By: Armbrister S.B. No. 1244
A BILL TO BE ENTITLED
AN ACT
relating to operation of video lottery machines at racetracks.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 466.002, Government Code, is amended by
amending Subdivisions (5), (8), and (9), and adding Subdivisions
(11), (12), (13), and (14) to read as follows:
(5) "Lottery means the procedures operated by the
state under this Act through which prizes are awarded or
distributed by chance among persons who have paid, or
unconditionally agreed to pay, for a chance or other opportunity to
receive a prize and includes all procedures associated with the
operation of video lottery games.
(8) "Player" means a person who contributes any part
of the consideration for a ticket or for a video lottery game.
(9) "Sales agent" or "sales agency" means a person
licensed under this Act to sell lottery tickets or to operate video
lottery game machines.
(11) "Video lottery game" means a lottery game approved by
the commission and conducted with or played on a video lottery
machine, or a network of video lottery machines, that are connected
to a central computer system operated by the commission.
(12) "Video lottery agent" means a sales agent or
sales agency licensed to operate a video lottery game on behalf of
the state at a racetrack licensed under Article 179e, Vernon's
Annotated Texas Civil Statutes.
(13) "Video lottery machine manufacturer" means a
person licensed by the commission to manufacture video lottery
machines.
(14) "Central computer system" means a central
computer operated by the commission that each video lottery machine
can communicate with to transmit auditing program information and
that can be used for the activation and disabling of video lottery
machines.
SECTION 2. Section 466.024, Government Code, is amended to
read as follows:
Sec. 466.024. Prohibited Games. (a) The executive
director or a lottery operator may not establish or operate a
lottery game in which the winner is chosen on the basis of the
outcome of a sports event.
(b) The commission shall adopt rules prohibiting the
operation of any game using a video lottery machine or machine other
than a video lottery game as defined in section 466.002.
(c) In this section:
(1) "Sports event" means a football, basketball,
baseball, or similar game, or a horse or dog race on which
pari-mutuel wagering is allowed.
(2) "Video lottery machine" or "machine" means any
electronic video game machine that, upon insertion of cash, is
available to play or simulate the play of a video game, including
video poker, keno, and blackjack, using a video display and
microprocessors in which the player may receive free games or
credits that can be redeemed for cash, coins, or tokens or that
directly dispenses cash, coins, or tokens.
SECTION 3. Section 466.155(a), Government Code, is amended
to read as follows:
(a) After a hearing, the director shall deny an application
for a license or the commission shall suspend or revoke a license if
the director or the commission, as applicable, finds that the
applicant or sales agent:
(1) is an individual who:
(A) has been convicted of a felony, criminal
fraud, gambling or gambling related offense, or a misdemeanor
involving moral turpitude, if less than 10 years has elapsed since
the termination of the sentence, parole, mandatory supervision, or
probation served for the offense;
(B) is or has been a professional gambler;
(C) is married to an individual:
(i) described in Paragraph (A) or (B); or
(ii) who is currently delinquent in the
payment of any state tax;
(D) is an officer or employee of the commission
or a lottery operator; or
(E) is a spouse, child, brother, sister, or
parent residing as a member of the same household in the principal
place of residence of a person described by Paragraph (D);
(2) is not an individual, and an individual described
in Subdivision (1):
(A) is an officer or director of the applicant or
sales agent;
(B) holds more than 10 percent of the stock in the
applicant or sales agent;
(C) holds an equitable interest greater than 10
percent in the applicant or sales agent;
(D) is a creditor of the applicant or sales agent
who holds more than 10 percent of the applicant's or sales agent's
outstanding debt;
(E) is the owner or lessee of a business that the
applicant or sales agent conducts or through which the applicant
will conduct a ticket sales agency;
(F) shares or will share in the profits, other
than stock dividends, of the applicant or sales agent; or
(G) participates in managing the affairs of the
applicant or sales agent;
(3) has been finally determined to be:
(A) delinquent in the payment of a tax or other
money collected by the comptroller, the Texas Workforce Commission,
or the Texas Alcoholic Beverage Commission;
(B) in default on a loan made under Chapter 52,
Education Code; or
(C) in default on a loan guaranteed under Chapter
57, Education Code;
(4) is a person whose location for the sales agency is:
(A) a location licensed for games of bingo under
Chapter 2001, Occupations Code;
(B) on land that is owned by:
(i) this state; or
(ii) a political subdivision of this state
and on which is located a public primary or secondary school, an
institution of higher education, or an agency of the state; or
[(C) a location for which a person holds a wine
and beer retailer's permit, mixed beverage permit, mixed beverage
late hours permit, private club registration permit, or private
club late hours permit issued under Chapter 25, 28, 29, 32, or 33,
Alcoholic Beverage Code; or]
(D) if the application is for a video lottery
agent, a racetrack licensed after January 1, 2003; or
(5) has violated this chapter or a rule adopted under
this chapter.
SECTION 4. Section 3.021, Texas Racing Act (Article 179e,
Vernon's Annotated Texas Civil Statutes) is amended by adding
Section 3.021(e) to read as follows:
(a) Any provision in this Act to the contrary
notwithstanding, the commission may license and regulate all
aspects of greyhound racing and horse racing in this state, whether
or not that racing involves pari-mutuel wagering.
(b) To protect the health, safety, and welfare of race
animals and participants in racing, to safeguard the interest of
the general public, and to promote the orderly conduct of racing
within the state, the commission may adopt rules for the licensing
and regulation of races and workouts at racetracks that do not offer
pari-mutuel wagering and for workouts at training facilities to
secure past performances and workouts.
(c) The commission may charge an annual fee for licensing
and regulating a racetrack that does not offer pari-mutuel wagering
or a training facility in a reasonable amount that may not exceed
the actual cost of enforcing rules adopted for the licensing and
regulation of races and workouts at such a facility.
(d) The commission may not adopt rules restricting
competitive bidding or advertising by a licensee except to prohibit
false, misleading, or deceptive practices. In its rules to
prohibit false, misleading, or deceptive practices, the commission
may not include a rule that:
(1) restricts the use of any medium for advertising;
(2) restricts the use of a licensee's personal
appearance or voice in an advertisement;
(3) relates to the size or duration of an
advertisement by the licensee; or
(4) restricts the licensee's advertisement under a
trade name.
(e) The commission may license and regulate all aspects of
the video lottery agents at racetracks in this state. In doing so,
the commission shall coordinate with the Texas Lottery Commission
to ensure no duplication of regulations. The commission may charge
a reasonable fee, as determined by rule, for regulating video
lottery agents at racetracks.
SECTION 5. Article 6, Texas Racing Act (Article 179e,
Vernon's Annotated Texas Civil Statutes) is amended by adding
Section 6.011 to read as follows:
Sec. 6.011. LICENSE REQUIRED FOR VIDEO LOTTERY. (a) A
person may not operate a video lottery game in this state without
obtaining a video lottery agent license from the commission.
(b) The commission shall issue a license to operate a video
lottery game to an applicant in good standing with the commission
that holds a racetrack license issued by the commission on or before
January 1, 2003.
(c) The commission may adopt rules and charge fees to
implement this section.
SECTION 6. Article 6, Texas Racing Act (Article 179e,
Vernon's Annotated Texas Civil Statutes) is amended by adding
Section 6.095 to read as follows:
Sec. 6.095. DEDUCTIONS FROM VIDEO LOTTERY PROCEEDS AT HORSE
TRACKS. All proceeds, net of proceeds returned to players and the
state, shall be allocated between the horse racetrack and horse
purses pursuant to an agreement between the horse racetrack and the
officially recognized horsemen's organization.
SECTION 7. Article 6, Texas Racing Act (Article 179e,
Vernon's Annotated Texas Civil Statutes) is amended by adding
Section 6.096 to read as follows:
Sec. 6.096. DEDUCTIONS FROM VIDEO LOTTERY PROCEEDS AT
GREYHOUND RACETRACKS. All proceeds, net of proceeds returned to
players and the state, shall be allocated between the greyhound
racetrack and greyhound purses pursuant to an agreement between the
greyhound racetrack and the official state greyhound breed
registry.
SECTION 8. Article 8, Texas Racing Act (Article 179e,
Vernon's Annotated Texas Civil Statutes) is amended by adding
Section 8.01(a) and (b) to read as follows:
(a) The commission shall allocate the live and simulcast
racing days for the conduct of live and simulcast racing at each
racetrack licensed under this Act. Each racetrack shall accord
reasonable access to races for all breeds of horses as determined by
the racetrack through negotiations with the representative state
breed registry with the final approval of the commission. In
granting approval, the commission shall consider the factors of
availability of competitive horses, economic feasibility, and
public interest. In allocating race dates under this section, the
commission shall consider live race dates separately from simulcast
race dates. The commission may prohibit Sunday racing unless the
prohibition would conflict with another provision of this Act.
(b) A racetrack that is licensed as a video lottery agent
may not offer for pari-mutuel wagering fewer live racing
opportunities or simulcast days than the number of live racing
opportunities conducted and simulcast days offered during the
calendar year preceding the year this Act takes effect, unless
otherwise agreed by mutual agreement by the affected parties.
SECTION 9. Section 47.01(4), Penal Code, is amended to read
as follows:
(4) "Gambling device" means any electronic,
electromechanical, or mechanical contrivance not excluded under
Paragraph (B) or the State Lottery Act (Chapter 466, Government
Code) that for a consideration affords the player an opportunity to
obtain anything of value, the award of which is determined solely or
partially by chance, even though accompanied by some skill, whether
or not the prize is automatically paid by the contrivance. The
term:
(A) includes, but is not limited to, gambling
device versions of bingo, keno, blackjack, lottery, roulette, video
poker, or similar electronic, electromechanical, or mechanical
games, or facsimiles thereof, that operate by chance or partially
so, that as a result of the play or operation of the game award
credits or free games, and that record the number of free games or
credits so awarded and the cancellation or removal of the free games
or credits; and
(B) does not include any electronic,
electromechanical, or mechanical contrivance designed, made, and
adapted solely for bona fide amusement purposes if the contrivance
rewards the player exclusively with noncash merchandise prizes,
toys, or novelties, or a representation of value redeemable for
those items, that have a wholesale value available from a single
play of the game or device of not more than 10 times the amount
charged to play the game or device once or $5, whichever is less.
SECTION 10. Section 47.06, Penal Code, is amended by
amending Subdivision (d) to read as follows:
(d) It is a defense to prosecution under Subsections (a) and
(c) that:
(1) the device, equipment, or paraphernalia is used
for or is intended for use in gambling that is to occur entirely in a
private place;
(2) a person involved in the gambling does not receive
any economic benefit other than personal winnings; [and]
(3) except for the advantage of skill or luck, the
chance of winning is the same for all participants; and
(4) the device, equipment or paraphernalia is used
pursuant to a license issued under the State Lottery Act (Chapter
466, Government Code).
SECTION 11. This Act takes effect September 1, 2003.