By: Kuempel H.B. No. 4237
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the authorization, licensing, and regulation of casino
  gaming in this state and the creation, powers, and duties of the
  Texas Gaming Commission; imposing and authorizing administrative
  and civil penalties; imposing a tax; imposing and authorizing fees;
  requiring occupational licenses; creating criminal offenses;
  making an appropriation.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Title 13, Occupations Code, is amended by adding
  Subtitle E to read as follows:
  SUBTITLE E. CASINO GAMING REGULATED BY TEXAS GAMING COMMISSION
  CHAPTER 2201. GENERAL PROVISIONS; TEXAS GAMING COMMISSION
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 2201.001.  DEFINITIONS. In this subtitle:
               (1)  "Affiliate" means a person who, directly or
  indirectly through one or more intermediaries, controls, is
  controlled by, or is under common control with another person.  A
  person is considered to control a company if the person
  beneficially owns more than a five percent equity interest in the
  company under the beneficial ownership rules adopted by the
  commission.
               (2)  "Applicant" means a person who has applied for a
  casino owner's license, a casino operator's license, an
  occupational license, a manufacturer's license, a casino service
  license, or a qualification to hold an equity interest in a casino
  owner license holder who has applied for the approval of any act or
  transaction for which approval is required or allowed under this
  subtitle.
               (3)  "Associated equipment" means any equipment,
  including a mechanical, electromechanical, or electronic
  contrivance, component, or machine, used in connection with gaming
  or with any game that would not otherwise be classified as a gaming
  device. The term includes dice, playing cards, links connecting
  progressive slot machines, equipment affecting the proper
  reporting of gross gaming revenue, computerized systems or software
  for monitoring slot machines, and devices for weighing or counting
  money.
               (4)  "Casino" means a facility at which gambling games
  are conducted for profit, as authorized by Chapters 2202 and 2203.
               (5)  "Casino gaming," "casino game," or "gambling
  game":
                     (A)  means any game or similar activity that
  involves the making of a bet, as defined by Section 47.01, Penal
  Code, for consideration and includes a banking or percentage game
  played with cards, dice, or a mechanical, electromechanical, or
  electronic device or machine for money, property, checks, credit,
  or a representative of value, including table games such as
  roulette, keno, twenty-one, blackjack, craps, poker, chuck-a-luck
  (dai shu), wheel of fortune, chemin de fer, baccarat, pai gow, slot
  machine, any other electronic game of chance, and any other table
  game or device approved by the commission; and
                     (B)  does not include:
                           (i)  bingo authorized under Chapter 2001;
                           (ii)  charitable raffles authorized under
  Chapter 2002;
                           (iii)  the state lottery conducted under
  Chapter 466, Government Code; or
                           (iv)  the making of a bet that:
                                 (a)  occurs in a private place, as
  defined by Section 47.01, Penal Code;
                                 (b)  in connection with, no person
  receives any economic benefit other than personal winnings; and
                                 (c)  except for the advantage of skill
  or luck, involves risks of losing and chances of winning that are
  the same for all participants.
               (6)  "Casino operator" means a person other than the
  casino owner license holder who contractually agrees to provide
  operational and managerial services for the operation of a casino
  on behalf of the casino owner license holder in return for receiving
  a payment based wholly or partly on profits or receipts from the
  casino.
               (7)  "Casino operator's license" or "operator's
  license" means a license issued under Section 2202.101.
               (8)  "Casino owner's license" or "owner's license"
  means a license issued under Section 2202.052.
               (9)  "Casino service" means the provision of goods or
  services, including security service and gaming schools, to a
  person holding a casino owner's or operator's license under this
  subtitle, other than a service requiring a manufacturer's license.
               (10)  "Casino service license" means a license issued
  under Section 2202.152.
               (11)  "Commission" means the Texas Gaming Commission.
               (12)  "Company" means a corporation, partnership,
  limited partnership, trust, association, joint stock company,
  joint venture, limited liability company, or other form of business
  organization. The term does not include a sole proprietorship or
  natural person.
               (13)  "Destination resort" means a mixed-use
  development consisting of a combination of various tourism
  amenities and facilities, including hotels, restaurants, meeting
  facilities, attractions, entertainment facilities, shopping
  centers, and casino gaming facilities.
               (14)  "Director" means a member of the board of
  directors of a corporation and a person performing similar
  functions with respect to a company other than a corporation.
               (15)  "Equity interest" means a proprietary interest,
  right, or claim allowing the holder to vote with respect to matters
  of organizational governance or participate in the profits and
  residual assets of a company, including common and preferred stock
  in a corporation, a general or limited partnership interest in a
  partnership, a similar interest in any other form of business
  organization, and a warrant, right, or similar interest to
  subscribe for a proprietary right or claim or that is convertible
  into a proprietary right or claim, with or without the payment of
  additional consideration.
               (16)  "Executive director" means the executive
  director of the commission.
               (17)  "Gaming agreement" means an agreement authorized
  under Chapter 2202 or 2203 between this state and a federally
  recognized Indian tribe with Indian lands in this state under which
  this state allows the tribe to conduct limited gaming activities
  authorized under Chapter 2202 or 2203 or applicable federal law.
               (18)  "Gaming-related business" means any business
  engaged in the service or support of gaming activities regulated
  under this subtitle or commission rule.
               (19)  "Gaming device" means a mechanical,
  electromechanical, or electronic contrivance, component, or
  machine used in connection with casino gaming or a gambling game
  that affects the result of a wager by determining win or loss. The
  term includes a system for processing information that can alter
  the normal criteria of random selection, affect the operation of a
  game, or determine the outcome of a game.
               (20)  "Gaming employee":
                     (A)  means an individual directly involved in the
  operation or conduct of casino gaming in a casino performing a
  service in a capacity that the commission finds appropriate for
  occupational licensing under Section 2202.102 and includes:
                           (i)  a boxman, a cashier, change personnel,
  counting room personnel, a dealer, a floor person, a host empowered
  to extend credit or complimentary services, a keno runner, a keno
  writer, a machine mechanic, or security personnel;
                           (ii)  a shift or pit boss or a supervisor or
  manager involved in gaming activities;
                           (iii)  accounting or internal auditing
  personnel directly involved in recordkeeping or the examination of
  records generated from gaming activities; and
                           (iv)  a junketeer or other independent agent
  whose compensation is based on the amount of money a patron wagers
  or loses or who is paid per patron more than the price of admission;
  and
                     (B)  does not include bartenders, cocktail
  waitresses, or other individuals engaged exclusively in preparing
  or serving food or beverages or individuals providing nominal,
  complimentary, or maintenance services.
               (21)  "Gaming position" means a designated place for a
  person to engage in casino gaming at a table game or slot machine.
               (22)  "Gross gaming revenue":
                     (A)  means the total amount of the following, less
  the sum of all money paid as losses to patrons, the amounts paid to
  purchase from independent financial institutions annuities to fund
  losses paid to patrons, and the items made deductible as losses
  under Section 2202.303:
                           (i)  money paid to an owner license holder
  from players of gambling games;
                           (ii)  money received by an owner license
  holder in payment for credit extended by the owner license holder to
  a patron for the purposes of gaming; and
                           (iii)  compensation received by an owner
  license holder for conducting any gambling game in which the
  license holder is not a party to a wager; and
                     (B)  does not include:
                           (i)  counterfeit money or tokens;
                           (ii)  coins of other countries that are
  received in slot machines or gaming devices;
                           (iii)  cash taken in fraudulent acts
  perpetrated against an owner's license holder for which the holder
  is not reimbursed; or
                           (iv)  cash received as entry fees for
  contests or tournaments in which the patrons compete for prizes.
               (23)  "Hearing examiner" means a person authorized by
  the commission to conduct hearings.
               (24)  "Indian lands" means land that was held in trust
  by the United States on January 1, 1998, for the benefit of the
  Indian tribe pursuant to the Ysleta del Sur Pueblo and Alabama and
  Coushatta Indian Tribes of Texas Restoration Act (Pub. L.
  No. 100-89) or on which gaming is permitted under the Indian Gaming
  Regulatory Act (18 U.S.C. Section 1166 et seq. and 25 U.S.C. Section
  2701 et seq.).
               (25)  "Institutional investor" means a person, other
  than a state or federal government pension plan, that meets the
  requirements of a qualified institutional buyer, as that term is
  defined by 17 C.F.R. Section 230.144A and is:
                     (A)  a bank as defined by Section 3(a)(6),
  Securities Exchange Act of 1934 (15 U.S.C. Section 78c);
                     (B)  an insurance company as defined by Section
  2(a)(17), Investment Company Act of 1940 (15 U.S.C. Section 80a-2);
                     (C)  an investment company registered under
  Section 8, Investment Company Act of 1940 (15 U.S.C. Section
  80a-8);
                     (D)  an investment adviser registered under
  Section 203, Investment Advisers Act of 1940 (15 U.S.C. Section
  80b-3);
                     (E)  a collective trust fund as defined by Section
  3(c)(11), Investment Company Act of 1940 (15 U.S.C. Section 80a-3);
                     (F)  an employee benefit plan or pension fund that
  is subject to the Employee Retirement Income Security Act of 1974
  (29 U.S.C. Section 1001 et seq.), excluding an employee benefit
  plan or pension fund sponsored by a publicly traded corporation
  registered with the commission;
                     (G)  a state or federal government pension plan;
                     (H)  a group composed entirely of persons
  specified in Paragraphs (A)-(G); or
                     (I)  any other person the commission determines
  for reasons consistent with the policies expressed in Section
  2202.001.
               (26)  "Key executive" means a corporation's directors
  and executive officers, a partnership's general partners, a trust's
  trustee, a joint venture's managing venturers, and each person
  possessing similar responsibilities and authorities in any other
  form of business organization.
               (27)  "License holder" means a person who holds a
  license issued by the commission.
               (28)  "Limited casino gaming" means casino gaming in a
  licensed facility such as a Class II or Class III casino that is
  limited to not more than 1250 gaming positions, of which not more
  than 25 percent may be at table games.
               (29)  "Manufacturer's license" means a license issued
  under Section 2202.151.
               (30)  "Metropolitan statistical area" means a
  metropolitan statistical area designated by the United States
  Office of Management and Budget.
               (31)  "Credit instrument" means a writing that
  evidences a gaming debt owed to a casino owner license holder at the
  time the debt is created, and includes any writing taken in
  consolidation, redemption, or payment of a previous credit
  instrument.
               (32)  "Occupational license" means a license issued
  under Section 2202.102.
               (33)  "Pari-mutuel wagering" has the meaning assigned
  by Section 2021.003.
               (34)  "Player" means a person who contributes any part
  of the consideration to play a gambling game. Consideration does
  not include a separate fee payable in order to wager.
               (35)  "Principal manager" means a person who, as
  determined under the rules of the commission, holds or exercises
  managerial, supervisory, or policy-making authority over the
  management or operation of a gaming activity or casino service that
  in the judgment of the commission warrants the occupational
  licensing as a principal manager for the protection of the public
  interest. The term includes a key executive of a license holder that
  is a company.
               (36)  "Slot machine" means a mechanical, electrical, or
  other device or machine that, on insertion of a coin, token, or
  similar object or on payment of consideration, is available to play
  or operate, the play or operation of which, wholly or partly by the
  element of chance, may entitle the player operating the machine to
  receive or deliver to the player a payment for winnings in the form
  of cash, premiums, merchandise, tokens, or any other thing of
  value. The term 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.
               (37)  "Sports event" means:
                     (A)  a football, basketball, baseball, or similar
  game;
                     (B)  a boxing or martial arts match;
                     (C)  a horse or dog race on which pari-mutuel
  wagering is authorized by law; or
                     (D)  any other event designated by the commission.
         Sec. 2201.002.  APPLICATION OF SUNSET ACT. (a) The Texas
  Gaming Commission is subject to Chapter 325, Government Code (Texas
  Sunset Act). Unless continued in existence as provided by that
  chapter, the commission is abolished September 1, 2031.
         (b)  On the date the commission is abolished under Subsection
  (a), the following statutes are repealed:
               (1)  this chapter;
               (2)  Chapter 2202; and
               (3)  Chapter 2203.
         Sec. 2201.003.  REFERENCES TO LICENSE INCLUDE CERTIFICATE OF
  REGISTRATION, FINDING OF SUITABILITY, OR OTHER APPROVAL.  A
  reference in this subtitle to a license applies to a certificate of
  registration, finding of suitability, or other affirmative
  regulatory approval provided under this subtitle, other law, or
  commission rule, unless otherwise expressly provided by this
  subtitle, another state or federal law, or commission rule.
         Sec. 2201.004.  EXEMPTION FROM TAXATION. A political
  subdivision of this state may not impose:
               (1)  a tax on the payment of a prize under Chapter 2203;
               (2)  a tax, fee, or other assessment on consideration
  paid to play a gambling game authorized by this subtitle; or
               (3)  a tax or fee on attendance at or admission to a
  casino authorized by this subtitle unless specifically authorized
  by statute.
  SUBCHAPTER B. TEXAS GAMING COMMISSION
         Sec. 2201.051.  COMMISSION; MEMBERSHIP. (a) The Texas
  Gaming Commission is composed of five members appointed by the
  governor with the advice and consent of the senate.
         (b)  Appointments to the commission shall be made without
  regard to race, color, disability, sex, religion, age, or national
  origin.
         Sec. 2201.052.  QUALIFICATIONS OF COMMISSION MEMBERS. To be
  eligible for appointment to the commission, a person:
               (1)  must be a citizen of the United States;
               (2)  must have resided in this state for the two years
  preceding the date of the person's appointment;
               (3)  must submit a financial statement that contains
  the information required by Chapter 572, Government Code;
               (4)  may not own a financial or other interest in an
  entity engaged in the conduct of casino gaming or the provision of
  casino services, or in a security issued by that entity, or be
  related within the second degree by affinity or the third degree by
  consanguinity, as determined under Chapter 573, Government Code, to
  an individual who owns such a financial or other interest or
  security;
               (5)  may not be an applicant for or holder of a license
  under a law administered by the commission or hold an equity
  interest in an owner license holder requiring qualification under
  Section 2202.060;
               (6)  may not be a member of the governing body of a
  political subdivision of this state; and
               (7)  may not hold an elective office or be an officer or
  official of a political party.
         Sec. 2201.053.  MEMBERSHIP AND EMPLOYEE RESTRICTIONS. (a)
  In this section, "Texas trade association" means a cooperative and
  voluntarily joined association of business or professional
  competitors in this state designed to assist its members and its
  industry or profession in dealing with mutual business or
  professional problems and in promoting their common interest.
         (b)  A person may not be a commission member or an employee of
  the commission employed in a "bona fide executive, administrative,
  or professional capacity," as that phrase is used for purposes of
  establishing an exemption to the overtime provisions of the federal
  Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.) if:
               (1)  the person is an officer, employee, manager, or
  paid consultant of a Texas trade association in the field of gaming;
  or
               (2)  the person's spouse is an officer, manager, or paid
  consultant of a Texas trade association in the field of gaming.
         (c)  A person may not be a commission member or act as general
  counsel to the commission if the person is required to register as a
  lobbyist under Chapter 305, Government Code, because of the
  person's activities for compensation on behalf of a profession
  related to the operation of the commission.
         Sec. 2201.054.  TERMS; VACANCIES. (a) Members of the
  commission serve staggered six-year terms, with the term or terms
  of one or two members expiring February 1 of each odd-numbered year.
         (b)  The governor shall fill a vacancy in a position on the
  commission for the remainder of the unexpired term.
         Sec. 2201.055.  PRESIDING OFFICER. The governor shall
  designate a commission member as presiding officer of the
  commission to serve in that capacity at the pleasure of the
  governor.
         Sec. 2201.056.  MEETINGS; OFFICIAL RECORD. (a) The
  commission shall meet not less than six times each year.
         (b)  The commission may meet at other times at the call of the
  presiding officer or as provided by commission rule.
         (c)  The commission shall keep an official record of all
  commission meetings and proceedings.
         Sec. 2201.057.  GROUNDS FOR REMOVAL. (a) It is a ground for
  removal from the commission that a member:
               (1)  does not have at the time of taking office the
  qualifications required by Section 2201.052;
               (2)  does not maintain during service on the commission
  the qualifications required by Section 2201.052;
               (3)  is ineligible for membership under Section
  2201.053;
               (4)  cannot, because of illness or disability,
  discharge the member's duties for a substantial part of the member's
  term; or
               (5)  is absent from more than half of the regularly
  scheduled commission meetings that the member is eligible to attend
  during a calendar year without an excuse approved by a majority vote
  of the commission.
         (b)  The validity of an action of the commission is not
  affected by the fact that it is taken when a ground for removal of a
  commission member exists.
         (c)  If the executive director or any other commission member
  has knowledge that a potential ground for removal of a commission
  member exists, the executive director shall notify the presiding
  officer of the commission of the potential ground for removal. The
  presiding officer shall then notify the governor and the attorney
  general that a potential ground for removal exists. If the
  potential ground for removal involves the presiding officer, the
  executive director shall notify the other commission members, the
  governor, and the attorney general that a potential ground for
  removal exists.
         Sec. 2201.058.  TRAINING. (a) A person who is appointed to
  and qualifies for office as a commission member may not vote,
  deliberate, or be counted as a member in attendance at a meeting of
  the commission until the person completes a training program that
  complies with this section.
         (b)  The training program must provide the person with
  information regarding:
               (1)  this subtitle and other laws related to casino
  gaming or gambling regulated by the commission;
               (2)  the commission's programs, functions, rules, and
  budget;
               (3)  the results of the most recent formal audit of the
  commission;
               (4)  the requirements of laws relating to open
  meetings, public information, administrative procedure, and
  conflict of interest; and
               (5)  any applicable ethics policies adopted by the
  commission or the Texas Ethics Commission.
         (c)  A person appointed to the commission is entitled to
  reimbursement, as provided by the General Appropriations Act, for
  travel expenses incurred in attending the training program
  regardless of whether the attendance at the program occurs before
  or after the person qualifies for office.
         Sec. 2201.059.  QUALIFICATIONS AND STANDARDS OF CONDUCT
  INFORMATION. The executive director or the executive director's
  designee shall provide to commission members, as often as
  necessary, information regarding their:
               (1)  qualifications for office under this chapter; and
               (2)  responsibilities under applicable laws relating
  to standards of conduct for state officers.
         Sec. 2201.060.  BOND. (a) Before assuming the duties of
  office, a commission member must execute a bond in the amount of
  $25,000 payable to the state and conditioned on the member's
  faithful performance of the member's duties of office.
         (b)  The bond must be approved by the governor.
         (c)  The cost of the bond shall be paid by the commission.
         Sec. 2201.061.  PROHIBITION OF CERTAIN ACTIVITIES. (a) A
  commission member may not:
               (1)  use the member's official authority to affect the
  result of an election or nomination for public office; or
               (2)  directly or indirectly coerce, attempt to coerce,
  command, or advise a person to pay, lend, or contribute anything of
  value to another person for political purposes.
         (b)  A commission member or the parent, spouse, or child of a
  commission member may not solicit or accept employment from a
  license holder under a law administered by the commission or from an
  applicant for a license before the second anniversary of the date
  the commission member's service on the commission ends.
         Sec. 2201.062.  APPLICATION OF FINANCIAL DISCLOSURE LAW.
  For purposes of Chapter 572, Government Code, a commission member
  and the executive director are appointed officers of a major state
  agency.
         Sec. 2201.063.  PER DIEM; EXPENSES. (a) A commission member
  is entitled to:
               (1)  a per diem in an amount prescribed by
  appropriation for each day spent in performing the duties of the
  member; and
               (2)  reimbursement for actual and necessary expenses
  incurred in performing those duties.
         (b)  Reimbursement for expenses under this section is
  subject to any applicable limitation in the General Appropriations
  Act.
         Sec. 2201.064.  EXECUTIVE DIRECTOR. (a) The commission
  shall appoint an executive director, who serves at the pleasure of
  the commission.
         (b)  A person is not eligible for appointment as executive
  director if the person:
               (1)  holds an elective office or is an officer or
  official of a political party; or
               (2)  is required to register as a lobbyist under
  Chapter 305, Government Code, because of the person's activities
  for compensation on behalf of a profession related to the operation
  of the commission.
         (c)  The executive director must have five or more years of
  responsible administrative experience in public or business
  administration or possess broad management skills.
         (d)  The executive director may not pursue any other business
  or occupation or hold any other office for profit.
         (e)  The executive director must meet all eligibility
  requirements relating to commission members, except the
  requirement for prior residency in this state.
         (f)  The executive director is entitled to an annual salary
  and other compensation specified by the commission.
         (g)  The executive director or the parent, spouse, or child
  of the executive director may not, before the second anniversary of
  the date the director's service to the commission ends, acquire a
  direct or indirect interest in or be employed by an entity licensed
  or registered by the commission in connection with the conduct of
  gaming or the provision of casino services in this state.
         Sec. 2201.065.  OFFICES. The commission shall maintain its
  primary office in Travis County and may maintain other offices
  determined to be necessary by the commission.
         Sec. 2201.066.  AUTHORITY TO SUE OR BE SUED; VENUE FOR CIVIL
  SUITS. (a) Subject to Section 2202.360, the commission may sue and
  be sued.
         (b)  Service of process in a suit against the commission may
  be secured by serving the executive director.
         (c)  A suit against the commission must be brought in Travis
  County.
         Sec. 2201.067.  AUDIT. The transactions of the commission
  are subject to audit by the state auditor under Chapter 321,
  Government Code.
  SUBCHAPTER C. POWERS AND DUTIES OF COMMISSION
         Sec. 2201.101.  GENERAL POWERS AND DUTIES. (a) The
  commission has broad authority and shall exercise strict control
  and close supervision over all activities authorized and conducted
  in this state under a law administered by the commission.
         (b)  The commission shall ensure that all gambling games,
  other casino gaming activities, and other gambling subject to the
  oversight or regulatory authority of the commission are conducted
  fairly and in compliance with the law.
         (c)  The commission also has the powers and duties granted
  under Chapters 2202 and 2203.
         (d)  All aspects of this subtitle and other laws administered
  by the commission, including those relating to licensing,
  qualification, execution, and enforcement, shall be administered
  by the executive director and the commission for the protection of
  the public and in the public interest.
         (e)  The commission and the executive director have full
  power and authority to hold hearings and, in connection with the
  hearings, to issue subpoenas, to compel the attendance of witnesses
  at any place in this state, to administer oaths, and to require
  testimony under oath. Any process or notice relating to a hearing
  may be served in the manner provided for service of process and
  notices in civil actions. The commission and the executive
  director may pay transportation and other expenses of witnesses as
  they consider reasonable.
         (f)  The executive director and the executive director's
  authorized employees may:
               (1)  inspect and examine a premises where casino gaming
  or other gambling regulated by the commission is conducted or
  equipment or supplies, including an electronic or other gaming
  device, or associated equipment is manufactured, assembled,
  produced, programmed, sold, leased, marketed, distributed,
  repaired, or modified for use in gaming;
               (2)  for good cause, seize and remove from a premises
  and impound equipment or supplies for the purpose of examination
  and inspection; and
               (3)  demand access to, inspect, examine, photocopy, or
  audit papers, books, and records of applicants and license and
  certificate holders, on their premises or elsewhere as practicable,
  in the presence of the applicant or license holder or the
  applicant's or license holder's agent, that report the gross income
  produced by a gaming-related business, verify the gross income, or
  affect other matters on the enforcement of this subtitle or other
  law administered by the commission.
         (g)  For the purpose of conducting audits after the cessation
  of casino gaming by a license holder, a former license holder shall
  furnish, on demand of the executive director or the executive
  director's authorized employees, books, papers, and records as
  necessary to conduct the audits. The former license holder shall
  maintain all books, papers, and records necessary for audits for
  three years after the date of the surrender or revocation of the
  license and is responsible for the costs incurred by the commission
  in the conduct of an audit under this section. If the former license
  holder seeks judicial review of a deficiency determination or files
  a petition for a redetermination, the former license holder must
  maintain all books, papers, and records until a final order is
  entered on the determination.
         (h)  The commission shall contract with at least one
  independent testing laboratory to scientifically test and
  technically evaluate gambling games, gaming devices, slot
  machines, and associated equipment for compliance with this
  subtitle. The independent testing laboratory must have a national
  or international reputation of being demonstrably competent and
  must be qualified to scientifically test and evaluate all
  components of gambling games, gaming devices, slot machines, and
  associated equipment for compliance with this subtitle and to
  perform the functions assigned to it under this subtitle. An
  independent testing laboratory may not be owned or controlled by a
  person licensed to conduct gambling games or to manufacture gaming
  equipment. The use of an independent testing laboratory for
  purposes related to the conduct of casino gaming under this
  subtitle must be made from a list of at least two laboratories
  approved by the commission.
         Sec. 2201.102.  RULEMAKING AUTHORITY. (a) The commission
  shall adopt rules the commission considers necessary or desirable
  for the public interest in carrying out the policy and provisions of
  this subtitle and the other laws administered by the commission.
         (b)  The rules must prescribe:
               (1)  the method and form of application that an
  applicant for a license under this subtitle must follow and
  complete before consideration of an application by the commission;
               (2)  the information to be furnished by an applicant or
  license holder under Chapter 2202 concerning antecedents, habits,
  character, associates, criminal history record information,
  business activities, and financial affairs;
               (3)  the criteria to be used in the award, revocation,
  and suspension of licenses under Chapter 2202;
               (4)  the information to be furnished by a license
  holder under Chapter 2202 relating to the holder's employees;
               (5)  the manner and procedure of hearings conducted by
  the commission or a hearing examiner of the commission;
               (6)  the payment of fees or costs an applicant or
  license holder under Chapter 2202 must pay;
               (7)  the procedures for the issuance of temporary
  licenses and temporary qualification to hold equity interests in a
  casino owner license holder under Chapter 2202;
               (8)  the manner and method of collection and payment of
  fees and the issuance of licenses;
               (9)  the definition of "unsuitable method of
  operation";
               (10)  the conditions under which the nonpayment of a
  gambling debt by a license holder constitutes grounds for
  disciplinary action;
               (11)  the manner of approval of gambling games, slot
  machines, and gaming devices;
               (12)  access to confidential information obtained
  under this chapter, Chapter 2202, Chapter 2203, or other law and the
  means to ensure that the confidentiality of the information is
  maintained and protected;
               (13)  financial reporting and internal control
  requirements for license holders;
               (14)  the manner in which money awarded to players of
  gambling games, compensation from gambling games and slot machines,
  and gross gaming revenue must be computed and reported under
  Chapter 2202;
               (15)  requirements for the annual audit of the
  financial statements of a license holder;
               (16)  requirements for periodic financial reports from
  each license holder consistent with standards and intervals
  prescribed by the commission;
               (17)  the procedures to be followed by a license holder
  for excluding a person from a casino; and
               (18)  the procedures for exempting or waiving
  institutional investors from the licensing requirements for
  shareholders of publicly traded corporations.
         Sec. 2201.103.  AUTHORITY OF EXECUTIVE DIRECTOR. (a)  With
  commission approval, the executive director may create executive
  positions as the director considers necessary to implement this
  chapter, Chapter 2202, Chapter 2203, and any other law administered
  by the commission.
         (b)  The executive director shall employ directors in the
  areas of audit, investigation, and enforcement. The audit director
  must be a certified public accountant, have five or more years of
  progressively responsible experience in general accounting, and
  have a comprehensive knowledge of the principles and practices of
  corporate finance or must possess qualifications of an expert in
  the field of corporate finance and auditing, general finance,
  gaming, and economics. Other directors must possess five or more
  years of training and experience in the fields of investigation,
  law enforcement, law, or gaming.
         (c)  The executive director may investigate, for the purpose
  of prosecution, a suspected criminal violation of this subtitle or
  other laws related to casino gaming or gambling regulated by the
  commission. For the purpose of the administration and enforcement
  of this subtitle or another related law, the executive director and
  employees designated as enforcement officers by the executive
  director may be commissioned as peace officers.
         (d)  The executive director, to further the objectives and
  purposes of this subtitle or other laws related to casino gaming or
  gambling regulated by the commission, may:
               (1)  direct and supervise all administrative actions of
  the commission;
               (2)  bring legal action in the name and on behalf of the
  commission;
               (3)  make, execute, and effect an agreement or contract
  authorized by the commission;
               (4)  employ the services of persons considered
  necessary for consultation or investigation and set the salaries of
  or contract for the services of legal, professional, technical, and
  operational personnel and consultants, except that outside legal
  assistance may be retained only with the approval of the attorney
  general;
               (5)  acquire furnishings, equipment, supplies,
  stationery, books, and all other things the executive director
  considers necessary or desirable in carrying out the executive
  director's functions; and
               (6)  perform other duties the executive director may
  consider necessary to effect the purposes of this subtitle or other
  laws related to casino gaming or gambling regulated by the
  commission.
         (e)  Except as otherwise provided in this subtitle, the costs
  of administration incurred by the executive director shall be paid
  in the same manner as other claims against the state are paid.
         Sec. 2201.104.  OFFICE OF HEARING EXAMINERS. (a) The
  commission shall create an office of hearing examiners to assist
  the commission in carrying out its powers and duties.
         (b)  The office of hearing examiners shall:
               (1)  hold hearings under the authority of the
  commission on matters relating to the commission's administration
  of this subtitle and other laws related to casino gaming or gambling
  regulated by the commission as the commission orders; and
               (2)  report after a hearing in the manner prescribed by
  the commission.
         (c)  The commission shall refer any contested case arising
  under this subtitle or other laws related to casino gaming or
  gambling regulated by the commission to the office of hearing
  examiners.
         (d)  The office of hearing examiners is independent of the
  executive director and is under the exclusive control of the
  commission.
         (e)  The office of hearing examiners is under the direction
  of a chief hearing examiner appointed by the commission.
         (f)  The commission may authorize the chief hearing examiner
  to delegate to one or more hearing examiners the authority to hold
  any hearing called by the chief hearing examiner.
         (g)  The chief hearing examiner and each assistant hearing
  examiner employed by the office of hearing examiners must be an
  attorney licensed to practice law in this state.
         (h)  The chief hearing examiner and each assistant hearing
  examiner may administer oaths, receive evidence, and issue
  subpoenas to compel the attendance of witnesses and the production
  of papers and documents in all matters delegated to the office of
  hearing examiners by the commission.
         (i)  The chief hearing examiner and each assistant hearing
  examiner is entitled to an annual salary and other compensation
  specified by the commission.
         (j)  The office of hearing examiners may contract for
  additional services it considers necessary to carry out its powers.
         Sec. 2201.105.  JUDICIAL REVIEW IN CONTESTED CASES. A final
  ruling of the commission in a contested case is subject to judicial
  review under Chapter 2001, Government Code. Judicial review is
  under the substantial evidence rule, as provided by that chapter.
         Sec. 2201.106.  RECORDS; CONFIDENTIAL INFORMATION. (a) The
  executive director shall maintain a file of all applications for
  licenses under this subtitle, together with a record of all action
  taken with respect to the applications.
         (b)  The commission and the executive director may maintain
  other records they consider desirable.
         (c)  The information made confidential by this subsection
  may be disclosed, wholly or partly, only:
               (1)  in the course of the necessary administration of
  this subtitle or in the enforcement of other laws related to casino
  gaming or other gambling regulated by the commission;
               (2)  under Section 2202.352;
               (3)  on the order of a court; or
               (4)  as authorized under commission rule, to an
  authorized agent of any agency of the United States, another state,
  or a political subdivision of this state.
         (d)  Notice of the content of any information furnished or
  released under Subsection (c) may be given to any affected
  applicant or license holder as prescribed by commission rule.
         (e)  The following information is confidential and may not be
  disclosed:
               (1)  information requested by the commission or the
  executive director under this subtitle or another applicable law
  that may otherwise be obtained relating to the finances, earnings,
  or revenue of an applicant or license holder;
               (2)  information pertaining to an applicant's criminal
  history record information, antecedents, and background that has
  been furnished to or obtained by the commission or the executive
  director from any source;
               (3)  information provided to the commission or the
  executive director or a commission employee by a governmental
  agency or an informer or on the assurance that the information will
  be held in confidence and treated as confidential;
               (4)  information obtained by the executive director or
  the commission from a license holder, including a casino service
  license holder, relating to the manufacturing, modification, or
  repair of gaming devices;
               (5)  security plans and procedures of the commission
  designed to ensure the integrity and security of the regulation and
  operation of casino gaming or other gambling regulated by the
  commission;
               (6)  the street address and telephone number of a prize
  winner unless the prize winner has consented to the release of the
  information;
               (7)  information relating to all system operations of
  gambling games, including security related to gambling games, and
  commission plans and procedures intended to ensure the integrity
  and security of the operation of gambling games and other gambling
  regulated by the commission; and
               (8)  reports and related information filed under
  Section 2202.011.
         Sec. 2201.107.  REPRESENTATION BY ATTORNEY GENERAL. (a) The
  attorney general shall represent the commission and the executive
  director in any proceeding to which the commission or the executive
  director is a party under this subtitle or another law administered
  by the commission or in any suit filed against the commission or
  executive director.
         (b)  The office of the attorney general on request shall
  advise the commission and the executive director in all other
  matters, including representing the commission when the commission
  acts in its official capacity.
         Sec. 2201.108.  RULES RESTRICTING ADVERTISING OR
  COMPETITIVE BIDDING. (a) The commission may not adopt rules
  restricting advertising or competitive bidding by a person
  regulated by the commission except to prohibit false, misleading,
  or deceptive practices by that person.
         (b)  The commission may not include in its rules to prohibit
  false, misleading, or deceptive practices by a person regulated by
  the commission a rule that:
               (1)  restricts the use of any advertising medium;
               (2)  restricts the person's personal appearance or the
  use of the person's voice in an advertisement;
               (3)  relates to the size or duration of an
  advertisement by the person; or
               (4)  restricts the use of a trade name in advertising by
  the person.
         Sec. 2201.109.  RULES ON CONSEQUENCES OF CRIMINAL
  CONVICTION. (a)  The commission shall adopt rules necessary to
  comply with Chapter 53.
         (b)  In adopting rules under this section, the commission
  shall list the specific offenses for which a conviction would
  constitute grounds for the commission to take action under Section
  53.021.
         Sec. 2201.110.  SUBPOENA. (a) The commission may request
  and, if necessary, compel by subpoena:
               (1)  the attendance of a witness for examination under
  oath; and
               (2)  the production for inspection and copying of
  records and other evidence relevant to the investigation of an
  alleged violation of this subtitle or other laws related to casino
  gaming or other gambling regulated by the commission.
         (b)  If a person fails to comply with a subpoena issued under
  this section, the commission, acting through the attorney general,
  may file suit to enforce the subpoena in a district court in Travis
  County or in the county in which a hearing conducted by the
  commission may be held.
         (c)  The court shall order a person to comply with the
  subpoena if the court determines that good cause exists for issuing
  the subpoena.
         Sec. 2201.111.  DIVISION OF RESPONSIBILITIES. The
  commission shall develop and implement policies that clearly
  separate the policy-making responsibilities of the commission and
  the management responsibilities of the executive director and the
  staff of the commission.
         Sec. 2201.112.  USE OF TECHNOLOGY. The commission shall
  implement a policy requiring the commission to use appropriate
  technological solutions to improve the commission's ability to
  perform its functions. The policy must ensure that the public is
  able to interact with the commission through the commission's
  Internet website.
         Sec. 2201.113.  NEGOTIATED RULEMAKING AND ALTERNATIVE
  DISPUTE RESOLUTION POLICY. (a) The commission shall develop and
  implement a policy to encourage the use of:
               (1)  negotiated rulemaking procedures under Chapter
  2008, Government Code, for the adoption of commission rules; and
               (2)  appropriate alternative dispute resolution
  procedures under Chapter 2009, Government Code, to assist in the
  resolution of internal and external disputes under the commission's
  jurisdiction.
         (b)  The commission's procedures relating to alternative
  dispute resolution must conform, to the extent possible, to any
  model guidelines issued by the State Office of Administrative
  Hearings for the use of alternative dispute resolution by state
  agencies.
         (c)  The commission shall designate an appropriately
  qualified person to:
               (1)  coordinate the implementation of the policy
  adopted under Subsection (a);
               (2)  serve as a resource for any training needed to
  implement the procedures for negotiated rulemaking or alternative
  dispute resolution; and
               (3)  collect data concerning the effectiveness of those
  procedures, as implemented by the commission.
         Sec. 2201.114.  COMMITTEES. The commission may appoint
  committees that it considers necessary to carry out its duties.
         Sec. 2201.115.  CONTRACT AUTHORITY. (a) The commission and
  executive director have broad authority and shall exercise strict
  control and close supervision over gambling games played in this
  state to promote and ensure integrity, security, honesty, and
  fairness in the operation and administration of gaming under this
  subtitle.
         (b)  The executive director may contract with a third party
  to perform a function, activity, or service in connection with the
  operation of casino gaming under this subtitle, other than
  investigative services, as prescribed by the executive director. A
  contract relating to the operation of gaming must be consistent
  with this subtitle.
         (c)  The executive director may award a contract for gaming
  supplies, equipment, or services, including a contract under
  Subsection (b), pending the completion of any investigation and
  license required by this subtitle. A contract awarded under this
  subsection must include a provision permitting the executive
  director to terminate the contract without penalty if the
  investigation reveals that the person to whom the contract is
  awarded does not satisfy the applicable requirements for a license
  under this subtitle.
         (d)  In the acquisition or provision of facilities,
  supplies, equipment, materials, or services related to the
  implementation of gaming under this subtitle, the commission must
  comply with procurement procedures prescribed under Subtitle D,
  Title 10, Government Code.
         Sec. 2201.116.  INVESTIGATIONS AND ENFORCEMENT. (a) A
  violation or alleged violation of this subtitle or of the penal laws
  of this state by the commission, its employees, or a person
  regulated under this subtitle may be investigated by the attorney
  general, the district attorney for Travis County, or a district
  attorney, criminal district attorney, or county attorney for the
  county in which violation or alleged violation occurred.
         (b)  The commission may investigate violations of this
  subtitle, rules adopted under this subtitle, or other laws related
  to casino gaming or other gambling regulated by the commission and
  may file a complaint requesting that an investigation be conducted
  in accordance with Subsection (a).
         Sec. 2201.117.  SECURITY. (a) The executive director shall
  maintain a department of security in the commission. The executive
  director shall appoint a deputy to administer the department. The
  deputy must be qualified by training and experience in law
  enforcement or security to supervise, direct, and administer the
  activities of the department.
         (b)  The executive director may employ security officers or
  investigators as the executive director considers necessary and may
  commission investigators or security officers as peace officers.
  The deputy and all investigators employed by the department of
  security and commissioned as peace officers must meet the
  requirements under Chapter 1701 for employment and commission as
  peace officers.
         (c)  A security officer or investigator employed by the
  department of security and commissioned as a peace officer, or a
  peace officer who is working in conjunction with the commission or
  the Department of Public Safety in the enforcement of this subtitle
  may:
               (1)  without a search warrant, search and seize a
  gaming device or other gaming equipment that is located on premises
  for which a person holds a license issued under this subtitle; or
               (2)  seize a gaming device or other gaming equipment
  that is being used or is in the possession of any person in
  violation of this subtitle or other laws related to casino gaming or
  other gambling regulated by the commission.
         (d)  The Department of Public Safety or any other state or
  local law enforcement agency, at the commission's request and in
  accordance with an interagency agreement, shall perform a full
  criminal history record information and background investigation
  of a prospective deputy or investigator of the department of
  security of the commission. The commission shall reimburse the
  agency for the actual costs of an investigation.
         (e)  At least once every two years, the executive director
  shall employ an independent firm that is experienced in security,
  including computer security and systems security, to conduct a
  comprehensive study of all aspects of gaming security.
         Sec. 2201.118.  DEMOGRAPHIC STUDIES. (a) The executive
  director shall, every two years, employ an independent firm
  experienced in demographic analysis to conduct a demographic study
  of players of gambling games. The study must include the income,
  age, sex, race, education, and frequency of participation of
  players of the games.
         (b)  The executive director shall report the results of the
  demographic study to the commission, the governor, and the
  legislature not later than January 1 of each odd-numbered year.
         Sec. 2201.119.  PROHIBITED GAMBLING GAMES. (a) Except as
  provided by this subtitle or other law, the executive director or
  any other person may not establish or operate a gambling game in
  which the winner is chosen on the basis of the outcome of a sports
  event.
         (b)  Except as provided by Chapter 2001 or this subtitle, the
  operation of any game using a slot machine or other gambling device
  is prohibited.
         Sec. 2201.120.  DEPARTMENT OF PUBLIC SAFETY RECORDS. (a)
  Except as otherwise provided by this subtitle, all files, records,
  information, compilations, documents, photographs, reports,
  summaries, and reviews of information and related matters
  collected, retained, or compiled by the Department of Public Safety
  in the discharge of its duties under this subtitle are confidential
  and are not subject to public disclosure. Each of those items is
  subject to discovery by a person who is the subject of the item.
         (b)  An investigation report or other document submitted by
  the Department of Public Safety to the commission becomes part of
  the investigative files of the commission and is subject to
  discovery by a person who is the subject of the investigation report
  or other document.
         (c)  Information that is in a form available to the public is
  not privileged or confidential under this section and is subject to
  public disclosure.
         Sec. 2201.121.  CRIMINAL BACKGROUND INVESTIGATION FOR
  CASINO GAMING. (a) The commission is entitled to conduct an
  investigation of and is entitled to obtain criminal history record
  information maintained by the Department of Public Safety, the
  Federal Bureau of Investigation Identification Division, or
  another law enforcement agency to assist in the criminal background
  investigation of any person directly involved with casino gaming
  regulated under this subtitle.
         (b)  Except as otherwise provided by this subtitle, a
  criminal background investigation is governed by commission rules
  adopted under this chapter.
         (c)  The Department of Public Safety or a state or local law
  enforcement agency in this state, in accordance with an interagency
  agreement with the commission, shall provide any assistance
  requested by the commission in the administration and enforcement
  of this subtitle, including conducting criminal background
  investigations of a person seeking a license required under this
  subtitle or of any person required to be named in an application for
  a license under this subtitle.
         (d)  This section does not limit the commission's right to
  obtain criminal history record information from any other local,
  state, or federal agency. The commission may enter into a
  confidentiality agreement with the agency as necessary and proper.
         (e)  Except as otherwise provided by this subtitle or other
  law, criminal history record information obtained by the commission
  under this section may be disclosed only:
               (1)  to another law enforcement agency to assist in or
  further an investigation related to the commission's operation and
  oversight of gaming; or
               (2)  under a court order.
         Sec. 2201.122.  PLAYER AGREEMENT TO ABIDE BY RULES AND
  INSTRUCTIONS. By participating as a player in a gambling game, a
  player agrees to abide by and be bound by the commission's rules and
  instructions, including the rules or instructions applicable to the
  particular gambling game involved. The player also agrees that the
  determination of whether the player is a valid winner is subject to:
               (1)  the commission's rules, instructions, and claims
  procedures, including those developed for the particular gambling
  game involved;
               (2)  any validation tests established by the commission
  for the particular gambling game involved; and
               (3)  the limitations and other provisions prescribed by
  this subtitle.
         Sec. 2201.123.  VENUE FOR CRIMINAL PROCEEDING. Venue is
  proper in Travis County or any county in which venue is proper under
  Chapter 13, Code of Criminal Procedure, for:
               (1)  an offense under this subtitle;
               (2)  an offense under the Penal Code, if the accused:
                     (A)  is regulated under this subtitle; and
                     (B)  is alleged to have committed the offense
  while engaged in gaming activities; or
               (3)  an offense under Title 7 or 11, Penal Code, that
  involves property consisting of or including a gaming device or
  gambling game prize.
  SUBCHAPTER D. PUBLIC PARTICIPATION AND COMPLAINT PROCEDURES
         Sec. 2201.151.  PUBLIC INTEREST INFORMATION. (a) The
  commission shall prepare and disseminate consumer information that
  describes the regulatory functions of the commission and the
  procedures by which consumer complaints are filed with and resolved
  by the commission.
         (b)  The commission shall make the information available to
  the public and appropriate state agencies.
         Sec. 2201.152.  COMPLAINTS. (a) The commission by rule
  shall establish methods by which consumers and service recipients
  are notified of the name, mailing address, and telephone number of
  the commission for the purpose of directing complaints to the
  commission. The commission may provide for that notice:
               (1)  on each form, application, or written contract for
  services of a person regulated under a law administered by the
  commission;
               (2)  on a sign prominently displayed in the place of
  business of each person regulated under a law administered by the
  commission; or
               (3)  in a bill for service provided by a person
  regulated under this subtitle.
         (b)  The commission shall list with its regular telephone
  number any toll-free telephone number established under other state
  law that may be called to present a complaint about a person
  regulated under this subtitle.
         Sec. 2201.153.  RECORDS OF COMPLAINTS. (a)  The commission
  shall maintain a system to promptly and efficiently act on
  complaints filed with the commission. The commission shall
  maintain:
               (1)  information about the parties to the complaint and
  the subject matter of the complaint;
               (2)  a summary of the results of the review or
  investigation of the complaint; and
               (3)  information about the disposition of the
  complaint.
         (b)  The commission shall make information available
  describing its procedures for complaint investigation and
  resolution.
         (c)  The commission shall periodically notify the parties of
  the status of the complaint until final disposition of the
  complaint.
         Sec. 2201.154.  GENERAL RULES REGARDING COMPLAINT
  INVESTIGATION AND DISPOSITION. The commission shall adopt rules
  concerning the investigation of a complaint filed with the
  commission. The rules must:
               (1)  distinguish between categories of complaints;
               (2)  ensure that complaints are not dismissed without
  appropriate consideration;
               (3)  require that the commission be advised of a
  complaint that is dismissed and that a letter be sent to the person
  who filed the complaint explaining the action taken on the
  dismissed complaint;
               (4)  ensure that the person who files a complaint has an
  opportunity to explain the allegations made in the complaint; and
               (5)  prescribe guidelines concerning the categories of
  complaints that require the use of a private investigator and the
  procedures for the commission to obtain the services of a private
  investigator.
         Sec. 2201.155.  DISPOSITION OF COMPLAINT. (a) The
  commission shall:
               (1)  dispose of each complaint in a timely manner; and
               (2)  establish a schedule for conducting each phase of
  a complaint that is under the control of the commission not later
  than the 30th day after the date the commission receives the
  complaint.
         (b)  Each party shall be notified of the projected time
  requirements for pursuing the complaint. The commission shall
  notify each party to the complaint of any change in the schedule
  established under Subsection (a)(2) not later than the seventh day
  after the date the change is made.
         (c)  The executive director shall notify the commission of a
  complaint that is not resolved within the time prescribed by the
  commission for resolving the complaint.
         Sec. 2201.156.  PUBLIC PARTICIPATION. (a) The commission
  shall develop and implement policies that provide the public with a
  reasonable opportunity to appear before the commission and to speak
  on any issue under the commission's jurisdiction.
         (b)  The commission shall prepare and maintain a written plan
  that describes how a person who does not speak English may be
  provided reasonable access to the commission's programs.
         Sec. 2201.157.  INFORMAL SETTLEMENT CONFERENCE. The
  commission by rule shall establish procedures for an informal
  settlement conference related to a complaint filed with the
  commission.
  CHAPTER 2202. CASINO GAMING
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 2202.001.  PUBLIC POLICY. (a)  All casino gaming that
  is conducted in this state and that is authorized by law shall be
  regulated and licensed under this chapter, unless federal law or
  another state law specifically provides otherwise.
         (b)  The legislature hereby finds, and declares it to be the
  public policy of this state, that:
               (1)  the development of regulated casino gaming at a
  limited number of locations in the state will benefit the general
  welfare of the people of this state by enhancing investment,
  economic development, and tourism in this state, resulting in
  thousands of new jobs and significant new revenue to the state for
  essential services;
               (2)  the conduct of regulated casino gaming in a
  limited number of destination resorts and smaller casinos will not
  harm the people of this state;
               (3)  the regulation of gaming in this state is
  important to ensure that gaming is:
                     (A)  conducted honestly and competitively; and
                     (B)  free from criminal and corruptive elements;
               (4)  public confidence and trust can be maintained only
  by strict regulation of all persons, locations, practices,
  associations, and activities related to the conduct of casino
  gaming and the casino service industry;
               (5)  persons owning any direct or indirect material
  interest in a casino should be licensed and controlled to protect
  the public health, safety, morals, good order, and general welfare
  of the people of this state;
               (6)  certain operators and employees of casinos should
  be regulated, licensed, and controlled to accomplish and promote
  these public policies while protecting the public health, safety,
  morals, good order, and general welfare of the people of this state;
               (7)  certain persons engaging in the casino service
  industry should be regulated, licensed, and controlled to
  accomplish and promote these public policies while protecting the
  public health, safety, morals, good order, and general welfare of
  the people of this state; and
               (8)  it is the intent of the legislature, where
  possible, to use the resources, goods, labor, and services of the
  people of this state in the operation and construction of
  destination resorts, casinos, and related amenities to the extent
  allowable by law.
         Sec. 2202.002.  EXEMPTION FROM FEDERAL STATUTE. (a) This
  chapter provides an exemption to the application of 15 U.S.C.
  Section 1172, in accordance with that section.
         (b)  All shipments of gaming devices into this state,
  including slot machines, conducted in compliance with the
  applicable provisions of 15 U.S.C. Sections 1173 and 1174 are legal
  shipments of the devices into this state.
         Sec. 2202.003.  CONSTRUCTION; APPLICABILITY OF OTHER LAWS.
  (a) Nothing in this chapter may be construed to implicitly repeal
  or modify existing state laws with respect to gambling, except that
  casino gaming is not prohibited by another law if conducted as
  authorized under this chapter.
         (b)  To the extent of any conflict between Chapter 2003,
  Government Code, and this chapter or a commission rule governing
  gaming devices, this chapter or the commission rule prevails in all
  matters related to gaming devices, including hearings before the
  State Office of Administrative Hearings.
         (c)  This chapter prevails to the extent of any conflict
  between this chapter and a provision of Subtitle A-1, Title 13
  (Texas Racing Act).
         Sec. 2202.004.  AUTHORITY TO IMPLEMENT GAMING. (a) The
  commission may implement casino gaming in accordance with this
  subtitle.
         (b)  The commission shall allow the operation of limited
  casino gaming pursuant to this subtitle at locations on Indian
  lands in accordance with an effective gaming agreement and in
  compliance with applicable federal law.
         Sec. 2202.005.  IMMUNITY FOR STATEMENT MADE IN PROCEEDING OR
  INVESTIGATION. Any written or oral statement made in the course of
  an official commission proceeding or investigative activities
  related to an application for commission licensing under this
  chapter, by any member or agent of the commission or any witness
  testifying under oath, that is relevant to the purpose of the
  proceeding is absolutely privileged and does not impose liability
  for defamation or constitute a ground for recovery in any civil
  action.
         Sec. 2202.006.  FINDING OF SUITABILITY. To promote the
  integrity and security of casino gaming under this subtitle, the
  commission in its discretion may require a finding of suitability
  for any person conducting business with or in relation to the
  operation of casino gaming who is not otherwise required to obtain a
  license from the commission for the person's gaming-related
  operations.
         Sec. 2202.007.  CONSENT TO COMMISSION DETERMINATION. (a)
  An application for a license under this chapter constitutes a
  request to the commission for a decision on the applicant's general
  suitability, character, integrity, and ability to participate or
  engage in or be associated with casino gaming under this chapter in
  the manner or position sought.
         (b)  By filing an application with the commission, the
  applicant specifically consents to the commission's determination
  if the application, after filing, becomes moot for any reason other
  than death.
         Sec. 2202.008.  ABSOLUTE AUTHORITY OF COMMISSION. To
  protect the integrity of casino gaming under this subtitle or the
  public health, welfare, or safety, or to prevent financial loss to
  this state, the commission has full and absolute power and
  authority to:
               (1)  deny any application or limit, condition,
  restrict, revoke, or suspend any license; and
               (2)  fine any license holder for any cause considered
  reasonable by the commission.
         Sec. 2202.009.  LICENSING AS REVOCABLE PERSONAL PRIVILEGES.
  (a) An applicant for a license under this chapter does not have any
  right to the license sought.
         (b)  Any license issued under this chapter is a revocable
  privilege, and a holder of the privilege does not acquire any vested
  right in or under the privilege.
         (c)  The courts of this state do not have jurisdiction to
  review a decision to deny, limit, or condition the license unless
  the judicial review is sought on the ground that the denial,
  limitation, or condition is based on a suspect classification, such
  as race, color, religion, sex, or national origin, in violation of
  the Equal Protection Clause of the Fourteenth Amendment to the
  United States Constitution. The state court must affirm the
  commission's action unless the violation is proven by clear and
  convincing evidence. If a state court has jurisdiction over a claim
  under this section, then this state's sovereign immunity is waived
  only to the extent expressly provided by Section 2202.360.
         (d)  A license issued or renewed under this chapter may not
  be transferred or assigned to another person unless approved in
  advance by the commission, and a license may not be pledged as
  collateral. The purchaser or successor of a license holder must
  independently qualify for a license required by this chapter.
         (e)  The following acts void the license unless approved in
  advance by the commission:
               (1)  the transfer, sale, or other disposition of an
  interest in the holder that results in a change in the identity of
  an equity interest holder; or
               (2)  the sale of the assets of the holder, other than
  assets bought and sold in the ordinary course of business, or any
  interest in the assets, to any person not already determined to have
  met the applicable qualifications of this chapter.
         Sec. 2202.010.  PRIZE RULES, PAYMENT, AND REDEMPTION. (a)
  The payment of prizes is the sole and exclusive responsibility of
  the casino owner or casino operator license holder. A prize may not
  be paid by the commission or this state except as otherwise
  authorized.
         (b)  Nothing in this chapter limits the ability of a casino
  owner or casino operator license holder to provide promotional
  prizes, including wide area progressive networks, in addition to
  prize payouts regulated by the commission.
         (c)  The commission shall enact rules consistent with this
  section governing the use and redemption of prizes and credits
  recorded on player account records, such as players' club cards and
  smart cards.
         Sec. 2202.011.  REPORT ON LITIGATION. (a) A casino owner or
  casino operator license holder shall report to the commission any
  litigation relating to casino operations, including a criminal
  proceeding, a proceeding involving an issue related to pari-mutuel
  activities that impact casino gaming operations, or a matter
  related to character or reputation relevant to a person's
  suitability under this chapter.
         (b)  The report required under Subsection (a) must be filed
  not later than the 30th day after the date the owner or operator
  acquires knowledge of the litigation.
         Sec. 2202.012.  COMMISSION APPROVAL REQUIRED FOR PROCEDURES
  AND ADMINISTRATIVE AND ACCOUNTING CONTROLS. (a) The commission's
  approval is required for all internal procedures and administrative
  and accounting controls of a casino owner or casino operator
  license holder.
         (b)  The commission by rule shall establish general
  accounting and auditing requirements and internal control
  standards for the conduct of casino gaming at casinos.
         Sec. 2202.013.  EMPLOYEE REPORTING. (a) In this section,
  "employee" includes any person connected directly with or
  compensated by an applicant or license holder as an agent, personal
  representative, consultant, or independent contractor.
         (b)  On or before the 15th day of each month, a casino owner
  or casino operator license holder shall submit to the commission an
  employee report for the casino operated by the owner or operator.
  For each gaming employee, the report must provide the employee's
  name, job title, date of birth, and social security number.
         (c)  The employee report is confidential and may not be
  disclosed except under commission order or in accordance with this
  subtitle.
         (d)  The commission may conduct criminal history background
  investigations of casino employees.
         (e)  The commission may prohibit an employee from performing
  any act relating to gaming if the commission finds that an employee
  has:
               (1)  committed, attempted, or conspired to commit any
  act prohibited by this chapter;
               (2)  concealed or refused to disclose any material fact
  in any commission investigation;
               (3)  committed, attempted, or conspired to commit an
  offense involving or related to larceny or embezzlement;
               (4)  been convicted in any jurisdiction of an offense
  involving or relating to gambling;
               (5)  accepted employment in a position for which
  commission approval is required after commission approval was
  denied for a reason involving personal unsuitability or after
  failing to apply for approval on commission request;
               (6)  been prohibited under color of governmental
  authority from being present on the premises of any casino or any
  establishment where casino gaming or pari-mutuel wagering is
  conducted for any reason relating to improper gambling activity or
  other illegal acts;
               (7)  wilfully defied any legislative investigative
  committee or other officially constituted body acting on behalf of
  the United States or any state, county, or municipality that sought
  to investigate alleged or potential crimes relating to gambling,
  corruption of public officials, or any organized criminal
  activities; or
               (8)  been convicted of any felony or any crime
  involving moral turpitude.
         (f)  The commission may prohibit an employee from performing
  any act relating to casino gaming based on a revocation or
  suspension of any casino gaming or pari-mutuel wagering license or
  for any other reason the commission finds appropriate, including a
  refusal by a regulatory authority to issue a license for the
  employee to engage in or be involved with casino gaming or with
  other regulated gaming or pari-mutuel wagering in any jurisdiction.
         Sec. 2202.014.  REPORT OF VIOLATIONS. A person who holds a
  license under this chapter shall immediately report a violation or
  suspected violation of this chapter or a rule adopted under this
  chapter by any license holder, by an employee of a license holder,
  or by any person on the premises of a casino, whether or not
  associated with the license holder.
         Sec. 2202.015.  INDEMNIFICATION, INSURANCE, AND BONDING
  REQUIREMENTS. (a) A license holder shall indemnify and hold
  harmless this state, the commission, and all officers and employees
  of this state and the commission from any and all claims which may
  be asserted against a license holder, the commission, this state,
  and the members, officers, employees, and authorized agents of this
  state or the commission arising from the license holder's
  participation in casino gaming authorized under this subtitle.
         (b)  Surety and insurance required under this chapter may
  only be issued by companies or financial institutions financially
  rated "A-" or better as rated by AM Best Company or another rating
  organization designated by the commission and duly licensed,
  admitted, and authorized to conduct business in this state, or by
  other surety approved by the commission.
         (c)  The commission shall be named as the obligee in each
  required surety and as an additional insured in each required
  insurance contract.
         (d)  A Class I casino owner or casino operator license holder
  may not be self-insured with regard to gaming operations under this
  section in excess of $50,000,000 per occurrence.
         (e)  A Class II or Class III casino owner or operator license
  holder may not be self-insured with regard to gaming operations
  under this section.
         (f)  The commission by rule shall establish minimum
  insurance coverage requirements for license holders under this
  chapter, including:
               (1)  insurance for performance;
               (2)  crime or fidelity insurance against losses caused
  by fraudulent or dishonest acts by an officer or employee of the
  license holder;
               (3)  commercial general liability insurance;
               (4)  property insurance;
               (5)  business auto liability insurance; and
               (6)  crime insurance for the location.
         Sec. 2202.016.  LIABILITY FOR CREDIT AWARDED OR DENIED;
  PLAYER DISPUTE. This state and the commission are not liable for
  any gaming device malfunction or error occurring at a casino that
  causes credit to be wrongfully awarded or denied to players.
  SUBCHAPTER B. CASINO OWNER'S LICENSE
         Sec. 2202.051.  CASINO OWNER'S LICENSE. (a)  Casino gaming
  may be lawfully conducted in a casino operating under a casino
  owner's license.
         (b)  A person may not own an equity interest in a casino at
  which casino gaming is conducted in this state unless the casino is
  operating under a casino owner's license issued for the conduct of
  casino gaming at that casino.
         (c)  A separate casino owner's license must be obtained for
  each casino conducting casino gaming.
         Sec. 2202.052.  ALLOCATION AND ISSUANCE OF CASINO OWNER'S
  LICENSES; TEMPORARY LICENSE. (a) The commission shall award
  casino owner's licenses to applicants for destination resorts and
  casinos as authorized by Section 47a(e), Article III, Texas
  Constitution.
         (b)  The commission shall:
               (1)  issue not more than four Class I casino owner's
  licenses to conduct casino gaming at destination resorts located in
  metropolitan statistical areas of this state with a population
  estimated at two million or more on July 1, 2019, provided that only
  one Class I licensed destination resort is located within one
  metropolitan statistical area;
               (2)  issue not more than three Class II casino owner's
  licenses to conduct limited casino gaming at an existing location
  to applicants who, on January 1, 2021, held and who continue to hold
  an active license to conduct pari-mutuel wagering on horse races at
  a racetrack located within a metropolitan statistical area with an
  estimated population of two million or more on July 1, 2019, and who
  comply with the requirements of this subtitle and commission rule;
  and
               (3)  issue not more than two Class III casino owner's
  licenses to conduct limited casino gaming to applicants who, on
  January 1, 2021, held and who continue to hold an active license to
  conduct pari-mutuel wagering on greyhound races at a racetrack
  located within a metropolitan statistical area with an estimated
  population of less than two million on July 1, 2019, and who comply
  with the requirements of this subtitle and commission rule.
         (c)  The commission by rule shall ensure license applicants
  who are issued a Class II casino owner's license under Subsection
  (b)(2) continue to maintain significant live horse racing at the
  applicant's racetrack and maintain the applicant's primary purpose
  as a horse racetrack and that limited casino gaming is used as a
  complementary amenity to promote and support horse racing in this
  state.
         (d)  The commission shall allow license applicants who are
  issued a Class III casino owner's license under Subsection (b)(3)
  to offer limited casino gaming at any location within the same
  metropolitan statistical area as the holder's licensed greyhound
  racetrack.
         (e)  The commission shall establish additional restrictions
  on Class II and Class III casino owner license holders, including
  limits on total square footage, casino gaming square footage, and
  overnight accommodations for the purposes of adequately
  distinguishing between types of gaming activities the license
  holder is authorized to conduct, as provided by Subsection (b), and
  to limit the scope of casino gaming in certain metropolitan
  statistical areas in this state.
         (f)  To ensure that a requisite level of economic development
  benefiting the people of this state accompanies each destination
  resort issued a Class I casino owner's license, the commission
  shall require an applicant, as a condition to receiving and holding
  the license, to commit to building a destination resort project
  with total land and development investments of at least:
               (1)  $2 billion for a destination resort located in a
  metropolitan statistical area with a population of five million or
  more; or
               (2)  $1 billion for a destination resort located in a
  metropolitan statistical area with a population of two million or
  more but less than five million.
         (g)  In meeting the requirements of Subsection (f), total
  land and development investments proposed as part of an application
  to conduct casino gaming at a destination resort may not include
  public money or facilities developed or built with public
  assistance or tax incentives of any kind.
         (h)  Land and development investments included as part of a
  destination resort in an application for a Class I casino owner's
  license that have been made within five years before the
  application is filed may be included in the calculation of new total
  land and development investments required under Subsection (f).
         (i)  The commission shall issue a Class II or Class III
  casino owner's license to conduct limited casino gaming to
  applicants based on evidence demonstrating that the issuance of the
  license to the applicant would have a significant positive economic
  impact in the area of this state in which the casino would be
  operated, and on the state as a whole.
         (j)  In addition to the casino owner's licenses issued under
  this section, the commission may issue a Class II or Class III
  casino owner's license to a federally recognized Indian tribe that
  had land in this state held in trust by the United States on January
  1, 1998. A license issued under this subsection authorizes the
  tribe to operate not more than one casino on tribal lands held in
  trust by the United States on January 1, 1998.
         (k)  A casino owner's license issued by the commission under
  Subsection (j) to an Indian tribe constitutes an agreement between
  this state and the tribe for purposes of the Indian Gaming
  Regulatory Act (Pub. L. No. 100-497).
         (l)  Except for simulcast common pool wagering conducted in a
  casino and except as otherwise authorized by the commission, the
  casino operations and financial records of a casino owner license
  holder under Subsection (b) who also holds a pari-mutuel license
  under Subtitle A-1, Title 13 (Texas Racing Act) shall be kept
  separate from the racing operations and records of the license
  holder.
         (m)  An Indian tribe to which Subsection (j) applies may, in
  lieu of a casino owner's license, operate a casino on Indian land
  described by Subsection (j) under an agreement with this state. The
  agreement is governed by this chapter and Chapter 2203.
         (n)  A casino owner's license may not be issued for a
  location in an area in which casino gaming is prohibited under a
  gaming agreement between an Indian tribe and this state.
         (o)  For purposes of determining the location of a casino, a
  casino is considered to be located in the county in which the main
  public entrance to the casino is located.
         (p)  The commission may issue a temporary license for one
  year or less to authorize the casino owner license holder to
  temporarily conduct casino gaming in accordance with commission
  rules at a location within 20 miles of the site for which the casino
  license was issued.
         Sec. 2202.053.  APPLICATION. (a) A person seeking a casino
  owner's license shall submit an application in accordance with
  commission rules containing information the commission finds
  necessary to determine:
               (1)  the suitability and eligibility of the applicant;
               (2)  the eligibility of the proposed location; and
               (3)  the economic impact of the overall destination
  resort or casino project.
         (b)  In addition to any other information the commission may
  require, an application must include the following information
  concerning the feasibility of the overall destination resort or
  casino project:
               (1)  proof that casino gaming was approved by the
  constitutional amendment proposed by the 87th Legislature, Regular
  Session, 2021, creating the Texas Gaming Commission and authorizing
  and regulating casino gaming at destination resorts;
               (2)  evidence that the applicant possesses, or has the
  right to acquire, sufficient real property on which the proposed
  destination resort or casino will be located that accommodates the
  applicant's construction and operation of the destination resort or
  casino project substantially as proposed;
               (3)  evidence that the applicant possesses, or
  reasonably expects to obtain, all state, county, and municipal
  permits and approvals necessary for the construction and operation
  of the proposed destination resort or casino within the time
  prescribed in this chapter; and
               (4)  evidence that the applicant is prepared to begin
  construction of its proposed destination resort or casino within 18
  months of receiving a casino owner's license and to proceed with the
  construction of the destination resort or casino without
  unnecessary delay.
         (c)  An applicant may apply for more than one casino owner's
  license relating to more than one destination resort or casino but
  must submit a separate application for each destination resort or
  casino for which a casino owner's license is sought.
         (d)  An application for a casino owner's license must be
  accompanied by the nonrefundable application fee in the amount
  provided by Section 2202.202.
         Sec. 2202.054.  MANDATORY REQUIREMENTS.  (a) A company is
  eligible to apply for and hold a casino owner's license only if:
               (1)  the company is incorporated or organized and in
  good standing in this state or organized under the laws of another
  state of the United States and qualified to conduct business in this
  state; and
               (2)  the company complies with all laws of this state.
         (b)  To be eligible to receive a casino owner's license to
  own a casino, an applicant must submit an application to the
  commission by the date established by the commission.
         (c)  An application may not be considered filed for purposes
  of this chapter if the application does not include the information
  prescribed by Section 2202.053(b) or is not accompanied by the
  required application fee.
         Sec. 2202.055.  CASINO OWNER'S LICENSE ISSUANCE
  CONSIDERATIONS. (a) The commission shall determine the initial and
  continuing suitability of each applicant for or holder of a casino
  owner's license based on suitability criteria the commission
  prescribes to ensure that all casino owner license holders are of
  good character, honesty, integrity, and financial stability, that a
  casino owner license holder has sufficient business probity,
  competence, and experience in casino gaming, and that a casino
  owner license holder meets other applicable qualifications for the
  issuance of the license.
         (b)  The commission shall give due consideration to the
  protection of the public health, safety, morals, and general
  welfare of the people of this state and for the reputation of the
  state's gaming industry.
         (c)  The burden of proving suitability to receive or hold a
  casino owner's license is on the applicant or license holder.
         (d)  In considering the initial and continuing suitability
  of an applicant for or holder of a casino owner's license, the
  commission may consider the suitability of:
               (1)  each person holding an equity interest in the
  applicant or license holder;
               (2)  each person holding, or proposed to receive, a
  casino operator's license, occupational license, or manufacturer's
  license employed by or conducting business with the applicant or
  holder; and
               (3)  each affiliate of the applicant or license holder.
         (e)  An applicant for or holder of a casino owner's license
  may not receive or hold a casino owner's license if the person or an
  officer or director:
               (1)  has been convicted of a felony in the past 20 years
  under the laws of this state, any other state, or the United States;
               (2)  has ever knowingly or intentionally submitted an
  application for a license under this chapter that contained false
  information;
               (3)  served as a principal manager for an applicant or
  license holder described by Subdivision (1) or (2);
               (4)  retains or employs another person described by
  Subdivision (2);
               (5)  is subject to any material equity interest of an
  applicant or license holder described by Subdivision (1) or (2);
               (6)  holds a manufacturer's license or casino service
  license;
               (7)  is a commission member; or
               (8)  is a member of the judiciary or an elected official
  of this state.
         (f)  The commission may adopt rules providing for a person's
  reciprocal determination of suitability to hold a casino owner's
  license based on a determination of suitability to own and operate a
  casino in any other jurisdiction the commission considers
  reasonable in light of the purpose of this chapter.
         Sec. 2202.056.  ECONOMIC IMPACT ANALYSIS. (a) In
  determining to whom to grant a Class I casino owner's license, the
  commission shall consider the following factors:
               (1)  the relevant financial investment to be made by
  each competing applicant for their destination resort project;
               (2)  whether an applicant will seek state and local tax
  breaks or incentives for their destination resort project;
               (3)  the relative prospective revenue to be collected
  by this state from casino gaming and nongaming businesses
  associated with each applicant's proposed destination resort
  project;
               (4)  the relative number of residents of this state who
  would be employed in each applicant's proposed destination resort
  project and any proposed nongaming businesses and the relative
  extent of each applicant's good faith plan to recruit, train, and
  promote a workforce that reflects the diverse populations of this
  state in all employment classifications;
               (5)  the relative extent to which an applicant's
  proposed destination resort and any proposed associated hotel and
  other nongaming businesses could be reasonably expected to
  encourage interstate tourism to this state;
               (6)  whether entities operating or individuals
  residing in this state are part of the application approval process
  or are approved vendors;
               (7)  the relative extent to which the scope, design,
  location, and construction of each applicant's destination resort
  and any associated hotel and other nongaming businesses could be
  reasonably expected to contribute to the local economy; and
               (8)  each applicant's experience in conducting licensed
  casino gaming operations and the applicant's financial ability to
  promptly construct and adequately maintain the destination resort
  for which the license is sought, including the experience of
  partners of the applicant, of affiliated companies of the applicant
  or its partners, of key personnel of the applicant or its partners,
  and of operating companies under contract with the applicant.
         (b)  In determining to whom to grant a Class II or Class III
  casino owner's license, the commission shall consider the following
  factors:
               (1)  the relevant financial investment previously made
  or to be made by each competing applicant;
               (2)  whether each applicant will seek state and local
  tax breaks or incentives for their casino project;
               (3)  the relative prospective revenue to be collected
  by this state from casino gaming and non-gaming businesses
  associated with each applicant's proposed casino project;
               (4)  the total number of residents of this state who
  would be employed by each applicant's proposed casino project and
  each applicant's commitment to a workforce that reflects the
  diverse populations of this state in all employment
  classifications; and
               (5)  each applicant's experience in conducting licensed
  casino gaming operations and the applicant's financial ability to
  promptly construct and adequately maintain the proposed casino
  project.
         Sec. 2202.057.  REVIEW OF APPLICATION. (a)  The commission
  shall issue an order approving or denying an application for a
  casino owner's license not later than 180 days after the date the
  application is filed.
         (b)  The commission may adopt rules for issuing any temporary
  or interim licenses the commission finds necessary to administer
  this chapter.
         Sec. 2202.058.  TRANSFERABILITY. A casino owner's license
  is not transferable and applies only to the specific site
  identified in the license.
         Sec. 2202.059.  DENIAL, SUSPENSION, AND REVOCATION. (a)  
  The commission may deny an application or revoke a casino owner's
  license for a reasonable cause.
         (b)  If the commission determines it has reasonable grounds
  to believe that a casino owner license holder may be unsuitable to
  continue to hold a casino owner's license, the commission shall
  conduct an investigation and hearing under Section 2202.351 and
  may, based on its determination, suspend, limit, or revoke the
  license.  On suspension or revocation of a casino owner's license,
  the license holder must immediately cease all casino gaming
  activities.
         (c)  If the holder of a casino owner's license fails to begin
  construction of a casino within 18 months after the receipt of the
  casino owner's license, or fails to begin casino gaming operations
  within three years after the receipt of the license, the license is
  forfeited, unless the commission, for good cause, has previously
  granted an appropriate extension of time.
         (d)  The right to receive and hold a casino owner's license
  is a revocable privilege, and not a right or property under the
  United States Constitution or the Texas Constitution. An applicant
  for or holder of a casino owner's license does not have a vested
  interest or right in a license issued under this chapter.
         Sec. 2202.060.  REGISTRATION OF INTEREST IN APPLICANT OR
  LICENSE HOLDER. (a) Except as provided by Subsection (b), a person
  who directly or indirectly owns an equity interest in an applicant
  for or holder of a casino owner's license shall register and qualify
  with the commission under commission rules and shall provide
  information the commission finds necessary to determine the
  suitability and eligibility of the person to retain the interest.
         (b)  The following persons are not required to register or
  qualify under this section:
               (1)  a key employee of the casino owner license holder
  that is required to apply for an occupational license under Section
  2202.102;
               (2)  an institutional investor that beneficially owns
  25 percent or less of the total equity of the casino owner license
  holder;
               (3)  a person that beneficially owns 10 percent or less
  of the total equity of the casino owner license holder; and
               (4)  any other group or class of persons that the
  commission by rule exempts from registration or qualification.
         (c)  A casino owner license holder shall provide to the
  commission the name, address, and interest in the casino owner
  license holder of each person who is exempt from registration or
  qualification under Subsection (b).
         (d)  A registration filed under this section must be
  accompanied by the application fee set out in Section 2202.202.
         Sec. 2202.061.  TRANSFERABILITY OF INTEREST. (a) Except as
  provided by this subsection, a casino owner license holder may not
  issue an equity interest to a person without the commission's
  determination of the qualification of the proposed subscriber or
  purchaser to hold the interest. A casino owner license holder that
  is a publicly held company may issue equity interests of five
  percent or less of its equity interest to any person without the
  consent of the commission.
         (b)  A person beneficially owning more than five percent of
  the equity interest of a casino owner license holder may not
  transfer any portion of the interest in the license holder to any
  person without the commission's determination of the qualification
  of the proposed transferee to hold the interest.
         (c)  A subscriber or proposed transferee of an interest by a
  casino owner license holder shall provide the commission with
  information the commission considers necessary to determine the
  qualification of the person. The commission, not later than 60 days
  after the date of the application, shall determine the
  qualification of a subscriber or proposed transferee and approve or
  deny the issuance or transfer.
         Sec. 2202.062.  DETERMINATION OF QUALIFICATION. (a) The
  commission shall determine the qualification of a person to acquire
  or continue to hold an equity interest in an applicant for or holder
  of a casino owner's license based on the qualification requirements
  the commission adopts for the protection of the public interest to
  ensure that persons holding securities issued by license holders
  are of good character, honesty, integrity, and financial stability,
  and are otherwise qualified to hold the interest.
         (b)  The burden of proving qualification to acquire or hold
  an equity interest in a license holder is on the person acquiring or
  holding the interest.
         (c)  A person is unsuitable to acquire or retain an equity
  interest in an applicant for or holder of a casino owner's license
  if the person would be unsuitable to receive a casino owner's
  license under Section 2202.055(e).
         (d)  If the commission has reasonable grounds to believe that
  a person holding an equity interest in an applicant for or holder of
  a casino owner's license may be unqualified to retain the person's
  interest, the commission shall conduct an investigation and hearing
  under Section 2202.351 and may, based on its determination, issue
  an unsuitability finding and divestiture order to the holder of the
  interest and the issuer of the interest. On receipt of a divestiture
  order, the person holding the interest shall tender the person's
  entire interest for purchase to the issuer or a third party on terms
  the commission approves.
         (e)  If the commission issues an unsuitability finding and
  divestiture order to a holder of an equity interest, the person
  subject to the order may not:
               (1)  receive, directly or indirectly, a dividend,
  interest, payment, or distribution of any kind relating to the
  security that is the subject of the order; or
               (2)  exercise, directly or indirectly, any voting power
  or other right with respect to the security to which the order
  relates.
         (f)  A person subject to an order may receive payment for the
  sale of the person's interest on terms the commission approves.
         Sec. 2202.063.  TERM OF CASINO OWNER'S LICENSE.  (a) Each
  Class I casino owner's license issued under this subchapter expires
  on the 50th anniversary of the date of issuance and may be renewed
  for one or more terms of 50 years.
         (b)  Each Class II and Class III casino owner's license
  issued under this subchapter expires on the 25th anniversary of the
  date of issuance and may be renewed for one or more terms of 25
  years.
         Sec. 2202.064.  LOCAL ZONING LAWS. Notwithstanding any
  other law, destination resorts at which casino gaming is authorized
  under Section 2202.052(b)(1) shall be subject to any applicable
  local government zoning and land use regulations in place on
  January 1, 2021. To the extent destination resorts could be
  classified under multiple regulations or classifications, local
  government zoning and land use authorities shall treat and classify
  destination resorts under the most permissive classification so as
  to ensure the maximum economic benefit to the state in the shortest
  possible timeline.
  SUBCHAPTER C. CASINO OPERATOR'S LICENSE AND OCCUPATIONAL LICENSE
         Sec. 2202.101.  CASINO OPERATOR'S LICENSE. (a) Except as
  provided by Subsection (b), a person may not provide services as a
  casino operator unless the person holds a casino operator's
  license.
         (b)  A casino operator license holder must hold a separate
  casino operator's license for each casino that the license holder
  operates unless the license holder is also the owner of the casino
  and holds a casino owner's license for the premises.
         Sec. 2202.102.  OCCUPATIONAL LICENSE. (a) Except as
  provided by Subsection (b), a person may not be employed as a gaming
  employee unless the person holds an occupational license.
         (b)  A casino owner license holder or casino operator license
  holder is not required to obtain an additional occupational license
  to provide services as a gaming employee in the casino to which the
  license relates.
         (c)  A casino owner license holder shall designate not fewer
  than one occupational license holder as a key employee having
  responsibility over all gaming activities.  Not fewer than one key
  employee must be available at the casino at all times when gaming is
  conducted on the owner's premises.
         (d)  A gaming employee designated by the casino owner license
  holder or determined by the commission to be a key employee shall be
  issued an occupational license designated as a key employee
  occupational license. In determining whether an employee is a key
  employee, the commission is not restricted by the title of the job
  performed by the employee but may consider the functions and
  responsibilities of the employee in making decisions.
         (e)  A person employed as a gaming employee must obtain an
  occupational license designated as a support occupational license.
  A person required to hold a support occupational license may not be
  a gaming employee of or assist the casino owner license holder or
  casino operator license holder until the employee obtains the
  support occupational license. A person licensed as a key employee
  is not required to obtain a support occupational license.
         Sec. 2202.103.  APPLICATION. (a) An application for a
  casino operator's license or an occupational license shall be made
  in compliance with commission rules and must contain information
  the commission finds necessary to determine the suitability and
  eligibility of the applicant to function as a casino operator or to
  be employed or retained as a gaming employee.
         (b)  An application for a casino operator's license or an
  occupational license must be accompanied by the required
  application fee.
         (c)  The commission may issue a temporary casino operator's
  license and a temporary occupational license.
         Sec. 2202.104.  RESIDENCY. A person is eligible to apply for
  and hold a casino operator's license or occupational license
  without regard to the residency of the applicant.
         Sec. 2202.105.  DETERMINATION OF SUITABILITY. (a) The
  commission shall determine the suitability of an applicant for or
  holder of a casino operator's license or occupational license based
  on suitability criteria the commission adopts in order to ensure
  that a license holder:
               (1)  is of good character, honesty, and integrity;
               (2)  has sufficient business probity, competence, and
  training or experience in the gaming industry to perform the
  function contemplated; and
               (3)  is otherwise qualified to be licensed.
         (b)  The burden of proving suitability to receive and hold a
  casino operator's license or occupational license is on the
  applicant or license holder.
         (c)  In considering the suitability of a company applying for
  or holding a casino operator's license or occupational license to
  receive and continue to hold the license, the commission shall
  consider the suitability of each principal manager and each holder
  of an equity interest of the company to individually receive and
  hold an occupational license based on the suitability standards
  that apply to the applicants for the license generally.
         (d)  A person may not be found suitable to receive or hold a
  casino operator's license or occupational license if that person
  would be found unsuitable to hold a casino owner's license under
  Section 2202.055(e), except that an applicant for a casino
  operator's license or occupational license who has been convicted
  of a felony may be found suitable if the person is found to be
  adequately rehabilitated under applicable rehabilitation
  requirements adopted by the commission, and the applicant or
  license holder is otherwise suitable for licensing.
         Sec. 2202.106.  DENIAL OR REVOCATION OF LICENSE. (a) The
  commission may deny an application for or revoke a casino
  operator's license or occupational license for any reasonable
  cause.
         (b)  If the commission determines that it has reasonable
  grounds to believe that a license holder may be unsuitable to
  continue to hold the license, giving due consideration to the
  protection of the health, safety, morals, and general welfare of
  this state and to the reputation of the state's gaming industry, the
  commission shall conduct an investigation and hearing under
  Sections 2202.351 and 2202.356 and may, based on its determination,
  suspend, limit, or revoke any license.
         (c)  On the suspension or revocation of a license, the
  license holder shall cease the provision of all services in any
  capacity requiring a license under Section 2202.101 or 2202.102.
         (d)  A holder of an occupational license that has been
  revoked or suspended may not:
               (1)  receive, directly or indirectly, any
  compensation, consideration, or payment of any kind relating to the
  conduct of casino gaming in any capacity requiring a license under
  Section 2202.101 or 2202.102, other than the payment for services
  rendered before the suspension or revocation; or
               (2)  serve or function in a capacity that would require
  a license under Section 2202.101 or 2202.102.
         (e)  The receipt and holding of a license is a privilege and
  is not a right or property under the United States Constitution or
  the Texas Constitution. An applicant for or holder of a casino
  operator's license or occupational license does not have a vested
  interest or right in a license issued under this chapter.
  SUBCHAPTER D. MANUFACTURER'S AND OTHER SERVICE PROVIDERS' LICENSES
         Sec. 2202.151.  MANUFACTURER'S LICENSE. (a) A person may
  not engage in any segment of the slot machine manufacturing
  industry in this state for which a manufacturer's license is
  required under this section without obtaining a manufacturer's
  license covering that segment of the industry. This subsection
  applies only to slot machines manufactured for use in this state.
         (b)  The commission shall adopt rules identifying segments
  of the manufacturing industry directly involved in the design,
  manufacture, assembly, production, programming, sale, lease,
  marketing, distribution, repair, or modification of slot machines
  or component parts of slot machines that the commission finds
  appropriate for licensing under this section.
         (c)  A manufacturer's license is personal to the license
  holder and allows the license holder to conduct business with any
  destination resort or casino.
         Sec. 2202.152.  CASINO SERVICE LICENSE. (a) A person may
  not engage in any segment of the casino service industry that
  requires a license without obtaining a casino service license.
         (b)  The commission shall adopt rules identifying segments
  of the casino service industry directly involved with providing
  gaming-related services, equipment, and supplies that the
  commission finds appropriate for licensing.
         (c)  A person is required to obtain a casino service license
  if the person:
               (1)  operates, conducts, or maintains a gaming-related
  business in a casino; or
               (2)  furnishes goods, property, or services to a casino
  in exchange for:
                     (A)  a payment based on a percentage of the
  earnings, profits, or receipts from the casino; or
                     (B)  a payment the commission finds to be grossly
  disproportionate to the value of the goods, property, or service
  provided.
         (d)  A utility company, a retail electric provider, a
  municipality, or another political subdivision is not required to
  obtain a casino service license under this section.
         (e)  A casino service license is personal to the license
  holder and allows the license holder to conduct business with any
  destination resort or casino.
         (f)  The holder of a casino owner's license or casino
  operator's license is not required to obtain a casino service
  license to provide services for which a casino service license
  would otherwise be required, if the license holder provides those
  services in the course of the license holder's operation or
  management of the casino to which the casino owner's license or
  casino operator's license relates.
         Sec. 2202.153.  APPLICATION. (a) A person seeking a
  manufacturer's license or casino service license shall submit an
  application in accordance with commission rules.
         (b)  The application must:
               (1)  contain information the commission finds
  necessary to determine the suitability and eligibility of the
  applicant; and
               (2)  be accompanied by the required application fee.
         Sec. 2202.154.  DETERMINATION OF SUITABILITY. (a) In
  considering the suitability of a company applying for or holding a
  manufacturer's license or casino service license to receive and
  continue to hold the license, the commission shall consider the
  suitability of each principal manager and each holder of an equity
  interest in the company applicant to individually receive and hold
  a manufacturer's license or casino service license based on the
  suitability standards that apply to the company applicant. A
  person may not be found suitable to receive or hold a manufacturer's
  license or casino service license if that person would be found
  unsuitable to hold a casino owner's license under Section
  2202.055(e).
         (b)  If the commission has reasonable grounds to believe that
  a license holder is unsuitable to hold a manufacturer's license or
  casino service license, the commission:
               (1)  shall conduct an investigation and hearing under
  Sections 2202.351 and 2202.356; and
               (2)  may, based on its determination, suspend, limit,
  or revoke a license.
         (c)  On suspension or revocation of a license, the license
  holder must cease the performance of manufacturing activity or
  casino service requiring a license under this chapter. After the
  revocation or suspension of the license, the affected license
  holder may not receive, directly or indirectly, compensation,
  consideration, or payment of any kind relating to manufacturing
  activity or provision of casino services in any capacity requiring
  a license under this chapter, other than the payment for goods or
  services provided before the suspension or revocation.
         (d)  A casino owner license holder or a casino operator
  license holder who has entered into a lease with a manufacturer's
  license holder or casino services license holder whose license has
  been revoked or suspended may continue to make payments on the lease
  based on the original terms and conditions of the lease without
  modification or may accelerate the lease and pay it off, at the sole
  option of the casino owner license holder or casino operator
  license holder.
         (e)  The burden of proving suitability to receive and hold a
  manufacturer's license or casino service license is on the license
  holder.
  SUBCHAPTER E. LICENSE RENEWAL AND FEES
         Sec. 2202.201.  TERMS; RENEWAL. (a)  Except as provided by
  Section 2202.063, an original or renewal license expires on the
  first anniversary of the date it is issued.
         (b)  The fee for a casino owner's license, casino operator's
  license, occupational license, manufacturer's license, or casino
  service license is in the amount provided by Section 2202.203 and
  must be paid annually. A license holder may renew an unexpired
  license by meeting the licensing requirements of the commission and
  paying the annual fee.
         Sec. 2202.202.  APPLICATION FEES. (a) An application fee
  received under this section must be:
               (1)  deposited in the Texas casino gaming fund; and
               (2)  used for the operation of the commission.
         (b)  An applicant for a Class I casino owner's license must
  pay an application fee of $1,000,000.
         (c)  An applicant for a Class II or Class III casino owner's
  license must pay an application fee of $500,000.
         (d)  An applicant for a manufacturer's license must pay an
  application fee of $300,000.
         (e)  An applicant for an operator's license must pay an
  application fee of $100,000.
         (f)  An applicant for a casino service license must pay an
  application fee of $200.
         (g)  A person registering and applying to qualify to hold an
  equity interest in a license holder must pay an application fee of
  $200.
         (h)  An individual applying for an occupational license must
  pay an application fee of $100.
         (i)  All application fees must be in the form of a money order
  or cashier's check and be payable to the Texas Gaming Commission,
  except that the commission may provide for the payment of the fees
  by electronic funds transfer or similar method. Application fees
  are nonrefundable.
         (j)  Application fees shall be applied toward the cost of
  investigating applicants' suitability for licensing or
  qualification under this chapter. Any costs of investigation
  incurred in excess of the application fee shall be paid by the
  applicant.
         Sec. 2202.203.  LICENSE FEES. (a) A holder of a Class I
  casino owner's license must pay an initial license fee of
  $50,000,000 and an annual license fee of $1,000,000. The initial
  license fee for a casino owner's license must be paid not later than
  the 30th day after the date the license is approved by the
  commission.
         (b)  A holder of a Class II or Class III casino owner's
  license must pay an initial license fee of $10,000,000 and an annual
  license fee of $500,000.
         (c)  A holder of a manufacturer's license must pay an annual
  license fee of $200,000.
         (d)  A holder of an operator's license must pay an annual
  license fee of $100,000.
         (e)  A holder of a casino service license must pay an annual
  license fee of $200.
         (f)  A holder of an equity interest in any license holder
  that is required to qualify with the commission must pay an annual
  fee of $200.
         (g)  A holder of an occupational license must pay an annual
  license fee of $100.
  SUBCHAPTER F. TEXAS CASINO GAMING FUND; TAXES ON GROSS GAMING
  REVENUE
         Sec. 2202.251.  TEXAS CASINO GAMING FUND. (a) The Texas
  casino gaming fund is a special fund in the state treasury.
         (b)  All application fees, investigation fees, and license
  fees collected by the commission or on the commission's behalf
  related to casino gaming shall be deposited to the credit of the
  Texas casino gaming fund.
         (c)  The Texas casino gaming fund may be used only for the
  operation of the commission and the administration of this chapter.
  If the money in the fund exceeds the amount necessary for the
  operation of the commission and the administration of this chapter,
  the legislature may transfer any excess amount to the general
  revenue fund.
         (d)  The operation of the commission and the administration
  of this chapter shall be supported by fees generated under this
  chapter and by a portion of the taxes imposed by Section 2202.252.
         Sec. 2202.252.  CASINO GAMING TAX; ALLOCATION OF TAX. (a)  A
  gaming tax is imposed on each holder of a casino owner's license in
  an amount equal to:
               (1)  10 percent of the gross gaming revenue of the
  casino from all gambling games operated under the license except
  slot machines; and
               (2)  25 percent of the gross gaming revenue of the
  casino from slot machines.
         (b)  The tax shall be computed and paid on a monthly basis in
  accordance with the procedures established by commission rule.
         (c)  Except as provided by Subsections (d), (e), and (f), the
  revenue from the taxes imposed by this section is allocated to the
  general revenue fund.
         (d)  Of the revenue from the tax imposed by Subsection (a):
               (1)  one-thirtieth of the revenue is allocated to the
  municipality in which the casino to which the license relates is
  located, and one-thirtieth of the revenue is allocated to the
  county in which the casino to which the license relates is located;
  or
               (2)  if the casino is located in an unincorporated
  area, one-fifteenth of the revenue is allocated to the county in
  which the casino to which the license relates is located.
         (e)  The comptroller shall transfer the appropriate amount
  allocated under Subsection (d) to the appropriate municipalities
  and counties not less than monthly in the manner the comptroller
  considers appropriate.
         (f)  Of the revenue from the tax imposed by Subsection (a):
               (1)  one-half of one percent shall be allocated to the
  general revenue fund and may be appropriated only to fund a
  compulsive gambling program established under Subchapter J; and
               (2)  $500,000 may be appropriated in each state fiscal
  biennium to the Department of Public Safety to be used to provide
  grants to prosecuting attorneys for the investigation and
  prosecution of offenses related to the possession of gambling
  devices.
         (g)  The taxes imposed by this section are due and payable on
  or before the 20th day of the month following the month in which the
  taxes are imposed.
         (h)  If the amount of gaming taxes required to be reported
  and paid under this section is later determined to be greater or
  less than the amount actually reported and paid by the license
  holder, the commission shall:
               (1)  assess and collect the additional gaming taxes
  determined to be due with interest until paid; or
               (2)  refund any overpayment, with interest, to the
  license holder.
         (i)  Interest required to be refunded under Subsection
  (h)(2) must be computed, until paid, at the rate of one percent per
  month from the first day of the first month following the due date
  of the additional gaming taxes.
         Sec. 2202.253.  DETERMINATION OF GROSS GAMING REVENUE. (a)
  In calculating gross gaming revenue, a prize, premium, drawing,
  benefit, or ticket that is redeemable for money, merchandise, or
  other promotional allowance, except money, chips, or tokens paid at
  face value directly to a patron as the result of a specific wager
  and the amount of cash paid to purchase an annuity to fund winnings,
  may not be deducted from gross gaming revenue as a loss at any game
  except a slot machine or a table game with a progressive jackpot.
         (b)  In calculating gross gaming revenue from slot machines
  at a casino, the actual cost to the license holder of any personal
  property distributed to a patron as the result of a legitimate wager
  may be deducted as a loss, but travel expenses, food, refreshments,
  lodging, or services at the license holder's facility may not be
  deducted. For the purposes of this subsection, personal property is
  distributed as the result of a legitimate wager if a patron must
  make a wager before receiving the personal property, regardless of
  whether the receipt of the personal property is dependent on the
  outcome of the wager.
         (c)  Cash or the value of noncash prizes awarded to patrons
  in a contest or tournament are not losses for purposes of
  determining gross gaming revenue under this section.
         Sec. 2202.254.  REFUND OF OVERPAYMENT. (a) Taxes imposed
  under this subchapter that are erroneously collected may be
  refunded, on approval of the commission, as other claims against
  the state are paid.
         (b)  Not later than the 90th day after the date notice of the
  commission's action on a claim for refund filed under this chapter
  is sent by mail, the claimant may bring an action against the
  commission on the grounds stated in the claim for the recovery of
  any part of the amount of the claim that has been disallowed.
         (c)  Failure to bring an action within the time specified by
  Subsection (b) constitutes a waiver of any demand against the state
  on account of alleged overpayments.
         (d)  If the commission fails to mail its notice of action on a
  claim within six months after the date the claim is filed, the
  claimant may consider the claim disallowed and bring an action
  against the commission on the grounds set forth in the claim for the
  recovery of any part of the amount claimed as an overpayment.
         (e)  In a case where a refund is granted, interest is allowed
  at the rates provided in Section 111.064, Tax Code.
         (f)  A claim for refund of taxes imposed under this
  subchapter that are paid in excess of the amount required to be
  reported and paid must be filed not later than two years after the
  date of overpayment.
         Sec. 2202.255.  DETERMINATION OF DEFICIENCY. (a) If a
  casino owner license holder fails to make a report of the taxes
  imposed under this subchapter as required by this chapter, or if the
  executive director is not satisfied with the license holder's
  report of the taxes, the executive director may compute and
  determine the amount required to be paid based on:
               (1)  any facts contained in the report;
               (2)  an audit conducted by the executive director;
               (3)  an estimate of the amount of taxes due;
               (4)  any information in the commission's possession or
  that may come into the executive director's possession; or
               (5)  any combination of the methods described by
  Subdivisions (1)-(4).
         (b)  In making a determination, the commission may offset
  overpayments and interest due against underpayments and interest or
  penalties due for the period of the audit.
         (c)  The executive director shall give prompt written notice
  of a determination of a deficiency under this section to the casino
  owner license holder. Except in the case of fraud or intent to evade
  the payment of the tax, a notice of a determination of a deficiency
  must be mailed not later than that later of the second anniversary
  of the:
               (1)  last day of the calendar month following the
  applicable reporting period in which the deficiency occurred; or
               (2)  date the report is filed by the license holder.
         (d)  If the reasons for the deficiency are not apparent, the
  executive director shall include an explanation of those reasons in
  the notice of a determination of a deficiency.
         (e)  If overpayments and interest exceed underpayments,
  penalties, and interest, the excess amount shall be refunded to the
  casino owner license holder.
         Sec. 2202.256.  PETITION FOR REVIEW. (a) A casino owner
  license holder against whom a determination is made under Section
  2202.255 may petition the commission for a redetermination not
  later than the 30th day after the date of service of notice of the
  determination. If a petition for redetermination satisfying the
  requirements of Subsection (c) is not filed within the 30-day
  period, the determination becomes final.
         (b)  If a petition for redetermination satisfying the
  requirements of Subsection (c) is filed within the 30-day period,
  the commission shall reconsider the determination and, if the
  petitioner requests, shall grant a hearing.
         (c)  A petition for redetermination must:
               (1)  specify the contested portions of the
  determination of deficiency;
               (2)  specify the grounds for redetermination;
               (3)  state whether a hearing is requested; and
               (4)  be accompanied by payment in full of the
  uncontested portion of the determination, including any interest
  and penalties.
         (d)  An order or decision of the commission on a petition for
  redetermination is final 10 days after the date of service on the
  petitioner.
         (e)  A petitioner against whom an order or decision of the
  commission becomes final may, not later than the 60th day after the
  date the decision is final, petition for judicial review in the
  manner provided by Chapter 2001, Government Code. The executive
  director may not petition for judicial review.
         Sec. 2202.257.  TAX ADMINISTRATION. (a)  The commission
  shall perform all functions incident to the administration,
  collection, enforcement, and operation of a fee or tax imposed
  under this chapter. The commission may adopt rules and prescribe
  forms for the administration, collection, and enforcement of a fee
  or tax and for the reporting of a fee or tax.
         (b)  Subtitle B, Title 2, Tax Code, applies to the
  administration, collection, and enforcement of a tax imposed under
  this subchapter, except that the powers and duties assigned to the
  comptroller under that subtitle are assigned to the commission.
  SUBCHAPTER G. REGULATION OF CASINO OPERATIONS
         Sec. 2202.301.  REGULATION OF CASINO OPERATIONS. (a) The
  commission shall adopt rules applicable to the operation of casinos
  as the commission finds necessary for the protection of the health,
  safety, morals, and general welfare of this state and for the
  reputation of the state's gaming industry.
         (b)  Casinos may operate 24 hours a day, seven days a week. A
  license holder may elect other hours of operation.
         (c)  The commission by rule shall authorize and regulate
  wagering at a casino on the outcome of a sports event. Rules adopted
  under this subsection must be consistent with any rules adopted by
  other state agencies regulating wagering on the outcome of a sports
  event.
         Sec. 2202.302.  USE OF CHIPS OR TOKENS. All gaming must be
  conducted with legal tender of the United States or with chips,
  tokens, or other instrumentality approved by the commission for
  that purpose.
         Sec. 2202.303.  REPORTING REQUIREMENTS. (a) A casino owner
  license holder shall keep the license holder's books and records in
  a manner that clearly shows the total amount of gross gaming
  revenue, as applicable, and other revenues received.
         (b)  The books and records kept by a casino owner license
  holder relating to gaming operations are not public records and the
  publication and dissemination of the materials by the commission is
  prohibited.
         (c)  A casino owner license holder shall file a report of
  each change of the corporate officers and directors with the
  commission. The commission shall, not later than the 90th day after
  the date of the change, approve or disapprove the change. During
  the 90-day period, the officer or director is entitled to exercise
  the powers of the office to which the officer or director was
  elected or appointed.
         (d)  A casino owner license holder shall report to the
  executive director in writing a change in company employees who
  have been designated as key employees.
         (e)  The commission may require that a company furnish the
  commission with a copy of its federal income tax return not later
  than the 30th day after the date the return is filed with the
  federal government.
         Sec. 2202.304.  EXCLUSION OF PERSONS. (a) The commission by
  rule shall provide for the establishment of a list of persons who
  must be excluded or ejected from a casino. The list may include a
  person whose presence in the casino or establishment is determined
  by the commission to pose a threat to the interests of this state,
  to licensed gaming, or to both interests.
         (b)  In making a determination under this section, the
  commission may consider any:
               (1)  prior conviction of a crime that is a felony in
  this state or under the laws of the United States or a crime
  involving moral turpitude or a violation of the gaming laws of a
  state; or
               (2)  violation of or conspiracy to violate this chapter
  relating to:
                     (A)  the failure to disclose an interest in a
  casino for which the person must obtain a license;
                     (B)  willful evasion of a fee or a tax;
                     (C)  notorious or unsavory reputation that would
  adversely affect public confidence and trust that the gaming
  industry is free from criminal or corruptive elements; or
                     (D)  a written order of a governmental agency that
  authorizes the exclusion or ejection of the person from a casino
  where casino gaming or pari-mutuel wagering is conducted.
         Sec. 2202.305.  INTERNAL AUDIT AND CONTROL SYSTEMS. (a)  A
  casino owner license holder shall adopt an internal control system
  that provides for:
               (1)  the safeguarding of its assets and revenues,
  especially the recording of cash and evidences of indebtedness; and
               (2)  the provision of reliable records, accounts, and
  reports of transactions, operations, and events, including reports
  to the executive director and the commission.
         (b)  The internal control system must be designed to
  reasonably ensure that:
               (1)  assets are safeguarded;
               (2)  financial records are accurate and reliable;
               (3)  transactions are performed only in accordance with
  management's general or specific authorization;
               (4)  transactions are recorded adequately to allow
  proper reporting of gaming revenue and of fees and taxes and to
  maintain accountability for assets;
               (5)  access to assets is allowed only in accordance
  with management's specific authorization;
               (6)  recorded accountability for assets is compared
  with actual assets at reasonable intervals and appropriate action
  is taken with respect to any discrepancies; and
               (7)  functions, duties, and responsibilities are
  appropriately segregated and performed in accordance with sound
  practices by competent, qualified personnel.
         (c)  A casino owner license holder and an applicant for a
  casino owner's license shall describe, in a manner approved or
  required by the executive director, the license holder's or
  applicant's administrative and accounting procedures in detail in a
  written system of internal control. A casino owner license holder
  and applicant for a casino owner's license shall submit a copy of
  the license holder's or applicant's written system to the executive
  director. A written system must include:
               (1)  an organizational chart depicting appropriate
  segregation of functions and responsibilities;
               (2)  a description of the duties and responsibilities
  of each position shown on the organizational chart;
               (3)  a detailed, narrative description of the
  administrative and accounting procedures designed to satisfy the
  requirements of Section 2202.303(a);
               (4)  a written statement signed by the license holder's
  chief financial officer and either the license holder's chief
  executive officer or the casino owner license holder attesting that
  the system satisfies the requirements of this section;
               (5)  if the written system is submitted by an
  applicant, a letter from an independent certified public accountant
  stating that the applicant's written system has been reviewed by
  the certified public accountant and complies with the requirements
  of this section; and
               (6)  other items the executive director may require.
         (d)  The commission shall adopt minimum standards for
  internal control procedures.
         Sec. 2202.306.  AGE REQUIREMENTS. A person under the age of
  21 years may not:
               (1)  play, be allowed to play, place wagers, or collect
  winnings, personally or through an agent, from any casino gaming
  authorized under this chapter; or
               (2)  be employed as a gaming employee.
         Sec. 2202.307.  ACCEPTANCE OF CREDIT INSTRUMENTS. (a) A
  credit instrument evidencing a gaming transaction may be enforced
  by legal process.
         (b)  A license holder may accept an incomplete credit
  instrument that is signed by a patron and states the amount of the
  debt. The license holder may complete the instrument as is
  necessary for the instrument to be presented for payment.
         (c)  A license holder:
               (1)  may not accept a credit instrument that is
  incomplete, except as authorized by Subsection (b); and
               (2)  may accept a credit instrument that is payable to
  an affiliate or may complete a credit instrument in the name of an
  affiliate as payee if the credit instrument otherwise complies with
  this section and the records of the affiliate pertaining to the
  credit instrument are made available to the executive director on
  request.
         (d)  This section does not prohibit the establishment of an
  account by a deposit of cash, recognized traveler's check, or any
  other instrument that is equivalent to cash.
         (e)  Any person, license holder, or the agents or employees
  of the person or license holder who violate this section are subject
  only to the penalties provided in this chapter relating to
  disciplinary actions. The failure of a person to comply with this
  section or commission rules does not invalidate a credit instrument
  or affect the ability to enforce the credit instrument or the
  transaction that the credit instrument represents.
         Sec. 2202.308.  GAMBLING DEBTS. (a)  Except as otherwise
  provided by this chapter, gambling debts not evidenced by a credit
  instrument are void and unenforceable and do not give rise to any
  administrative or civil cause of action.
         (b)  A claim by a patron of a license holder for payment of a
  gambling debt not evidenced by a credit instrument may be resolved
  by the executive director under commission rules.
         (c)  The executive director shall send a copy of the
  director's ruling by first class mail to the attorneys of record and
  shall keep an appropriate copy of the mailing. If a party is not
  represented by an attorney of record, the executive director shall
  send a copy of the ruling by first class mail to the party and shall
  keep an appropriate record of the mailing.
         (d)  A party or attorney of record notified by mail under
  this section is presumed to have been notified on the date on which
  the notice is mailed.
         (e)  A party aggrieved by the executive director's ruling is
  entitled to have the claim resolved by the commission in a contested
  case under Chapter 2001, Government Code, if the party files a
  written complaint with the commission challenging the executive
  director's decision not later than the 20th day after the date on
  which the party or the party's attorney of record is notified by
  mail.
         Sec. 2202.309.  QUESTIONING AND DETENTION OF PERSONS. (a) A
  casino owner license holder or the license holder's officer,
  employee, or agent may question any person on the license holder's
  premises suspected of violating this chapter. The casino owner
  license holder or the license holder's officer, employee, or agent
  is not criminally or civilly liable:
               (1)  as a result of the questioning; or
               (2)  for reporting the person suspected of the
  violation to the executive director or law enforcement authorities.
         (b)  A casino owner license holder or the license holder's
  officer, employee, or agent who has reasonable cause to believe
  that there has been a violation of this chapter in the license
  holder's casino by a person may take that person into custody and
  detain the person in the casino in a reasonable manner and for a
  reasonable length of time. The taking into custody and detention
  does not render a license holder or the license holder's officer,
  employee, or agent criminally or civilly liable unless it is
  established by clear and convincing evidence that the taking into
  custody and detention are unreasonable under all the circumstances.
         (c)  A casino owner license holder or the license holder's
  officer, employee, or agent is not entitled to the immunity from
  liability provided by Subsection (a) or (b) unless there is
  displayed in a conspicuous place in the license holder's
  establishment a notice in boldface type, clearly legible, and in
  substantially this form:
               A CASINO OWNER LICENSE HOLDER OR THE HOLDER'S
  OFFICER, EMPLOYEE, OR AGENT WHO HAS A REASONABLE CAUSE
  TO BELIEVE THAT A PERSON HAS VIOLATED A PROVISION OF
  CHAPTER 2202, OCCUPATIONS CODE, MAY QUESTION OR DETAIN
  THAT PERSON IN THIS ESTABLISHMENT.
         Sec. 2202.310.  SLOT MACHINE DISABLED. (a)  The commission
  may disable a slot machine operated by a license holder under this
  chapter at the time:
               (1)  a proceeding to summarily suspend the license is
  initiated;
               (2)  the commission discovers the license holder failed
  to deposit money received from slot machine operations as required
  if the license is being summarily suspended under this section; or
               (3)  an act or omission occurs that, under commission
  rules, justifies the termination of slot machine operations to:
                     (A)  protect the integrity of gaming or the public
  health, welfare, or safety; or
                     (B)  prevent financial loss to this state.
         (b)  The commission shall immediately disable a slot machine
  if necessary to protect the public health, welfare, or safety.
         Sec. 2202.311.  SLOT MACHINE: DISTRIBUTION AND COMMISSION
  APPROVAL. (a)  A person may not distribute a slot machine or other
  gaming or associated equipment for placement at a casino or
  destination resort in this state unless the machine or equipment
  has been approved by the commission.
         (b)  Only a person that holds a manufacturer's license issued
  under this chapter may apply for approval of a slot machine or other
  gaming or associated equipment.
         Sec. 2202.312.  TECHNICAL STANDARDS FOR GAMING EQUIPMENT.
  The commission by rule shall establish minimum technical standards
  for gaming equipment that may be operated in this state.
         Sec. 2202.313.  INCIDENT REPORTS. (a) A casino owner
  license holder or casino operator license holder shall record all
  potential criminal violations related to gaming activity in the
  casino operated by the owner or operator.
         (b)  The casino owner license holder or casino operator
  license holder for a casino shall assign each incident, without
  regard to materiality, a sequential number and, at a minimum,
  provide the following information in a permanent record prepared in
  accordance with commission rules to ensure the integrity of the
  record:
               (1)  the number assigned to the incident;
               (2)  the date and time of the incident;
               (3)  the nature of the incident;
               (4)  each person involved in the incident; and
               (5)  the name of the employee or other agent of the
  owner or operator who investigated the incident.
         Sec. 2202.314.  SLOT MACHINE EVENTS. A casino owner license
  holder or casino operator license holder of a casino shall keep a
  database of slot machine events. The commission by rule shall
  determine what constitutes a slot machine event for purposes of
  this section.
         Sec. 2202.315.  SECURITY. (a) The casino owner license
  holder or casino operator license holder of a casino shall:
               (1)  continuously monitor all slot machines through the
  use of a closed-circuit television system that records activity for
  a continuous 24-hour period, retain all videotapes or other media
  used to store video images for not fewer than seven days, and make
  the tapes or media available to the commission on request;
               (2)  submit for commission approval a security plan and
  a floor plan of the area where slot machines are operated showing
  slot machine locations and security camera mount locations; and
               (3)  employ at least the minimum number of private
  security personnel the commission determines is necessary to
  provide for safe and approved operation of the casino and the safety
  and well-being of the players.
         (b)  Private security personnel must be present during all
  hours of operation at each casino.
         (c)  An agent or employee of the commission or the Department
  of Public Safety or other law enforcement personnel may be present
  at a casino at any time.
         (d)  The commission may adopt rules to impose additional
  surveillance and security requirements related to casinos and the
  operation of slot machines.
         Sec. 2202.316.  COMMISSION RIGHT TO ENTER. The commission
  or the commission's representative, after displaying appropriate
  identification and credentials, has the free and unrestricted right
  to:
               (1)  enter the premises of a casino;
               (2)  enter at all times any other locations involved in
  operation or support of slot machines; and
               (3)  inspect and copy the records of the owner or
  operator of a casino pertaining to the operation of slot machines.
         Sec. 2202.317.  APPOINTMENT OF SUPERVISOR. (a) The
  commission by rule may provide for the appointment of a supervisor
  to manage and operate a casino at the direction of the commission
  and perform any act that a casino owner license holder or casino
  operator license holder is entitled to perform in the event that:
               (1)  the owner's or operator's license or other license
  required for operation of the casino is revoked or suspended,
  lapses, or is surrendered;
               (2)  a casino has been conveyed or transferred to a
  secured party receiver or trustee who does not hold the necessary
  licenses to operate the casino; or
               (3)  any other event occurs that causes the casino to
  cease the operation of slot machines.
         (b)  The rules may allow the commission to:
               (1)  take any action or adopt any procedure necessary
  to operate a casino pending the licensing of an owner or operator or
  a successor on the transfer or sale of the casino or property; and
               (2)  if necessary to continue the operation of the
  casino, sell the casino to a person that holds or has applied for
  the licenses required to operate the casino under this chapter and
  make appropriate distributions of the proceeds of the sale.
         Sec. 2202.318.  OFFENSE: CONVEYANCE OF CASINO PROPERTY. (a)  
  A person commits an offense if during the pendency of any proceeding
  before the commission that may result in the appointment of a
  supervisor or during the period of supervision the person:
               (1)  sells, leases, or otherwise conveys for less than
  full market value or pledges as security any property of a casino;
  or
               (2)  removes from this state or secretes from the
  commission or the supervisor any property, money, books, or records
  of the casino, including evidences of debts owed to the casino.
         (b)  An offense under Subsection (a) is a felony of the third
  degree.
  SUBCHAPTER H. ENFORCEMENT
         Sec. 2202.351.  ENFORCEMENT. (a) The executive director
  shall conduct an appropriate investigation to:
               (1)  determine whether there has been a violation of
  this chapter or of a commission rule;
               (2)  determine facts, conditions, practices, or
  matters that the director considers necessary or proper to aid in
  the enforcement of a law or rule;
               (3)  aid in adopting rules;
               (4)  secure information as a basis for recommending
  legislation relating to this chapter; and
               (5)  determine whether a license holder is able to meet
  the license holder's financial obligations, including all
  financial obligations imposed by this chapter, as they become due.
         (b)  If after an investigation the executive director is
  satisfied that a license should be limited, conditioned, suspended,
  or revoked, or that a fine should be levied, the executive director
  shall initiate a hearing under Section 2202.356.
         Sec. 2202.352.  PRIVILEGED DOCUMENTS. (a)  A communication
  or document of an applicant or license holder that is required by
  law or commission rule or by a subpoena issued by the commission and
  that is to be made or transmitted to the commission or the executive
  director is privileged and does not impose liability for defamation
  or constitute a ground for recovery in a civil action by a person
  other than the commission.
         (b)  If a document or communication contains information
  that is privileged, the privilege is not waived or lost because the
  document or communication is disclosed to the commission or the
  executive director.
         (c)  Notwithstanding the powers granted to the commission
  and the executive director by this chapter:
               (1)  the commission and the executive director may not
  release or disclose privileged information, documents, or
  communications provided by an applicant and required by a lawful
  court order after timely notice of the proceedings has been given to
  the applicant or license holder without the prior written consent
  of the applicant or license holder;
               (2)  the commission and the executive director shall
  maintain all privileged information, documents, and communications
  in a secure place accessible only to members of the commission and
  the executive director; and
               (3)  the commission shall adopt procedures to protect
  the privileged nature of information, documents, and
  communications provided by an applicant or license holder.
         Sec. 2202.353.  RELEASE OF CONFIDENTIAL INFORMATION. An
  application to a court for an order requiring the commission or the
  executive director to release any information declared by law to be
  confidential shall be made only on a motion in writing delivered not
  later than the 10th day before the date of application to the
  commission, the attorney general, and all persons who may be
  affected by the entry of the order. Copies of the motion and all
  papers filed in support of the motion shall be served with the
  notice by delivering a copy in person or by certified mail to the
  last known address of the person to be served.
         Sec. 2202.354.  EMERGENCY ORDERS. (a) The commission may
  issue an emergency order for suspension, limitation, or
  conditioning of a license or may issue an emergency order requiring
  a casino to keep an individual license holder from the premises of
  the licensed establishment or to not pay the license holder any
  remuneration for services or any profits, income, or accruals on
  the license holder's investment in the casino.
         (b)  An emergency order may be issued only if the commission
  determines that:
               (1)  a license holder has wilfully failed to report,
  pay, or truthfully account for a fee imposed under this chapter or
  wilfully attempted in any manner to evade or defeat a fee or
  payment;
               (2)  a license holder or gaming employee has cheated at
  a gambling game; or
               (3)  the action is necessary for the immediate
  preservation of the public peace, health, safety, morals, good
  order, or general welfare.
         (c)  The emergency order must state the grounds on which it
  is issued, including a statement of facts constituting the alleged
  emergency necessitating the action.
         (d)  An emergency order may be issued only with the approval
  of and under the signature of four or more members of the
  commission.
         (e)  An emergency order is effective immediately on issuance
  and service on the license holder or resident agent of the license
  holder, gaming employee, or, in cases involving registration, on
  issuance and service on the person or entity involved or resident
  agent of the entity involved. An emergency order may suspend,
  limit, condition, or take other action in relation to the license of
  one or more persons in an operation without affecting other
  individual license holders or the casino. An emergency order
  remains effective until further order of the commission or final
  disposition of the case.
         (f)  Not later than the fifth day after the date of issuance
  of an emergency order, the executive director shall file a
  complaint and serve it on the person or entity involved. The person
  or entity against whom the emergency order has been issued and
  served is entitled to a hearing before the commission and to
  judicial review of the decision and order of the commission under
  Chapter 2001, Government Code. Judicial review is under the
  substantial evidence rule, as provided by that chapter.
         Sec. 2202.355.  REVOCATION OF LICENSE. (a)  The commission
  shall revoke or suspend a license issued under this chapter if the
  holder of the license at any time fails to meet the eligibility
  requirements set forth in this chapter.
         (b)  Failure to timely remit gaming revenue generated by slot
  machines to the commission or any tax or other fee owed to this
  state as demonstrated by report from the applicable taxing
  authority or to timely file any report or information required
  under this chapter as a condition of any license issued under this
  chapter may be grounds for suspension or revocation, or both, of a
  license issued under this chapter.
         Sec. 2202.356.  DISCIPLINARY HEARING. (a) Before the
  commission revokes or suspends a license or imposes monetary
  penalties for a violation of this chapter, the commission shall
  provide written notice to the license holder of the revocation, the
  period of suspension, or the monetary penalty. The notice shall
  include:
               (1)  the effective date of the revocation or the period
  of suspension or the amount of the monetary penalty, as applicable;
               (2)  each reason for the revocation, suspension, or
  penalty;
               (3)  an explanation of the evidence supporting the
  reasons;
               (4)  an opportunity to present the license holder's
  position in response on or before the 15th day after the effective
  date of the revocation; and
               (5)  a statement explaining the person's right to an
  administrative hearing to determine whether the revocation,
  suspension, or penalty is warranted.
         (b)  The notice required under Subsection (a) must be made by
  personal delivery or by mail to the person's mailing address as it
  appears on the commission's records.
         (c)  To obtain an administrative hearing on a suspension,
  revocation, or penalty under this section, a person must submit a
  written request for a hearing to the commission not later than the
  20th day after the date notice is delivered personally or is mailed.
         (d)  If the commission receives a timely request under
  Subsection (c), the commission shall provide the person with an
  opportunity for a hearing as soon as practicable. If the commission
  does not receive a timely request under Subsection (c), the
  commission may impose the penalty, revoke or suspend a license, or
  sustain the revocation or suspension without a hearing.
         (e)  Except as provided by Subsection (f), the hearing must
  be held not earlier than the 11th day after the date the written
  request is submitted to the commission.
         (f)  The commission may provide that a revocation or
  suspension takes effect on receipt of notice under Subsection (a)
  if the commission finds that the action is necessary to prevent or
  remedy a threat to public health, safety, or welfare. The
  commission by rule shall establish a nonexclusive list of
  violations that present a threat to the public health, safety, or
  welfare.
         (g)  A hearing on a revocation or suspension that takes
  effect on receipt of notice must be held not later than the 14th day
  after the date the commission receives the request for hearing
  under this section. The revocation or suspension continues in
  effect until the hearing is completed. If the hearing is continued,
  the revocation or suspension shall continue in effect beyond the
  14-day period at the request of the license holder or on a finding
  of good cause by the commission or administrative law judge.
         (h)  To prevail in an administrative hearing under this
  section occurring after revocation or suspension, the license
  holder must demonstrate by clear and convincing evidence that the
  deprivation or imposition of a penalty was unwarranted or otherwise
  unlawful. The post-deprivation hearing may be conducted by the
  commission or referred to the State Office of Administrative
  Hearings.
         (i)  The administrative record created by the hearing
  conducted by the State Office of Administrative Hearings shall be
  provided to the commission for review and determination on the
  revocation or suspension.
         (j)  If an administrative law judge of the State Office of
  Administrative Hearings conducts a hearing under this section and
  the proposal for decision supports the commission's position, the
  administrative law judge shall include in the proposal a finding of
  the costs, fees, expenses, and reasonable and necessary attorney's
  fees this state incurred in bringing the proceeding.
         (k)  The commission may adopt the findings for costs, fees,
  and expenses and make the finding a part of the final order entered
  in the proceeding.  Proceeds collected from a finding made under
  this section shall be paid to the commission.
         Sec. 2202.357.  JUDICIAL REVIEW OF REVOCATION, SUSPENSION,
  OR PENALTY IMPOSITION. (a) A person aggrieved by a final decision
  of the commission to revoke or suspend a license or to impose any
  monetary penalty may obtain judicial review before a district court
  in Travis County.
         (b)  The judicial review must be instituted by serving on the
  commission and filing a petition not later than the 20th day after
  the effective date of the final decision and must identify the order
  appealed from and the grounds or reason why the petitioner contends
  the decision of the commission should be reversed or modified.
         (c)  The review must be conducted by the court sitting
  without jury, and must not be a trial de novo but is confined to the
  record on review. The reviewing court may only affirm the decision,
  remand the case for further proceedings, or reverse the decision if
  the substantial rights of the petitioner have been violated.
         (d)  If any court of competent jurisdiction concludes on
  judicial review limited to the administrative record before the
  commission and subject to the substantial evidence standard that
  the revocation, suspension, or penalty was unwarranted or otherwise
  unlawful, the sole remedy available is invalidation of the penalty
  or reinstatement of the license and the continued distribution,
  manufacture, or operation of slot machines.
         (e)  The commission, this state, or the members, officers,
  employees, and authorized agents of the commission or the state are
  not under any circumstances subject to monetary damages, attorney's
  fees, or court costs resulting from a penalty imposed or from the
  revocation of a license.
         Sec. 2202.358.  EFFECT OF DENIAL OF LICENSE. (a) If a
  person denied a license has previously been issued a temporary
  license, the temporary license expires immediately on the issuance
  of the denial.
         (b)  Except as otherwise authorized by the commission, a
  person denied a license may not reapply for any license before the
  second anniversary of the date of the denial.
         Sec. 2202.359.  AGREEMENT TO WAIVE ENFORCEABILITY. A
  license holder by virtue of accepting the license agrees that the
  privilege of holding a license under this chapter is conditioned on
  the holder's agreement to Sections 2202.355, 2202.356, and 2202.357
  and the holder waives any right to challenge or otherwise appeal the
  enforceability of those sections.
         Sec. 2202.360.  LIMITED WAIVER OF SOVEREIGN IMMUNITY; NO
  LIABILITY OF STATE FOR ENFORCEMENT. (a) This state does not waive
  its sovereign immunity by negotiating gaming agreements with Indian
  tribes or other persons for the operation of casino gaming or
  gambling games under this subtitle. An actor or agent for this state
  may not waive this state's sovereign immunity absent an express
  legislative grant of that authority. The only waiver of sovereign
  immunity relative to gaming operations is provided by this section.
         (b)  With regard to gaming operations on Indian lands, this
  state consents to the jurisdiction of the District Court of the
  United States with jurisdiction in the county where the Indian
  lands are located, or if the federal court lacks jurisdiction, to
  the jurisdiction of a district court in Travis County, solely for
  the purpose of resolving disputes arising from a gaming agreement
  authorized under this chapter or Chapter 2203 for declaratory or
  injunctive relief or contract damages of $100,000 or more. Any
  disputes relating to damages or other awards valued at less than
  $100,000 shall be arbitrated under the rules of the American
  Arbitration Association, provided, however, that application of
  the rules may not be construed as a waiver of sovereign immunity.
         (c)  All financial obligations of the commission are payable
  solely out of the income, revenues, and receipts of the commission
  and are subject to statutory restrictions and appropriations.
         (d)  This state and the commission are not liable if
  performance by the commission is compromised or terminated by acts
  or omissions of the legislature or the state or federal judiciary.
         (e)  This state and the commission are not liable for acts or
  omissions related to the enforcement of this subtitle.
         Sec. 2202.361.  ABSOLUTE PRIVILEGE OF REQUIRED
  COMMUNICATIONS AND DOCUMENTS. (a)  Any communication, document, or
  record of an applicant for or holder of a license that is made or
  transmitted to the commission or any of its employees to comply with
  any law, including a commission rule, to comply with a subpoena
  issued by the commission, or to assist the commission or its
  designee in the performance of their respective duties is
  absolutely privileged, does not impose liability for defamation,
  and is not a ground for recovery in any civil action.
         (b)  If a communication, document, or record provided under
  Subsection (a) contains any information that is privileged under
  state law, that privilege is not waived or lost because the
  communication, document, or record is disclosed to the commission
  or any commission employees.
         (c)  The commission shall maintain all privileged
  information, communications, documents, and records in a secure
  place as determined in the commission's sole discretion that is
  accessible only to commission members and authorized commission
  employees.
  SUBCHAPTER I. PENALTIES AND OFFENSES
         Sec. 2202.401.  FAILURE TO PAY FEES. (a)  License fees and
  other fees required by this chapter must be paid to the commission
  on or before the dates provided by law for each fee.
         (b)  A person failing to timely pay a fee or tax when due
  shall pay in addition a penalty of not less than $50 or 25 percent of
  the amount due, whichever is the greater. The penalty may not
  exceed $1,000 if the fee or tax is less than 10 days late and may not
  exceed $5,000 under any circumstances. The commission shall
  collect the penalty in the same manner as other charges, license
  fees, and penalties are collected under this chapter.
         Sec. 2202.402.  FAILURE TO REPORT, PAY, OR ACCOUNT FOR FEE OR
  TAX. (a) A person commits an offense if the person wilfully:
               (1)  fails to report, pay, or truthfully account for a
  fee or tax imposed under this chapter; or
               (2)  attempts in any manner to evade or defeat a fee or
  tax.
         (b)  An offense under this section is a Class A misdemeanor.
         Sec. 2202.403.  GAMING FRAUD. (a) A person commits an
  offense if the person knowingly:
               (1)  alters or misrepresents the outcome of a game or
  other event on which wagers have been made after the outcome is made
  sure but before it is revealed to the players;
               (2)  places, increases, or decreases a bet or
  determines the course of play after acquiring knowledge, not
  available to all players, of the outcome of the game or an event
  that affects the outcome of the game or that is the subject of the
  bet or aids anyone in acquiring such knowledge for the purpose of
  placing, increasing, or decreasing a bet or determining the course
  of play contingent on that event or outcome;
               (3)  claims, collects, or takes, or attempts to claim,
  collect, or take, money or anything of value in or from a gambling
  game, with the intent to defraud, without having made a wager
  contingent on the game;
               (4)  claims, collects, or takes an amount greater than
  the amount won from a gambling game;
               (5)  entices or induces another to go to a place where a
  gambling game is being conducted or operated in violation of this
  subtitle, with the intent that the other person play or participate
  in that gambling game;
               (6)  places or increases a bet after acquiring
  knowledge of the outcome of the game or other event that is the
  subject of the bet, including past posting and pressing bets;
               (7)  reduces the amount wagered or cancels the bet
  after acquiring knowledge of the outcome of the game or other event
  that is the subject of the bet, including pinching bets; or
               (8)  manipulates, with the intent to cheat, a component
  of a gaming device in a manner contrary to the designed and normal
  operational purpose for the component, including varying the pull
  of the handle of a slot machine, with knowledge that the
  manipulation affects the outcome of the game or with knowledge of an
  event that affects the outcome of the game.
         (b)  An offense under this section is a felony of the third
  degree.
         Sec. 2202.404.  USE OF PROHIBITED DEVICES. (a) A person
  commits an offense if the person, at a casino, uses or possesses
  with the intent to use a device, other than those customarily used
  in the conduct of gaming to assist in:
               (1)  projecting the outcome of the game;
               (2)  keeping track of the cards played; or
               (3)  analyzing the probability of the occurrence of an
  event relating to the game.
         (b)  An offense under this section is a felony of the third
  degree.
         Sec. 2202.405.  USE OF COUNTERFEIT OR UNAUTHORIZED TOKEN,
  CHIP, OR COIN. (a)  A person commits an offense if the person
  knowingly uses counterfeit tokens, chips, or coins in a gambling
  game.
         (b)  A person commits an offense if the person, in playing
  any gambling game designed to receive, be played with, or be
  operated by lawful tender of the United States of America or by
  tokens or chips approved by the executive director knowingly uses a
  token, chip, or coin other than tokens, chips, or coins designed for
  the game.
         (c)  A person, other than an authorized employee of an
  owner's license holder acting in furtherance of the person's
  employment within an establishment, commits an offense if the
  person knowingly has on the person's body or in the person's
  possession on or off the premises of a casino a device intended to
  be used to violate the provisions of this chapter.
         (d)  A person, other than an authorized employee of a license
  holder acting in furtherance of the person's employment within a
  casino, commits an offense if the person knowingly has on the
  person's body or in the person's possession on or off the premises
  of a casino a key or device known to have been designed for the
  purpose of and suitable for opening, entering, or affecting the
  operation of a gambling game, a drop box, or an electronic or
  mechanical device connected to the game or box or for removing money
  or other contents from the game or box.
         (e)  A person commits an offense if the person, with the
  intent to manufacture slugs for unauthorized use in gaming devices
  located at a casino, knowingly has on the person's body or in the
  person's possession paraphernalia for manufacturing slugs.  In this
  subsection, "paraphernalia for manufacturing slugs" means the
  equipment, products, and materials that are intended for use or
  designed for use in manufacturing, producing, fabricating,
  preparing, testing, analyzing, packaging, storing, or concealing a
  counterfeit facsimile of the chips or tokens approved by the
  executive director or a lawful coin of the United States, the use of
  which is an offense under Subsection (b). The term includes:
               (1)  lead or lead alloys;
               (2)  molds, forms, or similar equipment capable of
  producing a likeness of a gaming token or United States coin;
               (3)  melting pots or other receptacles;
               (4)  torches; and
               (5)  tongs, trimming tools, or other similar equipment.
         (f)  Possession of more than one of the devices, equipment,
  products, or materials described in this section permits a
  rebuttable inference that the possessor intended to use them to
  cheat. In this subsection, "cheat" has the meaning assigned by
  Section 2202.406.
         (g)  An offense under this section is a felony of the third
  degree.
         Sec. 2202.406.  CHEATING. (a) In this section, "cheat"
  means to alter the elements of chance, method of selection, or
  criteria that determine the result of a game or the amount or
  frequency of payment in a game.
         (b)  A person commits an offense if the person knowingly
  cheats at any gambling game.
         (c)  An offense under this section is a state jail felony.
         Sec. 2202.407.  POSSESSION OF UNLAWFUL GAMING DEVICES. (a)
  A person commits an offense if the person possesses any slot machine
  or other gaming device that the person knows has been manufactured,
  sold, or distributed in violation of this chapter.
         (b)  An offense under this section is a Class A misdemeanor.
         Sec. 2202.408.  UNLAWFUL MANUFACTURE, SALE, OR DISTRIBUTION
  OF GAMING EQUIPMENT. (a) In this section, "cheat" has the meaning
  assigned by Section 2202.406.
         (b)  A person commits an offense if the person manufactures,
  sells, or distributes cards, chips, dice, a game, or a device
  intended to be used to violate this chapter.
         (c)  A person commits an offense if the person marks, alters,
  or otherwise modifies any associated equipment or gaming device in
  a manner that:
               (1)  affects the result of a wager by determining a win
  or loss; or
               (2)  alters the normal criteria of random selection
  that affect the operation of a game or determine the outcome of a
  game.
         (d)  A person commits an offense if the person instructs
  another person in cheating or in the use of a device for cheating at
  any game authorized to be conducted at a casino, with the knowledge
  or intent that the information or use may be employed to violate
  this chapter.
         (e)  An offense under this section is a felony of the third
  degree.
         Sec. 2202.409.  UNLAWFUL REPORTING. (a) A person commits an
  offense if the person, in a license application, in a book or record
  required to be maintained by this chapter or a rule adopted under
  this chapter, or in a report required to be submitted by this
  chapter or a rule adopted under this chapter:
               (1)  makes a statement or entry that the person knows to
  be false or misleading; or
               (2)  knowingly fails to maintain or make an entry the
  person knows is required to be maintained or made.
         (b)  A person commits an offense if the person knowingly
  refuses to produce for inspection by the executive director a book,
  record, or document required to be maintained or made by this
  chapter or a rule adopted under this chapter.
         (c)  An offense under this section is a Class A misdemeanor.
         Sec. 2202.410.  OTHER UNLAWFUL VIOLATIONS. (a) A person
  commits an offense if the person knowingly violates, attempts to
  violate, or conspires to violate a provision of this chapter
  specifying a prohibited act in a manner that is not otherwise
  specified as an offense under this subchapter.
         (b)  An offense under this section is a Class A misdemeanor.
         Sec. 2202.411.  UNAUTHORIZED OPERATION, USE, OR POSSESSION
  OF GAMING DEVICE. (a) A person may not operate, use, or possess a
  gaming device unless the operation, use, or possession is expressly
  authorized by this chapter or other law.
         (b)  Except for transport to or from a casino and as provided
  by this chapter, a person commits an offense if the person operates,
  uses, or possesses a gaming device that is not authorized under this
  chapter or other law. An offense under this subsection is a felony
  of the third degree.
         (c)  Notwithstanding Subsection (b), a casino owner or
  operator, or a manufacturer may store a gaming device as authorized
  by the commission for a period not to exceed 120 consecutive days,
  and the commission may possess gaming devices for study and
  evaluation.
         (d)  Nothing in this section shall be construed to prohibit
  the operation, use, or possession of equipment, machines,
  technological aids, or other devices allowed in connection with the
  play of bingo under Chapter 2001.
         Sec. 2202.412.  SALE OF GAMBLING GAME TO OR PURCHASE OF
  GAMBLING GAME BY PERSON YOUNGER THAN 21 YEARS OF AGE. (a)  A person
  licensed under this chapter or an employee of the person commits an
  offense if the person intentionally or knowingly allows a person
  younger than 21 years of age to play a gambling game.
         (b)  An individual who is younger than 21 years of age
  commits an offense if the individual:
               (1)  plays a gambling game; or
               (2)  falsely represents the individual to be 21 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 play a gambling game.
         (c)  It is a defense to prosecution under Subsection (b) that
  the individual younger than 21 years of age is participating in an
  inspection or investigation on behalf of the commission or other
  appropriate governmental entity regarding compliance with this
  section.
         (d)  An offense under Subsection (a) is a Class C
  misdemeanor.
         (e)  An offense under Subsection (b) is a misdemeanor
  punishable by a fine not to exceed $250.
         Sec. 2202.413.  PURCHASE OF GAMBLING GAME WITH PUBLIC
  ASSISTANCE FUNDS. (a) A person commits an offense if the person
  intentionally or knowingly plays a gambling game with public
  assistance funds issued to the person under:
               (1)  Chapter 31, Human Resources Code; or
               (2)  Chapter 33, Human Resources Code, including funds
  on electronic benefit transfer cards administered under Chapter 33,
  Human Resources Code.
         (b)  An offense under this section is a Class C misdemeanor.
         Sec. 2202.414.  TAMPERING WITH GAMING OR ASSOCIATED
  EQUIPMENT. (a) A person commits an offense if the person
  intentionally or knowingly tampers with, damages, defaces, or
  renders inoperable any vending machine, electronic computer
  terminal, gaming device or other gaming or associated equipment, or
  other mechanical device used in a gambling game.
         (b)  An offense under this section is a felony of the third
  degree.
         Sec. 2202.415.  EFFECT ON OTHER LAWS. A person who is
  subject to prosecution under an offense under this subchapter and
  an offense under Chapter 47, Penal Code, may be prosecuted under
  either or both laws.
  SUBCHAPTER J. PROBLEM GAMBLING AND ADDICTION
         Sec. 2202.451.  PROBLEM GAMBLING AND ADDICTION GRANT FUND.
  (a)  The problem gambling and addiction grant fund is an account in
  the general revenue fund.
         (b)  Money credited to the fund may be used only for awarding
  grants under this subchapter. The fund shall be administered in
  accordance with this subchapter.
         (c)  An expenditure from the problem gambling and addiction
  grant fund shall be made in accordance with the General
  Appropriations Act.
         (d)  Grants from money in the fund may be used only to:
               (1)  provide treatment for problem gambling, gambling
  addiction, alcoholism, drug abuse, and other addictive behaviors;
  and
               (2)  provide funding for research related to the impact
  of gambling on state residents.
         Sec. 2202.452.  GRANT PROGRAM. (a) From funds appropriated
  for the purpose, the commission shall administer a grant program to
  provide assistance for the direct treatment of persons diagnosed as
  suffering from pathological gambling and other addictive behaviors
  and to provide funding for research regarding the impact of
  gambling on residents of this state.
         (b)  Research grants awarded under this section may include
  grants for determining the effectiveness of education and
  prevention efforts on the prevalence of pathological gambling in
  this state.
         (c)  A grant may be made only after open solicitation of
  proposals and evaluation of proposals against criteria established
  by commission rule.
         (d)  Public and private entities are eligible to apply for
  and receive grants under this section.
         (e)  A grant made in accordance with this section shall be
  made from funds appropriated to the commission from the problem
  gambling and addiction grant fund and funds provided to the
  commission in accordance with Section 2202.453.
         Sec. 2202.453.  GIFTS AND DONATIONS. The commission may
  solicit and accept grants, gifts, contributions, or bequests made
  for the purpose of funding grants under this subchapter and expend
  the money for the purpose described by Section 2202.452, for which
  the money was received.
         Sec. 2202.454.  RULES. (a) The commission shall administer
  this subchapter and adopt rules establishing criteria for
  qualification to receive grants and other matters considered
  necessary by the commission for the administration of this
  subchapter.
         (b)  The rules adopted by the commission must require that
  each recipient of a grant report at least annually to the commission
  the grantee's measurable achievement of specific outcome goals.
  CHAPTER 2203. TRIBAL GAMING AGREEMENTS
         Sec. 2203.001.  DUTY OF GOVERNOR.  The governor shall
  execute, on behalf of this state, with a federally recognized
  Indian tribe with Indian lands in this state a gaming agreement
  containing the terms set forth in Section 2203.002, as a
  ministerial act, without preconditions, not later than the 30th day
  after the date the governor receives a request from the tribe,
  accompanied by or in the form of a duly enacted resolution of the
  tribe's governing body, to enter into the gaming agreement.
         Sec. 2203.002.  MODEL TRIBAL GAMING AGREEMENT. (a) A gaming
  agreement executed under Section 2203.001 must be in the form and
  contain the provisions as follows:
  GAMING AGREEMENT GOVERNING GAMING OPERATIONS Between the [Name of
  Tribe] and the STATE OF TEXAS
         This agreement is made and entered into by and between the
  [Name of Tribe], a federally recognized Indian Tribe ("Tribe"), and
  the State of Texas ("State"), with respect to gaming on the Tribe's
  Indian lands (as defined by Chapter 2201, Texas Occupations Code).
         This agreement governs gambling on Indian lands held in trust
  by the United States on January 1, 1998, for the Tribe.
         Pursuant to express provisions of the Ysleta del Sur Pueblo
  and Alabama and Coushatta Indian Tribes of Texas Restoration Act
  (Pub. L. No. 100-89) addressing jurisdiction, the Tribe may engage
  in any gaming activities that another person may be authorized to
  engage in under Subtitle E, Title 13, Occupations Code.
         The Tribe shall regulate the gaming activities authorized
  under this agreement on the Tribe's Indian lands.
         The Tribe shall adopt rules and procedures substantially
  similar to the requirements of Subtitle E, Title 13, Occupations
  Code, except that any regulatory oversight established under
  Subtitle E for gaming conducted under a license shall be exercised
  by the Tribe for gaming conducted under this agreement. The Tribe
  may adopt the rules and procedures by reference to any provisions of
  Subtitle E, Title 13, Occupations Code.
         (b)  A gaming agreement under Subsection (a) between this
  state and a federally recognized Indian Tribe that is not subject to
  the Ysleta del Sur Pueblo and Alabama and Coushatta Indian Tribes of
  Texas Restoration Act (Pub. L. No. 100-89) may not include the
  provision related to that Act.
         Sec. 2203.003.  NEGOTIATION FOR DIFFERENT TRIBAL GAMING
  AGREEMENT TERMS. (a)  This chapter does not limit the ability of a
  federally recognized Indian tribe to request that a gaming
  agreement be negotiated with this state on terms that are different
  from those set forth in the gaming agreement under Section
  2203.002, or the ability of this state to engage in negotiations and
  to reach agreement under any applicable federal law.
         (b)  In offering to enter into a gaming agreement with Indian
  tribes in this state under Section 2203.002, and, excluding
  assessments by this state as provided in that section of the amounts
  necessary to defray state costs of regulating activities as
  provided under the gaming agreement, nothing in this chapter may be
  construed to mean that:
               (1)  this state is imposing any tax, fee, charge, or
  other assessment on an Indian tribe or on any other person or entity
  authorized by an Indian tribe as a condition to engaging in a Class
  III activity as defined in the Indian Gaming Regulatory Act (Pub. L.
  No. 100-497); or
               (2)  this state is refusing to enter into gaming
  agreement negotiations based on the lack of authority of this state
  or a political subdivision of this state to impose the tax, fee,
  charge, or other assessment.
         (c)  If any federally recognized tribe with jurisdiction
  over Indian lands in this state requests that the governor enter
  into negotiations for a gaming agreement under federal law
  applicable to the tribe, including the Indian Gaming Regulatory Act
  (Pub. L. No. 100-497), on terms different than those prescribed in
  the gaming agreement set forth in Section 2203.002, the governor
  shall enter into those negotiations under the federal law
  applicable to the tribe and without preconditions and is authorized
  to reach agreement and execute the agreement on behalf of this
  state.
         Sec. 2203.004.  IMPLEMENTATION OF GAMING AGREEMENT. The
  governor shall execute any documents necessary to implement a
  gaming agreement authorized under this subchapter.
         Sec. 2203.005.  INCORPORATION INTO STATE LAW. The model
  gaming agreement set out in Section 2203.002 is hereby incorporated
  into state law, and the operation of gaming authorized under the
  agreement is expressly authorized as a matter of state law for any
  Indian tribe entering into the gaming agreement in accordance with
  this subchapter.
         Sec. 2203.006.  REGULATORY MONEY RECEIVED UNDER GAMING
  AGREEMENT. All money received by the commission under a gaming
  agreement for regulatory costs incurred relative to tribal gaming
  operations may be used only to defray expenses of the commission
  incurred in the oversight, compliance with, and enforcement of
  gaming operations conducted pursuant to a gaming agreement.
         Sec. 2203.007.  INJUNCTION; CIVIL PENALTY. (a) If the
  commission, the appropriate governing body for an Indian tribe, or
  the attorney general has reason to believe that this chapter has
  been or is about to be violated, the attorney general may petition a
  court for appropriate injunctive relief to restrain the violation.
  Filing of the petition does not waive applicable sovereign
  immunity.
         (b)  Venue for an action by this state seeking injunctive
  relief is in a district court in Travis County.
         (c)  If the court finds that this chapter has been knowingly
  violated, the court shall order all proceeds from any illegal
  gambling to be forfeited to the appropriate governing body as a
  civil penalty.
         (d)  The remedies provided by this section are not exclusive.
  The commission may suspend or revoke a license, impose an
  administrative penalty, or seek injunctive or civil penalties or
  both, depending on the severity of the violation.
         SECTION 2.  Article 2.12, Code of Criminal Procedure, is
  amended to read as follows:
         Art. 2.12.  WHO ARE PEACE OFFICERS. The following are peace
  officers:
               (1)  sheriffs, their deputies, and those reserve
  deputies who hold a permanent peace officer license issued under
  Chapter 1701, Occupations Code;
               (2)  constables, deputy constables, and those reserve
  deputy constables who hold a permanent peace officer license issued
  under Chapter 1701, Occupations Code;
               (3)  marshals or police officers of an incorporated
  city, town, or village, and those reserve municipal police officers
  who hold a permanent peace officer license issued under Chapter
  1701, Occupations Code;
               (4)  rangers, officers, and members of the reserve
  officer corps commissioned by the Public Safety Commission and the
  Director of the Department of Public Safety;
               (5)  investigators of the district attorneys', criminal
  district attorneys', and county attorneys' offices;
               (6)  law enforcement agents of the Texas Alcoholic
  Beverage Commission;
               (7)  each member of an arson investigating unit
  commissioned by a city, a county, or the state;
               (8)  officers commissioned under Section 37.081,
  Education Code, or Subchapter E, Chapter 51, Education Code;
               (9)  officers commissioned by the General Services
  Commission;
               (10)  law enforcement officers commissioned by the
  Parks and Wildlife Commission;
               (11)  airport police officers commissioned by a city
  with a population of more than 1.18 million located primarily in a
  county with a population of 2 million or more that operates an
  airport that serves commercial air carriers;
               (12)  airport security personnel commissioned as peace
  officers by the governing body of any political subdivision of this
  state, other than a city described by Subdivision (11), that
  operates an airport that serves commercial air carriers;
               (13)  municipal park and recreational patrolmen and
  security officers;
               (14)  security officers and investigators commissioned
  as peace officers by the comptroller;
               (15)  officers commissioned by a water control and
  improvement district under Section 49.216, Water Code;
               (16)  officers commissioned by a board of trustees
  under Chapter 54, Transportation Code;
               (17)  investigators commissioned by the Texas Medical
  Board;
               (18)  officers commissioned by:
                     (A)  the board of managers of the Dallas County
  Hospital District, the Tarrant County Hospital District, the Bexar
  County Hospital District, or the El Paso County Hospital District
  under Section 281.057, Health and Safety Code;
                     (B)  the board of directors of the Ector County
  Hospital District under Section 1024.117, Special District Local
  Laws Code;
                     (C)  the board of directors of the Midland County
  Hospital District of Midland County, Texas, under Section 1061.121,
  Special District Local Laws Code; and
                     (D)  the board of hospital managers of the Lubbock
  County Hospital District of Lubbock County, Texas, under Section
  1053.113, Special District Local Laws Code;
               (19)  county park rangers commissioned under
  Subchapter E, Chapter 351, Local Government Code;
               (20)  investigators employed by the Texas Racing
  Commission;
               (21)  officers commissioned under Chapter 554,
  Occupations Code;
               (22)  officers commissioned by the governing body of a
  metropolitan rapid transit authority under Section 451.108,
  Transportation Code, or by a regional transportation authority
  under Section 452.110, Transportation Code;
               (23)  investigators commissioned by the attorney
  general under Section 402.009, Government Code;
               (24)  security officers and investigators commissioned
  as peace officers under Chapter 466, Government Code;
               (25)  officers appointed by an appellate court under
  Subchapter F, Chapter 53, Government Code;
               (26)  officers commissioned by the state fire marshal
  under Chapter 417, Government Code;
               (27)  an investigator commissioned by the commissioner
  of insurance under Section 701.104, Insurance Code;
               (28)  apprehension specialists and inspectors general
  commissioned by the Texas Juvenile Justice Department as officers
  under Sections 242.102 and 243.052, Human Resources Code;
               (29)  officers appointed by the inspector general of
  the Texas Department of Criminal Justice under Section 493.019,
  Government Code;
               (30)  investigators commissioned by the Texas
  Commission on Law Enforcement under Section 1701.160, Occupations
  Code;
               (31)  commission investigators commissioned by the
  Texas Private Security Board under Section 1702.061, Occupations
  Code;
               (32)  the fire marshal and any officers, inspectors, or
  investigators commissioned by an emergency services district under
  Chapter 775, Health and Safety Code;
               (33)  officers commissioned by the State Board of
  Dental Examiners under Section 254.013, Occupations Code, subject
  to the limitations imposed by that section;
               (34)  investigators commissioned by the Texas Juvenile
  Justice Department as officers under Section 221.011, Human
  Resources Code; [and]
               (35)  the fire marshal and any related officers,
  inspectors, or investigators commissioned by a county under
  Subchapter B, Chapter 352, Local Government Code; and
               (36)  investigators, security officers, and
  enforcement officers commissioned by the Texas Gaming Commission
  under Chapter 2201, Occupations Code.
         SECTION 3.  Subchapter F, Chapter 411, Government Code, is
  amended by adding Section 411.1085 to read as follows:
         Sec. 411.1085.  ACCESS TO CRIMINAL HISTORY RECORD
  INFORMATION: TEXAS GAMING COMMISSION. (a) The Texas Gaming
  Commission is entitled to obtain from the department criminal
  history record information maintained by the department that
  relates to a person who, under Subtitle E, Title 13, Occupations
  Code, is:
               (1)  a casino employee or an applicant for an
  occupational license;
               (2)  a person required to hold a license or be named in
  a license application under that subtitle;
               (3)  a casino owner or operator or prospective casino
  owner or operator;
               (4)  a person who manufactures or distributes casino
  equipment or supplies or a representative of a person who
  manufactures or distributes casino equipment or supplies offered to
  the casino;
               (5)  a person who has submitted a written bid or
  proposal to the commission in connection with the procurement of
  goods or services by the commission, if the amount of the bid or
  proposal exceeds $500;
               (6)  a person who proposes to enter into or who has a
  contract with the commission to supply goods or services to the
  commission;
               (7)  if a person described in Subdivisions (4) through
  (6) is not an individual, each individual who:
                     (A)  is an officer or director of the person;
                     (B)  holds more than 10 percent of the stock in the
  person;
                     (C)  holds an equitable interest greater than 10
  percent in the person;
                     (D)  shares or will share in the profits, other
  than stock dividends, of the person;
                     (E)  participates in managing the affairs of the
  person; or
                     (F)  is an employee of the person who:
                           (i)  enters or will enter a casino in this
  state to perform a business function; or
                           (ii)  is or will be in close proximity to
  money from casino gaming;
               (8)  an employee or prospective employee, including the
  executive director or a prospective executive director, of the
  commission; or
               (9)  a person described under Subdivisions (1)-(8)
  whose license is renewed under that subtitle.
         (b)  Criminal history record information obtained by the
  Texas Gaming Commission under Subsection (a) may not be released or
  disclosed to any person except on court order or as provided by
  Subsection (c).
         (c)  The Texas Gaming Commission is not prohibited from
  disclosing to the person who is the subject of the criminal history
  record information the dates and places of arrests, offenses, and
  dispositions contained in the criminal history record information.
         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)  was permitted under Chapter 2004, Occupations
  Code;
               (4)  consisted entirely of participation in the state
  lottery authorized by the State Lottery Act (Chapter 466,
  Government Code);
               (5)  was permitted under Subtitle A-1, Title 13,
  Occupations Code (Texas Racing Act); [or]
               (6)  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;
  or
               (7)  consisted entirely of participation in an
  authorized gambling game in a casino authorized under an
  appropriate license issued under Subtitle E, Title 13, Occupations
  Code.
         SECTION 5.  Section 47.06(f), Penal Code, is amended to read
  as follows:
         (f)  It is a defense to prosecution under Subsection (a) or
  (c) that the person owned, manufactured, transferred, or possessed
  the gambling device, equipment, or paraphernalia for the sole
  purpose of shipping it:
               (1)  to a casino authorized under an appropriate
  license issued under Subtitle E, Title 13, Occupations Code, for
  casino gaming; or
               (2)  to another jurisdiction where the possession or
  use of the device, equipment, or paraphernalia was legal.
         SECTION 6.  Section 47.09(a), Penal Code, is amended to read
  as follows:
         (a)  It is a defense to prosecution under this chapter that
  the conduct:
               (1)  was authorized under:
                     (A)  Chapter 2001, Occupations Code;
                     (B)  Chapter 2002, Occupations Code;
                     (C)  Chapter 2004, Occupations Code;
                     (D)  Subtitle A-1, Title 13, Occupations Code
  (Texas Racing Act); [or]
                     (E)  Chapter 280, Finance Code; or
                     (F)  Subtitle E, Title 13, Occupations Code;
               (2)  consisted entirely of participation in the state
  lottery authorized by Chapter 466, Government Code; or
               (3)  was a necessary incident to the operation of the
  state lottery and was directly or indirectly authorized by:
                     (A)  Chapter 466, Government Code;
                     (B)  the lottery division of the Texas Lottery
  Commission;
                     (C)  the Texas Lottery Commission; or
                     (D)  the director of the lottery division of the
  Texas Lottery Commission.
         SECTION 7.  (a) Funds in the Texas casino gaming fund may be
  appropriated only to the Texas Gaming Commission for the operation
  of the commission and the administration of Subtitle E, Title 13,
  Occupations Code, as added by this Act, for the biennium ending
  August 31, 2023.
         (b)  Not later than January 1, 2022, the initial members of
  the Texas Gaming Commission shall be appointed in accordance with
  Chapter 2201, Occupations Code, as added by this Act. In making the
  initial appointments, the governor shall designate one member to a
  term expiring February 1, 2024, two members to terms expiring
  February 1, 2026, and two members to terms expiring February 1,
  2028.
         SECTION 8.  (a) The Texas Gaming Commission Legislative
  Oversight Committee is created to facilitate the creation of the
  Texas Gaming Commission and the assignment of powers, duties,
  functions, programs, and activities of the commission as provided
  by this Act.
         (b)  The committee is composed of seven members as follows:
               (1)  two members of the senate, appointed by the
  lieutenant governor not later than December 1, 2021;
               (2)  two members of the house of representatives,
  appointed by the speaker of the house of representatives not later
  than December 1, 2021; and
               (3)  three members of the public, appointed by the
  governor not later than December 1, 2021.
         (c)  Once the members of the Texas Gaming Commission have
  been appointed and have selected an executive director, the
  executive director of the Texas Gaming Commission shall serve as an
  ex officio member of the committee.
         (d)  A member of the committee serves at the pleasure of the
  appointing official.
         (e)  The lieutenant governor and the speaker of the house of
  representatives shall alternate designating a presiding officer
  from among their respective appointments. The speaker of the house
  of representatives shall make the first designation.
         (f)  A member of the committee may not receive compensation
  for serving on the committee but is entitled to reimbursement for
  travel expenses incurred by the member while conducting the
  business of the committee as provided by the General Appropriations
  Act.
         (g)  The committee shall:
               (1)  facilitate the assignment of powers, duties,
  functions, programs, and activities of the Texas Gaming Commission
  as provided by this Act;
               (2)  adopt an initial training program to meet the
  requirements of Section 2201.058, Occupations Code, as added by
  this Act, to train the initial appointees of the Texas Gaming
  Commission;
               (3)  with assistance from the Texas Gaming Commission,
  advise the executive director and members of the Texas Gaming
  Commission concerning the powers, duties, functions, programs, and
  activities established under this Act and the funds and obligations
  that are related to the powers, duties, functions, programs, or
  activities;
               (4)  meet at the call of the presiding officer;
               (5)  research, take public testimony, and issue reports
  on other appropriate issues or specific issues requested by the
  lieutenant governor, speaker of the house of representatives, or
  governor; and
               (6)  review specific recommendations for legislation
  proposed by the Texas Gaming Commission or the other agencies.
         (h)  The committee may request reports and other information
  from the Texas Gaming Commission, other state agencies, and the
  attorney general relating to gaming in this state and other
  appropriate issues.
         (i)  The committee shall use existing staff of the senate,
  the house of representatives, and the Texas Legislative Council to
  assist the committee in performing its duties under this section.
         (j)  Chapter 551, Government Code, applies to the committee.
         (k)  The committee shall report to the governor, lieutenant
  governor, and speaker of the house of representatives not later
  than November 15 of each even-numbered year. The report must
  include:
               (1)  identification of significant issues within
  gaming regulation, with recommendations for action;
               (2)  an analysis of the effectiveness and efficiency of
  gaming regulation, with recommendations for any necessary
  research; and
               (3)  recommendations for legislative action.
         SECTION 9.  (a) The assignment of powers, duties,
  functions, programs, and activities of the Texas Gaming Commission
  must be accomplished in accordance with a schedule included in a
  work plan developed by the executive director and members of the
  Texas Gaming Commission and submitted to the governor and the
  Legislative Budget Board not later than September 1, 2022. The
  executive director and commission members shall provide to the
  governor and the Legislative Budget Board work plan status reports
  and updates on at least a quarterly basis following submission of
  the initial work plan. The work plan must be made available to the
  public.
         (b)  Not later than March 1, 2022, the Texas Gaming
  Commission shall hold a public hearing and accept public comment
  regarding the work plan required to be developed by the executive
  director and members of the Texas Gaming Commission under this
  section.
         (c)  In developing the work plan, the executive director and
  members of the Texas Gaming Commission shall hold public hearings
  in various geographic areas in this state before submitting the
  plan to the governor and the Legislative Budget Board as required by
  this section.
         (d)  The Texas Gaming Commission shall implement the powers,
  duties, functions, programs, and activities assigned to the
  commission under this Act in accordance with a work plan designed by
  the commission to ensure that the implementation of gaming
  regulation under this Act is accomplished in a careful and
  deliberative manner.
         (e)  A work plan designed by the commission under this
  section must include the following phases:
               (1)  a planning phase, during which the commission will
  focus on and stabilize the organization of the agency's powers,
  duties, functions, programs, and activities, and which must
  include:
                     (A)  initiation of recommendations made by the
  Texas Gaming Commission Legislative Oversight Committee;
                     (B)  creation of interagency and intra-agency
  steering committees;
                     (C)  development of global visions, goals, and
  organizational strategies; and
                     (D)  development of communications and risk
  management plans;
               (2)  an integration phase, during which the commission
  will identify opportunities and problems and design customized
  solutions for those problems, and which must include:
                     (A)  identification of key issues related to costs
  or legal requirements for other commission activities;
                     (B)  planning for daily operations; and
                     (C)  validation of fiscal and program synergies;
               (3)  an optimization phase, during which the commission
  will complete and expand on the initial transitions, and which must
  include:
                     (A)  optimization of initial implementation
  initiatives;
                     (B)  use of enterprise teaming operations;
                     (C)  building infrastructures to support and
  facilitate changes in gaming regulation and oversight; and
                     (D)  identification and use of beneficial assets
  management and facilities approaches; and
               (4)  a transformation phase, during which the
  commission will continue implementing initial and additional
  changes in gaming regulation and oversight, and which must include
  implementation of changes in agency management activities.
         SECTION 10.  As soon as practicable after the constitutional
  amendment to authorize casino gaming in this state proposed by the
  87th Legislature, Regular Session, 2021, is approved by the voters
  and becomes effective, the Texas Gaming Commission shall adopt the
  rules necessary to implement that gaming in accordance with Chapter
  2202, Occupations Code, as added by this Act.
         SECTION 11.  This Act takes effect on the date the amendment
  proposed by the 87th Legislature, Regular Session, 2021, to foster
  economic development and job growth and to provide tax relief and
  funding for education and public safety by creating the Texas
  Gaming Commission, authorizing casino gaming at a limited number of
  destination resorts and facilities licensed by the commission, and
  authorizing sports wagering is approved by the voters. If that
  amendment is not approved by the voters, this Act has no effect.