By Ellis S.B. No. 87
74R1082 CAG-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the authorization and regulation of limited casino
1-3 gambling and to the creation, powers, and duties of the Texas
1-4 Gaming Commission; authorizing taxes; providing civil and criminal
1-5 penalties.
1-6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-7 SECTION 1. Title 6, Revised Statutes, is amended by adding
1-8 Article 179h to read as follows:
1-9 Art. 179h. LIMITED GAMBLING
1-10 ARTICLE 1. GENERAL PROVISIONS
1-11 Sec. 1.001. SHORT TITLE. This article may be cited as the
1-12 "Texas Economic Development and Gaming Control Act."
1-13 Sec. 1.002. PUBLIC POLICY. (a) All casino gaming that is
1-14 conducted in this state and that is authorized by law shall be
1-15 regulated and licensed under this Act, unless the legislature
1-16 specifically provides otherwise.
1-17 (b) The legislature hereby finds, and declares it to be the
1-18 public policy of this state, that:
1-19 (1) the development of regulated limited casino gaming
1-20 in the state will benefit the general welfare of the people of this
1-21 state by enhancing investment, development, and tourism in this
1-22 state, resulting in new jobs and additional revenues to the state;
1-23 (2) the conduct of regulated casino gaming in a
1-24 limited number of casinos will result in no detriment to the
2-1 citizens of this state;
2-2 (3) the regulation of gaming in this state is
2-3 important in order that gaming be conducted honestly and
2-4 competitively and that gaming be free from criminal and corruptive
2-5 elements;
2-6 (4) public confidence and trust can be maintained only
2-7 by strict regulation of all persons, locations, practices,
2-8 associations, and activities related to the conduct of gaming and
2-9 the casino service industry;
2-10 (5) persons owning any direct or indirect material
2-11 interest in a casino should be licensed and controlled to protect
2-12 the public health, safety, morals, good order, and general welfare
2-13 of the citizens of this state;
2-14 (6) certain operators and employees of casinos should
2-15 be regulated, licensed, and controlled to accomplish and promote
2-16 these public policies while protecting the public health, safety,
2-17 morals, good order, and general welfare of the citizens of this
2-18 state;
2-19 (7) certain persons engaging in the casino service
2-20 industry should be regulated, licensed, and controlled to
2-21 accomplish and promote the above public policies while protecting
2-22 the public health, safety, morals, good order, and general welfare
2-23 of the citizens of this state; and
2-24 (8) it is the intent of this Act, where possible, to
2-25 use the resources, goods, labor, and services of the citizens of
2-26 this state in the operation and construction of casinos and
2-27 casino-related amenities to the extent allowable by law.
3-1 Sec. 1.003. DEFINITIONS. In this Act:
3-2 (1) "Affiliate" means a person who, directly or
3-3 indirectly through one or more intermediaries, controls, is
3-4 controlled by, or is under common control with another person. A
3-5 person is considered to control a company if the person
3-6 beneficially owns more than a five-percent equity interest in the
3-7 company under the beneficial ownership regulations adopted by the
3-8 commission.
3-9 (2) "Applicant" means a person who has applied for an
3-10 owner's license, an operator's license, an occupational license, a
3-11 manufacturer's license, a casino service license, or a
3-12 qualification to hold an equity interest or creditor interest in an
3-13 owner licensee or who has applied for the approval of any act or
3-14 transaction for which approval is required or permitted under this
3-15 Act.
3-16 (3) "Associated equipment" means any equipment or
3-17 mechanical, electromechanical, or electronic contrivance,
3-18 component, or machine used in connection with gaming or with any
3-19 game that would not otherwise be classified as a gaming device,
3-20 including dice, playing cards, links connecting progressive slot
3-21 machines, equipment affecting the proper reporting of gross gaming
3-22 revenue, computerized systems or software for monitoring slot
3-23 machines, and devices for weighing or counting money.
3-24 (4) "Casino" means a facility for which an owner's
3-25 license is in effect under this Act permitting the conduct of
3-26 gaming.
3-27 (5) "Casino operator" means a person, other than the
4-1 owner licensee, who contractually agrees to provide operational and
4-2 managerial services for the operation of the casino on behalf of
4-3 the owner licensee in return for receiving a payment based either
4-4 on profits or on receipts from the casino.
4-5 (6) "Casino service" means the provision of goods or
4-6 services to a person holding an owner's or operator's license under
4-7 this Act, other than a service requiring a manufacturer's license,
4-8 including security businesses and gaming schools.
4-9 (7) "Casino service license" means a license issued
4-10 under Section 6.002 of this Act.
4-11 (8) "Casino service licensee" means the holder of a
4-12 casino service license.
4-13 (9) "Chairman" means the chairman of the Texas Gaming
4-14 Commission.
4-15 (10) "Commission" means the Texas Gaming Commission.
4-16 (11) "Commission member" means a member of the
4-17 commission.
4-18 (12) "Company" means a corporation, partnership,
4-19 limited partnership, trust, association, joint stock company, joint
4-20 venture, limited liability company, or other form of business
4-21 organization and does not include a sole proprietorship or natural
4-22 person.
4-23 (13) "Creditor interest" means a right or claim, of
4-24 whatever character, against a person for the payment of money
4-25 borrowed, whether secured or unsecured, matured or unmatured,
4-26 liquidated or absolute, fixed or contingent, and includes
4-27 obligations based on the person's profits or receipts.
5-1 (14) "Director" means a member of the board of
5-2 directors of a corporation and a person performing similar
5-3 functions with respect to a company other than a corporation.
5-4 (15) "Equity interest" means a proprietary right or
5-5 claim allowing the holder either to vote with respect to matters of
5-6 organizational governance or to participate in the profits and
5-7 residual assets of a company, including common and preferred stock
5-8 in a corporation, general and limited partnership interests in a
5-9 partnership, similar interests in any other form of business
5-10 organization, and a warrant, right, or similar interest convertible
5-11 into, or to subscribe for, a proprietary right or claim, with or
5-12 without the payment of additional consideration.
5-13 (16) "Executive director" means the executive director
5-14 of the commission.
5-15 (17) "Family" means, with respect to a natural person,
5-16 any other natural person deemed to be related within the second
5-17 degree by affinity or the third degree by consanguinity, as
5-18 determined under Subchapter B, Chapter 573, Government Code.
5-19 (18) "Game" or "gambling game" means:
5-20 (A) a banking or percentage game played with
5-21 cards, dice, or a mechanical, electromechanical, or electronic
5-22 device or machine for money, property, checks, credit, or a
5-23 representative of value, including roulette, keno, twenty-one,
5-24 blackjack, craps, poker, chuck-a-luck (dai shu), wheel of fortune,
5-25 chemin de fer, baccarat, pai gow, slot machine, any other
5-26 electronic game of chance, and any other game or device approved by
5-27 the commission;
6-1 (B) simulcast wagering on pari-mutuel greyhound
6-2 or horse racing;
6-3 (C) the maintenance of a race book; and
6-4 (D) any other method of effecting a wager
6-5 approved by the commission.
6-6 The term does not include:
6-7 (i) bingo, as authorized by the Bingo
6-8 Enabling Act (Article 179d, Vernon's Texas Civil Statutes);
6-9 (ii) charitable raffles, as authorized by
6-10 the Charitable Raffle Enabling Act (Article 179f, Revised
6-11 Statutes);
6-12 (iii) the state lottery, as authorized by
6-13 the State Lottery Act (Article 179g, Vernon's Texas Civil
6-14 Statutes); or
6-15 (iv) wagering made on the outcome of a
6-16 sports event or activity other than greyhound or horse racing.
6-17 (19) "Gaming" or "gambling" means to deal, operate,
6-18 carry on, conduct, maintain, or expose for play a game in a casino.
6-19 (20) "Gaming device" means a mechanical,
6-20 electromechanical, or electronic contrivance, component, or machine
6-21 used in connection with gaming or a game that affects the result of
6-22 a wager by determining win or loss. The term includes a system for
6-23 processing information that can alter the normal criteria of random
6-24 selection, affect the operation of a game, or determine the outcome
6-25 of a game.
6-26 (21) "Gaming employee" means an individual directly
6-27 involved in the operation or conduct of gaming in a casino
7-1 performing a service in a capacity that the commission finds
7-2 appropriate for occupational licensing under Section 5.002 of this
7-3 Act and includes:
7-4 (A) boxmen;
7-5 (B) cashiers;
7-6 (C) change personnel;
7-7 (D) counting room personnel;
7-8 (E) dealers;
7-9 (F) floor men;
7-10 (G) hosts empowered to extend credit or
7-11 complimentary services;
7-12 (H) keno runners;
7-13 (I) keno writers;
7-14 (J) machine mechanics;
7-15 (K) security personnel;
7-16 (L) shift or pit bosses;
7-17 (M) supervisors or managers involved in gaming
7-18 activities;
7-19 (N) accounting or internal auditing personnel
7-20 directly involved in recordkeeping or the examination of records
7-21 generated from gaming activities; and
7-22 (O) junketeers or other independent agents whose
7-23 compensation is based on how much a patron wagers or loses or who
7-24 are paid per patron more than the price of admission.
7-25 The term does not include bartenders, cocktail
7-26 waitresses, or other individuals engaged exclusively in preparing
7-27 or serving food or beverages or individuals providing nominal,
8-1 complimentary, or maintenance services.
8-2 (22) "Gross gaming revenue" means the total of the
8-3 following, less the total of all cash paid out as losses to patrons
8-4 and those amounts paid to purchase annuities to fund losses paid to
8-5 patrons over several years by independent financial institutions
8-6 and items made deductible as losses under Section 10.002 of this
8-7 Act:
8-8 (A) cash received by an owner licensee as
8-9 winnings;
8-10 (B) cash received by an owner licensee in
8-11 payment for credit extended by the owner licensee to a patron for
8-12 the purposes of gaming; and
8-13 (C) compensation received by an owner licensee
8-14 for conducting any game in which the owner licensee is not a party
8-15 to a wager.
8-16 Cash or the value of noncash prizes awarded to patrons
8-17 in a contest or tournament are not losses. "Gross gaming revenue"
8-18 does not include:
8-19 (i) counterfeit money or tokens;
8-20 (ii) coins of other countries that are
8-21 received in slot machines or gaming devices;
8-22 (iii) cash taken in fraudulent acts
8-23 perpetrated against an owner licensee for which the licensee is not
8-24 reimbursed; or
8-25 (iv) cash received as entry fees for
8-26 contests or tournaments in which the patrons compete for prizes.
8-27 (23) "Hearing examiner" means a person authorized by
9-1 the commission to conduct hearings.
9-2 (24) "Institutional investor" means a person, other
9-3 than a state or federal pension plan, that meets the requirements
9-4 of a "qualified institutional buyer" as defined in Rule 144A of the
9-5 Securities Act of 1933, as amended, and is:
9-6 (A) a bank as defined in 3(a)(6) of the Federal
9-7 Securities Exchange Act of 1934, as amended;
9-8 (B) an insurance company as defined in Section
9-9 2(a)(17) of the Investment Company Act of 1940, as amended;
9-10 (C) an investment company registered under
9-11 Section 8 of the Investment Company Act of 1940, as amended;
9-12 (D) an investment adviser registered under
9-13 Section 203 of the Investment Advisers Act of 1940, as amended;
9-14 (E) collective trust funds as defined in Section
9-15 3(c)(11) of the Investment Company Act of 1940, as amended;
9-16 (F) an employee benefit plan or pension fund
9-17 that is subject to the Employee Retirement Income Security Act of
9-18 1974, as amended, excluding an employee benefit plan or pension
9-19 fund sponsored by a publicly traded corporation registered with the
9-20 commission;
9-21 (G) a state or federal government pension plan;
9-22 (H) a group composed entirely of persons
9-23 specified in Paragraphs (A)-(F); or
9-24 (I) such other persons as the commission may
9-25 determine for reasons consistent with the policies expressed in
9-26 Section 1.002 of this Act.
9-27 (25) "Key executive" means a corporation's directors
10-1 and executive officers, a partnership's general partners, a trust's
10-2 trustee, a joint venture's managing venturers, and each person
10-3 possessing similar responsibilities and authorities in any other
10-4 form of business organization.
10-5 (26) "License" means an owner's license, an operator's
10-6 license, an occupational license, a casino service license, a
10-7 manufacturer's license, or a qualification to hold an equity
10-8 interest or creditor interest in an owner licensee.
10-9 (27) "Licensee" means a person issued a license under
10-10 this Act.
10-11 (28) "Manufacturer licensee" means the holder of a
10-12 manufacturer's license.
10-13 (29) "Manufacturer's license" means a license issued
10-14 under Section 6.001 of this Act.
10-15 (30) "Negotiable instrument" means a writing that
10-16 evidences a transaction between a natural person and an owner
10-17 licensee at the time of the transaction whose gaming chips, tokens,
10-18 or currency are exchanged for the instrument and includes a writing
10-19 taken in consolidation, redemption, or payment of a prior
10-20 instrument.
10-21 (31) "Occupational license" means a license issued
10-22 under Section 5.002 of this Act.
10-23 (32) "Occupational licensee" means the holder of an
10-24 occupational license.
10-25 (33) "Operator's license" means a license issued under
10-26 Section 5.001 of this Act.
10-27 (34) "Operator licensee" means the holder of an
11-1 operator's license.
11-2 (35) "Owner's license" means a license issued under
11-3 either Section 4.002 or Section 4.003 of this Act.
11-4 (36) "Owner licensee" means a person holding an
11-5 owner's license.
11-6 (37) "Person" includes a natural person, corporation,
11-7 organization, business trust, estate, trust, partnership,
11-8 association, and any other legal entity.
11-9 (38) "Principal manager" means a person who, under the
11-10 regulations of the commission, holds or exercises managerial,
11-11 supervisory, or policy-making authority over the management or
11-12 operation of a gaming activity or casino service that in the
11-13 judgment of the commission warrants the occupational licensing as a
11-14 principal manager under this Act for the protection of the public
11-15 interest. "Principal manager" includes the key executives of a
11-16 licensee that is a company and each person controlling such a
11-17 company.
11-18 (39) "Project commitment" means, with respect to an
11-19 application for an owner's license for a proposed casino, the total
11-20 cost of constructing and furnishing the casino and any related
11-21 hotel and entertainment, retail, and parking facilities, including
11-22 the cost of acquiring and preparing the underlying real estate, the
11-23 cost of obtaining requisite permits and approvals, the cost of
11-24 acquiring and installing slot machines, gaming devices, and
11-25 associated equipment, and fees for professional services and
11-26 financing.
11-27 (40) "Publicly traded company" means a company that:
12-1 (A) has one or more classes of securities
12-2 registered under Section 12 of the Securities Exchange Act of 1934,
12-3 as amended (15 U.S.C. Section 781); or
12-4 (B) is an issuer subject to Section 15(d) of the
12-5 Securities Exchange Act of 1934, as amended (15 U.S.C. Section
12-6 780).
12-7 The term does not include a company or other legal
12-8 entity that has securities registered or is deemed to be an issuer
12-9 solely because it guaranteed a security issued by an affiliate
12-10 under a public offering or is considered to be a co-issuer of a
12-11 public offering of securities under 17 C.F.R. Section 230.140.
12-12 (41) "Race book" means wagers accepted on the outcome
12-13 of an event held at a greyhound or horse racetrack that uses the
12-14 pari-mutuel system of wagering.
12-15 (42) "Regulation" means a rule, standard, directive,
12-16 or statement of general applicability that effects the law or
12-17 policy or that describes the procedures of the commission. The
12-18 term does not include:
12-19 (A) a statement concerning only the internal
12-20 management of the commission and not affecting the rights or
12-21 procedures available to a licensee or other person;
12-22 (B) a declaratory ruling;
12-23 (C) an interagency memorandum;
12-24 (D) the commission's decision in a contested
12-25 case or relating to an application for a license; or
12-26 (E) a notice concerning the fees to be charged
12-27 that are necessary for the administration of this Act.
13-1 (43) "Slot machine" means a mechanical, electrical, or
13-2 other device, contrivance, or machine that, on insertion of a coin,
13-3 token, or similar object or on payment of consideration, is
13-4 available to play or operate, the play or operation of which,
13-5 whether by reason of the skill of the operator or the application
13-6 of the element of chance, or both, may deliver or entitle the
13-7 person playing or operating the machine to receive cash, premiums,
13-8 merchandise, tokens, or any thing of value, whether the payoff is
13-9 made automatically from the machine or is made in another manner.
13-10 Sec. 1.004. EXEMPTION FROM FEDERAL STATUTES. (a) Under the
13-11 authority of Section 2 of an act of the Congress of the United
13-12 States entitled "An act to prohibit transportation of gambling
13-13 devices in interstate and foreign commerce," approved January 2,
13-14 1951, Chapter 1194, 64 Stat. 1134, and also designated as 15 U.S.C.
13-15 Sections 1171-1177, this state declares that this state is exempt
13-16 from Section 2 of that certain act of Congress of the United States
13-17 entitled "An act to prohibit transportation of gambling devices in
13-18 interstate and foreign commerce," approved January 2, 1951, Chapter
13-19 1194, 64 Stat. 1134 (15 U.S.C. Sections 1171-1177).
13-20 (b) All shipments of gaming devices, including slot
13-21 machines, into this state, the registering, recording, and labeling
13-22 of which has been performed by the supplier under Sections 3 and 4
13-23 of an act of the Congress of the United States entitled "An act to
13-24 prohibit transportation of gambling devices in interstate and
13-25 foreign commerce," approved January 2, 1951, Chapter 1194, 64 Stat.
13-26 1134, and also designated as 15 U.S.C. Sections 1171-1177, are
13-27 legal shipments of the devices into this state.
14-1 ARTICLE 2. TEXAS GAMING COMMISSION
14-2 Sec. 2.001. TEXAS GAMING COMMISSION. (a) The Texas Gaming
14-3 Commission is composed of seven members. Six members shall be
14-4 appointed by the governor. The chairman of the Public Safety
14-5 Commission is an ex officio member of the commission and has the
14-6 right to vote.
14-7 (b) In making appointments to the commission, the governor
14-8 shall attempt to achieve representation of all the population
14-9 groups of this state.
14-10 Sec. 2.002. QUALIFICATIONS OF COMMISSION MEMBERS. (a) To
14-11 be eligible for appointment to the commission, an individual:
14-12 (1) must be a citizen of the United States;
14-13 (2) must have resided in this state for the two years
14-14 before the date of the person's appointment;
14-15 (3) must submit a financial statement that contains
14-16 the information required by Chapter 572, Government Code;
14-17 (4) may not own a financial or other interest in a
14-18 person engaged in the conduct of gaming or the provision of casino
14-19 services, or in a security issued by that person, or be related
14-20 within the second degree by affinity or the third degree by
14-21 consanguinity, as determined under Chapter 573, Government Code, to
14-22 an individual who owns a financial or other interest or security;
14-23 (5) may not be an applicant for or holder of a license
14-24 under this Act or hold an equity interest or creditor interest in
14-25 an owner licensee requiring qualification under Section 4.013 of
14-26 this Act; and
14-27 (6) may not be a member of the governing body of a
15-1 political subdivision within the state.
15-2 (b) A member of the legislature, a person holding an
15-3 elective office, or an officer or official of a political party is
15-4 not eligible for appointment to the commission.
15-5 Sec. 2.003. TERM. Appointed members of the commission hold
15-6 office for staggered terms of six years. The terms of two members
15-7 expire February 1 of each odd-numbered year.
15-8 Sec. 2.004. PRESIDING OFFICER. The governor shall designate
15-9 one member to serve as presiding officer of the commission for a
15-10 term of two years.
15-11 Sec. 2.005. BOND. (a) Before assuming the duties of
15-12 office, an appointed member of the commission must execute a bond
15-13 that is:
15-14 (1) payable to the state;
15-15 (2) in the amount of $25,000; and
15-16 (3) conditioned on the member's faithful performance
15-17 of the member's duties of office.
15-18 (b) The bond must be approved by the governor.
15-19 (c) The cost of the bond shall be paid by the commission.
15-20 Sec. 2.006. PROHIBITION OF CERTAIN ACTIVITIES. (a) An
15-21 appointed member of the commission may not:
15-22 (1) use the member's official authority to affect the
15-23 result of an election or nomination for public office; or
15-24 (2) directly or indirectly coerce, attempt to coerce,
15-25 command, or advise a person to pay, lend, or contribute anything of
15-26 value to another person for political purposes.
15-27 (b) A commission member or the spouse of a commission member
16-1 may not solicit or accept employment from a licensee or an
16-2 applicant for a license under this Act before the second
16-3 anniversary of the date the commission member's service ends.
16-4 Sec. 2.007. REMOVAL. (a) It is a ground for removal from
16-5 the commission if an appointed member:
16-6 (1) does not have at the time of appointment the
16-7 qualifications required for appointment to the commission;
16-8 (2) does not maintain during service on the commission
16-9 the qualifications required for the appointment to the commission;
16-10 (3) violates a prohibition established by Section
16-11 2.006 of this Act;
16-12 (4) cannot discharge the member's duties for a
16-13 substantial part of the term that the member is appointed for
16-14 because of illness or disability; or
16-15 (5) is absent from more than one-half of the regularly
16-16 scheduled commission meetings that the member is eligible to attend
16-17 during a calendar year, unless the absence is excused by majority
16-18 vote of the commission.
16-19 (b) The validity of an action of the commission is not
16-20 affected by the fact that it is taken when a ground for removal of
16-21 a commission member exists.
16-22 (c) If the presiding officer has knowledge that a potential
16-23 ground for removal exists, the presiding officer shall notify the
16-24 governor and the attorney general.
16-25 Sec. 2.008. PER DIEM; EXPENSES. Each appointed member of
16-26 the commission is entitled to a per diem in an amount prescribed by
16-27 appropriation for each day spent in performing the duties of the
17-1 member and is entitled to reimbursement for actual and necessary
17-2 expenses incurred in performing those duties. Reimbursement for
17-3 expenses under this section is subject to any applicable limitation
17-4 in the General Appropriations Act. The ex officio member is
17-5 entitled to reimbursement for expenses from that member's agency as
17-6 provided by law for expenses incurred in the performance of that
17-7 member's other official duties.
17-8 Sec. 2.009. EXECUTIVE DIRECTOR. (a) The commission shall
17-9 appoint an executive director, who serves at the pleasure of the
17-10 commission.
17-11 (b) A member of the legislature, a person holding any
17-12 elective office, or an officer or official of any political party
17-13 is not eligible for appointment as executive director.
17-14 (c) The executive director must have five or more years of
17-15 responsible administrative experience in public or business
17-16 administration or possess broad management skills.
17-17 (d) The executive director shall devote the director's
17-18 entire time and attention to the duties imposed under this Act and
17-19 the business of the commission and may not pursue any other
17-20 business or occupation or hold any other office for profit.
17-21 (e) The executive director must meet all eligibility
17-22 requirements relating to members of the commission, except that
17-23 there is no requirement for prior residency in this state.
17-24 (f) The executive director is entitled to an annual salary
17-25 and other compensation specified by the commission.
17-26 (g) The executive director may not, before the second
17-27 anniversary of the date the director's service to the commission
18-1 ends, acquire a direct or indirect interest in or be employed by a
18-2 person licensed in the conduct of gaming or the provision of casino
18-3 services in this state.
18-4 Sec. 2.010. OFFICE. The commission shall maintain its
18-5 general office in the city of Austin and may maintain other offices
18-6 determined to be necessary by the commission.
18-7 Sec. 2.011. MEETINGS; QUORUM. (a) The commission shall
18-8 meet not less than once per month during the first 24 months of its
18-9 existence and not less than six times in each calendar year
18-10 thereafter.
18-11 (b) The commission may meet at other times at the call of
18-12 the presiding officer or as provided by commission rule.
18-13 (c) A majority of the active members is a quorum of the
18-14 commission.
18-15 Sec. 2.012. APPLICATION OF OTHER LAWS. (a) The commission
18-16 is subject to Chapter 325, Government Code (Texas Sunset Act).
18-17 Unless continued in existence as provided by that chapter, the
18-18 commission is abolished and this Act expires September 1, 2007.
18-19 (b) The commission is subject to the open meetings law,
18-20 Chapter 551, Government Code.
18-21 (c) The commission is subject to the open records law,
18-22 Chapter 552, Government Code.
18-23 (d) The commission is subject to Chapter 2001, Government
18-24 Code (Administrative Procedure Act).
18-25 Sec. 2.013. AUTHORITY TO SUE OR BE SUED. (a) The
18-26 commission may sue and be sued.
18-27 (b) Service of process in a suit against the commission may
19-1 be secured by serving the executive director.
19-2 (c) A suit against the commission must be brought in Travis
19-3 County.
19-4 Sec. 2.014. AUDIT. The transactions of the commission are
19-5 subject to audit by the state auditor under Chapter 321, Government
19-6 Code.
19-7 ARTICLE 3. POWERS AND DUTIES OF COMMISSION AND EMPLOYEES
19-8 Sec. 3.001. GENERAL POWERS. (a) All aspects of this Act,
19-9 including those relating to licensing, qualification, execution,
19-10 and enforcement, shall be administered by the executive director
19-11 and the commission for the protection of the public and in the
19-12 public interest in accordance with Chapter 2001, Government Code,
19-13 and other policies of this state. A person who is aggrieved by a
19-14 commission decision in a contested case and who has exhausted
19-15 available administrative remedies is entitled to judicial review
19-16 under Chapter 2001, Government Code.
19-17 (b) The commission and the executive director have full
19-18 power and authority to hold hearings, and in connection to the
19-19 hearings, to issue subpoenas, to compel the attendance of witnesses
19-20 at any place in this state, to administer oaths, and to require
19-21 testimony under oath. Any process or notice relating to a hearing
19-22 may be served in the manner provided for service of process and
19-23 notices in civil actions. The commission and the executive
19-24 director may pay transportation and other expenses of witnesses as
19-25 they deem reasonable and proper.
19-26 (c) The executive director and the executive director's
19-27 authorized employees may:
20-1 (1) inspect and examine a premises where gaming is
20-2 conducted or equipment or supplies, including a slot machine, a
20-3 gaming device, or associated equipment that is manufactured,
20-4 assembled, produced, programmed, sold, leased, marketed,
20-5 distributed, repaired, or modified for use in gaming;
20-6 (2) for good cause, seize and remove from a premises
20-7 and impound equipment or supplies for the purpose of examination
20-8 and inspection; and
20-9 (3) demand access to, inspect, examine, photocopy, or
20-10 audit papers, books, and records of applicants and licensees, on
20-11 their premises or elsewhere as practicable, in the presence of the
20-12 licensee or the licensee's agent, reporting the gross income
20-13 produced by a gaming business, verification of the gross income,
20-14 and other matters affecting the enforcement of this Act.
20-15 (d) For the purpose of conducting audits after the cessation
20-16 of gaming by a licensee, a former licensee shall furnish, on demand
20-17 of the executive director or the executive director's authorized
20-18 employees, books, papers, and records as necessary to conduct the
20-19 audits. The former licensee shall maintain all books, papers, and
20-20 records necessary for audits for three years after the date of the
20-21 surrender or revocation of the license. If the former licensee
20-22 seeks judicial review of a deficiency determination or files a
20-23 petition for a redetermination, the former licensee must maintain
20-24 all books, papers, and records until a final order is entered on
20-25 the determination.
20-26 Sec. 3.002. COMMISSION RULEMAKING AUTHORITY. (a) The
20-27 commission shall adopt, amend, or repeal regulations, consistent
21-1 with the policy, objectives, and purposes of this Act, as it deems
21-2 necessary or desirable in the public interest in carrying out the
21-3 policy and provisions of this Act.
21-4 (b) These regulations shall set out:
21-5 (1) the method and form of application that an
21-6 applicant for a license must follow and complete before
21-7 consideration of an application by the executive director or the
21-8 commission;
21-9 (2) the information to be furnished by an applicant or
21-10 licensee concerning antecedents, habits, character, associates,
21-11 criminal record, business activities, and financial affairs;
21-12 (3) the criteria to be used in the award, revocation,
21-13 and suspension of licenses;
21-14 (4) the information to be furnished by a licensee
21-15 relating to the licensee's employees;
21-16 (5) the manner and procedure of hearings conducted by
21-17 the commission or a hearing examiner of the commission;
21-18 (6) the payment of fees or costs an applicant must
21-19 pay;
21-20 (7) the procedures for the issuance of temporary
21-21 licenses and temporary qualification to hold equity interests and
21-22 creditor interests in owner licensees;
21-23 (8) the manner and method of collection and payment of
21-24 fees and the issuance of licenses;
21-25 (9) the definition of "unsuitable method of
21-26 operation";
21-27 (10) the conditions under which the nonpayment of a
22-1 gambling debt by a licensee shall be deemed grounds for
22-2 disciplinary action;
22-3 (11) the manner of approval of new games, slot
22-4 machines, and gaming devices;
22-5 (12) access to confidential information obtained under
22-6 this Act and ensure that the confidentiality of the information is
22-7 maintained and protected;
22-8 (13) financial reporting and internal control
22-9 requirements for licensees;
22-10 (14) the manner in which winnings, compensation from
22-11 games and gaming devices, and gross gaming revenue must be computed
22-12 and reported by an owner licensee;
22-13 (15) requirements for the annual audit of the
22-14 financial statements of a licensee;
22-15 (16) requirements for periodic financial reports from
22-16 each licensee consistent with standards and intervals prescribed by
22-17 the commission;
22-18 (17) the procedures to be followed by a licensee for
22-19 excluding a person from a casino; and
22-20 (18) the procedures for exempting or waiving
22-21 institutional investors from the licensing requirements for
22-22 shareholders of publicly traded corporations.
22-23 Sec. 3.003. AUTHORITY OF EXECUTIVE DIRECTOR. (a) The
22-24 executive director may create executive positions as the director
22-25 considers necessary to implement the provisions of this Act.
22-26 (b) The executive director shall employ division directors
22-27 in the areas of audit, investigation, and enforcement. The
23-1 director of the audit division must be a certified public
23-2 accountant, have five or more years of progressively responsible
23-3 experience in general accounting, and have a comprehensive
23-4 knowledge of the principles and practices of corporate finance or
23-5 must possess qualifications of an expert in the field of corporate
23-6 finance and auditing, general finance, gaming, and economics.
23-7 Other directors must possess five or more years of training and
23-8 experience in the fields of investigation, law enforcement, law, or
23-9 gaming.
23-10 (c) The executive director may investigate, for the purpose
23-11 of prosecution, a suspected criminal violation of this Act. For
23-12 the purpose of the administration and enforcement of this Act, the
23-13 executive director and employees designated by the executive
23-14 director have the powers of a peace officer of this state.
23-15 (d) The executive director, in pursuit of the attainment of
23-16 the objectives and the purposes of this Act, may:
23-17 (1) direct and supervise all administrative actions of
23-18 the commission;
23-19 (2) bring legal action in the name and on behalf of
23-20 the commission;
23-21 (3) make, execute, and effect an agreement or contract
23-22 authorized by the commission;
23-23 (4) employ the services of persons considered
23-24 necessary for consultation or investigation and set the salaries of
23-25 or contract for the services of legal, professional, technical, and
23-26 operational personnel and consultants, except that, for the purpose
23-27 of implementing this Act, additional legal assistance may be
24-1 retained only with the approval of the attorney general;
24-2 (5) acquire furnishings, equipment, supplies,
24-3 stationery, books, and all other things the director deems
24-4 necessary or desirable in carrying out the director's functions;
24-5 and
24-6 (6) perform such other duties the director may
24-7 consider necessary to effect the purposes of this Act.
24-8 (e) Except as otherwise provided in this Act, the costs of
24-9 administration incurred by the executive director shall be paid in
24-10 the same manner as other claims against the state are paid.
24-11 Sec. 3.004. OFFICE OF HEARING EXAMINERS. (a) The
24-12 commission shall create an office of hearing examiners to assist
24-13 the commission in carrying out its powers and duties under this
24-14 Act.
24-15 (b) The office of hearing examiners shall hold hearings
24-16 under the authority of the commission on matters relating to the
24-17 commission's administration of this Act as the commission orders
24-18 and shall report after hearing in the manner prescribed by the
24-19 commission.
24-20 (c) The office of hearing examiners is independent of the
24-21 executive director and is under the exclusive control of the
24-22 commission.
24-23 (d) The office of hearing examiners shall be under the
24-24 direction of a chief hearing examiner appointed by the commission.
24-25 (e) The commission may authorize the chief hearing examiner
24-26 to delegate to one or more hearing examiners the authority to hold
24-27 any hearing called by the chief hearing examiner.
25-1 (f) The chief hearing examiner and all assistant hearing
25-2 examiners employed by the office of hearing examiners shall be
25-3 attorneys licensed to practice law in this state.
25-4 (g) The chief hearing examiner and all assistant hearing
25-5 examiners may administer oaths, receive evidence, and issue
25-6 subpoenas to compel the attendance of witnesses and the production
25-7 of papers and documents in all matters delegated by the commission.
25-8 (h) The chief hearing examiner and all assistant hearing
25-9 examiners are entitled to an annual salary and other compensation
25-10 specified by the commission.
25-11 (i) The office of hearing examiners may contract for
25-12 additional services it deems necessary to carry out its powers.
25-13 (j) A final ruling of the commission is subject to judicial
25-14 review under Chapter 2001, Government Code.
25-15 Sec. 3.005. RECORDS. (a) The executive director shall
25-16 maintain a file of all applications for licenses under this Act,
25-17 together with a record of all action taken with respect to the
25-18 applications.
25-19 (b) The commission and the executive director may maintain
25-20 other files and records they consider desirable.
25-21 (c) All the information or data set forth in Subdivisions
25-22 (1)-(4) of this subsection is confidential and may be revealed,
25-23 wholly or partly, only in the course of the necessary
25-24 administration of this Act, under Section 12.002 of this Act, or on
25-25 the lawful order of a court of competent jurisdiction, except that
25-26 the executive director or the commission may reveal the information
25-27 or data to an authorized agent of any agency of the United States,
26-1 a state, or an authorized political subdivision of this state under
26-2 regulations adopted by the commission. Notice of the content of
26-3 any information or data furnished or released under this subsection
26-4 may be given to any affected applicant or licensee as prescribed by
26-5 regulations adopted by the commission. The following information
26-6 is confidential:
26-7 (1) information or data requested by the commission or
26-8 the executive director to be furnished to either of them under this
26-9 Act or that may otherwise be obtained relating to the finances,
26-10 earnings, or revenue of an applicant or licensee;
26-11 (2) information or data pertaining to an applicant's
26-12 criminal record, antecedents, and background that has been
26-13 furnished to or obtained by the commission or the executive
26-14 director from any source;
26-15 (3) information or data provided to the members of the
26-16 commission or the executive director or its employees by a
26-17 governmental agency or an informer or on the assurance that the
26-18 information will be held in confidence and treated as confidential;
26-19 and
26-20 (4) information or data obtained by the executive
26-21 director or the commission from a casino service licensee relating
26-22 to the manufacturing, modification, or repair of slot machines or
26-23 gaming devices.
26-24 Sec. 3.006. REPRESENTATION BY ATTORNEY GENERAL. (a) The
26-25 attorney general shall represent the commission and the executive
26-26 director in any proceeding to which the commission or the executive
26-27 director is a party under this Act or in any suit filed against the
27-1 commission or executive director.
27-2 (b) The office of the attorney general shall also advise the
27-3 commission and the executive director in all other matters,
27-4 including representing the commission when the commission acts in
27-5 its official capacity.
27-6 ARTICLE 4. OWNER'S LICENSE
27-7 Sec. 4.001. OWNER'S LICENSE. (a) Gaming may lawfully be
27-8 conducted in a casino operating under an owner's license.
27-9 (b) It is unlawful for a person to own an equity interest in
27-10 a casino in this state if an owner's license has not been issued
27-11 for the casino.
27-12 (c) A separate owner's license must be obtained for each
27-13 casino conducting gaming.
27-14 Sec. 4.002. ALLOCATION OF OWNER'S LICENSES. (a) The
27-15 commission shall award owner's licenses to applicants in counties
27-16 within the following population classifications:
27-17 (1) four owner's licenses may be awarded to a county
27-18 with a population of more than 2.5 million;
27-19 (2) not fewer than three owner's licenses may be
27-20 awarded to a county with a population of not less than 1.8 million
27-21 but not more than 2.5 million;
27-22 (3) not fewer than two but not more than three owner's
27-23 licenses may be awarded to a county with a population of not less
27-24 than 1 million but less than 1.8 million;
27-25 (4) not less than one owner's license may be awarded
27-26 to all counties with a population of not less than 380,000 but less
27-27 than 1 million;
28-1 (5) not fewer than six owner's licenses may be awarded
28-2 to all counties with a population of not less than 180,000 but less
28-3 than 380,000;
28-4 (6) not fewer than two owner's licenses may be awarded
28-5 to all counties that are contiguous to an international boundary
28-6 and have a population of 35,000 or more; and
28-7 (7) other owner's licenses may be awarded in the
28-8 discretion of the commission.
28-9 (b) Notwithstanding Subsection (a) of this section:
28-10 (1) no more than 24 owner's licenses may be issued by
28-11 the commission under this section;
28-12 (2) a license may not be issued in a county unless the
28-13 voters of the county or of a municipality located within the county
28-14 have adopted a proposition legalizing casino gaming at a local
28-15 option election held under this Act;
28-16 (3) not more than four owner's licenses may be issued
28-17 in one county;
28-18 (4) a license may not be issued in a county or
28-19 municipality in which gaming is being conducted under the Indian
28-20 Gaming Regulatory Act (25 U.S.C. Section 2701 et seq.) as of the
28-21 effective date of this Act; and
28-22 (5) not fewer than three of the owner's licenses
28-23 allocated under Subsections (a)(5) and (6) may be awarded in
28-24 counties that contain an island in the Gulf of Mexico on which
28-25 there is an incorporated city with a population of at least 50,000,
28-26 and in allocating all licenses under this subsection, the
28-27 commission shall consider, in addition to the other suitability
29-1 criteria described in this Act, the ability of the proposed casino
29-2 facility to attract interstate or international tourism and to
29-3 develop jobs within political subdivisions in which there has been
29-4 a history of unemployment in excess of six percent for a period of
29-5 three consecutive years out of the preceding five years before the
29-6 effective date of this Act as determined by the commission.
29-7 (c) For purposes of determining the location of a casino
29-8 under this Act, a casino is considered to be located in the
29-9 municipality in which the main public entrance to the casino is
29-10 located or, if the main public entrance is located outside a
29-11 municipality, in the county in which the entrance is located.
29-12 (d) A person may not beneficially own, directly or
29-13 indirectly, an equity interest of more than five percent of the
29-14 total equity interest in more than three owner licensees.
29-15 (e) A person may not operate, either under an owner's
29-16 license or under an operator's license, more than three casinos.
29-17 (f) If gaming is not approved in a county or municipality
29-18 within a county to which an owner's license has been allocated
29-19 through a local option election in accordance with Section 14.001
29-20 of this Act within three years after the effective date of this
29-21 Act, or if no applicant for an owner's license in a county that a
29-22 license has been allocated to has been awarded an owner's license
29-23 by the commission, the commission may award the licenses allocated
29-24 to the county in Subsection (a) of this section to any other county
29-25 at the commission's discretion.
29-26 Sec. 4.003. ADDITIONAL OWNER'S LICENSES FOR CERTAIN
29-27 PARI-MUTUEL FACILITIES. (a) In addition to the owner's licenses
30-1 provided under Section 4.002 of this Act, the commission shall
30-2 issue an owner's license to be held in conjunction with each
30-3 license to operate a greyhound or Class I horse racetrack under the
30-4 Texas Racing Act (Article 179e, Vernon's Texas Civil Statutes) held
30-5 on the effective date of this Act.
30-6 (b) The issuance of an owner's license under this section is
30-7 subject to the applicant's satisfaction of all application,
30-8 applicant eligibility, suitability, and other criteria applicable
30-9 to applicants under Section 4.002 of this Act, except those
30-10 relating to requisite economic impact under Section 4.007 of this
30-11 Act. Except as otherwise provided in Subsection (a) of this
30-12 section, all provisions of this Act apply equally to licensees
30-13 under this section and Section 4.002 of this Act.
30-14 (c) Notwithstanding anything to the contrary in the Texas
30-15 Racing Act (Article 179e, Vernon's Texas Civil Statutes), all
30-16 matters relating to owner's licenses issued under this section,
30-17 including licensing, manner of operation, and enforcement, are
30-18 regulated exclusively by the commission.
30-19 (d) Fees and taxes imposed with respect to owner's licenses
30-20 under this section shall be collected and paid as required by this
30-21 Act.
30-22 (e) Except as to simulcast common pool wagering conducted in
30-23 a casino and except as otherwise authorized by the commission, the
30-24 casino operations and financial records of an owner licensee under
30-25 this section shall be kept separate from the racing operations and
30-26 records of the licensee.
30-27 (f) The commission shall adopt regulations requiring the
31-1 continued common ownership of a casino licensed under this section
31-2 and the racetrack associated with the casino.
31-3 Sec. 4.004. APPLICATION. (a) Application for an owner's
31-4 license shall be made according to the regulations of the
31-5 commission and shall contain information the commission finds
31-6 necessary to determine the suitability and eligibility of the
31-7 applicant, the eligibility of the proposed location, and the
31-8 economic impact of the overall casino project.
31-9 (b) In addition to any other information which the
31-10 commission may require, applications shall include the following
31-11 information concerning the feasibility of the overall casino
31-12 project:
31-13 (1) proof that gaming has been approved through a
31-14 local option election by the municipality where the applicant's
31-15 proposed casino is to be located or by the county where the casino
31-16 is to be located if the casino is proposed in an unincorporated
31-17 area;
31-18 (2) evidence that the applicant possesses, or has the
31-19 right to acquire, sufficient real property on which the proposed
31-20 casino will be located in order to allow the applicant's
31-21 construction and operation of the casino project substantially as
31-22 proposed;
31-23 (3) evidence that the applicant possesses, or
31-24 reasonably expects to obtain, all state, county, and municipal
31-25 permits and approvals necessary for the construction and operation
31-26 of the proposed casino within the time periods prescribed in this
31-27 Act;
32-1 (4) evidence that the applicant possesses, or
32-2 reasonably expects to obtain, all funds or financing necessary to
32-3 construct and operate the applicant's proposed casino within the
32-4 time periods prescribed in this Act; and
32-5 (5) evidence that the applicant is prepared to begin
32-6 construction of its proposed casino promptly on receiving an
32-7 owner's license and to proceed with the construction of the casino
32-8 without unnecessary delay.
32-9 (c) Applicants may apply for more than one owner's license
32-10 relating to more than one casino, but must submit a separate
32-11 application for each casino for which an owner's license is sought.
32-12 (d) An application for an owner's license must be
32-13 accompanied by the nonrefundable application fee set out in Section
32-14 8.001 of this Act.
32-15 Sec. 4.005. MANDATORY REQUIREMENTS. (a) During the first
32-16 two years an individual holds an owner's license, the individual
32-17 must be a resident of this state and comply with the residency
32-18 requirements set out by the commission.
32-19 (b) A company is eligible to apply for and hold an owner's
32-20 license only if:
32-21 (1) the company is incorporated or organized and in
32-22 good standing in this state or organized under the laws of another
32-23 state of the United States and qualified to do business in this
32-24 state;
32-25 (2) the company complies with all the requirements of
32-26 the laws of this state; and
32-27 (3)(A) persons who beneficially own at least one-third
33-1 of the equity interest of the company in accordance with the
33-2 beneficial ownership criteria established by the commission are
33-3 residents of this state under the residency requirements set out by
33-4 the commission; or
33-5 (B) the company has held an owner's license
33-6 under this Act for two years or more.
33-7 (c) To be eligible to receive an owner's license to own a
33-8 casino located in any municipality or located in an unincorporated
33-9 area of a county, an applicant must submit its application to the
33-10 commission not less than 60 days after the later of the date that
33-11 the governing body of the municipality or county gives written
33-12 notice to the commission under Section 14.006 of this Act that
33-13 gaming as authorized under this Act has been legalized through a
33-14 local option election or the date that the commission establishes
33-15 procedures for application.
33-16 (d) An application may not be considered filed for purposes
33-17 of this Act that does not include the information prescribed in
33-18 Section 4.004(b) of this Act or that is not accompanied by the
33-19 prescribed application fee.
33-20 (e) This section does not supersede the residency and
33-21 ownership requirements prescribed in the Texas Racing Act (Article
33-22 179e, Vernon's Texas Civil Statutes) with respect to ownership and
33-23 operation of pari-mutuel racetracks.
33-24 Sec. 4.006. LICENSE AWARD CONSIDERATIONS. (a) The
33-25 commission shall determine the initial and continuing suitability
33-26 of each applicant for or holder of an owner's license based on
33-27 suitability criteria the commission adopts to ensure that all owner
34-1 licensees are of good character, honesty, integrity, and financial
34-2 stability, that an owner licensee has sufficient business probity,
34-3 competence, and experience in gaming, and that an owner licensee is
34-4 otherwise qualified to be licensed.
34-5 (b) The commission shall give due consideration to the
34-6 protection of the public health, safety, morals, and general
34-7 welfare of the citizens of this state and for the reputation of the
34-8 state's gaming industry.
34-9 (c) The burden of proving suitability to receive and hold an
34-10 owner's license is on the applicant or licensee.
34-11 (d) In considering the initial and continuing suitability of
34-12 an applicant for or holder of an owner's license, the commission
34-13 may consider the suitability of:
34-14 (1) each person holding an equity interest or creditor
34-15 interest in the applicant or holder;
34-16 (2) each person holding, or proposed to receive, an
34-17 operator's license, occupational license, or manufacturer's license
34-18 employed by or doing business with the applicant or holder; and
34-19 (3) each affiliate of the applicant or holder.
34-20 (e) An applicant for or holder of an owner's license may not
34-21 receive or hold an owner's license if the person:
34-22 (1) has ever been convicted of a felony under the laws
34-23 of this state, any other state, or the United States;
34-24 (2) has ever been convicted of a gaming violation
34-25 under the laws of this state or any other state;
34-26 (3) has ever knowingly or intentionally submitted an
34-27 application for a license under this Act that contained false
35-1 information;
35-2 (4) served as a principal manager for a person who
35-3 committed a violation of Subsection (e)(1), (2), or (3) of this
35-4 section;
35-5 (5) retains or employs another person who violated
35-6 Subsection (e)(1), (2), (3), or (4) of this section;
35-7 (6) beneficially owns any material equity interest or
35-8 creditor interest in the applicant or holder and has violated
35-9 Subdivision (1), (2), (3), or (4) of this subsection;
35-10 (7) holds a manufacturer's license or casino service
35-11 license under this Act;
35-12 (8) is a member of the commission; or
35-13 (9) is a member of the judiciary or an elected
35-14 official of this state.
35-15 (f) The commission may adopt regulations providing for a
35-16 person's reciprocal determination of suitability to hold an owner's
35-17 license under this Act based on:
35-18 (1) a determination of suitability to own and operate
35-19 a casino in any other jurisdiction the commission deems reasonable
35-20 in light of the purpose of this Act; or
35-21 (2) the person's ownership of a greyhound or Class I
35-22 horse racing facility under the Texas Racing Act (Article 179e,
35-23 Vernon's Texas Civil Statutes).
35-24 Sec. 4.007. ECONOMIC IMPACT ANALYSIS. (a) In determining
35-25 whether or, in the case of multiple applicants competing for a
35-26 limited number of owner's licenses within a county, to whom to
35-27 grant an owner's license, the commission shall consider the
36-1 following factors:
36-2 (1) the relative prospective revenues to be collected
36-3 by the state from the conduct of gaming at the casino and the
36-4 overall economic impact of each competing applicant's proposed
36-5 casino and associated facilities;
36-6 (2) the relative number of residents of this state who
36-7 would be employed in an applicant's proposed casino and any
36-8 proposed associated hotel and nongaming businesses and the relative
36-9 extent of the applicant's good faith affirmative action plan to
36-10 recruit, train, and upgrade minorities in all employment
36-11 classifications;
36-12 (3) the relative extent to which an applicant's
36-13 proposed casino and any proposed associated hotel and nongaming
36-14 businesses could be reasonably expected to encourage interstate
36-15 tourism to the state;
36-16 (4) the relative extent to which the scope, design,
36-17 location, and construction of the applicant's casino and any
36-18 associated hotel and nongaming businesses could be reasonably
36-19 expected to contribute to developing a first-class gaming industry
36-20 in this state; and
36-21 (5) the applicant's experience in conducting licensed
36-22 gaming operations and the applicant's financial ability to promptly
36-23 construct and adequately maintain the casino sought to be licensed.
36-24 In evaluating the applicant's experience in conducting licensed
36-25 gaming operations, the commission shall consider the experience of
36-26 partners of the applicant, the experience of affiliated companies
36-27 of the applicant or its partners, the experience of key personnel
37-1 of the applicant or its partners, and the experience of operating
37-2 companies under contract with the applicant.
37-3 (b) To ensure that a requisite level of economic development
37-4 benefiting the people of this state accompanies each casino for
37-5 which an owner's license is granted under this Act, the commission
37-6 shall require an applicant, as a condition to receiving and holding
37-7 an owner's license under Section 4.002 of this Act, to commit to
37-8 provide new investment in conjunction with the casino in the
37-9 following amounts:
37-10 (1) casinos to be licensed in a county with a
37-11 population of 1 million or more shall have a minimum project
37-12 commitment of $100 million;
37-13 (2) casinos to be licensed in a county with a
37-14 population of 500,000 or more but less than 1 million shall have a
37-15 minimum project commitment of $80 million;
37-16 (3) casinos to be licensed in a county with a
37-17 population of 250,000 or more but less than 500,000 shall have a
37-18 minimum project commitment of $60 million;
37-19 (4) casinos to be licensed in any county with a
37-20 population of 150,000 or more but less than 250,000 shall have a
37-21 minimum project commitment of $40 million; and
37-22 (5) casinos to be licensed in any county with a
37-23 population of less than 150,000 shall have a minimum project
37-24 commitment of $30 million.
37-25 Sec. 4.008. PROOF OF LOCAL OPTION ELECTION. The commission
37-26 may not accept an application for an owner's license relating to a
37-27 casino proposed to be located in a municipality or in an
38-1 unincorporated area of a county before receiving certification from
38-2 the governing body of the municipality or county that gaming has
38-3 been legalized through a local option election.
38-4 Sec. 4.009. REVIEW OF APPLICATION. (a) The commission
38-5 shall issue an order approving or denying an application for an
38-6 owner's license not more than six months after the date of the
38-7 filing of the application.
38-8 (b) The commission may adopt regulations for awarding
38-9 temporary or interim licensing the commission finds necessary in
38-10 the administration of this Act.
38-11 Sec. 4.010. TRANSFERABILITY. An owner's license is not
38-12 transferable and relates only to the specific site identified in
38-13 the license.
38-14 Sec. 4.011. DENIAL AND REVOCATION. (a) The commission has
38-15 the full and absolute power and authority to deny an application or
38-16 revoke an owner's license for a reasonable cause.
38-17 (b) If the commission determines it has reasonable grounds
38-18 to believe that an owner licensee may be unsuitable to continue to
38-19 hold an owner's license under this Act, the commission shall
38-20 conduct an investigation and hearing under Section 12.001 of this
38-21 Act and may, based on its determination in the hearing, suspend,
38-22 limit, or revoke the license. On suspension or revocation of an
38-23 owner's license, the licensee must immediately cease all gaming.
38-24 (c) If the holder of an owner's license fails to begin
38-25 construction of a casino within one year after the receipt of the
38-26 owner's license, or fails to begin gaming operations within three
38-27 years after the receipt of the license, the license is forfeited,
39-1 unless the commission, for good cause, had previously granted an
39-2 appropriate extension of time.
39-3 (d) The right to receive and to continue to hold an owner's
39-4 license is a pure and absolute revocable privilege, and not a
39-5 right, property or otherwise, under the constitutions of the United
39-6 States or this state. An applicant for or holder of an owner's
39-7 license does not have a vested interest or right in a license
39-8 granted under this Act.
39-9 Sec. 4.012. REGISTRATION OF INTEREST IN LICENSE. (a)
39-10 Except as provided by Subsection (b) of this section, a person who
39-11 directly or indirectly owns an equity or creditor interest in an
39-12 applicant for or holder of an owner's license shall register and
39-13 qualify with the commission under the regulations adopted by the
39-14 commission and shall provide information the commission finds
39-15 necessary to determine the suitability and eligibility of the
39-16 person to retain the interest.
39-17 (b) The following persons are not required to register or
39-18 qualify under this section:
39-19 (1) a key employee of the owner licensee that is
39-20 required to apply for an occupational license under Section 5.002
39-21 of this Act;
39-22 (2) an institutional investor;
39-23 (3) a person that beneficially owns five percent or
39-24 less of the total equity or creditor interest of the owner
39-25 licensee; and
39-26 (4) any other group or class of persons that the
39-27 commission, by regulation, exempts from registration or
40-1 qualification.
40-2 (c) A registration filed under this section must be
40-3 accompanied by the application fee set out in Section 8.001 of this
40-4 Act.
40-5 Sec. 4.013. TRANSFERABILITY OF INTEREST. (a) Except as
40-6 provided by this subsection, an owner licensee may not issue an
40-7 equity or creditor interest to a person before the commission's
40-8 determination of the qualification of the proposed subscriber or
40-9 purchaser to hold the interest under this Act. An owner licensee
40-10 that is a publicly held company may issue equity or creditor
40-11 interests of five percent or less of its equity or creditor
40-12 interest to any person without the consent of the commission.
40-13 (b) A person beneficially owning more than five percent of
40-14 the equity or creditor interest of an owner licensee may not
40-15 transfer any portion of the interest in the licensee to any person
40-16 before the commission's determination of the qualification of the
40-17 proposed transferee to hold the interest under this Act.
40-18 (c) A subscriber or proposed transferee of an interest by an
40-19 owner licensee shall provide the commission with information the
40-20 commission considers necessary to determine the qualification of
40-21 the person. The commission, not later than 60 days after the date
40-22 of the application, shall determine the qualification of a
40-23 subscriber or proposed transferee and approve or deny the issuance
40-24 or transfer.
40-25 Sec. 4.014. DETERMINATION OF QUALIFICATION. (a) The
40-26 commission shall determine the qualification of a person to acquire
40-27 or continue to hold an equity or creditor interest in an applicant
41-1 for or holder of an owner's license based on the qualification
41-2 requirements the commission adopts for the protection of the public
41-3 interests to ensure that the persons holding securities issued by
41-4 licensees are of good character, honesty, integrity, and financial
41-5 stability, and that they are otherwise qualified to hold the
41-6 interest.
41-7 (b) The burden of proving qualification to acquire or hold
41-8 an equity or creditor interest in a licensee is on the person
41-9 acquiring or holding the interest.
41-10 (c) A person is unsuitable to acquire or retain an equity or
41-11 creditor interest in an applicant for or holder of an owner's
41-12 license if the person would be unsuitable to receive an owner's
41-13 license under Section 4.006(e) of this Act.
41-14 (d) If the commission has reasonable grounds to believe that
41-15 a person holding an equity or creditor interest in an applicant for
41-16 or holder of an owner licensee may be unqualified to retain its
41-17 interest, the commission shall conduct an investigation and hearing
41-18 under Section 12.001 of this Act and may, based on its
41-19 determination, issue an unsuitability finding and divestiture order
41-20 to the holder of the interest and the issuer of the interest. On
41-21 receipt of a divestiture order, the person holding the interest
41-22 shall tender its entire interest for purchase to the issuer or a
41-23 third party on terms the commission approves.
41-24 (e) If the commission issues an unsuitability finding and
41-25 divestiture order to a holder of an equity interest or creditor
41-26 interest, the person subject to the order may not:
41-27 (1) receive, directly or indirectly, a dividend,
42-1 interest, payment, or distribution of any kind relating to the
42-2 security that is the subject of the order; or
42-3 (2) exercise, directly or indirectly, any voting power
42-4 or other right with respect to the security the order relates to.
42-5 (f) A person subject to an order may receive payment for the
42-6 sale of the person's interest on terms the commission approves.
42-7 ARTICLE 5. OPERATOR AND OCCUPATIONAL LICENSES
42-8 Sec. 5.001. OPERATOR'S LICENSE. (a) It is an offense for a
42-9 person to provide services as a casino operator without holding an
42-10 operator's license.
42-11 (b) A casino operator must hold a separate license for each
42-12 casino that the casino operator operates unless the operator is
42-13 also the owner of the premises and holds an owner's license for the
42-14 premises.
42-15 Sec. 5.002. OCCUPATIONAL LICENSE. (a) It is an offense for
42-16 a person to be employed as a gaming employee without holding an
42-17 occupational license.
42-18 (b) A holder of an owner's or operator's license is not
42-19 required to obtain an occupational license to provide services as a
42-20 gaming employee in the casino to which the license relates.
42-21 (c) An owner shall at all times have not less than one
42-22 occupational licensee designated as a "key employee" having
42-23 responsibility over all gaming activities who shall be available at
42-24 the casino at all times when gaming is conducted on the licensee's
42-25 premises.
42-26 (d) A gaming employee either designated as a "key employee"
42-27 or determined to be a "key employee" by the commission shall be
43-1 issued an occupational license designated as a "key employee
43-2 occupational license." In determining whether an employee is a key
43-3 employee, the commission is not restricted by the title of the job
43-4 performed by the employee but may consider the functions and
43-5 responsibilities of the employee in making decisions.
43-6 (e) A person employed in the field of gaming as a gaming
43-7 employee shall obtain an occupational license designated as a
43-8 "support occupational license." A person required to hold a
43-9 support occupational license may not be a gaming employee of or
43-10 assist the owner or operator licensee until the employee obtains a
43-11 support occupational license. A person licensed as a key employee
43-12 does not need to obtain a support occupational license.
43-13 Sec. 5.003. APPLICATION. (a) Application for an operator's
43-14 license or an occupational license shall be made in compliance with
43-15 regulations of the commission and shall contain information the
43-16 commission finds necessary to determine the suitability and
43-17 eligibility of the applicant to function as a casino operator or to
43-18 be employed or retained as a gaming employee.
43-19 (b) An application for an operator's license or an
43-20 occupational license must be accompanied by the required
43-21 application fee.
43-22 (c) The commission may issue a temporary operator's license
43-23 and a temporary occupational license.
43-24 Sec. 5.004. RESIDENCY. A person is eligible to apply for
43-25 and hold an operator's license or an occupational license under
43-26 this Act without regard to the residency of the applicant.
43-27 Sec. 5.005. DETERMINATION OF SUITABILITY. (a) The
44-1 commission shall determine the suitability of an applicant for or
44-2 holder of an operator's license or an occupational license based
44-3 upon suitability criteria the commission adopts in order to ensure
44-4 that a licensee:
44-5 (1) is of good character, honesty, and integrity;
44-6 (2) has sufficient business probity, competence, and
44-7 training or experience in the gaming industry to perform the
44-8 function contemplated; and
44-9 (3) is otherwise qualified to be licensed.
44-10 (b) The burden of proving suitability to receive and hold an
44-11 operator's license or an occupational license is on the applicant
44-12 or licensee.
44-13 (c) In considering the suitability of a company applying for
44-14 or holding an operator's license or an occupational license to
44-15 receive and continue to hold the license, the commission shall
44-16 consider the suitability of each principal manager and each holder
44-17 of an equity interest and creditor interest of the company to
44-18 individually receive and hold an occupational license based on the
44-19 suitability standards that apply to the applicants for the license
44-20 generally.
44-21 (d) A person may not be found suitable to receive or hold an
44-22 operator's license or an occupational license if that person would
44-23 be found unsuitable to hold an owner's license under Section
44-24 4.006(e) of this Act, except that an applicant for an operator's
44-25 license or an occupational license who has been convicted of a
44-26 felony may be found suitable if the person is found to be
44-27 adequately rehabilitated under the rehabilitation requirements
45-1 adopted by the commission and the applicant or licensee is
45-2 otherwise suitable for licensing.
45-3 Sec. 5.006. DENIAL OR REVOCATION OF LICENSE. (a) The
45-4 commission has the full and absolute power and authority to deny an
45-5 application for or to revoke an operator's license or an
45-6 occupational license for any reasonable cause.
45-7 (b) If the commission determines that it has reasonable
45-8 grounds to believe that a licensee may be unsuitable to continue to
45-9 hold a license under this Act, giving due consideration to the
45-10 protection of the health, safety, morals, and general welfare of
45-11 the state and to the reputation of the state's gaming industry, the
45-12 commission shall conduct an investigation and hearing provided in
45-13 Section 12.001 of this Act and may, based on its findings, suspend,
45-14 limit, or revoke any license.
45-15 (c) On the suspension or revocation of a license, the
45-16 licensee shall cease the provision of all services in any capacity
45-17 requiring a license under Sections 5.001 and 5.002 of this Act.
45-18 (d) A holder of an occupational license that has been
45-19 revoked or suspended may not:
45-20 (1) receive, directly or indirectly, any compensation,
45-21 consideration, or payment of any kind relating to the conduct of
45-22 gaming in any capacity requiring an occupational license under
45-23 Section 5.001 or 5.002 of this Act, other than the payment for
45-24 services rendered before the suspension or revocation; or
45-25 (2) serve or function in a capacity that would require
45-26 a license under either Section 5.001 or 5.002 of this Act.
45-27 (e) The receipt and holding of a license is a pure and
46-1 absolute revocable privilege and is not a right, property or
46-2 otherwise, under the United States Constitution or the Texas
46-3 Constitution. An applicant for or holder of an operator's license
46-4 or an occupational license does not have a vested interest or right
46-5 in a license granted under this Act.
46-6 ARTICLE 6. MANUFACTURER'S AND OTHER SERVICE PROVIDERS' LICENSES
46-7 Sec. 6.001. MANUFACTURER'S LICENSE. (a) It is an offense
46-8 for a person to engage in any segment of the slot manufacturing
46-9 industry in this state for which a manufacturer's license is
46-10 required under this section without obtaining a manufacturer's
46-11 license covering the segment of the industry in which the person is
46-12 engaged.
46-13 (b) The commission shall adopt regulations identifying
46-14 segments of the manufacturing industry directly involved in the
46-15 design, manufacture, assembly, production, programming, sale,
46-16 lease, marketing, distribution, repair, or modification of slot
46-17 machines or component parts of slot machines that the commission
46-18 finds appropriate for licensing under this section.
46-19 (c) A manufacturer's license is personal to the licensee and
46-20 allows the licensee to do business with any casino.
46-21 Sec. 6.002. CASINO SERVICE LICENSE. (a) It is an offense
46-22 for a person to engage in any segment of the casino service
46-23 industry that requires a license without obtaining a casino service
46-24 license.
46-25 (b) The commission shall adopt regulations identifying
46-26 segments of the casino service industry directly involved with
46-27 providing gaming-related services, equipment, and supplies that the
47-1 commission finds appropriate for licensing.
47-2 (c) A person is required to obtain a casino service license
47-3 if the person:
47-4 (1) operates, conducts, or maintains a gaming-related
47-5 business in a casino; or
47-6 (2) furnishes goods, property, or services to a casino
47-7 in exchange for either a payment based upon a percentage of the
47-8 earnings, profits, or receipts from the casino or a payment that
47-9 the commission finds to be grossly disproportionate to the value of
47-10 the goods, property, or service provided.
47-11 (d) A utility company, a municipality, and other political
47-12 subdivisions are not required to obtain casino service licenses
47-13 under this section.
47-14 (e) A casino service license is personal to the licensee and
47-15 allows the licensee to do business with any casino.
47-16 Sec. 6.003. APPLICATION. (a) Application for a
47-17 manufacturer's license or a casino service license shall be made in
47-18 compliance with the regulations adopted by the commission and shall
47-19 contain information the commission finds necessary to determine the
47-20 suitability and eligibility of the applicant.
47-21 (b) An application for a manufacturer's license or a casino
47-22 service license must be accompanied by the required application
47-23 fee.
47-24 Sec. 6.004. DETERMINATION OF SUITABILITY. (a) In
47-25 considering the suitability of a company applying for or holding a
47-26 manufacturer's license or a casino service license to receive and
47-27 continue to hold the license, the commission shall consider the
48-1 suitability of each principal manager and each holder of an equity
48-2 interest and creditor interest in the company applicant to
48-3 individually receive and hold a manufacturer's license or a casino
48-4 service license based upon the suitability standards that apply to
48-5 the company applicant. A person may not be found suitable to
48-6 receive or hold a manufacturer's license or a casino service
48-7 license if that person would be found unsuitable to hold an owner's
48-8 license under Section 4.006(e) of this Act.
48-9 (b) If the commission determines that it has reasonable
48-10 grounds to believe that a licensee may be unsuitable to hold a
48-11 manufacturer's license or a casino service license, the commission
48-12 shall conduct an investigation and hearing under Section 12.001 of
48-13 this Act and may, based upon its findings, suspend, limit, or
48-14 revoke a license.
48-15 (c) On suspension or revocation of a license, the licensee
48-16 must cease the performance of manufacturing activity or casino
48-17 service requiring a license under this Act. After the revocation
48-18 or suspension of the license, the affected licensee may not
48-19 receive, directly or indirectly, compensation, consideration, or
48-20 payment of any kind relating to manufacturing activity or provision
48-21 of casino services in any capacity requiring a license under this
48-22 Act, other than the payment for goods or services provided before
48-23 the suspension or revocation.
48-24 (d) An owner or casino operator who has entered into a lease
48-25 with a manufacturer licensee or casino services licensee whose
48-26 license has been revoked or suspended may continue to make payments
48-27 on the lease based upon its original terms and conditions without
49-1 modification or may accelerate the lease and pay it off, at the
49-2 sole option of the owner or operator.
49-3 (e) The burden of proving suitability to receive and hold a
49-4 manufacturer's license or casino service license is on the
49-5 licensee.
49-6 ARTICLE 7. LICENSE RENEWAL
49-7 Sec. 7.001. TERMS; RENEWAL; TEMPORARY LICENSE. (a) Before
49-8 the issuance of a license, the commission may issue a temporary
49-9 license for six months or less and may renew the temporary license
49-10 as many times as the commission finds appropriate on the payment of
49-11 the fee and execution of the bond, if required.
49-12 (b) The commission may issue a temporary license only to a
49-13 person it believes will be determined to be qualified based on:
49-14 (1) the commission's review of the background
49-15 investigations conducted by other state agencies or departments or
49-16 other United States jurisdictions with gaming activities; and
49-17 (2) the commission's determination that there is
49-18 nothing in those background investigations of the applicant that
49-19 would cause the applicant not to qualify for a license in this
49-20 state.
49-21 (c) An original or renewal license expires on the first
49-22 anniversary of the date it is issued.
49-23 (d) The fee for an owner's, operator's, occupational,
49-24 manufacturer's, or casino service license shall be in the amount
49-25 established in Section 8.002 of this Act and shall be paid
49-26 annually. A licensee may renew an unexpired license annually by
49-27 meeting the licensing requirements of the commission and by paying
50-1 the annual fee.
50-2 ARTICLE 8. APPLICATION AND LICENSE FEES
50-3 Sec. 8.001. APPLICATION FEES. (a) An applicant for an
50-4 owner's license during the first two years after the effective date
50-5 of this Act shall pay a $100,000 application fee for each
50-6 application to the state treasurer not later than the 30th day
50-7 after the effective date of this Act. The fees collected by the
50-8 state treasurer on behalf of the commission shall be deposited in
50-9 the Texas casino gaming fund.
50-10 (b) Application fees tendered during the 30-day period
50-11 following the effective date of this Act are not required to be
50-12 accompanied by an application. Applications during the first two
50-13 years after the effective date of this Act shall be filed on a date
50-14 determined by a regulation adopted by the commission.
50-15 (c) An application fee for an owner's license paid not later
50-16 than the 30th day after the effective date of this Act shall be
50-17 accompanied by a document indicating the name of the applicant or
50-18 an affiliate or partner of the applicant and the name of the county
50-19 in which the casino is proposed to be located.
50-20 (d) During the first two years after the effective date of
50-21 this Act, an applicant may not apply for an owner's license for a
50-22 site in a county unless the application fee for a license in that
50-23 county was paid during the period set out in Subsection (a) of this
50-24 section. If the applicant seeks more than one license in a county
50-25 during the first two years after the effective date of this Act,
50-26 the applicant or its affiliates or partners shall file the number
50-27 of application fees designating that county that is equal to the
51-1 number of licenses in that county that it is seeking.
51-2 (e) Notwithstanding Subsections (a), (b), (c), and (d) of
51-3 this section, if no applicant pays an application fee for a site in
51-4 a specific county and a municipality within a county or the county
51-5 passes a local option election approving casino gaming or if
51-6 applicants pay application fees for sites within a county and a
51-7 municipality within the county or the county fails to approve a
51-8 local option election approving casino gaming, the commission may
51-9 accept applications for a site in the jurisdiction that passes the
51-10 local option election from persons who have filed applications for
51-11 other sites where a local option election failed and for a site in
51-12 other counties or municipalities and apply the applicant's initial
51-13 application fee to the new site.
51-14 (f) An applicant for an owner's license who has not
51-15 submitted an application fee under Subsection (a) or (e) of this
51-16 section shall send with its application an application fee of
51-17 $100,000.
51-18 (g) An applicant for a manufacturer's license shall pay an
51-19 application fee of $100,000.
51-20 (h) A casino operator applying for an operator's license
51-21 shall pay an application fee of $50,000.
51-22 (i) An applicant for a casino service license shall pay an
51-23 application fee of $100.
51-24 (j) A person registering and applying to qualify to hold an
51-25 equity interest or creditor interest in a licensee shall pay an
51-26 application fee of $100.
51-27 (k) An individual applying for an occupational license shall
52-1 pay an application fee of $100.
52-2 (l) All application fees shall be in the form of a money
52-3 order or cashier's check and shall be payable to the Texas Gaming
52-4 Commission. Application fees are nonrefundable.
52-5 (m) Application fees shall be applied toward the cost of
52-6 investigating applicants' suitability for licensing or
52-7 qualification under this Act. Any costs of investigation incurred
52-8 over the application fee shall be paid by the applicant.
52-9 Sec. 8.002. LICENSE FEES. (a) A holder of an owner's
52-10 license shall pay an annual license fee of $100,000.
52-11 (b) A holder of a manufacturer's license shall pay an annual
52-12 license fee of $100,000.
52-13 (c) A casino operator holding an operator's license shall
52-14 pay an annual license fee of $50,000.
52-15 (d) A holder of a casino service license shall pay an annual
52-16 license fee of $100.
52-17 (e) A holder of an equity interest or creditor interest in
52-18 any licensee that is required to qualify with the commission shall
52-19 pay an annual fee of $100.
52-20 (f) A holder of an occupational license shall pay an annual
52-21 license fee of $100.
52-22 ARTICLE 9. CASINO GAMING FUND
52-23 Sec. 9.001. TEXAS CASINO GAMING FUND. (a) The Texas casino
52-24 gaming fund is a special fund in the state treasury.
52-25 (b) All application fees, investigation fees, and license
52-26 fees collected by the commission or on the commission's behalf
52-27 shall be deposited in the treasury to the credit of the Texas
53-1 casino gaming fund.
53-2 (c) The Texas casino gaming fund shall be used exclusively
53-3 for the operation of the commission and the administration of this
53-4 Act. However, if the revenues in the fund exceed the amount
53-5 necessary for the operation of the commission and the
53-6 administration of the Act, the legislature may transfer any excess
53-7 amount to the general revenue fund.
53-8 (d) All proceeds from the gaming tax imposed by Section
53-9 10.001 of this Act that are allocated to the state shall be
53-10 deposited in the state treasury to the credit of the general
53-11 revenue fund.
53-12 (e) The operation of the commission and the administration
53-13 of this Act shall be supported by fees generated under this Act and
53-14 by a portion of the gaming taxes imposed by Section 10.001 of this
53-15 Act. The operation of the commission shall never be a charge
53-16 against the general revenues of this state except to the extent
53-17 those revenues are raised by taxes or fees imposed on gaming
53-18 activities.
53-19 ARTICLE 10. TAX ON GROSS GAMING REVENUE
53-20 Sec. 10.001. GAMING TAX; ALLOCATION OF TAX. (a) There is
53-21 imposed on each holder of an owner's license a gaming tax in an
53-22 amount equal to 15 percent of the gross gaming revenue of the
53-23 casino operated under the license. The tax shall be computed and
53-24 paid on a monthly basis as required by commission regulation.
53-25 (b) Five-sixths of the tax imposed by this section, with the
53-26 exception provided in Subsection (d) of this section, is allocated
53-27 to the general revenue fund.
54-1 (c) Sixty-six and two-thirds percent and thirty-three and
54-2 one-third percent of the remaining one-sixth of the tax imposed by
54-3 this section are allocated to the municipality and county,
54-4 respectively, in which the casino to which the license relates is
54-5 located, or, if the casino is deemed to be located in an
54-6 unincorporated area, the remaining one-sixth of the tax imposed by
54-7 this section shall be allocated to the county in which the casino
54-8 to which the license relates is located.
54-9 (d) One-tenth of one percent of the gaming tax allocated to
54-10 general revenue under Subsection (b) of this section shall be
54-11 allocated to the Texas Commission on Alcohol and Drug Abuse for the
54-12 commission's compulsive gambling program under Section 461.018,
54-13 Health and Safety Code.
54-14 (e) The gross gaming taxes levied by this Act are due and
54-15 payable on or before the 20th day of the month following the month
54-16 in which the taxes accrue.
54-17 (f) If the amount of gaming taxes required to be reported
54-18 and paid under this section is later determined to be greater or
54-19 less than the amount actually reported and paid by the licensee,
54-20 the commission shall:
54-21 (1) assess and collect the additional gaming taxes
54-22 determined to be due with interest until paid; or
54-23 (2) refund any overpayment, with interest, to the
54-24 licensee.
54-25 (g) Interest must be computed, until paid, at the rate of
54-26 one percent per month from the first day of the first month
54-27 following either the due date of the additional gaming taxes or the
55-1 date of overpayment.
55-2 Sec. 10.002. DETERMINATION OF GROSS GAMING REVENUE. (a) In
55-3 calculating gross gaming revenue, a prize, premium, drawing,
55-4 benefit, or ticket that is redeemable for money, merchandise, or
55-5 other promotional allowance, except money or tokens paid at face
55-6 value directly to a patron as the result of a specific wager and
55-7 the amount of cash paid to purchase an annuity to fund winnings,
55-8 may not be deducted as a loss from winnings at any game except a
55-9 slot machine.
55-10 (b) In calculating gross gaming revenue from slot machines,
55-11 the actual cost to the licensee of any personal property
55-12 distributed to a patron as the result of a legitimate wager may be
55-13 deducted as a loss, but travel expenses, food, refreshments,
55-14 lodging, or services at the licensee's facility may not be
55-15 deducted. For the purposes of this subsection, "as the result of a
55-16 legitimate wager" means that the patron must make a wager before
55-17 receiving the personal property, regardless of whether the receipt
55-18 of the personal property is dependent on the outcome of the wager.
55-19 Sec. 10.003. REFUND OF OVERPAYMENT. (a) Taxes on gross
55-20 gaming revenue that are erroneously collected may be refunded, on
55-21 approval by the commission, as other claims against the state are
55-22 paid.
55-23 (b) Not later than the 90th day after the date of the
55-24 mailing of the notice of the commission's action on a claim for
55-25 refund filed under this Act, the claimant may bring an action
55-26 against the commission on the grounds stated in the claim in any
55-27 court of competent jurisdiction for the recovery of any part of the
56-1 amount of the claim that has been disallowed.
56-2 (c) Failure to bring an action within the time specified in
56-3 Subsection (b) of this section constitutes a waiver of any demand
56-4 against the state on account of alleged overpayments.
56-5 (d) If the commission fails to mail its notice of action on
56-6 a claim before six months after the date the claim is filed, the
56-7 claimant may consider the claim disallowed and bring an action
56-8 against the commission on the grounds set forth in the claim for
56-9 the recovery of any part of the amount claimed as an overpayment.
56-10 (e) In a case where a refund is granted, interest is allowed
56-11 at the rates provided in Subtitle B, Title 2, Tax Code.
56-12 (f) A claim for refund of gross gaming revenue fees paid in
56-13 excess of the amount required to be reported and paid must be filed
56-14 not later than two years after the date of overpayment.
56-15 Sec. 10.004. DETERMINATION OF DEFICIENCY. (a) If an owner
56-16 licensee fails to make a report of the gaming taxes as required by
56-17 this Act, or if the executive director is not satisfied with the
56-18 report of the gross gaming revenue license fees required to be paid
56-19 to the state under this Act by an owner licensee, the executive
56-20 director may compute and determine the amount required to be paid
56-21 on the basis of:
56-22 (1) the facts contained in the report, if any;
56-23 (2) an audit conducted by the executive director;
56-24 (3) an estimate of the amount of fees due under this
56-25 Act;
56-26 (4) any information in the commission's possession or
56-27 that may come in the executive director's possession; or
57-1 (5) any combination of the methods described in
57-2 Subdivisions (1)-(4) of this subsection.
57-3 (b) In making a determination, the commission may offset
57-4 overpayments and interest due against underpayments and interest or
57-5 penalties due for the period of the audit.
57-6 (c) The executive director shall give prompt written notice
57-7 of a determination of a deficiency under this section to the owner
57-8 licensee. Except in the case of fraud or intent to evade the
57-9 payment of the gross gaming revenue license fee imposed by this
57-10 Act, a notice of a determination of a deficiency must be mailed not
57-11 later than two years after the last day of the calendar month
57-12 following the applicable reporting period in which the deficiency
57-13 occurred or not later than two years after the report is filed by
57-14 the owner licensee, whichever is later.
57-15 (d) If the reasons for the deficiency are not apparent, the
57-16 executive director shall include an explanation of those reasons in
57-17 the notice of a determination of a deficiency.
57-18 (e) If overpayments and interest exceed underpayments,
57-19 penalties, and interest, the excess payment shall be refunded to
57-20 the owner licensee.
57-21 Sec. 10.005. PETITION FOR REVIEW. (a) An owner licensee
57-22 against whom a determination is made under Section 10.004 of this
57-23 Act may petition the commission for a redetermination not later
57-24 than the 30th day after the date of the service of notice of the
57-25 determination. If a petition for redetermination satisfying the
57-26 requirements of Subsection (c) of this section is not filed within
57-27 the 30-day period, the determination becomes final.
58-1 (b) If a petition for redetermination satisfying the
58-2 requirements of Subsection (c) of this section is filed within the
58-3 30-day period, the commission shall reconsider the determination
58-4 and, if the petitioner requests, shall grant a hearing.
58-5 (c) A petition for redetermination must:
58-6 (1) specify the contested portions of the
58-7 determination of deficiency;
58-8 (2) specify the grounds for redetermination;
58-9 (3) state whether a hearing is requested; and
58-10 (4) be accompanied by payment in full of the
58-11 uncontested portion of the determination, including any interest
58-12 and penalties.
58-13 (d) An order or decision of the commission on a petition for
58-14 redetermination is final 10 days after the date of service on the
58-15 petitioner.
58-16 (e) A petitioner against whom an order or decision of the
58-17 commission becomes final may, not later than the 60th day after the
58-18 date the decision is final, petition for judicial review in the
58-19 manner provided by Chapter 2001, Government Code. The executive
58-20 director may not petition for judicial review.
58-21 Sec. 10.006. CERTAIN POLITICAL SUBDIVISION TAXES BARRED. A
58-22 county, municipality, or other political subdivision of this state
58-23 may not impose a license fee or tax on a person licensed to conduct
58-24 gaming under this Act. This section does not preclude the
58-25 imposition of local real property taxes, sales taxes, hotel lodging
58-26 taxes, or normal fees for standard municipal services.
58-27 Sec. 10.007. TAX ADMINISTRATION. (a) The commission shall
59-1 perform all functions incident to the administration, collection,
59-2 enforcement, and operation of a fee or tax imposed under this Act.
59-3 The commission may adopt rules and prescribe forms that are
59-4 consistent with this Act for the administration, collection, and
59-5 enforcement of a fee or tax imposed under this Act and for the
59-6 reporting of a fee or tax imposed under this Act.
59-7 (b) Except as modified by this Act, Subtitle B, Title 2, Tax
59-8 Code, applies to the administration, collection, and enforcement of
59-9 a tax authorized or imposed under this Act. For purposes of the
59-10 application of Subtitle B, Title 2, Tax Code, to a tax authorized
59-11 or imposed under this Act only, the powers and duties assigned to
59-12 the comptroller under that subtitle are assigned to the commission.
59-13 ARTICLE 11. REGULATION OF CASINO OPERATIONS
59-14 Sec. 11.001. REGULATION OF CASINO OPERATIONS. (a) The
59-15 commission shall adopt regulations applicable to the operation of
59-16 casinos as the commission finds necessary for the protection of the
59-17 health, safety, morals, and general welfare of the state and for
59-18 the reputation of the state's gaming industry.
59-19 (b) Casinos are entitled to operate 24 hours a day, seven
59-20 days a week. Licensees may, at their option, elect other hours of
59-21 operation.
59-22 Sec. 11.002. USE OF CHIPS OR TOKENS. All gaming must be
59-23 conducted with chips, tokens, or other instrumentalities approved
59-24 by the executive director or the commission or with the legal
59-25 tender of the United States.
59-26 Sec. 11.003. REPORTING REQUIREMENTS. (a) An owner licensee
59-27 shall keep the licensee's books and records in a manner that
60-1 clearly shows the total amount of gross gaming revenue and other
60-2 revenues received.
60-3 (b) The books and records kept by an owner licensee relating
60-4 to gaming operations are not public records and the publication and
60-5 dissemination of the materials by the commission is prohibited.
60-6 The commission may publish and disseminate gaming revenues of each
60-7 owner licensee at a frequency and in the level of detail as it
60-8 considers appropriate.
60-9 (c) An owner licensee shall file a report of each change of
60-10 the corporate officers and directors with the commission and the
60-11 executive director. The commission shall, not later than the 90th
60-12 day after the date of the change, approve or disapprove the change.
60-13 During the 90-day period, the officer or director is entitled to
60-14 exercise the powers of the office to which the officer or director
60-15 was elected or appointed.
60-16 (d) An owner licensee shall report to the executive director
60-17 in writing a change in company employees who have been designated
60-18 as key employees.
60-19 (e) The commission or the executive director may require
60-20 that a company furnish the commission or the executive director
60-21 with a copy of its federal income tax return not later than the
60-22 30th day after the date the return is filed with the federal
60-23 government.
60-24 Sec. 11.004. EXCLUSION OF PERSONS. (a) The commission
60-25 shall, by regulation, provide for the establishment of a list of
60-26 persons who are to be excluded or ejected from a casino. The list
60-27 may include a person whose presence in the establishment is
61-1 determined by the commission to pose a threat to the interests of
61-2 this state, to licensed gaming, or to both interests.
61-3 (b) In making a determination under this section, the
61-4 commission may consider any:
61-5 (1) prior conviction of a crime that is a felony in
61-6 this state or under the laws of the United States or a crime
61-7 involving moral turpitude or a violation of the gaming laws of a
61-8 state; or
61-9 (2) violation of or conspiracy to violate the
61-10 provisions of this Act relating to:
61-11 (A) the failure to disclose an interest in a
61-12 gaming establishment for which the person must obtain a license;
61-13 (B) wilful evasion of a fee or a tax;
61-14 (C) notorious or unsavory reputation that would
61-15 adversely affect public confidence and trust that the gaming
61-16 industry is free from criminal or corruptive elements; or
61-17 (D) a written order of a governmental agency
61-18 that authorizes the exclusion or ejection of the person from an
61-19 establishment where gaming or pari-mutuel wagering is conducted.
61-20 (c) Race, color, creed, national origin or ancestry, or sex
61-21 may not be grounds for placing the name of a person upon the list.
61-22 (d) This section does not abrogate the common law of
61-23 innkeepers.
61-24 Sec. 11.005. INTERNAL AUDIT AND CONTROL SYSTEMS. (a) An
61-25 owner licensee shall adopt an internal control system that provides
61-26 for:
61-27 (1) the safeguarding of its assets and revenues,
62-1 especially the recording of cash and evidences of indebtedness; and
62-2 (2) the provision of reliable records, accounts, and
62-3 reports of transactions, operations, and events, including reports
62-4 to the executive director and the commission.
62-5 (b) The internal control system must be designed to
62-6 reasonably ensure that:
62-7 (1) assets are safeguarded;
62-8 (2) financial records are accurate and reliable;
62-9 (3) transactions are performed only in accordance with
62-10 management's general or specific authorization;
62-11 (4) transactions are recorded adequately to permit
62-12 proper reporting of gaming revenue and of fees and taxes and to
62-13 maintain accountability for assets;
62-14 (5) access to assets is permitted only in accordance
62-15 with management's specific authorization;
62-16 (6) recorded accountability for assets is compared
62-17 with actual assets at reasonable intervals and appropriate action
62-18 is taken with respect to any discrepancies; and
62-19 (7) functions, duties, and responsibilities are
62-20 appropriately segregated and performed in accordance with sound
62-21 practices by competent, qualified personnel.
62-22 (c) An owner licensee and an applicant for an owner's
62-23 license shall describe, in a manner approved or required by the
62-24 executive director, the licensee's or applicant's administrative
62-25 and accounting procedures in detail in a written system of internal
62-26 control. An owner licensee and applicant for an owner's license
62-27 shall submit a copy of the licensee's or applicant's written system
63-1 to the executive director. A written system must include:
63-2 (1) an organizational chart depicting appropriate
63-3 segregation of functions and responsibilities;
63-4 (2) a description of the duties and responsibilities
63-5 of each position shown on the organizational chart;
63-6 (3) a detailed, narrative description of the
63-7 administrative and accounting procedures designed to satisfy the
63-8 requirements of Section 11.003(a) of this Act;
63-9 (4) a written statement signed by the licensee's chief
63-10 financial officer and either the licensee's chief executive officer
63-11 or an owner licensee attesting that the system satisfies the
63-12 requirements of this section;
63-13 (5) if the written system is submitted by an
63-14 applicant, a letter from an independent certified public accountant
63-15 stating that the applicant's written system has been reviewed by
63-16 the certified public accountant and complies with the requirements
63-17 of this section; and
63-18 (6) other items the executive director may require.
63-19 (d) The executive director, with the advice of the
63-20 commission, shall adopt and publish minimum standards for internal
63-21 control procedures.
63-22 Sec. 11.006. AGE REQUIREMENTS. A person under the age of 21
63-23 years may not:
63-24 (1) play, be allowed to play, place wagers, or collect
63-25 winnings, personally or through an agent, from any gaming
63-26 authorized under this Act; or
63-27 (2) be employed as a gaming employee.
64-1 Sec. 11.007. ACCEPTANCE OF NEGOTIABLE INSTRUMENTS. (a) A
64-2 negotiable instrument evidencing a gaming transaction may be
64-3 enforced by legal process.
64-4 (b) A licensee or person acting on the licensee's behalf may
64-5 accept an incomplete negotiable instrument that is signed by a
64-6 patron and states the amount of the debt in figures. The licensee
64-7 or person may complete the instrument as is necessary for the
64-8 instrument to be presented for payment.
64-9 (c) A licensee or person acting on behalf of a licensee:
64-10 (1) may not accept a negotiable instrument which is
64-11 incomplete, except as authorized in Subsection (b) of this section;
64-12 and
64-13 (2) may accept a negotiable instrument that is payable
64-14 to an affiliate or may complete a negotiable instrument in the name
64-15 of an affiliate as payee if the negotiable instrument otherwise
64-16 complies with this section and the records of the affiliate
64-17 pertaining to the negotiable instrument are made available to the
64-18 executive director on request.
64-19 (d) This section does not prohibit the establishment of an
64-20 account by a deposit of cash, recognized traveler's check, or any
64-21 other instrument that is equivalent to cash.
64-22 (e) Any person, licensee, or the agents or employees of the
64-23 person or licensee who violate this section are subject only to the
64-24 penalties provided in the provisions of this Act relating to
64-25 disciplinary actions. The failure of a person to comply with this
64-26 section or the regulations of the commission does not invalidate a
64-27 negotiable instrument or affect the ability to enforce the
65-1 negotiable instrument or the transaction that the negotiable
65-2 instrument represents.
65-3 Sec. 11.008. GAMING DEBTS. (a) Except as otherwise
65-4 provided by this Act, gaming debts not evidenced by a negotiable
65-5 instrument are void and unenforceable and do not give rise to any
65-6 administrative or civil cause of action.
65-7 (b) A claim by a patron of a licensee for payment of a
65-8 gaming debt not evidenced by a negotiable instrument may be
65-9 resolved by the executive director under regulations adopted by the
65-10 commission.
65-11 (c) The executive director shall send a copy of the
65-12 director's ruling by first class mail to the attorneys of record
65-13 and shall keep an appropriate copy of the mailing. If a party is
65-14 not represented by an attorney of record, the executive director
65-15 shall send a copy of the ruling by first class mail to the party
65-16 and shall keep an appropriate record of the mailing.
65-17 (d) A party or attorney of record notified by mail under
65-18 this section is presumed to have been notified on the date on which
65-19 the notice is mailed.
65-20 (e) A party aggrieved by the executive director's ruling is
65-21 entitled to have the claim resolved by the commission in a
65-22 contested case if the party files a written complaint with the
65-23 commission challenging the executive director's decision not later
65-24 than the 20th day after the date on which the party or the party's
65-25 attorney of record is notified by mail.
65-26 Sec. 11.009. DETENTION OF PERSONS. (a) An owner licensee
65-27 or the licensee's officers, employees, or agents may question any
66-1 person on the licensee's premises suspected of violating any of the
66-2 provisions of this Act. An owner licensee or any of the licensee's
66-3 officers, employees, or agents is not criminally or civilly liable:
66-4 (1) as a result of questioning; or
66-5 (2) for reporting to the executive director or law
66-6 enforcement authorities the person suspected of the violation.
66-7 (b) An owner licensee or the licensee's officer, employee,
66-8 or agent who has reasonable cause for believing that there has been
66-9 a violation of this Act in the establishment by a person may take
66-10 that person into custody and detain the person in the establishment
66-11 in a reasonable manner and for a reasonable length of time. The
66-12 taking into custody and detention does not render the licensee or
66-13 the licensee's officer, employee, or agent criminally or civilly
66-14 liable unless it is established by clear and convincing evidence
66-15 that the taking into custody and detention are unreasonable under
66-16 all the circumstances.
66-17 (c) An owner licensee or the licensee's officer, employee,
66-18 or agent is not entitled to the immunity from liability provided
66-19 for in Subsection (a) of this section unless there is displayed in
66-20 a conspicuous place in the licensee's establishment a notice in
66-21 bold-faced type, clearly legible, and in substantially this form:
66-22 An owner licensee or an owner licensee's officer,
66-23 employee, or agent who has reasonable cause for
66-24 believing that a person has violated a provision of the
66-25 Texas Economic Development and Gaming Control Act may
66-26 detain that person in the establishment.
66-27 ARTICLE 12. ENFORCEMENT
67-1 Sec. 12.001. ENFORCEMENT. (a) The executive director shall
67-2 conduct appropriate investigation to:
67-3 (1) determine whether there has been a violation of
67-4 this Act or of a regulation adopted by the commission;
67-5 (2) determine facts, conditions, practices, or matters
67-6 that the director deems necessary or proper to aid in the
67-7 enforcement of a law or regulation;
67-8 (3) aid in adopting regulations;
67-9 (4) secure information as a basis for recommending
67-10 legislation relating to this Act; and
67-11 (5) determine whether a licensee is able to meet the
67-12 licensee's financial obligations, including all financial
67-13 obligations imposed by this Act, as they become due.
67-14 (b) If after an investigation the executive director is
67-15 satisfied that a license, registration, finding of suitability, or
67-16 prior approval by the commission of a transaction for which
67-17 approval was required or permitted under this Act should be
67-18 limited, conditioned, suspended, or revoked, or that a fine should
67-19 be levied, the executive director shall initiate a hearing by
67-20 filing a complaint with the commission and transmit a summary of
67-21 evidence that bears on the matter and the transcript of testimony
67-22 at any investigative hearing conducted by or on behalf of the
67-23 executive director regarding the licensee. The complaint must be a
67-24 written statement of charges that must set forth in ordinary and
67-25 concise language the acts or omission with which the respondent is
67-26 charged. The complaint must specify the statute or regulation that
67-27 the respondent is alleged to have violated. A complaint must
68-1 contain a factual allegation and shall not consist merely of
68-2 charges raised on the language of the statute or regulation. On
68-3 the filing of the complaint, the executive director shall serve a
68-4 copy of the complaint on the respondent either personally or by
68-5 registered or certified mail at the respondent's address on file
68-6 with the executive director.
68-7 (c) Except as provided by Section 10.005 of this Act, the
68-8 respondent must answer not later than the 30th day after the date
68-9 of the service of the complaint.
68-10 (d) On receipt of the complaint of the executive director,
68-11 the commission shall review all matter presented in support and
68-12 shall appoint a hearing examiner to conduct further proceedings.
68-13 (e) The hearing examiner shall conduct proceedings under
68-14 Chapter 2001, Government Code. After the proceedings, the hearing
68-15 examiner may recommend that the commission take any appropriate
68-16 action, including revocation, suspension, limitation or
68-17 conditioning of a license, or imposition of a fine not to exceed
68-18 $5,000 for each violation.
68-19 (f) The commission shall review the recommendation. The
68-20 commission may remand the case to the hearing examiner for the
68-21 presentation of additional evidence on a showing of good cause as
68-22 to why the evidence could not have been presented at the previous
68-23 hearing.
68-24 (g) The commission shall, by a majority vote, accept,
68-25 reject, or modify the recommendation.
68-26 (h) If the commission limits, conditions, suspends, or
68-27 revokes a license or imposes a fine, or limits, conditions,
69-1 suspends, or revokes a registration, finding of suitability, or
69-2 prior approval, the commission shall issue its written order.
69-3 (i) A limitation, condition, revocation, suspension, or fine
69-4 imposed is effective until reversed following judicial review,
69-5 except that the commission may stay its order pending a rehearing
69-6 or judicial review on terms and conditions as it considers proper.
69-7 (j) Judicial review of an order or decision of the
69-8 commission may be had under Chapter 2001, Government Code.
69-9 Sec. 12.002. PRIVILEGED DOCUMENTS. (a) A communication or
69-10 document of an applicant or licensee that is required by law or a
69-11 regulation of the commission or a subpoena issued by the commission
69-12 and that is to be made or transmitted to the commission or the
69-13 executive director is absolutely privileged and does not impose
69-14 liability for defamation or constitute a ground for recovery in any
69-15 civil action.
69-16 (b) If a document or communication contains information that
69-17 is privileged, the privilege is not waived or lost because the
69-18 document or communication is disclosed to the commission or the
69-19 executive director.
69-20 (c) Notwithstanding the powers granted to the commission and
69-21 the executive director by this Act:
69-22 (1) the commission and the executive director may not
69-23 release or disclose privileged information, documents, or
69-24 communications provided by an applicant and required by a lawful
69-25 court order after timely notice of the proceedings has been given
69-26 to the applicant or licensee without the prior written consent of
69-27 the applicant or licensee;
70-1 (2) the commission and the executive director shall
70-2 maintain all privileged information, documents, and communications
70-3 in a secure place accessible only to members of the commission and
70-4 the executive director; and
70-5 (3) the commission shall adopt procedures and
70-6 regulations to protect the privileged nature of information,
70-7 documents, and communications provided by an applicant or licensee.
70-8 Sec. 12.003. RELEASE OF CONFIDENTIAL INFORMATION. An
70-9 application to a court for an order requiring the commission or the
70-10 executive director to release any information declared by law to be
70-11 confidential shall be made only on a motion in writing delivered
70-12 not later than the 10th day before the date of application to the
70-13 commission, the attorney general, and all persons who may be
70-14 affected by the entry of the order. Copies of the motion and all
70-15 papers filed in support of it shall be served with the notice by
70-16 delivering a copy in person or by certified mail to the last known
70-17 address of the person to be served.
70-18 Sec. 12.004. EMERGENCY ORDERS. (a) The commission may
70-19 issue an emergency order for suspension, limitation, or
70-20 conditioning of a license, registration, finding of suitability, or
70-21 work permit or may issue an emergency order requiring a casino to
70-22 keep an individual licensee from the premises of the licensed
70-23 gaming establishment or to not pay the licensee any remuneration
70-24 for services or any profits, income, or accruals on the licensee's
70-25 investment in the casino.
70-26 (b) An emergency order may be issued only when the
70-27 commission believes that:
71-1 (1) a licensee has wilfully failed to report, pay, or
71-2 truthfully account for a fee imposed under this Act or wilfully
71-3 attempted in any manner to evade or defeat a fee or payment;
71-4 (2) a licensee or gaming employee has cheated at a
71-5 gambling game; or
71-6 (3) the action is necessary for the immediate
71-7 preservation of the public peace, health, safety, morals, good
71-8 order, or general welfare.
71-9 (c) The emergency order must state the grounds on which it
71-10 is issued, including a statement of facts constituting the alleged
71-11 emergency necessitating the action.
71-12 (d) An emergency order may be issued only with the approval
71-13 of and under the signature of four or more members of the
71-14 commission.
71-15 (e) An emergency order is effective immediately on issuance
71-16 and service on the licensee or resident agent of the licensee,
71-17 gaming employee, or, in cases involving registration or findings of
71-18 suitability, on issuance and service on the person or entity
71-19 involved or resident agent of the entity involved. An emergency
71-20 order may suspend, limit, condition, or take other action in
71-21 relation to the license of one or more persons in an operation
71-22 without affecting other individual licensees or the casino. An
71-23 emergency order remains effective until further order of the
71-24 commission or final disposition of the case.
71-25 (f) Within five days after issuance of an emergency order,
71-26 the executive director shall file a complaint and serve it on the
71-27 person or entity involved. The person or entity against whom the
72-1 emergency order has been issued and served is entitled to a hearing
72-2 before the commission and to judicial review of the decision and
72-3 order of the commission under Chapter 2001, Government Code.
72-4 ARTICLE 13. PENALTIES AND OFFENSES
72-5 Sec. 13.001. FAILURE TO PAY FEES. (a) License fees and
72-6 fees required by law must be paid to the commission on or before
72-7 the dates provided by law or regulation for each fee.
72-8 (b) A person failing to timely pay a fee or tax when due
72-9 shall pay in addition a penalty of not less than $50 or 25 percent
72-10 of the amount due, whichever is the greater. The penalty may not
72-11 exceed $1,000 if the fees are less than 10 days late and may not
72-12 exceed $5,000 under any circumstances. The penalty shall be
72-13 collected as are other charges, license fees, and penalties under
72-14 this Act.
72-15 Sec. 13.002. FAILURE TO REPORT, PAY, OR ACCOUNT FOR FEE OR
72-16 TAX. (a) A person commits an offense if the person wilfully fails
72-17 to report, pay, or truthfully account for a license fee or tax
72-18 imposed under this Act or wilfully attempts in any manner to evade
72-19 or defeat a license fee, tax, or payment.
72-20 (b) An offense under this section is a Class A misdemeanor.
72-21 Sec. 13.003. FRAUD. (a) A person commits an offense if the
72-22 person knowingly:
72-23 (1) alters or misrepresents the outcome of a game or
72-24 other event on which wagers have been made after the outcome is
72-25 made sure but before it is revealed to the players;
72-26 (2) places, increases, or decreases a bet or
72-27 determines the course of play after acquiring knowledge, not
73-1 available to all players, of the outcome of the game or an event
73-2 that affects the outcome of the game or that is the subject of the
73-3 bet or aids anyone in acquiring such knowledge for the purpose of
73-4 placing, increasing, or decreasing a bet or determining the course
73-5 of play contingent on that event or outcome;
73-6 (3) claims, collects, or takes, or attempts to claim,
73-7 collect, or take, money or anything of value in or from a gambling
73-8 game, with intent to defraud, without having made a wager
73-9 contingent thereon, or claims, collects, or takes an amount greater
73-10 than the amount won;
73-11 (4) entices or induces another to go to a place where
73-12 a gambling game is being conducted or operated in violation of the
73-13 Act, with the intent that the other person play or participate in
73-14 that gambling game;
73-15 (5) places or increases a bet after acquiring
73-16 knowledge of the outcome of the game or other event that is the
73-17 subject of the bet, including past posting and pressing bets;
73-18 (6) reduces the amount wagered or cancels the bet
73-19 after acquiring knowledge of the outcome of the game or other event
73-20 that is the subject of the bet, including pinching bets; or
73-21 (7) manipulates, with the intent to cheat, a component
73-22 of a gaming device in a manner contrary to the designed and normal
73-23 operational purpose for the component, including, but not limited
73-24 to, varying the pull of the handle of a slot machine, with
73-25 knowledge that the manipulation affects the outcome of the game or
73-26 with knowledge of an event that affects the outcome of the game.
73-27 (b) An offense under this section is a felony of the third
74-1 degree.
74-2 Sec. 13.004. USE OF PROHIBITED DEVICES. (a) A person
74-3 commits an offense if the person, at a casino, uses or possesses
74-4 with the intent to use a device, other than those customarily used
74-5 in the conduct of gaming to assist in:
74-6 (1) projecting the outcome of the game;
74-7 (2) keeping track of the cards played;
74-8 (3) analyzing the probability of the occurrence of an
74-9 event relating to the game; or
74-10 (4) analyzing the strategy for playing or betting to
74-11 be used in the game.
74-12 (b) An offense under this section is a felony of the third
74-13 degree.
74-14 Sec. 13.005. USE OF COUNTERFEIT OR UNAUTHORIZED TOKEN, CHIP,
74-15 OR COIN. (a) A person commits an offense if the person knowingly
74-16 uses counterfeit chips in a gambling game.
74-17 (b) A person commits an offense if the person, in playing or
74-18 using any gambling game designed to be played with, receive, or be
74-19 operated by chips or tokens approved by the executive director or
74-20 by lawful coin of the United States of America:
74-21 (1) knowingly uses other than chips or tokens approved
74-22 by the commission or lawful coin, legal tender of the United States
74-23 of America, or uses coin not of the same denomination as the coin
74-24 intended to be used in that gambling game; or
74-25 (2) uses any device or means to violate the provisions
74-26 of this Act.
74-27 (c) A person, other than a duly authorized employee of an
75-1 owner licensee acting in furtherance of the person's employment
75-2 within an establishment commits an offense if the person knowingly
75-3 has on the person's body or in the person's possession on or off
75-4 the premises of a casino a device intended to be used to violate
75-5 the provisions of this Act.
75-6 (d) A person, other than a duly authorized employee of an
75-7 owner licensee acting in furtherance of the person's employment
75-8 within an establishment, commits an offense if the person knowingly
75-9 has on the person's body or in the person's possession on or off
75-10 the premises of a casino a key or device known to have been
75-11 designed for the purpose of and suitable for opening, entering, or
75-12 affecting the operation of a gambling game, a drop box, or an
75-13 electronic or mechanical device connected to the game or box or for
75-14 removing money or other contents from the game or box.
75-15 (e) A person commits an offense if the person knowingly has
75-16 on the person's body or in the person's possession paraphernalia
75-17 for manufacturing slugs for use in gaming devices. In this
75-18 subsection, "paraphernalia for manufacturing slugs" means the
75-19 equipment, products, and materials that are intended for use or
75-20 designed for use in manufacturing, producing, fabricating,
75-21 preparing, testing, analyzing, packaging, storing, or concealing a
75-22 counterfeit facsimile of the chips or tokens approved by the
75-23 executive director or a lawful coin of the United States, the use
75-24 of which is an offense under Subsection (b) of this section. The
75-25 term includes:
75-26 (1) lead or lead alloys;
75-27 (2) molds, forms, or similar equipment capable of
76-1 producing a likeness of a gaming token or United States coin;
76-2 (3) melting pots or other receptacles;
76-3 (4) torches; and
76-4 (5) tongs, trimming tools, or other similar equipment.
76-5 (f) Possession of more than one of the devices, equipment,
76-6 products, or materials described in this section permits a
76-7 rebuttable inference that the possessor intended to use them for
76-8 cheating.
76-9 (g) An offense under this section is a felony of the third
76-10 degree.
76-11 Sec. 13.006. CHEATING. (a) A person commits an offense if
76-12 the person knowingly cheats at any gambling game.
76-13 (b) An offense under this section is a state jail felony.
76-14 Sec. 13.007. POSSESSION OF UNLAWFUL DEVICES. (a) A person
76-15 commits an offense if the person knowingly possesses any slot
76-16 machine or gaming device that has been manufactured, sold, or
76-17 distributed in violation of this Act.
76-18 (b) An offense under this section is a Class A misdemeanor.
76-19 Sec. 13.008. UNLAWFUL MANUFACTURE, SALE, OR DISTRIBUTION OF
76-20 GAMING EQUIPMENT. (a) A person commits an offense if the person
76-21 manufactures, sells, or distributes cards, chips, dice, a game, or
76-22 a device intended to be used to violate a provision of this Act.
76-23 (b) A person commits an offense if the person marks, alters,
76-24 or otherwise modifies any associated equipment or gaming device in
76-25 a manner that:
76-26 (1) affects the result of a wager by determining win
76-27 or loss; or
77-1 (2) alters the normal criteria of random selection,
77-2 which affects the operation of a game or which determines the
77-3 outcome of a game.
77-4 (c) A person commits an offense if the person instructs
77-5 another in cheating or in the use of a device for cheating, with
77-6 the knowledge or intent that the information or use conveyed may be
77-7 employed to violate a provision of this Act.
77-8 (d) An offense under this section is a felony of the third
77-9 degree.
77-10 Sec. 13.009. REPORTING PENALTIES. (a) A person commits an
77-11 offense if the person, in a license application, in a book or
77-12 record required to be maintained by this Act or a rule adopted
77-13 under this Act, or in a report required to be submitted by this Act
77-14 or a rule adopted under this Act:
77-15 (1) makes a statement or entry that the person knows
77-16 to be false or misleading; or
77-17 (2) knowingly fails to maintain or make an entry the
77-18 person knows is required to be maintained or made.
77-19 (b) A person commits an offense if the person knowingly
77-20 refuses to produce for inspection by the executive director a book,
77-21 record, or document required to be maintained or made by this Act
77-22 or a rule adopted under this Act.
77-23 (c) An offense under this section is a Class A misdemeanor.
77-24 Sec. 13.010. GAMING BY MINORS. (a) A person commits an
77-25 offense if the person knowingly permits an individual that the
77-26 person knows is younger than 21 years of age to participate in
77-27 gaming.
78-1 (b) An individual commits an offense if the individual
78-2 participates in gaming and the individual is younger than 21 years
78-3 of age at the time of participation.
78-4 (c) An offense under this section is a Class C misdemeanor.
78-5 Sec. 13.011. GENERAL PENALTY. (a) A person commits an
78-6 offense if the person wilfully violates, attempts to violate, or
78-7 conspires to violate any of the provisions of this Act specifying
78-8 prohibited acts.
78-9 (b) If no penalty is otherwise specified, an offense under
78-10 this section is a Class A misdemeanor.
78-11 ARTICLE 14. LOCAL OPTION ELECTIONS
78-12 Sec. 14.001. ORDERING LOCAL OPTION ELECTION. The governing
78-13 body of an eligible political subdivision may at any time order and
78-14 hold an election to legalize gaming under this Act in that
78-15 political subdivision. However, no election shall be held before
78-16 the date of the election at which the constitutional amendment
78-17 proposed by the 74th Legislature, Regular Session, 1995, is
78-18 submitted to the voters. The local option election authorized by
78-19 this section may be held on the same date as the election at which
78-20 the constitutional amendment proposed by the 74th Legislature,
78-21 Regular Session, 1995, is presented to the voters. The governing
78-22 body of a political subdivision shall order and hold an election to
78-23 legalize gaming under this Act in the political subdivision if the
78-24 governing body is presented with a petition that meets the
78-25 requirements of Section 14.002 of this Act and is certified as
78-26 valid under Section 14.003 of this Act.
78-27 Sec. 14.002. PETITION REQUIREMENTS. (a) A petition for a
79-1 legalization election must have a statement substantially as
79-2 follows before the space reserved for signatures on each page:
79-3 "This petition is to require that an election be held in (name of
79-4 political subdivision) to legalize casino gaming in (name of
79-5 political subdivision) under Article 179h, Revised Statutes."
79-6 (b) A petition is valid only if it is signed by registered
79-7 voters of the political subdivision in a number equal to or greater
79-8 than the lesser of:
79-9 (1) three percent of the number of votes cast for
79-10 governor by qualified voters of the political subdivision in the
79-11 most recent gubernatorial general election; or
79-12 (2) in an election to be held in a municipality, the
79-13 number specified in a municipality's charter.
79-14 (c) Each voter must enter beside the voter's signature the
79-15 date the voter signs the petition. A signature may not be counted
79-16 as valid if the date of signing is earlier than the 90th day before
79-17 the date the petition is submitted to the governing body. A
79-18 signature may be affixed to a petition before the effective date of
79-19 this section. A petition may not be presented to the governing
79-20 body of a political subdivision before the effective date of this
79-21 section.
79-22 (d) Each voter must provide on the petition the voter's
79-23 current voter registration number, printed name, and residence
79-24 address, including zip code.
79-25 Sec. 14.003. VERIFICATION. (a) Not later than the fifth
79-26 day after the date a petition for an election under this Act is
79-27 received in the office of the governing body, the governing body
80-1 shall submit the petition for verification to the municipal
80-2 secretary or county clerk, as applicable.
80-3 (b) The officer to whom the petition is submitted for
80-4 verification shall determine whether the petition is signed by the
80-5 required number of registered voters of the political subdivision.
80-6 Not later than the 30th day after the date the petition is
80-7 submitted to the officer for verification, the officer shall
80-8 certify in writing to the governing body of the political
80-9 subdivision whether the petition is valid or invalid. If the
80-10 officer determines that the petition is invalid, the officer shall
80-11 state all reasons for that determination.
80-12 Sec. 14.004. ORDERING ELECTION. If the municipal secretary
80-13 or county clerk, as applicable, certifies that a petition is valid,
80-14 not later than the 30th day after the date of certification, the
80-15 governing body shall order that an election be held in the
80-16 municipality or county on the next uniform election date under
80-17 Section 41.001, Election Code, that occurs after the 45th day after
80-18 the date on which the governing body orders the election. The
80-19 governing body shall state in the order the issue to be voted on.
80-20 The municipal secretary or county clerk shall notify the commission
80-21 by certified mail, return receipt requested, that an election has
80-22 been ordered.
80-23 Sec. 14.005. BALLOT PROPOSITION. The ballot in a
80-24 legalization election shall be printed to provide for voting for or
80-25 against the proposition: "Legalizing casino gaming within (name of
80-26 political subdivision) under Article 179h, Revised Statutes."
80-27 Sec. 14.006. ELECTION RESULTS. (a) If the majority of the
81-1 votes cast in a legalization election favor the legalization of
81-2 gaming, gaming authorized under this Act is permitted within the
81-3 political subdivision holding the election effective the 10th day
81-4 after the date of the election.
81-5 (b) The governing body of a political subdivision in which a
81-6 legalization election has been held shall give written notice of
81-7 the results of the election to the commission not later than the
81-8 third day after the date the election is canvassed.
81-9 (c) If less than a majority of the votes cast in a
81-10 legalization election in any county or municipality are cast in
81-11 favor of the legalization of gaming, gaming shall not be permitted
81-12 in the county or municipality holding the election, and a
81-13 subsequent election on the issue may not be held in the county or
81-14 municipality before the corresponding uniform election date one
81-15 year after the date of the election.
81-16 (d) If less than a majority of the votes cast in two
81-17 consecutive legalization elections within any county or
81-18 municipality are cast in favor of the legalization of gaming,
81-19 gaming shall not be permitted in the county or municipality holding
81-20 the election, and a subsequent election on the issue may not be
81-21 held in the county or municipality before the corresponding uniform
81-22 election date five years after the date of the election.
81-23 (e) A countywide legalization election does not permit
81-24 gaming in any municipality within the county unless gaming is
81-25 legalized within the municipality through a separate municipal
81-26 legalization election. The failure of any countywide legalization
81-27 election has no effect on subsequent elections in municipalities
82-1 located within the county, and the failure of any municipal
82-2 legalization election has no effect on subsequent countywide
82-3 legalization elections.
82-4 SECTION 2. Section 47.02(c), Penal Code, is amended to read
82-5 as follows:
82-6 (c) It is a defense to prosecution under this section that
82-7 the actor reasonably believed that the conduct:
82-8 (1) was permitted under the Bingo Enabling Act
82-9 (Article 179d, Vernon's Texas Civil Statutes);
82-10 (2) was permitted under the Charitable Raffle Enabling
82-11 Act (Article 179f, Revised Statutes);
82-12 (3) consisted entirely of participation in the state
82-13 lottery authorized by the State Lottery Act (Article 179g, Vernon's
82-14 Texas Civil Statutes); <or>
82-15 (4) was permitted under the Texas Racing Act (Article
82-16 179e, Vernon's Texas Civil Statutes); or
82-17 (5) was permitted under the Texas Economic Development
82-18 and Gaming Control Act (Article 179h, Revised Statutes).
82-19 SECTION 3. Section 47.09(a), Penal Code, is amended to read
82-20 as follows:
82-21 (a) It is a defense to prosecution under this chapter that
82-22 the conduct:
82-23 (1) was authorized under:
82-24 (A) the Bingo Enabling Act (Article 179d,
82-25 Vernon's Texas Civil Statutes);
82-26 (B) the Texas Racing Act (Article 179e, Vernon's
82-27 Texas Civil Statutes); <or>
83-1 (C) the Charitable Raffle Enabling Act (Article
83-2 179f, Revised Statutes); or
83-3 (D) the Texas Economic Development and Gaming
83-4 Control Act (Article 179h, Revised Statutes);
83-5 (2) consisted entirely of participation in the state
83-6 lottery authorized by the State Lottery Act (Article 179g, Vernon's
83-7 Texas Civil Statutes); or
83-8 (3) was a necessary incident to the operation of the
83-9 state lottery and was directly or indirectly authorized by the:
83-10 (A) State Lottery Act;
83-11 (B) lottery division of the comptroller's
83-12 office;
83-13 (C) comptroller; or
83-14 (D) director of the lottery division.
83-15 SECTION 4. Article 8803, Revised Statutes, is amended to
83-16 read as follows:
83-17 Art. 8803. Exemptions From Tax. (a) Gas meters, pay
83-18 telephones, pay toilets, food vending machines, confection vending
83-19 machines, beverage vending machines, merchandise vending machines,
83-20 and cigarette vending machines which are now subject to an
83-21 occupation or gross receipts tax, stamp vending machines, and
83-22 "service coin-operated machines," as that term is defined, are
83-23 expressly exempt from the tax levied herein, and the other
83-24 provisions of this Chapter.
83-25 (b) An electronic or electromechanical gaming device
83-26 permitted under the Texas Economic Development and Gaming Control
83-27 Act (Article 179h, Revised Statutes) is exempt from the tax imposed
84-1 by this Chapter and from the other provisions of this Chapter.
84-2 SECTION 5. Section 572.003(c), Government Code, is conformed
84-3 to Chapters 260, 284, and 408, Acts of the 73rd Legislature,
84-4 Regular Session, 1993, and amended to read as follows:
84-5 (c) The term means a member of:
84-6 (1) the Public Utility Commission of Texas;
84-7 (2) the Texas Department of Commerce;
84-8 (3) the Texas Natural Resource Conservation
84-9 Commission;
84-10 (4) the Texas Alcoholic Beverage Commission;
84-11 (5) The Finance Commission of Texas;
84-12 (6) the General Services Commission;
84-13 (7) the Texas Board of Criminal Justice;
84-14 (8) the board of trustees of the Employees Retirement
84-15 System of Texas;
84-16 (9) the Texas Transportation Commission;
84-17 (10) the Texas Workers' Compensation Commission;
84-18 (11) the State Board of Insurance;
84-19 (12) the Parks and Wildlife Commission;
84-20 (13) the Public Safety Commission;
84-21 (14) the Texas Ethics Commission;
84-22 (15) the State Securities Board;
84-23 (16) the Texas Water Development Board;
84-24 (17) the governing board of a public senior college or
84-25 university as defined by Section 61.003, Education Code, or of The
84-26 University of Texas Southwestern Medical Center at Dallas, The
84-27 University of Texas Medical Branch at Galveston, The University of
85-1 Texas Health Science Center at Houston, The University of Texas
85-2 Health Science Center at San Antonio, The University of Texas
85-3 System Cancer Center, The University of Texas Health Science Center
85-4 at Tyler, Texas College of Osteopathic Medicine, Texas Tech
85-5 University Health Sciences Center, Texas State Technical
85-6 Institute--Amarillo, Texas State Technical Institute--Harlingen,
85-7 Texas State Technical Institute--Sweetwater, or Texas State
85-8 Technical Institute--Waco;
85-9 (18) the Texas Higher Education Coordinating Board;
85-10 (19) the Texas Employment Commission;
85-11 (20) the State Banking Board;
85-12 (21) the board of trustees of the Teachers Retirement
85-13 System of Texas;
85-14 (22) the Credit Union Commission;
85-15 (23) the School Land Board;
85-16 (24) the board of the Texas Department of Housing and
85-17 Community Affairs;
85-18 (25) the Texas Racing Commission;
85-19 (26) the State Board of Dental Examiners;
85-20 (27) the Texas Board of Licensure for Nursing Home
85-21 Administrators;
85-22 (28) the Texas State Board of Medical Examiners;
85-23 (29) the Board of Pardons and Paroles;
85-24 (30) the State Board of Pharmacy;
85-25 (31) the Department of Information Resources governing
85-26 board;
85-27 (32) the Motor Vehicle Board;
86-1 (33) the Texas Real Estate Commission;
86-2 (34) the board of directors of the State Bar of Texas;
86-3 (35) the bond review board;
86-4 (36) the Texas Board of Health;
86-5 (37) the Texas Board of Mental Health and Mental
86-6 Retardation;
86-7 (38) the Texas Board on Aging;
86-8 (39) the Texas Board of Human Services;
86-9 (40) the Texas Funeral Service Commission; <or>
86-10 (41) the board of directors of a river authority
86-11 created under the Texas Constitution or a statute of this state;
86-12 (42) the director of the lottery division in the
86-13 office of the comptroller;
86-14 (43) the deputy in charge of the department of
86-15 security in the lottery division in the office of the comptroller;
86-16 or
86-17 (44) a member of the Texas Gaming Commission.
86-18 SECTION 6. Section 11.05, Texas Racing Act (Article 179e,
86-19 Vernon's Texas Civil Statutes), is amended to read as follows:
86-20 Sec. 11.05. Unlawful Wagering. A person shall not wager on
86-21 the result of a greyhound race or horse race in this state except
86-22 as permitted by this Act or by the Texas Economic Development and
86-23 Gaming Control Act (Article 179h, Revised Statutes).
86-24 SECTION 7. All funds in the Texas casino gaming fund are
86-25 appropriated to the Texas Gaming Commission for the operation of
86-26 the commission and the administration of the Texas Economic
86-27 Development and Gaming Control Act (Article 179h, Revised
87-1 Statutes), as added by Section 1 of this Act for the biennium
87-2 ending August 31, 1997.
87-3 SECTION 8. The governor shall make the initial appointments
87-4 to the Texas Gaming Commission not later than 30 days after the
87-5 effective date of this Act. In making the initial appointments to
87-6 the Texas Gaming Commission, the governor shall designate two
87-7 members for terms expiring in 1997, two members for terms expiring
87-8 in 1999, and two members for terms expiring in 2001.
87-9 SECTION 9. Article 14 of the Texas Economic Development and
87-10 Gaming Control Act (Article 179h, Revised Statutes), as added by
87-11 Section 1 of this Act, takes effect on September 1, 1995. The
87-12 remainder of this Act takes effect on the date on which the
87-13 constitutional amendment proposed by the 74th Legislature, Regular
87-14 Session, 1995, takes effect. If that amendment is not approved by
87-15 the voters, then this entire Act has no effect.
87-16 SECTION 10. The importance of this legislation and the
87-17 crowded condition of the calendars in both houses create an
87-18 emergency and an imperative public necessity that the
87-19 constitutional rule requiring bills to be read on three several
87-20 days in each house be suspended, and this rule is hereby suspended.