This website will be unavailable from Friday, April 26, 2024 at 6:00 p.m. through Monday, April 29, 2024 at 7:00 a.m. due to data center maintenance.
79R9308 YDB-D
By: West, Royce S.B. No. 1097
A BILL TO BE ENTITLED
AN ACT
relating to the operation of video lottery games as part of the
state lottery in municipalities or counties in which the voters
have approved the operation of the games; providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. It is the intent of the legislature that a local
option election to authorize the operation of video lottery games
as part of the state lottery in a county or municipality may not be
held, and that video lottery games may not be conducted under this
Act, unless and until the voters of this state have approved the
constitutional amendment authorizing the operation of video
lottery games on behalf of the state by persons licensed to operate
video lottery games in counties or municipalities in which the
voters have approved the operation of the games.
SECTION 2. Subtitle E, Title 4, Government Code, is amended
by adding Chapter 466A to read as follows:
CHAPTER 466A. VIDEO LOTTERY
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 466A.001. DEFINITIONS. In this chapter:
(1) "Commission" means the Texas Lottery Commission.
(2) "Division" means the lottery division established
by the commission under Chapter 467.
(3) "Video lottery" means the conduct of video lottery
games as part of the state lottery as authorized under this chapter.
(4) "Video lottery game" means any game of chance,
including a game of chance in which the outcome may be partially
determined by skill or ability, that for consideration may be
played by an individual on an electronic machine or video display.
(5) "Video lottery retailer" means a person licensed
under this chapter to conduct video lottery.
(6) "Video lottery technology provider" means a
person licensed under this chapter to provide video lottery
equipment and services.
[Sections 466A.002-466A.050 reserved for expansion]
SUBCHAPTER B. ADMINISTRATION
Sec. 466A.051. POWERS AND DUTIES OF COMMISSION AND
EXECUTIVE DIRECTOR. (a) The commission and the executive director
of the commission have broad authority and shall exercise strict
control and close supervision over video lottery games operated in
this state under this chapter to promote and ensure integrity,
security, honesty, and fairness in the conduct and administration
of video lottery.
(b) The executive director may contract with or employ a
person to perform a function, activity, or service in connection
with video lottery as prescribed by the executive director.
Sec. 466A.052. RULES. The commission shall adopt all rules
necessary to conduct or supervise video lottery, administer this
chapter, and provide security for video lottery.
Sec. 466A.053. ANNUAL REPORT. The commission shall file an
annual report with the governor, the comptroller, and the
legislature that summarizes video lottery revenues, prize
disbursements, and other expenses for the state fiscal year
preceding the report. The report must be in the form and reported
in the time provided by the General Appropriations Act.
Sec. 466A.054. INVESTIGATIONS. In addition to other state
or local officials, the attorney general may investigate a
violation or alleged violation of:
(1) this chapter by any person; or
(2) the penal laws of this state in connection with the
conduct or administration of video lottery by the commission or its
personnel, a video lottery retailer, or a video lottery technology
provider.
[Sections 466A.055-466A.100 reserved for expansion]
SUBCHAPTER C. LICENSE AND CONTRACT REQUIREMENTS
Sec. 466A.101. RESTRICTIONS ON VIDEO LOTTERY. (a) A person
may not conduct video lottery in this state unless the person is a
video lottery retailer that conducts the video lottery on property
owned or leased by the retailer that is located in territory in
which the operation of video lottery games is authorized under
Subchapter E.
(b) A person may not provide video lottery technology for
use in this state unless the person holds a license as a video
lottery technology provider.
(c) A person may not conduct a video lottery game in this
state unless:
(1) the commission owns a proprietary interest in the
game software or other intellectual property component of the game;
(2) the type of game is approved for use by the
commission; and
(3) the machine on which the game is played is actively
linked to and controlled by the commission's video lottery central
computer system.
Sec. 466A.102. VIDEO LOTTERY CENTRAL COMPUTER SYSTEM. The
commission shall establish and maintain a video lottery central
computer system to link all video lottery machines operated under
this chapter to provide the information, control, and security
measures required by the commission.
Sec. 466A.103. VIDEO LOTTERY RETAILER LICENSE. (a) On
application, the commission may issue a video lottery retailer
license to a person selected by the commission who is not ineligible
to hold the license under another provision of this chapter or
commission rule.
(b) A person that holds a license issued under this section
may operate video lottery games in accordance with this chapter and
commission rules at a location approved by the commission that is
located in territory in which the operation of video lottery games
is authorized under Subchapter E.
(c) The commission by rule may establish the minimum
qualifications for a person to hold a video lottery retailer
license under this section. The commission shall establish those
qualifications as the commission determines appropriate to
maximize revenues from the lottery to support public education and
serve the convenience of persons wishing to play video lottery
games consistent with the health and safety of the public.
Sec. 466A.104. VIDEO LOTTERY TECHNOLOGY PROVIDER LICENSE.
(a) The commission shall issue a video lottery technology provider
license to an eligible person with resources and technology the
commission determines to be compatible with the video lottery
central computer system to provide video lottery equipment and
services to video lottery retailers conducting video lottery under
this chapter.
(b) A person licensed as a video lottery technology provider
may not provide video lottery technology or equipment to any person
without the consent of the commission.
(c) The commission by rule may establish the minimum
qualifications for a video lottery technology provider license.
The commission shall establish those qualifications as the
commission determines appropriate to promote a competitive market
for video lottery goods and services and the availability of
reliable video lottery equipment and services to the commission and
to video lottery retailers conducting video lottery games under
this chapter, consistent with the health and safety of the public.
Sec. 466A.105. DISCIPLINARY ACTION. (a) The commission
may refuse to issue a license or may revoke, suspend, or refuse to
renew a license or may reprimand a license holder for a violation of
this chapter, other state law, or a rule of the commission.
(b) If the commission proposes to take action under
Subsection (a), the person is entitled to notice and a hearing.
(c) The commission may place on probation subject to
reasonable conditions a person whose license is suspended.
(d) The commission may summarily suspend a license issued
under this chapter in the manner prescribed by Section 466.160 if
the commission determines that the action is necessary to maintain
the integrity, security, or fairness of video lottery operations.
(e) The commission by rule shall develop a system for
monitoring a license holder's compliance with this chapter.
(f) The commission shall adopt the rules and procedures
necessary to administer this section.
[Sections 466A.106-466A.150 reserved for expansion]
SUBCHAPTER D. REVENUE
Sec. 466A.151. DIVISION OF REVENUE OF VIDEO LOTTERY
RETAILER. (a) At the times and in the manner prescribed by
commission rule, a video lottery retailer shall pay to the
commission __ percent of the net terminal income derived from video
lottery games operated by the retailer.
(b) The remainder of the net terminal income shall be
retained by the video lottery retailer.
Sec. 466A.152. STATE VIDEO LOTTERY ACCOUNT. (a) The state
video lottery account is a special account in the general revenue
fund. The account consists of all revenue received by the
commission from video lottery, fees received under this chapter,
and all money credited to the account from any other fund or source
under law.
(b) Money in the state video lottery account may be used
only:
(1) for the payment of costs incurred in the operation
and administration of video lottery;
(2) for the payment of prizes for video lottery
winners; and
(3) for transfer to the general revenue fund.
(c) The comptroller shall maintain a reserve in the fund
sufficient to pay the amounts necessary or estimated to be
necessary for the purposes provided by Subsections (b)(1) and (2).
The remaining money in the fund shall be transferred to the general
revenue fund at least monthly.
[Sections 466A.153-466A.200 reserved for expansion]
SUBCHAPTER E. AUTHORIZATION OF VIDEO LOTTERY
BY LOCAL OPTION
Sec. 466A.201. LOCAL OPTION ELECTION ORDER. On receipt of a
petition calling for an election under this subchapter, the
commissioners court of a county in which the operation of video
lottery games is not currently authorized in all parts of the county
or the governing body of a municipality in which the operation of
video lottery games is not currently authorized shall order an
election on whether to authorize the operation of video lottery
games as part of the state lottery in the county or municipality.
Sec. 466A.202. PETITION FOR ELECTION. (a) A petition
calling for a local option election described by Section 466A.201
must contain:
(1) a heading that includes the following words:
"Petition for a Local Option Election to Authorize the Operation of
Video Lottery Games"; and
(2) a statement of the issue to be voted on, in the
following words: "Authorizing the operation of video lottery games
as part of the state lottery in _________ (insert name of county or
municipality)."
(b) The petition must be signed by a number of registered
voters of the county or municipality, as applicable, equal to not
less than five percent of the number of votes cast in the county or
municipality for all candidates for governor in the most recent
gubernatorial general election.
(c) Not later than the 40th day after the date the
commissioners court or governing body receives the petition, the
county or municipal clerk shall determine whether the petition is
valid and shall certify that determination to the commissioners
court or governing body.
Sec. 466A.203. ELECTION; AUTHORIZATION OF VIDEO LOTTERY.
(a) If the county or municipal clerk certifies that a petition
submitted under Section 466A.202 is valid, the commissioners court
or governing body at its next regular session after the
certification shall order an election to be held in the county or
municipality on the next uniform election date authorized by
Section 41.001, Election Code, that occurs at least 65 days after
the date of the order and that affords enough time to hold the
election in the manner required by law.
(b) The ballot shall be printed to permit voting for or
against the proposition: "Authorizing the operation of video
lottery games as part of the state lottery in _________ (insert name
of county or municipality)." If the election is to be held in a
county in which is located territory of one or more municipalities
in which the approval of video lottery games by the voters of the
county will not apply as provided by Subsection (d), the
proposition shall include the phrase "other than in _________
(insert name of municipality or municipalities)."
(c) If a majority of the votes cast in the election favor the
proposition, the operation of video lottery games is authorized in
the county or municipality, other than as provided by Subsection
(d), and the commissioners court or governing body shall certify
that fact to the secretary of state not later than the 10th day
after the date the returns are canvassed. The secretary of state
shall promptly notify the commission on receipt of the
certification.
(d) In a county in which the operation of video lottery
games is approved by the voters in an election under this section,
the approval does not apply to territory located in a municipality
in which an election has previously been held under this section in
which a majority of the voters voting in the election did not favor
a proposition authorizing the operation of video lottery games.
[Sections 466A.204-466A.250 reserved for expansion]
SUBCHAPTER F. OFFENSES; PENALTIES
Sec. 466A.251. MANIPULATION OR TAMPERING. (a) A person
commits an offense if the person intentionally or knowingly
manipulates the outcome of a video lottery game, the amount of a
video lottery game prize, or the operation of a video lottery
machine by physical, electronic, or other means, other than in
accordance with commission rules.
(b) An offense under this section is a felony of the third
degree.
Sec. 466A.252. SALE OF VIDEO LOTTERY GAME TO PERSON YOUNGER
THAN 18 YEARS OF AGE. (a) A video lottery retailer or an employee
or agent of a video lottery retailer commits an offense if the
person intentionally or knowingly:
(1) sells or offers to sell a play of a video lottery
game to an individual the person knows is younger than 18 years of
age or permits the individual to purchase a play of a video lottery
game; or
(2) pays money or issues a video credit slip or other
winnings for a play of a video lottery game to an individual the
person knows is younger than 18 years of age.
(b) An individual who is younger than 18 years of age
commits an offense if the individual:
(1) purchases a play of a video lottery game;
(2) accepts money, a video credit slip, or other
payment of winnings for play of a video lottery game; or
(3) falsely represents the individual to be 18 years
of age or older by displaying evidence of age that is false or
fraudulent or misrepresents in any way the individual's age in
order to purchase a play of a video lottery game.
(c) An offense under Subsection (a) is a Class B
misdemeanor.
(d) An offense under Subsection (b) is a misdemeanor
punishable by a fine not to exceed $250.
Sec. 466A.253. ADMINISTRATIVE PENALTY. The commission may
impose an administrative penalty against a person licensed under
this chapter who violates this chapter or a rule or order adopted
under this chapter.
Sec. 466A.254. CIVIL PENALTY. (a) A person who violates
this chapter or a rule adopted by the commission under this chapter
is liable to the state for a civil penalty not to exceed $5,000 for
each day of violation.
(b) At the request of the commission, the attorney general
shall bring an action to recover a civil penalty authorized by this
section.
SECTION 3. Section 466.024(b), Government Code, is amended
to read as follows:
(b) The commission shall adopt rules prohibiting the
operation of any game using a video lottery machine or machine,
except in accordance with Chapter 466A.
SECTION 4. Section 47.02(c), Penal Code, is amended to read
as follows:
(c) It is a defense to prosecution under this section that
the actor reasonably believed that the conduct:
(1) was permitted under Chapter 2001, Occupations
Code;
(2) was permitted under Chapter 2002, Occupations
Code;
(3) consisted entirely of participation in:
(A) the state lottery authorized by [the State
Lottery Act (]Chapter 466, Government Code[)]; or
(B) state video lottery authorized by Chapter
466A, Government Code;
(4) was permitted under the Texas Racing Act (Article
179e, Vernon's Texas Civil Statutes); or
(5) consisted entirely of participation in a drawing
for the opportunity to participate in a hunting, fishing, or other
recreational event conducted by the Parks and Wildlife Department.
SECTION 5. Section 47.09, Penal Code, is amended by
amending Subsection (a) and adding Subsection (c) to read as
follows:
(a) It is a defense to prosecution under this chapter that
the conduct:
(1) was authorized under:
(A) Chapter 2001, Occupations Code;
(B) Chapter 2002, Occupations Code; or
(C) the Texas Racing Act (Article 179e, Vernon's
Texas Civil Statutes);
(2) consisted entirely of participation in the state
lottery authorized by Chapter 466, Government Code, or in state
video lottery authorized by Chapter 466A, Government Code; or
(3) was a necessary incident to the operation of the
state lottery or state video lottery and was directly or indirectly
authorized by:
(A) Chapter 466 or 466A, Government Code;
(B) the lottery division of the Texas Lottery
Commission;
(C) the Texas Lottery Commission; or
(D) the director of the lottery division of the
Texas Lottery Commission.
(c) Subsection (a)(3) applies to a person manufacturing,
possessing, or operating a gambling device under a license or other
authorization of the Texas Lottery Commission under Chapter 466A,
Government Code, or under a contract entered into with the
commission under that chapter.
SECTION 6. Chapter 47, Penal Code, is amended by adding
Section 47.095 to read as follows:
Sec. 47.095. INTERSTATE OR FOREIGN COMMERCE DEFENSE. It is
a defense to prosecution under this chapter that a person sells,
leases, transports, possesses, stores, or manufactures a gambling
device with the authorization of the Texas Lottery Commission under
Chapter 466A, Government Code, for transportation in interstate or
foreign commerce.
SECTION 7. (a) As soon as practicable after the effective
date of this Act, the Texas Lottery Commission shall adopt the rules
necessary to implement video lottery in accordance with Chapter
466A, Government Code, as added by this Act.
(b) The commission may adopt initial rules for purposes of
implementing video lottery in accordance with Chapter 466A,
Government Code, as added by this Act, that expire not later than
May 1, 2007. Chapter 2001, Government Code, does not apply to the
adoption of those rules. This subsection expires June 1, 2007.
SECTION 8. The change in law made by this Act applies only
to an offense committed on or after the effective date of this Act.
An offense committed before the effective date of this Act is
covered by the law in effect when the offense was committed, and the
former law is continued in effect for that purpose. For purposes of
this section, an offense was committed before the effective date of
this Act if any element of the offense was committed before that
date.
SECTION 9. This Act takes effect on the date the
constitutional amendment proposed by the 79th Legislature, Regular
Session, 2005, authorizing the operation of video lottery games on
behalf of the state by persons licensed to operate video lottery
games in counties or municipalities in which the voters have
approved the operation of the games takes effect. If that amendment
is not approved by the voters, this Act has no effect.