishment. | ||
Sec. 2005.007. PUBLIC POLICY: PREFERENCE FOR STATE | ||
RESOURCES. It is the intent of this chapter, where possible, to use | ||
the resources, goods, labor, and services of this state in the | ||
operation of social gaming-related amenities to the extent | ||
allowable by law. | ||
SUBCHAPTER B. POWERS AND DUTIES OF COMMISSION AND DEPARTMENT | ||
Sec. 2005.051. COMMISSION RULES ON REGULATION AND | ||
LICENSING. (a) To protect the public health, safety, and welfare | ||
and to ensure that social gaming authorized under this chapter is | ||
conducted fairly at social gaming establishments, the commission | ||
shall adopt rules providing for: | ||
(1) fees in amounts reasonable and necessary to | ||
administer this chapter; | ||
(2) requirements for licensing and renewal of a | ||
license issued under this chapter; | ||
(3) standards of conduct for license holders under | ||
this chapter; and | ||
(4) the administration and enforcement of this | ||
chapter. | ||
(b) The executive director shall ensure that rules adopted | ||
under this section are consistent with state and federal law. | ||
Sec. 2005.052. EXECUTIVE DIRECTOR AND DEPARTMENT DUTIES; | ||
APPLICABILITY OF OTHER LAW. (a) The executive director and | ||
department shall administer this chapter and license and regulate | ||
each social gaming establishment and operator in accordance with | ||
this chapter and rules adopted under this chapter. | ||
(b) Chapter 51 applies to licensing, regulation, and | ||
enforcement under this chapter. The department shall assess | ||
against a social gaming establishment a civil or administrative | ||
penalty authorized under that chapter for a violation of that | ||
chapter, this chapter, or a commission rule. | ||
SUBCHAPTER C. SOCIAL GAMING LICENSING AND REGULATION | ||
Sec. 2005.101. LICENSE REQUIRED. (a) A person may not own | ||
or operate a social gaming establishment unless the person holds a | ||
social gaming establishment license issued under this chapter for | ||
the conduct of social games at the social gaming establishment. | ||
(b) A person may not act as an operator at a social gaming | ||
establishment unless the person holds a license issued under this | ||
chapter. | ||
Sec. 2005.102. GENERAL APPLICATION REQUIREMENTS; LICENSE | ||
TERM. (a) An applicant for a license under this chapter shall: | ||
(1) submit to the department a completed application | ||
on a form prescribed by the department; | ||
(2) pay the required fees; and | ||
(3) provide any other information required by | ||
commission rule. | ||
(b) A license issued under this chapter expires on the first | ||
anniversary of the date of issuance. | ||
(c) An applicant for a social gaming establishment license | ||
for a social gaming establishment in a county subject to Chapter | ||
234, Local Government Code, must hold a game room permit issued | ||
under that chapter and be in good standing with the issuing | ||
authority. | ||
Sec. 2005.103. OPERATOR LICENSE QUALIFICATIONS. (a) An | ||
applicant for issuance or renewal of an operator license, or the | ||
applicant's controlling person, if applicable, must: | ||
(1) be 18 years of age or older; | ||
(2) demonstrate honesty, trustworthiness, and | ||
integrity; and | ||
(3) complete an education course approved by the | ||
commission under Section 2005.151. | ||
(b) On receipt of an original application for a license | ||
under this chapter, the department shall conduct a criminal history | ||
check on each applicant and each controlling person of an applicant | ||
to determine whether the applicant or controlling person is | ||
qualified for issuance of a license under this chapter. The | ||
department in accordance with commission rules may conduct a | ||
criminal history check for renewal of a license issued under this | ||
chapter. | ||
(c) In conducting a criminal history check under Subsection | ||
(b), the department may obtain from the Department of Public Safety | ||
criminal history record information for the applicant, controlling | ||
person, or license holder, as provided by Section 411.122, | ||
Government Code. | ||
(d) In conducting a criminal history check under Subsection | ||
(b), the department must obtain fingerprints from the applicant, | ||
controlling person, or license holder and submit the fingerprints | ||
for processing through appropriate local, state, and federal law | ||
enforcement agencies. | ||
Sec. 2005.104. SURETY BOND FOR OPERATOR LICENSE. (a) An | ||
applicant for issuance of, or a license holder applying for renewal | ||
of, an operator license must provide a surety bond in the amount of | ||
$50,000. | ||
(b) The surety bond provided by an applicant or license | ||
holder: | ||
(1) must be issued by a company authorized to conduct | ||
business in this state; | ||
(2) must comply with all applicable provisions of the | ||
Insurance Code; | ||
(3) must be payable to the department for the purpose | ||
of: | ||
(A) satisfying a judgment awarded to this state | ||
or a political subdivision of this state against the applicant or | ||
license holder for actions engaged in as an operator conducting | ||
social gaming activities; | ||
(B) paying penalties assessed on the applicant or | ||
license holder by this state or a political subdivision of this | ||
state for actions engaged in as an operator conducting social | ||
gaming activities; or | ||
(C) settling a tax debt or other debt owed to this | ||
state or a political subdivision of this state arising out of | ||
actions engaged in by an operator conducting social gaming | ||
activities; and | ||
(4) may not be limited to one claim, provided that the | ||
sum of all claims does not exceed the face value of the surety bond. | ||
(c) An applicant or license holder required to file a surety | ||
bond under this section must file a new bond with each application | ||
for renewal of the license holder's operator license. | ||
(d) A company that issues a surety bond for purposes of | ||
satisfying this section shall notify the department in writing not | ||
later than the 30th day before the date on which the company will | ||
cancel the bond. | ||
(e) An operator whose surety bond is canceled shall | ||
immediately cease operating a social gaming establishment. The | ||
operator may continue to operate the social gaming establishment | ||
after providing to the department a surety bond that is an | ||
acceptable replacement for the canceled bond. | ||
Sec. 2005.105. DENIAL OF APPLICATION. The commission or | ||
the executive director may deny an application for issuance or | ||
renewal of a license if: | ||
(1) the applicant or license holder does not meet the | ||
qualifications for the license; | ||
(2) after conducting an investigation and providing | ||
notice and an opportunity for a hearing, the executive director | ||
determines that the applicant or license holder has violated this | ||
chapter or a rule adopted under this chapter; or | ||
(3) the applicant or license holder engaged in fraud | ||
or misrepresentation in applying for or obtaining a license under | ||
this chapter. | ||
Sec. 2005.106. LICENSE RENEWAL. (a) A license issued under | ||
this chapter expires on the first or second anniversary of the date | ||
of issuance, as determined by commission rule. | ||
(b) The commission by rule shall establish the requirements | ||
for renewal of a license issued under this chapter, including the | ||
payment of applicable fees. | ||
Sec. 2005.107. STATEWIDE VALIDITY; NONTRANSFERABLE. A | ||
license issued under this chapter is valid throughout this state | ||
and is not transferable. | ||
SUBCHAPTER D. EDUCATION | ||
Sec. 2005.151. RECOGNITION OF EDUCATION PROGRAMS AND | ||
COURSES. The commission by rule shall develop criteria by which the | ||
commission approves education programs and courses for operators | ||
and dealers. | ||
SUBCHAPTER E. INSPECTIONS AND INVESTIGATIONS | ||
Sec. 2005.201. INSPECTIONS; INVESTIGATIONS. (a) The | ||
department may conduct inspections and investigations of social | ||
gaming establishments and persons suspected of being in violation | ||
of or threatening to violate this chapter as necessary to enforce | ||
this chapter or Chapter 51. | ||
(b) The department may: | ||
(1) enter the business premises of a license holder | ||
regulated by the department or a person suspected of being in | ||
violation of or threatening to violate this chapter or a rule or | ||
order of the commission or an order of the executive director under | ||
this chapter; and | ||
(2) examine and copy records pertinent to the | ||
inspection or investigation. | ||
SUBCHAPTER F. ADMINISTRATIVE SANCTIONS; ENFORCEMENT | ||
Sec. 2005.251. ADMINISTRATIVE SANCTIONS. (a) The | ||
commission or the executive director may deny an application for a | ||
license, revoke, suspend, or refuse to renew a license, or | ||
reprimand a license holder for a violation of this chapter or a rule | ||
or order of the commission or an order of the executive director. | ||
(b) The commission or the executive director may impose an | ||
administrative penalty on a person under Subchapter F, Chapter 51, | ||
regardless of whether the person holds a license under this | ||
chapter, if the person violates this chapter or a rule or order of | ||
the commission or an order of the executive director. | ||
Sec. 2005.252. CEASE AND DESIST ORDER; INJUNCTION; CIVIL | ||
PENALTY. (a) The executive director may issue a cease and desist | ||
order as necessary to enforce this chapter if the executive | ||
director determines that the action is necessary to prevent a | ||
violation of this chapter or to protect the health and safety of the | ||
public. | ||
(b) The attorney general or the executive director may bring | ||
an action for an injunction or a civil penalty under this chapter, | ||
as provided by Section 51.352. | ||
SECTION 2. Section 47.02(c), Penal Code, as effective April | ||
1, 2019, is amended to read as follows: | ||
(c) It is a defense to prosecution under this section that | ||
the actor reasonably believed that the conduct: | ||
(1) was permitted under Chapter 2001, Occupations | ||
Code; | ||
(2) was permitted under Chapter 2002, Occupations | ||
Code; | ||
(3) was permitted under Chapter 2004, Occupations | ||
Code; | ||
(4) was permitted under Chapter 2005, Occupations | ||
Code; | ||
(5) consisted entirely of participation in the state | ||
lottery authorized by the State Lottery Act (Chapter 466, | ||
Government Code); | ||
(6) [ |
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Occupations Code (Texas Racing Act); or | ||
(7) [ |
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drawing for the opportunity to participate in a hunting, fishing, | ||
or other recreational event conducted by the Parks and Wildlife | ||
Department. | ||
SECTION 3. Section 47.06, Penal Code, is amended by adding | ||
Subsection (f-1) to read as follows: | ||
(f-1) It is a defense to prosecution under Subsection (a) or | ||
(c) that the person owned, manufactured, transferred, or possessed | ||
the equipment or paraphernalia related to social gaming for the | ||
sole purpose of shipping it to a social gaming establishment | ||
licensed under Chapter 2005, Occupations Code. | ||
SECTION 4. Section 47.09(a), Penal Code, as effective April | ||
1, 2019, is amended to read as follows: | ||
(a) It is a defense to prosecution under this chapter that | ||
the conduct: | ||
(1) was authorized under: | ||
(A) Chapter 2001, Occupations Code; | ||
(B) Chapter 2002, Occupations Code; | ||
(C) Chapter 2004, Occupations Code; | ||
(D) Chapter 2005, Occupations Code; | ||
(E) Subtitle A-1, Title 13, Occupations Code | ||
(Texas Racing Act); or | ||
(F) [ |
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(2) consisted entirely of participation in the state | ||
lottery authorized by Chapter 466, Government Code; or | ||
(3) was a necessary incident to the operation of the | ||
state lottery and was directly or indirectly authorized by: | ||
(A) Chapter 466, Government Code; | ||
(B) the lottery division of the Texas Lottery | ||
Commission; | ||
(C) the Texas Lottery Commission; or | ||
(D) the director of the lottery division of the | ||
Texas Lottery Commission. | ||
SECTION 5. Not later than June 1, 2020, the Texas Commission | ||
of Licensing and Regulation shall adopt the rules necessary and the | ||
Texas Department of Licensing and Regulation shall develop the | ||
applications and establish the procedures necessary to implement | ||
Chapter 2005, Occupations Code, as added by this Act. | ||
SECTION 6. This Act takes effect September 1, 2019. |