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