83(R) HB 292 - Introduced version

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	83R704 GCB-D

	By: Rodriguez of Travis	H.B. No. 292



	A BILL TO BE ENTITLED
	AN ACT
	relating to the authorization and regulation of poker gaming and
	the duties of the Texas Lottery Commission; providing civil and
	criminal penalties.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Subtitle A, Title 13, Occupations Code, is
	amended by adding Chapter 2004 to read as follows:
	CHAPTER 2004. POKER GAMING
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec. 2004.001. SHORT TITLE; APPLICABILITY. (a) This
	chapter may be cited as the Poker Gaming Act of 2013.
	(b) This chapter does not apply to the conduct of bingo,
	charitable raffles, the state lottery, or video poker.
	Sec. 2004.002. PUBLIC POLICY. (a) All poker gaming
	conducted in this state and authorized by law shall be regulated and
	licensed under this chapter unless state or federal law
	specifically provides otherwise.
	(b) The legislature finds and declares it to be the public
	policy of this state that:
	(1) poker is a game of skill and not a lottery or gift
	enterprise prohibited by the Texas Constitution;
	(2) unregulated poker gaming conducted by unlicensed
	operators in public establishments is inimical to the public
	health, safety, morals, welfare, and good order, and a person in
	this state may not offer and has no right to offer the game of poker
	for profit except as expressly permitted by the laws of this state;
	(3) the development of regulated poker gaming in this
	state will benefit the general welfare of the people of this state
	by enhancing investment, development, and tourism in this state,
	resulting in new jobs and additional revenue to this state;
	(4) the conduct of regulated poker gaming by licensed
	operators in authorized establishments will not harm the people of
	this state;
	(5) the regulation of poker gaming in this state is
	important to ensure that poker gaming:
	(A) is conducted honestly and competitively; and
	(B) is free from criminal and other corruptive
	elements;
	(6) public confidence and trust can be maintained only
	by strict regulation of all persons, locations, practices,
	associations, and activities related to the conduct of poker gaming
	and the poker gaming service industry;
	(7) persons owning any interest in an operator
	conducting poker gaming and in a person distributing materials and
	specific equipment relating to poker gaming must be licensed and
	controlled to protect the public health, safety, morals, and good
	order and the general welfare of the people of this state;
	(8) certain operators and employees of establishments
	authorized to conduct poker gaming and certain manufacturers and
	distributors in the poker gaming service industry must be
	regulated, licensed, and controlled to accomplish and promote these
	public policies while protecting the public health, safety, morals,
	and good order and the general welfare of the people of this state;
	and
	(9) it is the intent of this chapter, where possible,
	to use the resources, goods, labor, and services of the people of
	this state in the operation of poker gaming-related amenities to
	the extent allowable by law.
	Sec. 2004.003. DEFINITIONS. In this chapter:
	(1) "Alcoholic beverage" has the meaning assigned by
	Section 1.04, Alcoholic Beverage Code.
	(2) "Badge" means a form of identification issued by
	the commission to identify the holder of a license issued under this
	chapter.
	(3) "Bet" means an agreement to win or lose chips or
	tokens, or an electronic facsimile of either, in a game of poker.
	(4) "Bonus program" means a local promotion bonus
	program or a statewide bad beat bonus program.
	(5) "Cage manager" means an individual who creates and
	maintains player accounts, provides cash-in and cash-out of chips
	or player accounts, and determines and maintains the amount of
	gross receipts tax due and payable to the comptroller by a licensed
	operator on each day's gross receipts. The cage manager may be
	assisted by an electronic method to perform any of these duties.
	(6) "Collection fee" means the fee assessed on each
	communal pot in accordance with Section 2004.411.
	(7) "Commission" means the Texas Lottery Commission.
	(8) "Communal pot" means the total amount of wagers
	collectively made during one hand of poker.
	(9) "Company" means a corporation, partnership,
	limited partnership, trust, association, joint stock company,
	joint venture, limited liability company, or other form of business
	organization, but does not include a sole proprietorship or natural
	person.
	(10) "Creditor interest" means a right or claim of any
	character against a person for the payment of money borrowed,
	whether secured or unsecured, matured or unmatured, liquidated or
	absolute, or fixed or contingent, and includes an obligation based
	on the person's profits or receipts.
	(11) "Dealer" means an individual who deals cards to
	players at a poker gaming table on the premises of a licensed
	operator.
	(12) "Director" means the director of poker gaming
	operations of the commission.
	(13) "Electronic poker table" means a poker gaming
	table, including its components, that provides multiple player
	positions and allows players to play against other players in the
	same poker game using electronic representations of cards and
	chips.
	(14) "Equity interest" means a proprietary interest,
	right, or claim in a company that allows the holder either to vote
	with respect to matters of organizational governance or to
	participate in the profits and residual assets of the 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, or a warrant, right, or
	similar interest convertible into, or to subscribe for, a
	proprietary right or claim, with or without the payment of
	additional consideration.
	(15) "Executive director" means the executive
	director of the commission.
	(16) "Fidelity bond" means insurance against a
	licensed operator's financial loss resulting from theft or
	embezzlement by an employee.
	(17) "Gross receipts" means the total amount
	accumulated from all:
	(A) collection fees assessed; and
	(B) promotion bonus fees assessed.
	(18) "Licensed operator" means a person who holds a
	license issued by the commission to conduct poker gaming under this
	chapter.
	(19) "Manufacturer" means:
	(A) a person who assembles from raw materials or
	subparts a completed piece of poker gaming equipment or supplies
	for use in poker gaming in this state; or
	(B) a person who converts, modifies, adds to, or
	removes parts from any poker gaming equipment, item, or assembly to
	further its promotion or sale for or use in poker gaming in this
	state.
	(20) "Nonprofit organization" means an unincorporated
	association or a nonprofit corporation formed under the Texas
	Nonprofit Corporation Law, as described by Section 1.008, Business
	Organizations Code, that:
	(A) does not distribute any of its income to its
	members, officers, or governing body, other than as reasonable
	compensation for services; and
	(B) has tax-exempt status under Section 501(c),
	Internal Revenue Code of 1986.
	(21) "Pari-mutuel license holder" means a person
	licensed to conduct wagering on a greyhound race or a horse race
	under the Texas Racing Act (Article 179e, Vernon's Texas Civil
	Statutes).
	(22) "Player" means a patron who participates in poker
	gaming on the premises of a licensed operator.
	(23) "Poker" or "poker game" means a card game in which
	players place a bet based on the highest or lowest ranking hand of
	cards held or combination of highest and lowest cards held. The
	term includes the game known as Texas Hold'em or any variation or
	combination of Texas Hold'em, but does not include blackjack,
	hearts, pinochle, rummy, Internet poker, video poker, or Asian card
	games such as Pai Gow.
	(24) "Poker card deck" means a set of 52 cards with 13
	values and with each card value represented once in each of four
	suits: spades, hearts, diamonds, and clubs.
	(25) "Poker gaming" means the conduct of poker games.
	(26) "Poker gaming equipment" means any equipment or
	mechanical, electromechanical, or electronic contrivance,
	component, machine, or device, expendable supply, or other
	paraphernalia used in conjunction with poker gaming, including a
	computerized system or software for enabling poker gaming or
	monitoring poker gaming revenue or a device for weighing or
	counting money. The term includes playing cards, gaming chips or
	tokens, or a card shuffling device, or an electronic version of any
	of those items, including a poker game.
	(27) "Premises" means the area subject to the direct
	control of and actual use by a licensed operator to conduct poker
	gaming. The term includes a location or place.
	(28) "Principal manager" means a person who, in
	accordance with commission rules, holds or exercises managerial,
	supervisory, or policy-making authority over the management or
	operation of a poker gaming activity that, in the commission's
	judgment, warrants employee licensing as a principal manager for
	the protection of the public interest. The term includes a key
	executive of a holder of a license issued under this chapter that is
	a company and each person controlling the holder that is a company.
	(29) "Promotion bonus fee" means the fee assessed on
	each communal pot for bonus programs in accordance with Section
	2004.410.
	(30) "Wager" means a bet.
	Sec. 2004.004. STATUS OF POKER AS CLASS II GAMING. Poker
	gaming authorized under this chapter is considered Class II gaming
	under the Indian Gaming Regulatory Act (Pub. L. No. 100-497).
	[Sections 2004.005-2004.050 reserved for expansion]
	SUBCHAPTER B. COMMISSION POWERS AND DUTIES
	Sec. 2004.051. CONTROL AND SUPERVISION OF POKER GAMING;
	POKER DIVISION. (a) The commission shall administer this chapter.
	(b) The commission has broad authority and shall exercise
	strict control and close supervision over all poker gaming
	conducted in this state to ensure that poker gaming is fairly
	conducted.
	(c) The commission shall execute its authority through a
	poker gaming division established by the commission to administer
	this chapter.
	Sec. 2004.052. DIRECTOR OF POKER GAMING OPERATIONS. (a)
	The commission shall employ a director of poker gaming operations.
	(b) The director shall administer the poker gaming division
	under the direction of the commission.
	Sec. 2004.053. OFFICERS AND INVESTIGATORS. The commission
	may employ officers or investigators the commission considers
	necessary to administer this chapter.
	Sec. 2004.054. RULEMAKING AUTHORITY. The commission shall
	adopt rules as necessary to enforce and administer this chapter.
	Sec. 2004.055. APPROVAL OF POKER GAMING EQUIPMENT. (a) The
	commission by rule shall provide procedures for the approval of
	poker gaming equipment for use in poker gaming in this state as
	authorized under this chapter.
	(b) The commission may not approve for use in poker gaming
	in this state an electronic poker table or other electronic device
	that is capable of displaying an electromechanically or
	electronically simulated poker game.
	(c) The holder of a license issued under this chapter may
	not:
	(1) use, sell, or distribute poker gaming equipment
	that has not been approved by the commission; or
	(2) use, sell, or distribute an electronic poker table
	or other device described by Subsection (b).
	Sec. 2004.056. PUBLIC INFORMATION. (a) The commission
	shall provide to any person on request a printed copy of this
	chapter and the rules applicable to the enforcement of this
	chapter.
	(b) The commission may charge a reasonable fee for a copy
	provided under this section.
	Sec. 2004.057. ADVISORY OPINIONS. (a) A person may request
	from the commission an advisory opinion regarding compliance with
	this chapter and commission rules.
	(b) The commission shall respond to a request under
	Subsection (a) not later than the 60th day after the date a request
	is received, unless the commission determines that the request does
	not contain sufficient facts to provide an answer on which the
	requestor may rely. The commission shall request any additional
	information required from the requestor not later than the 10th
	business day after the date the request is received. If the
	commission requests additional information, the commission shall
	respond to the request not later than the 60th day after the date
	additional information is received pursuant to the request for
	additional information.
	(c) A person who requests an advisory opinion under
	Subsection (a) may act in reliance on the opinion in the conduct of
	any activity under any license issued under this chapter if the
	conduct is substantially consistent with the opinion and the facts
	stated in the request.
	(d) An advisory opinion issued under this section is not a
	rule under Subchapter B, Chapter 2001, Government Code, and the
	rulemaking requirements of that subchapter do not apply to a
	request for an advisory opinion or any advisory opinion issued by
	the commission under this chapter.
	(e) Nothing in this section precludes the commission from
	requesting an attorney general's opinion under Section 402.042,
	Government Code. In the event the commission requests an attorney
	general's opinion on a matter that is the subject of an advisory
	opinion request under this section, the deadlines established under
	Subsection (b) are tolled until the 30th day following the date the
	attorney general's opinion is issued.
	Sec. 2004.058. GENERAL LICENSE PROHIBITION. A person
	described by Section 243.007(a), Local Government Code, who holds a
	license or other permit issued by a municipality or county as
	provided by that section may not:
	(1) conduct poker gaming in this state; or
	(2) hold a license issued under this chapter.
	[Sections 2004.059-2004.100 reserved for expansion]
	SUBCHAPTER C. LICENSE TO CONDUCT POKER GAMING
	Sec. 2004.101. OPERATOR'S LICENSE REQUIRED; LOCATION AND
	TABLE RESTRICTIONS. (a) A person may not conduct poker gaming in
	the state unless the person holds an operator's license issued by
	the commission.
	(b) Poker gaming conducted by a licensed operator may be
	conducted only on premises operating in accordance with the
	operator's license. This subsection does not prohibit a person
	from playing a poker game authorized by other state law.
	(c) A person may not own an equity interest in a location in
	this state at which poker gaming is conducted by a licensed operator
	and for which an operator's license is not in effect.
	(d) A separate operator's license must be obtained for each
	location at which poker gaming is conducted.
	(e) If a licensed operator is an Indian tribe that holds a
	license issued under Section 2004.103(a)(1)(B), the location at
	which poker gaming is conducted under the license must be on the
	tribe's reservation in this state.
	(f) The commission by rule shall prescribe the maximum
	number of poker gaming tables a licensed operator may operate at a
	single location licensed by the commission.
	Sec. 2004.102. OPERATOR'S LICENSE APPLICATION. (a) In
	accordance with commission rules, an applicant for an operator's
	license shall file with the commission an application that contains
	the information identified in Subsections (b) and (c) and any
	additional information the commission requires to determine the
	suitability and eligibility of the applicant to conduct poker
	gaming in this state.
	(b) The application must include:
	(1) the name and address of the applicant;
	(2) the names and addresses of the officers of a
	company applicant;
	(3) the name and address of the person that owns the
	premises where the applicant intends to conduct poker gaming under
	the license sought;
	(4) the address of the premises where the applicant
	intends to conduct poker gaming under the license sought;
	(5) if the applicant leases or will lease the premises
	at which the applicant intends to conduct poker gaming:
	(A) the name and address of the lessor of the
	building in which the premises are located; and
	(B) for an applicant described by Section
	2004.103(a)(1)(A)(i), the license number of the commercial lessor
	who leases the premises for the conduct of bingo under Chapter 2001;
	(6) the number of poker tables requested for the
	license holder's poker gaming premises; and
	(7) for a pari-mutuel license holder applicant, a
	financial statement certified by a certified public accountant
	demonstrating that the applicant holds gross capital assets,
	including land and buildings, of at least $1 million.
	(c) An applicant, other than an applicant described by
	Section 2004.103(a)(1)(B), must attach to the application a copy
	of:
	(1) the person's license to conduct bingo under
	Chapter 2001; or
	(2) the person's pari-mutuel license.
	Sec. 2004.103. OPERATOR'S LICENSE: MANDATORY ISSUANCE;
	CONTINUED SUITABILITY. (a) The commission shall issue an
	operator's license to an applicant that:
	(1) meets one of the following requirements:
	(A) holds:
	(i) a license issued by the commission
	authorizing the applicant to conduct bingo under Chapter 2001; or
	(ii) a pari-mutuel license issued by the
	Texas Racing Commission authorizing the applicant to conduct
	wagering on a greyhound race or a horse race; or
	(B) is a federally recognized Indian tribe that
	has a reservation in this state;
	(2) files the application in accordance with this
	chapter;
	(3) signs the application;
	(4) pays the required application fee; and
	(5) meets any additional requirements prescribed by
	the commission.
	(b) The commission may not issue an operator's license to an
	applicant unless the applicant provides the video surveillance
	equipment required by Section 2004.418.
	(c) The commission may adopt rules providing for a person's
	continued suitability to hold an operator's license.
	(d) The opportunity to hold an operator'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 an operator's license does not have a vested interest or
	right in a license granted under this chapter.
	Sec. 2004.104. NONTRANSFERABILITY. An operator's license
	applies only to the specific premises location identified in the
	license and is not transferable to another person or location.
	Sec. 2004.105. REGISTRATION OF INTEREST IN OPERATOR. (a)
	Except as provided by Subsection (b), a person who directly or
	indirectly owns an equity interest or creditor interest in an
	applicant for or holder of an operator's license shall:
	(1) register and qualify with the commission under
	commission rules; and
	(2) 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) an employee of a licensed operator who is required
	to apply for an employee's license under Subchapter D;
	(2) an institutional investor; or
	(3) any other group or class of persons that the
	commission by rule exempts from registration or qualification.
	(c) The commission shall adopt rules to implement this
	section, including rules establishing procedures for registration
	application, qualification, and renewal. A registration filed
	under this section must be accompanied by the required application
	fee.
	Sec. 2004.106. OPERATOR'S LICENSE CONTINGENT ON LICENSE TO
	CONDUCT BINGO OR PARI-MUTUEL LICENSE. (a) An operator, other than
	an operator described by Section 2004.103(a)(1)(B), must at all
	times hold:
	(1) a license issued by the commission authorizing the
	license holder to conduct bingo under Chapter 2001; or
	(2) a pari-mutuel license issued by the Texas Racing
	Commission authorizing the license holder to conduct wagering on a
	greyhound race or a horse race.
	(b) The commission shall revoke an operator's license
	issued under Section 2004.103(a)(1)(A) if the operator's license
	described by Subsection (a) is canceled or revoked.
	(c) A licensed operator shall immediately notify the
	commission on the expiration or suspension, cancellation, or
	revocation by the Texas Racing Commission of any pari-mutuel
	license held by the operator authorizing the operator to conduct
	wagering on a greyhound race or a horse race.
	(d) The Texas Racing Commission shall notify the commission
	when the Texas Racing Commission suspends, cancels, or revokes a
	pari-mutuel license authorizing an operator to conduct wagering on
	a greyhound race or a horse race.
	(e) The bingo division of the commission shall notify the
	poker gaming division of the commission when the bingo division
	suspends, cancels, or revokes a license authorizing an operator to
	conduct bingo or a commercial lessor license of a premises at which
	poker gaming is conducted.
	[Sections 2004.107-2004.150 reserved for expansion]
	SUBCHAPTER D. EMPLOYEE'S LICENSES
	Sec. 2004.151. DEALER'S LICENSE REQUIRED. (a) A person may
	not act as a dealer unless the person holds a dealer's license.
	(b) A licensed operator shall ensure that each dealer
	employed by the operator holds a dealer's license issued by the
	commission.
	Sec. 2004.152. DEALER'S LICENSE APPLICATION; ISSUANCE AND
	DISPLAY OF BADGE. (a) A dealer's license application must:
	(1) be submitted in accordance with commission rules;
	(2) contain the information the commission requires to
	determine the applicant's suitability and eligibility to act as a
	dealer; and
	(3) be accompanied by the required application fee.
	(b) An applicant for a dealer's license shall:
	(1) sign the application; and
	(2) attest under penalties of perjury that the
	information contained in the application is true, correct, and
	complete.
	(c) The commission shall conduct a criminal background
	check on each applicant for a dealer's license.
	(d) Not later than the 60th day after the date the
	commission grants an application for a dealer's license, the
	commission shall issue a dealer's badge to the applicant.
	(e) A licensed dealer must prominently display on the
	dealer's person the badge issued by the commission at all times when
	the dealer is on the premises of a licensed operator as an employee
	of the licensed operator.
	Sec. 2004.153. RESIDENCY. A person is eligible to apply for
	and hold a dealer's license without regard to the applicant's
	residency in this state.
	Sec. 2004.154. DETERMINATION OF SUITABILITY OF DEALER'S
	LICENSE APPLICANT OR HOLDER. (a) The commission shall determine
	the suitability of an applicant for or holder of a dealer's license
	based on suitability criteria prescribed by the commission to
	ensure that the applicant or dealer:
	(1) has not been convicted of a felony;
	(2) has not had a complaint alleging physical
	intimidation filed against the applicant or dealer with a law
	enforcement authority;
	(3) has sufficient business probity, competence, and
	training or experience in the poker gaming industry to act as a
	dealer; and
	(4) is otherwise qualified to be licensed.
	(b) The burden of proving suitability to receive or hold a
	dealer's license is on the applicant or license holder.
	Sec. 2004.155. DENIAL, SUSPENSION, LIMITATION, OR
	REVOCATION OF DEALER'S LICENSE. (a) The commission may deny an
	application for or suspend, limit, or revoke a dealer's license for
	any reasonable cause.
	(b) If the commission determines it has reasonable grounds
	to believe that a licensed dealer might be unsuitable to continue to
	hold the license, for protection of the public health, safety,
	morals, and good order, of the general welfare of the people of this
	state, and of the reputation of this state's poker gaming industry,
	the commission shall conduct an investigation and hearing as
	provided by Subchapter J and, based on the commission's
	determination, may deny, suspend, limit, or revoke a dealer's
	license.
	(c) On the suspension or revocation of a dealer's license,
	the license holder may not provide services in any capacity
	requiring a license under Section 2004.151.
	(d) A holder of a dealer's license that has been suspended
	or revoked may not:
	(1) receive, directly or indirectly, any
	compensation, consideration, or payment of any kind relating to the
	conduct of gaming in any capacity requiring a license under Section
	2004.151, other than payment for services rendered before the
	suspension or revocation; or
	(2) serve or function in a capacity that would require
	a license under Section 2004.151.
	(e) The receipt and holding of a dealer's 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 dealer's license does not have a vested interest or right in a
	license granted under this chapter.
	Sec. 2004.156. TRAINING PROGRAM FOR LICENSED DEALERS. (a)
	A licensed dealer shall complete a training program in accordance
	with commission rule.
	(b) A training program approved by the commission must
	include training related to:
	(1) the conduct of poker gaming;
	(2) the administration and operation of poker gaming;
	(3) the promotion of poker gaming; and
	(4) gaming awareness, including:
	(A) problem or compulsive gambling;
	(B) cheating techniques;
	(C) underage gaming; and
	(D) criminal awareness.
	(c) The commission by rule shall establish:
	(1) the content and time frame of the training
	program;
	(2) information related to training that must be
	reported to the commission; and
	(3) other training program requirements the
	commission determines are necessary to promote the fair conduct of
	poker gaming and compliance with this chapter.
	Sec. 2004.157. OTHER EMPLOYEE'S LICENSES. (a) The
	commission by rule may establish other employee's licenses the
	commission determines are necessary to protect the public health,
	safety, morals, and good order and the general welfare of the people
	of this state, including licenses for principal managers, cage
	managers, owners, and card room service personnel.
	(b) A person may not engage in any conduct for which the
	commission requires a person to hold a license under this section
	unless the person holds the applicable license.
	(c) The commission by rule shall prescribe procedures and
	fees for licenses issued under this section as the commission
	determines appropriate.
	[Sections 2004.158-2004.200 reserved for expansion]
	SUBCHAPTER E. MANUFACTURER'S AND DISTRIBUTOR'S LICENSES
	Sec. 2004.201. MANUFACTURER'S LICENSE. (a) A person may
	not engage in any activity related to the poker gaming equipment
	manufacturing industry in this state for which a manufacturer's
	license is required unless the person holds a manufacturer's
	license for that activity.
	(b) The commission shall adopt rules identifying activities
	related to the design, manufacture, assembly, production, sale,
	lease, marketing, distribution, or repair of poker gaming equipment
	in this state for use in poker gaming authorized under this chapter
	that the commission determines appropriate for licensing under this
	section.
	(c) A manufacturer's license is personal to the license
	holder and allows the holder to conduct business related to the
	licensed activity with any person licensed to operate poker gaming
	in this state.
	Sec. 2004.202. DISTRIBUTOR'S LICENSE. (a) A person may not
	distribute or offer to distribute poker gaming equipment for use in
	poker gaming authorized under this chapter in this state unless the
	person holds a distributor's license under this subchapter.
	(b) A person must obtain a distributor's license to
	distribute poker gaming equipment in this state to a licensed
	operator for use on the operator's premises.
	(c) A distributor's license is personal to the license
	holder and allows the holder to conduct business with any person
	licensed to operate poker gaming in this state. The license is not
	transferable.
	Sec. 2004.203. LICENSE APPLICATION. (a) In accordance
	with commission rules, an applicant for a manufacturer's license or
	distributor's license shall file with the commission an application
	that contains information the commission requires to determine the
	suitability and eligibility of the applicant.
	(b) The application must be signed by an applicant that is
	an individual or by the presiding officer and the secretary of an
	applicant that is a company. Each signatory shall attest under
	penalties of perjury that the information contained in the
	application is true, correct, and complete.
	(c) An application for a manufacturer's license or
	distributor's license must be accompanied by the required
	application fee.
	Sec. 2004.204. SUITABILITY DETERMINATION; DENIAL,
	SUSPENSION, LIMITATION, OR REVOCATION OF LICENSE. (a) In
	considering the suitability of a company applying for or holding a
	manufacturer's license or distributor's license, the commission
	shall consider the suitability of each principal manager and each
	holder of an equity interest or creditor interest in the company
	applicant to individually receive and hold a manufacturer's license
	or distributor's license based on the suitability standards that
	apply to the company applicant. A person may not hold a
	manufacturer's license or distributor's license if that person
	would be found unsuitable to hold an operator's license.
	(b) If the commission determines that it has reasonable
	grounds to believe an applicant or license holder is unsuitable to
	hold a manufacturer's license or distributor's license, the
	commission shall conduct an investigation and hearing under
	Subchapter J and, based on the commission's determination, may
	deny, suspend, limit, or revoke the license. If the applicant is an
	entity other than an individual, the commission may investigate
	equity owners of the applicant who have at least a 10 percent
	ownership in the applicant.
	(c) On suspension or revocation of a license, the license
	holder may not perform any manufacturing activity or distribution
	activity requiring a license under this chapter. A holder of a
	manufacturer's or distributor's license that has been suspended or
	revoked may not receive, directly or indirectly, compensation,
	consideration, or payment of any kind relating to any manufacturing
	or distribution activity in any capacity requiring a license under
	this chapter, other than payment for goods provided before the
	suspension or revocation.
	(d) A licensed operator who has entered into a lease with a
	manufacturer or distributor whose license has been suspended or
	revoked may continue to make payments on the lease based on the
	original terms of the lease without modification or may accelerate
	the lease and pay it off, at the sole option of the operator.
	(e) The burden of proving suitability to receive or hold a
	manufacturer's or distributor's license is on the applicant or
	license holder.
	[Sections 2004.205-2004.250 reserved for expansion]
	SUBCHAPTER F. TEMPORARY LICENSE; LICENSE RENEWAL
	Sec. 2004.251. TEMPORARY LICENSE. (a) Before issuing a
	license under this chapter, the commission may issue a temporary
	license for a period not to exceed six months and may renew the
	temporary license as many times as the commission determines
	appropriate on the payment of the fee and execution of the bond, if
	required.
	(b) The commission may issue a temporary license only to a
	person the commission believes will be qualified to hold the
	license based on:
	(1) the commission's review of the background
	investigations conducted by other state agencies or other
	government agencies in United States or Canadian jurisdictions with
	regulated poker gaming activities; and
	(2) the commission's determination that the background
	investigations of the applicant failed to reveal anything that
	would cause the applicant not to qualify for a license in this
	state.
	Sec. 2004.252. LICENSE TERM; RENEWAL. (a) A license issued
	under this chapter expires on the first anniversary of the date of
	issuance.
	(b) A license holder may annually renew a license by
	complying with the commission's licensing requirements and paying
	the annual license fee.
	(c) A license holder shall submit with each license renewal
	fee a renewal application on a form prescribed by the commission.
	[Sections 2004.253-2004.300 reserved for expansion]
	SUBCHAPTER G. APPLICATION AND LICENSE FEES
	Sec. 2004.301. APPLICATION FEES. (a) Except as provided by
	Subsection (b), an applicant for a license required by this chapter
	shall pay an application fee in the amount of:
	(1) $1,000 for an operator's license;
	(2) $100 for a dealer's license;
	(3) $250 for a manufacturer's license; or
	(4) $250 for a distributor's license.
	(b) The commission may increase an application fee if the
	amount prescribed by Subsection (a) does not cover the commission's
	cost of evaluating the application and issuing a license.
	(c) Application fees are nonrefundable and must:
	(1) be in the form prescribed by the commission; and
	(2) be payable to the commission.
	(d) The commission shall apply an application fee toward the
	cost of investigating the applicant's suitability for licensing or
	qualification under this chapter. The applicant shall pay any
	costs of investigation incurred in excess of the assessed
	application fee.
	Sec. 2004.302. LICENSE FEES. A holder of a license issued
	under this chapter shall annually pay the commission a license fee
	in the amount of:
	(1) $1,000 for an operator's license;
	(2) $100 for a dealer's license;
	(3) $250 for a manufacturer's license; or
	(4) $250 for a distributor's license.
	[Sections 2004.303-2004.350 reserved for expansion]
	SUBCHAPTER H. TAXES
	Sec. 2004.351. GROSS RECEIPTS TAX. (a) A tax is imposed on
	the gross receipts received in connection with the premises of a
	licensed operator conducting poker gaming under this chapter.
	(b) Except as provided by Subsection (c), the tax rate is 18
	percent of the gross receipts received for poker gaming by a
	licensed operator.
	(c) The tax rate is 16 percent of the gross receipts
	received for poker gaming by a licensed operator who holds a
	pari-mutuel license described by Section 2004.103(a)(1)(A)(ii).
	Sec. 2004.352. PAYMENT AND REPORTING OF TAX. (a) A
	licensed operator must electronically submit a report of each day's
	total gross receipts to the comptroller not later than 5 p.m. on the
	day following the day the gross receipts were collected.
	(b) The tax is due and payable by the licensed operator to
	the comptroller not later than the deadline provided by Subsection
	(a) for the report required by that subsection. The depository used
	by a licensed operator for deposit of gross receipts taxes due to
	the comptroller must be a licensed financial institution located in
	this state. The comptroller may sweep or debit the licensed
	operator's bank account on a daily basis to collect the gross
	receipts tax due and payable. An operator may not continue to
	conduct any poker gaming activity on the operator's premises if, at
	the time the comptroller sweeps the account, the amount reported
	under Subsection (a) is not available for collection.
	(c) The report of a tax must be filed under oath on forms
	prescribed by the commission.
	(d) The comptroller and the commission shall adopt rules for
	the payment of the tax.
	(e) A licensed operator required to file a tax return with
	the comptroller shall provide a copy of the tax return to the
	commission in the manner prescribed by commission rule.
	(f) The comptroller shall deposit the revenue collected
	under this section to the credit of the poker gaming revenue fund.
	Sec. 2004.353. POKER GAMING REVENUE FUND. (a) The poker
	gaming revenue fund is established as an account held outside the
	treasury.
	(b) Money in the poker gaming revenue fund may be used only
	for the following purposes:
	(1) the payment of costs incurred by this state in the
	regulation of poker gaming under this chapter; and
	(2) after a sufficient amount is retained in the fund
	to cover the costs provided by Subdivision (1), the balance to be
	transferred on or before the 15th day of each month to the Texas
	Department of Housing and Community Affairs to be used only as
	follows:
	(A) 50 percent for grants to municipalities,
	counties, and nonprofit organizations to support activities
	relating to:
	(i) shelter and services for the homeless
	and the prevention of homelessness;
	(ii) renovation of shelters for use as
	homeless shelters;
	(iii) assistance to the homeless in
	obtaining permanent housing;
	(iv) medical and psychological counseling
	for the homeless; and
	(v) the supervision, development, and
	implementation of homeless prevention activities; and
	(B) the remainder to the housing trust fund
	established under Section 2306.201, Government Code.
	Sec. 2004.354. FAILURE TO PAY OR REPORT TAX; PENALTIES AND
	INTEREST. (a) A licensed operator that fails to deposit gross
	receipts tax due and payable to the comptroller for the gross
	receipts collected at the operator's premises by the deadline for
	payment of the tax prescribed by Section 2004.352 may not conduct
	poker gaming at those premises until the tax is paid.
	(b) If a person fails to report gross receipts as required
	by this subchapter or fails to pay to the comptroller taxes imposed
	under this subchapter later than the second day after the date the
	report or payment is due, the commission shall compute and
	determine the amount of taxes required to be paid and shall assess a
	penalty equal to five percent of the taxes owed. If the payment is
	not received by the 30th day after the date the gross receipts tax
	is due, the commission shall assess an additional penalty equal to
	five percent of the gross receipts tax.
	(c) A delinquent tax accrues interest at the rate provided
	by Section 111.060, Tax Code, beginning on the 60th day after the
	tax due date.
	(d) Interest at the rate of 10 percent a year attaches to a
	delinquency penalty imposed under Subsection (b), beginning on the
	60th day after the date the penalty is imposed.
	Sec. 2004.355. RECOMPUTATION OF TAX. (a) If the commission
	is not satisfied with a tax return or the amount of tax required to
	be remitted under this chapter to this state by a licensed operator,
	the commission or the comptroller may compute and determine the
	amount required to be paid on the basis of:
	(1) the facts contained in the return or report of
	receipts; or
	(2) any information that the commission or comptroller
	possesses, or that may come into the possession of the commission,
	without regard to the period covered by the information.
	(b) A licensed operator subject to a tax computed under this
	section may request an investigation and hearing under Subchapter
	J, at which the person may present evidence on the amount of tax
	due.
	(c) The commission shall conduct an audit of the person's
	accounts as part of the investigation under Section 2004.451.
	Sec. 2004.356. DETERMINATION IF RETURN NOT MADE. (a) If a
	licensed operator fails to make a required return or if a person
	conducts poker gaming without a license issued under this chapter,
	the commission shall estimate the gross receipts received by the
	operator or person. The estimate must cover the period:
	(1) for which the operator failed to make a return; or
	(2) during which the person conducted poker gaming
	without a license.
	(b) An estimate under this section must be based on any
	information covering any period that the commission possesses or
	that may come into the possession of the commission.
	(c) On the basis of the commission's estimate, the
	commission shall compute and determine the amount of taxes imposed
	by this subchapter on those gross receipts and assess a penalty
	equal to 10 percent of that tax amount.
	(d) One or more determinations may be made under this
	section for one or more periods.
	Sec. 2004.357. JEOPARDY DETERMINATION. (a) If the
	commission believes that the collection of a gross receipts tax
	required to be paid or the amount of a determination under Section
	2004.356 will be jeopardized by delay, the commission shall make a
	determination of the amount of the tax required to be collected,
	noting the finding of jeopardy on the determination. The
	determined amount is due and payable immediately.
	(b) If a license holder does not pay the amount specified by
	a determination on or before the 20th day after the date of service
	of the determination on the license holder, the amount becomes
	final at the end of the 20th day unless the license holder files a
	petition for redetermination on or before the 20th day after
	service of notice of the determination.
	(c) A delinquency penalty of 10 percent of the tax and
	interest at the rate of 10 percent a year attaches to the amount of
	the tax required to be collected.
	Sec. 2004.358. APPLICATION OF TAX LAWS. Subtitle B, Title
	2, Tax Code, applies to the administration, collection, and
	enforcement of the gross receipts tax imposed under Section
	2004.351 except as modified by this chapter.
	Sec. 2004.359. DELINQUENCY: SEIZURE AND SALE. (a) At any
	time before the third anniversary of the date a person becomes
	delinquent in the payment of a gross receipts tax imposed under this
	subchapter, the commission may collect the amount as provided by
	this section.
	(b) The commission may order the sheriff or constable for
	the jurisdiction in which licensed poker gaming tables for which a
	gross receipts tax is delinquent to conduct the seizure and sale
	authorized by this section. The sheriff or constable may deduct
	reasonable expenses from any amount realized by sale of the
	property.
	(c) The commission or sheriff or constable shall seize
	personal or real property of the license holder that is not exempt
	from execution under the laws of this state and sell the property at
	public auction to pay the amount of taxes due, any interest or
	penalties due on those taxes, and any expense incurred in
	connection with the seizure and sale. Personal property must be
	seized and sold first, and real property may be seized and sold only
	if the sale of personal property does not produce an amount
	sufficient to pay the total amount of taxes, interest, or penalties
	due. The seizure and sale must be conducted in accordance with
	applicable state law.
	Sec. 2004.360. SECURITY. (a) Not later than the fifth day
	after the date the licensed operator receives notice from the
	commission of an order approving the application for an operator's
	license, each operator, to secure payment of the gross receipts tax
	imposed under this subchapter, shall furnish to the commission
	security in the form and amount the commission considers
	appropriate, which may be in the form of:
	(1) a cash bond;
	(2) a bond from a surety company chartered or
	authorized to conduct business in this state;
	(3) certificates of deposit;
	(4) certificates of savings;
	(5) United States treasury bonds; or
	(6) subject to the approval of the commission, an
	assignment of negotiable stocks or bonds.
	(b) The commission shall set the amount of the security,
	taking into consideration the amount of money that has or is
	expected to become due from the licensed operator, based on the
	number of poker gaming tables to be operated on the operator's
	premises. The commission may adjust the amount of security
	required after the licensed operator begins conducting poker gaming
	on the premises and paying gross receipts taxes.
	(c) If a licensed operator fails to pay the gross receipts
	tax imposed under this subchapter, the commission may notify the
	licensed operator and any surety of the delinquency by jeopardy or
	deficiency determination. If payment is not made when due, the
	commission may order the forfeit of all or part of the security to
	cover the amount due.
	(d) If the licensed operator ceases to conduct poker gaming
	and relinquishes the operator's license, the commission shall
	authorize the release of all security on a determination that no
	amounts of the gross receipts tax remain due and payable under this
	subchapter.
	[Sections 2004.361-2004.400 reserved for expansion]
	SUBCHAPTER I. REGULATION OF POKER GAMING OPERATIONS
	Sec. 2004.401. REGULATION OF POKER GAMING OPERATIONS. (a)
	The commission shall adopt rules to govern the operation of poker
	gaming at a licensed operator's premises as the commission
	determines necessary for the protection of the public health,
	safety, morals, and good order, of the general welfare of the people
	of this state, and of the reputation of this state's poker gaming
	industry.
	(b) The executive director shall adopt rules under this
	chapter consistent with provisions of Chapter 2001 governing bingo
	for a licensed operator that holds a license to conduct bingo. To
	the extent the executive director determines feasible and necessary
	to protect the public health, safety, and welfare and this state's
	financial interests, the executive director shall adopt rules that
	impose on the conduct of poker gaming under this chapter the same
	type and manner of regulation as imposed under Chapter 2001 for the
	conduct of bingo, including:
	(1) restrictions on premises providers similar to
	Section 2001.401;
	(2) location restrictions similar to Sections
	2001.402, 2001.403, and 2001.404;
	(3) rent restrictions similar to Sections 2001.405 and
	2001.406;
	(4) restrictions on persons allowed to operate or
	conduct poker gaming;
	(5) authorization for joint employment of certain
	poker gaming employees;
	(6) limitations on the number and duration of poker
	gaming occasions similar to Section 2001.419;
	(7) authorization for two or more license holders to
	form an accounting unit similar to Subchapter I-1, Chapter 2001;
	and
	(8) regulations relating to poker gaming accounts and
	the uses of poker gaming proceeds similar to Subchapter J, Chapter
	2001.
	Sec. 2004.402. HOURS OF OPERATION. (a) A licensed operator
	other than a license holder that holds a license to conduct bingo
	issued under Chapter 2001 may conduct poker gaming on the premises
	covered by the operator's license at any time.
	(b) A licensed operator that holds a license to conduct
	bingo issued under Chapter 2001 may conduct poker gaming only for
	the duration and at the location the operator is authorized to
	conduct bingo under Chapter 2001 unless otherwise provided by
	commission rule.
	(c) The hours of operation for poker gaming must be clearly
	posted in the licensed operator's poker gaming area.
	Sec. 2004.403. TABLE LIMITS; TOURNAMENTS. (a) A licensed
	operator shall establish table limits for each poker gaming table.
	(b) The licensed operator may conduct tournaments at any
	time the operator is authorized to conduct poker gaming and charge a
	buy-in fee not to exceed $100 and a tournament registration fee not
	to exceed $30.
	Sec. 2004.404. BANK. A licensed operator shall establish
	on the operator's premises a bank to convert legal United States
	tender into chips or tokens and to convert chips or tokens into
	cash.
	Sec. 2004.405. USE OF CHIPS OR TOKENS. (a) All poker
	gaming conducted by a licensed operator shall be conducted using
	chips or tokens approved by the commission.
	(b) All chips or tokens must bear the logo of the licensed
	operator's premises and must be manufactured in a manner designed
	to substantially decrease the chips' or tokens' susceptibility to
	counterfeiting. The commission may inspect a licensed operator's
	chips or tokens to confirm compliance with this section.
	Sec. 2004.406. USE OF PLAYING CARDS. (a) Poker gaming
	conducted by a licensed operator shall be played with one or more
	poker industry standard poker card decks.
	(b) Each poker card deck used in poker gaming must be sealed
	with a label indicating the deck was manufactured or distributed by
	a licensed manufacturer or distributor.
	(c) Not more than 50 separate poker hands may be played with
	the same poker card deck.
	(d) Each poker card deck must be monitored and cataloged in
	a log that documents the exact location of the cards on a licensed
	operator's premises.
	Sec. 2004.407. RULES OF PLAY. All poker rules used in poker
	gaming conducted by a licensed operator shall be submitted to and
	approved by the commission.
	Sec. 2004.408. BOND REQUIREMENT. (a) Each employee of a
	licensed operator who handles cash must be bonded.
	(b) For each employee required to comply with Subsection
	(a), a licensed operator shall:
	(1) submit to the commission a copy of the certificate
	evidencing that the employee has obtained a fidelity bond from a
	surety company chartered or authorized to conduct business in this
	state; and
	(2) post a copy of the certificate in a conspicuous
	location on the operator's premises.
	Sec. 2004.409. BADGES. (a) During the operation of poker
	gaming, each individual licensed under this chapter shall wear in a
	prominently visible location on the individual's person a numbered
	badge issued by the commission.
	(b) An individual who ceases employment with a licensed
	operator shall immediately surrender the individual's badge to the
	operator. Not later than the 10th day after the date the individual
	surrenders the badge, the licensed operator shall:
	(1) on a form adopted by the commission notify the
	commission in writing of a change in status of the individual; and
	(2) submit the surrendered badge to the commission.
	(c) Each badge issued to an individual must prominently
	display on the front of the badge:
	(1) capital letters identifying the license held by
	the individual;
	(2) the first name of the individual;
	(3) the picture of the individual submitted with the
	individual's license application;
	(4) the badge number; and
	(5) the expiration date of the license.
	(d) The full name of the license holder, along with the type
	of license, must be printed on the reverse side of the badge.
	Sec. 2004.410. BONUS PROGRAMS. (a) The commission by rule
	shall establish promotion bonus programs for bad beat hands and
	other bonus programs. The programs may be statewide or limited to
	individual premises.
	(b) Each licensed operator shall:
	(1) collect promotion bonus fees in accordance with
	commission rule; and
	(2) award a bonus that does not exceed $250 to the
	player who wins the bonus.
	(c) The amount awarded under Subsection (b)(2) shall be
	deducted from the daily promotion bonus fee that would otherwise be
	remitted to this state.
	(d) The commission shall award to the winning player of a
	bonus program any amount that exceeds $250.
	(e) A distributor may collect from the commission an
	administrative fee, not to exceed 20 percent of the promotion bonus
	fee paid to a winning player.
	Sec. 2004.411. COLLECTION FEE. (a) Each licensed operator
	shall collect a collection fee on each poker hand played. The
	collection fee may not exceed 10 percent of the communal pot in each
	hand of poker played, with a maximum of $4 per hand.
	(b) The commission shall adopt rules necessary to
	administer this section.
	Sec. 2004.412. PROMOTION BONUS FEE. (a) A promotion bonus
	fee may not exceed $1 per hand.
	(b) The promotion bonus fee shall be remitted to this state,
	after deducting the gross receipts tax, the fee used for bonus
	programs, and administrative fees not to exceed 20 percent of the
	promotion bonus fee.
	Sec. 2004.413. CONTRIBUTION TO PURSE FUND. (a) A
	pari-mutuel license holder described by Section
	2004.103(a)(1)(A)(ii) that conducts poker gaming in this state
	shall deposit in a purse fund two percent of the license holder's
	gross receipts from that poker gaming.
	(b) Money in the purse fund may only be expended in
	accordance with rules adopted by the Texas Racing Commission under
	Section 18.09, Texas Racing Act (Article 179e, Vernon's Texas Civil
	Statutes).
	Sec. 2004.414. REPORTING REQUIREMENTS. (a) A licensed
	operator shall keep books and records in a manner that clearly shows
	the total amount of gross receipts and total deposits made by all
	poker gaming players.
	(b) The books and records kept by a licensed operator
	relating to poker gaming operations are not public information, and
	publication and dissemination of the materials by the commission
	are prohibited. The commission may publish and disseminate the
	total gross receipts of each licensed operator at the frequency and
	in the level of detail the commission considers appropriate.
	(c) A licensed operator that is not an individual shall file
	a report of each change of the operator's 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 position to which the officer or director
	was elected or appointed.
	(d) The commission may require that a licensed operator
	provide the commission with a copy of the operator's federal income
	tax return not later than the 30th day after the date the return is
	filed with the federal government. The federal income tax returns
	submitted to the commission are not public information, and
	publication and dissemination of the materials by the commission
	are prohibited.
	Sec. 2004.415. EXCLUSION OF PERSONS. (a) The commission by
	rule shall provide for the maintenance of a list of persons who are
	to be excluded or ejected from poker gaming premises. The list may
	include a person whose presence in poker gaming premises is
	determined by the commission to pose a threat to the interests of
	this state, to licensed poker gaming, or to both.
	(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 the United States; or
	(2) violation of or conspiracy to violate the
	provisions of this chapter relating to:
	(A) the failure to disclose an interest in a
	licensed operator;
	(B) wilful evasion of a fee or a tax; or
	(C) a notorious or unsavory reputation that would
	adversely affect public confidence and trust that the poker gaming
	industry is free from criminal or corruptive elements.
	Sec. 2004.416. INTERNAL AUDIT AND CONTROL SYSTEMS. (a) A
	licensed operator shall adopt an internal control system that:
	(1) safeguards its assets and revenues, which must
	include means for recording cash transactions and balances and
	evidences of indebtedness; and
	(2) provides for reliable records, accounts, and
	reports of transactions, operations, and events, including reports
	to the 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 poker gaming revenue and of fees and taxes and
	to maintain accountability for assets;
	(5) access to assets is permitted only in accordance
	with the licensed operator'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 licensed operator or an applicant for an operator's
	license shall describe, in a manner approved or required by the
	director, the licensed operator's or applicant's administrative and
	accounting procedures in detail in a written system of internal
	control. A licensed operator or applicant for an operator's
	license shall submit a copy of the written system. A written system
	must include:
	(1) an organizational chart depicting appropriate
	segregation of duties 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 2004.352(a);
	(4) a written statement signed by the licensed
	operator or applicant's chief financial officer or by the licensed
	operator or applicant, if an individual, 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 director may require.
	(d) The commission shall adopt minimum standards for
	internal control procedures.
	Sec. 2004.417. AGE REQUIREMENTS. (a) Except as provided by
	Subsection (b), a person younger than 21 years of age may not:
	(1) play, be allowed to play, place wagers, or collect
	a communal pot, personally or through an agent, or be present in the
	poker gaming area during poker gaming at any premises authorized
	under this chapter; or
	(2) be employed as a poker gaming employee.
	(b) In accordance with commission rules and Section
	2001.418, the following may be present and participate in bingo
	games in the bingo area of a licensed operator that is separate and
	divided from the poker gaming area of the licensed operator's
	premises:
	(1) an individual who is 18 to 20 years of age; and
	(2) an individual who is younger than 18 years of age
	and is accompanied by the individual's parent or guardian.
	Sec. 2004.418. VIDEO SURVEILLANCE AND DISPUTE RESOLUTION.
	(a) Each licensed operator shall provide video surveillance of the
	poker gaming conducted at each poker gaming table as follows:
	(1) at least two video surveillance cameras must be
	dedicated to each poker gaming table;
	(2) the video cameras must have a clear, unobstructed
	view of the communal cards, chips, and dealers' hands; and
	(3) the video records must be maintained for at least
	30 days unless a notice is received from the commission under
	Subsection (c), in which case the video surveillance tape recording
	must be maintained until the commission notifies the operator that
	the dispute has been resolved.
	(b) If a player at a poker gaming table disputes the
	decision of the dealer regarding the final disposition of an
	individual game, the player may file a complaint with the licensed
	operator. The licensed operator shall attempt to resolve a gaming
	dispute immediately on receiving a complaint.
	(c) Players in a poker game must make a formal complaint of
	the dispute to the commission by the end of the next business day
	following the date the poker game was played. The commission shall
	notify the licensed operator immediately of the complaint, and the
	operator shall send to the commission a copy of any video recording
	related to the complaint.
	(d) The commission shall adopt rules and develop forms for
	use by players for resolution of complaints submitted by players
	under this section.
	(e) The commission shall establish rules for surveillance
	at charitable poker tournaments.
	Sec. 2004.419. QUESTIONING AND DETENTION OF PERSONS. A
	licensed operator or an employee of the operator may question any
	person on the poker gaming premises who is suspected of violating
	this chapter. The licensed operator or the operator's employee 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 director or law enforcement authorities.
	Sec. 2004.420. SERVICE OF COMPLIMENTARY ALCOHOLIC
	BEVERAGES PROHIBITED. A licensed operator may not serve
	complimentary alcoholic beverages to a player on the operator's
	poker gaming premises.
	[Sections 2004.421-2004.450 reserved for expansion]
	SUBCHAPTER J. ENFORCEMENT
	Sec. 2004.451. INVESTIGATION. The commission may conduct
	an appropriate investigation to:
	(1) determine whether this chapter or a commission
	rule was violated;
	(2) determine facts, conditions, practices, or
	matters the commission 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.
	Sec. 2004.452. AUDIT. (a) The commission may conduct an
	audit of a license holder's books and records as part of an
	investigation.
	(b) If a recomputation of tax under Section 2004.355 is at
	issue, the commission shall conduct an audit.
	Sec. 2004.453. COMPLAINT. (a) If after an investigation
	the commission is satisfied that a license, finding of suitability,
	or prior approval by the commission of a transaction for which
	approval was required or authorized under this chapter should be
	limited, conditioned, suspended, or revoked, or that a fine should
	be imposed, the executive director shall:
	(1) initiate a hearing by filing a complaint with the
	commission; and
	(2) transmit a summary of evidence that bears on the
	matter and the transcript of testimony at an investigative hearing
	conducted by or on behalf of the executive director regarding the
	matter.
	(b) The complaint must:
	(1) be a written statement of charges that sets forth
	in ordinary and concise language the acts or omissions with which
	the respondent is charged;
	(2) specify the statute or rule that the respondent is
	alleged to have violated;
	(3) contain a factual allegation; and
	(4) not consist merely of charges raised on the
	language of the statute or rule.
	(c) On the filing of the complaint, the executive director
	shall serve a copy of the complaint on the respondent either
	personally or by registered or certified mail at the respondent's
	address on file with the executive director.
	(d) The respondent must file an answer with the executive
	director not later than the 30th day after the date the complaint is
	served.
	Sec. 2004.454. HEARING. (a) On receipt of a complaint
	under this subchapter, the commission shall review all matter
	presented in support of the complaint and shall appoint a hearing
	examiner to conduct further proceedings.
	(b) The hearing examiner shall conduct proceedings under
	Chapter 2001, Government Code. After the proceedings, the hearing
	examiner may recommend that the commission take any appropriate
	action, including revocation, suspension, limitation, or
	conditioning of a license, finding of suitability, or prior
	approval or imposition of a fine not to exceed $5,000 for each
	violation.
	(c) The commission shall review the recommendation. The
	commission may remand the case to the hearing examiner for
	presentation of additional evidence on a showing of good cause as to
	why the evidence could not have been presented at the previous
	hearing.
	(d) The commission shall accept, reject, or modify the
	recommendation.
	(e) If the commission limits, conditions, suspends, or
	revokes a license, finding of suitability, or prior approval or
	imposes a fine, the commission shall issue a written order.
	(f) A limitation, condition, revocation, suspension, or
	fine imposed is effective according to its terms until reversed
	following judicial review, except that the commission may stay its
	order pending a rehearing or judicial review on terms and
	conditions the commission considers proper.
	Sec. 2004.455. JUDICIAL REVIEW. Judicial review of an
	order or decision of the commission may be made under Chapter 2001,
	Government Code. Judicial review is under the substantial evidence
	rule as described by Section 2001.174, Government Code.
	Sec. 2004.456. 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 is privileged
	and does not impose liability for defamation or constitute a ground
	for recovery in a civil action.
	(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.
	(c) Notwithstanding the powers granted to the commission by
	this chapter, the commission:
	(1) may not release or disclose privileged
	information, documents, or communications provided by an applicant
	or license holder and required by a 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) shall maintain all privileged information,
	documents, and communications in a secure place accessible only to
	commission members and the executive director; and
	(3) shall adopt procedures to protect the privileged
	nature of information, documents, and communications provided by an
	applicant or license holder.
	Sec. 2004.457. RELEASE OF CONFIDENTIAL INFORMATION. (a)
	An application to a court for an order requiring the commission to
	release any confidential information shall be made only on a
	written motion 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.
	(b) 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. 2004.458. EMERGENCY ORDERS. (a) The commission may
	issue an emergency order to:
	(1) suspend, limit, or condition a license or finding
	of suitability; or
	(2) require a licensed operator to keep an individual
	license holder from the premises or to not pay the holder any
	remuneration for services or any profits, income, or accruals on
	the licensed operator's investment in the premises.
	(b) An emergency order may be issued only if the commission
	determines that:
	(1) a license holder or person found suitable has
	wilfully failed to report, pay, or truthfully account for a fee,
	tax, or other amount imposed under this chapter or wilfully
	attempted in any manner to evade or defeat a fee, tax, or other
	payment;
	(2) a license holder cheated at a poker 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 a majority of the commission members.
	(e) An emergency order is effective immediately on issuance
	and service on the license holder or resident agent of the license
	holder, an employee, or, in cases involving findings of
	suitability, 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 or suitability
	finding of one or more persons in an operation without affecting
	other individual license holders or persons subject to a
	suitability finding. 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 involved. The person 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
	described by Section 2001.174, Government Code.
	Sec. 2004.459. ACCESS TO CRIMINAL HISTORY RECORD
	INFORMATION. (a) The commission, the executive director, and the
	director are entitled to conduct an investigation of and 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
	investigation of:
	(1) a licensed operator or an applicant for an
	operator's license;
	(2) a person required to be named in a license
	application;
	(3) an employee of a licensed operator, if the
	employee is or will be directly involved in poker gaming
	operations;
	(4) a person who manufactures or distributes poker
	gaming equipment, or a representative of a person who manufactures
	or distributes poker gaming equipment or supplies offered to a
	poker card room;
	(5) a dealer or other employee license holder or
	applicant;
	(6) a registered owner of an equity or creditor
	interest in a licensed operator or an applicant for such a
	registration; or
	(7) if a person described in another subdivision of
	this subsection is not an individual, an 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) is a creditor of the person who holds more
	than 10 percent of the person's outstanding debt;
	(E) is the owner or lessee of a business that the
	person conducts or through which the person will conduct poker
	gaming-related activities;
	(F) shares or will share in the profits, other
	than stock dividends, of the person;
	(G) participates in managing the affairs of the
	person; or
	(H) is an employee of the person who is or will be
	involved in providing services to a poker card room.
	(b) On each anniversary of the date of issuance of an
	operator's license, the commission shall obtain criminal history
	record information maintained by the Department of Public Safety on
	the licensed operator and on each holder of a 10 percent or greater
	equity or creditor interest in the licensed operator.
	(c) Not later than the first anniversary after the date of
	each license renewal, the commission shall obtain criminal history
	record information maintained by the Department of Public Safety on
	each licensed dealer or other employee, manufacturer, or
	distributor.
	Sec. 2004.460. FINGERPRINTS. The commission may deny an
	application for a license or the commission may suspend or revoke a
	license if the applicant fails on request to provide a complete
	legible set of fingerprints of a person required to be named in a
	license application.
	Sec. 2004.461. DEPARTMENT OF PUBLIC SAFETY ASSISTANCE;
	COSTS OF INVESTIGATION. (a) The executive director or the director
	may request the cooperation of the Department of Public Safety to
	perform a background investigation of a person listed in Section
	2004.459. The commission shall reimburse the department for the
	actual cost of an investigation.
	(b) The executive director may require a person who is
	subject to investigation to pay all costs of the investigation and
	to provide any information, including fingerprints, necessary to
	carry out the investigation or facilitate access to state or
	federal criminal history record information. Payments made to the
	executive director under this subsection shall be deposited in the
	general revenue fund and may be used only to reimburse the
	commission or the Department of Public Safety for the actual costs
	of an investigation.
	(c) Unless otherwise prohibited by law, the Department of
	Public Safety may retain any record or information submitted to it
	under this section. The department shall notify the executive
	director or the director of any change in information provided to
	the executive director or the director when the department learns
	of the change.
	[Sections 2004.462-2004.500 reserved for expansion]
	SUBCHAPTER K. PENALTIES AND OFFENSES
	Sec. 2004.501. 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 when due shall pay
	in addition a penalty of not less than $50 or 25 percent of the
	amount due, whichever is greater. The penalty may not exceed $1,000
	if the fee is less than 10 days late and may not exceed $5,000 under
	any circumstances. The penalty shall be collected in the same
	manner as other charges, license fees, and penalties under this
	chapter.
	Sec. 2004.502. FAILURE TO REPORT, PAY, OR ACCOUNT FOR FEE.
	(a) A person commits an offense if the person wilfully fails to
	report, pay, or truthfully account for a fee imposed under this
	chapter or wilfully attempts in any manner to evade or defeat a fee.
	(b) An offense under this section is a Class A misdemeanor.
	Sec. 2004.503. FRAUD. (a) A person commits an offense if
	the person knowingly:
	(1) alters or misrepresents the outcome of a poker
	game 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 any thing of value in or from a poker
	game, with intent to defraud, without having made a wager
	contingent on the poker game, or claims, collects, or takes an
	amount greater than the amount won;
	(4) induces another to go to a place where poker gaming
	is being conducted or operated in violation of this chapter, with
	the intent that the other person play or participate in that poker
	gaming; or
	(5) manipulates, with the intent to cheat, a component
	of poker gaming equipment in a manner contrary to the designed and
	normal operational purpose for the component, with knowledge that
	the manipulation affects the conduct or outcome of a poker 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. 2004.504. USE OF PROHIBITED DEVICES. (a) A person
	commits an offense if the person, at a premises of a licensed
	operator, uses or possesses with the intent to use a device, other
	than a device customarily used in the conduct of poker gaming, to
	assist in:
	(1) projecting the outcome of a poker game; or
	(2) 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. 2004.505. USE OF COUNTERFEIT OR UNAUTHORIZED CHIPS,
	TOKENS, PLAYING CARDS, OR OTHER DEVICES. (a) A person commits an
	offense if the person knowingly uses counterfeit chips, tokens, or
	playing cards in a poker game.
	(b) A person commits an offense if the person, in playing a
	poker game designed to be played with chips or tokens approved by
	the commission:
	(1) knowingly uses a chip or token other than a chip or
	token approved by the commission; or
	(2) uses any device or other means to violate the
	provisions of this chapter.
	(c) A person, other than an authorized employee of a
	licensed operator acting in furtherance of the person's employment
	in 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 where poker gaming is conducted a device intended to be
	used to violate the provisions of this chapter.
	(d) A person, other than an authorized employee of a
	licensed operator acting in furtherance of the person's employment
	in 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 a key or device known to have been designed for the purpose
	of and suitable for opening, entering, or affecting the operation
	of a poker gaming table, a drop box, or a device connected to the
	table or box or for removing money or other contents from the table
	or box.
	(e) 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 for
	cheating.
	(f) An offense under this section is a felony of the third
	degree.
	Sec. 2004.506. CHEATING. (a) A person commits an offense
	if the person knowingly cheats at any poker game.
	(b) An offense under this section is a state jail felony.
	Sec. 2004.507. UNAUTHORIZED OPERATION OF POKER GAMING
	TABLES. (a) A person commits an offense if the person operates
	poker gaming tables without a license issued by the commission.
	(b) A person commits an offense if the person operates more
	than four poker gaming tables at the premises of a licensed
	operator.
	(c) An offense under this section is a state jail felony.
	Sec. 2004.508. POSSESSION OF UNLAWFUL DEVICES. (a) A
	person commits an offense if the person knowingly possesses any
	poker gaming device that has been manufactured, sold, or
	distributed in violation of this chapter.
	(b) An offense under this section is a Class A misdemeanor.
	Sec. 2004.509. UNLAWFUL MANUFACTURE, SALE, OR DISTRIBUTION
	OF POKER GAMING EQUIPMENT. (a) A person commits an offense if the
	person manufactures, sells, or distributes poker tables, cards,
	chips, or a device intended for use in violating this chapter.
	(b) A person commits an offense if the person marks, alters,
	or otherwise modifies any cards, chips, tokens, or poker gaming
	device in a manner that:
	(1) affects the result of a wager by determining 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.
	(c) A person commits an offense if the person instructs
	another person in cheating or in the use of a device for cheating at
	any poker game authorized to be conducted at the premises of a
	licensed operator, with the knowledge or intent that the
	information or use may be employed to violate this chapter.
	(d) An offense under this section is a felony of the third
	degree.
	Sec. 2004.510. REPORTING PENALTIES. (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. 2004.511. GAMING BY MINORS. (a) A person commits an
	offense if the person knowingly permits an individual that the
	person knows is younger than 21 years of age to participate in poker
	gaming at premises at which poker gaming is conducted under a
	license issued under this chapter.
	(b) An individual younger than 21 years of age commits an
	offense if the individual participates in poker gaming at premises
	at which poker gaming is conducted under a license issued under this
	chapter.
	(c) An offense under this section is a Class C misdemeanor.
	Sec. 2004.512. GENERAL PENALTY; CONSPIRACY. (a) A person
	commits an offense if the person knowingly or wilfully violates,
	attempts to violate, or conspires to violate a provision of this
	chapter specifying a prohibited act.
	(b) Unless another penalty is specified for the offense, an
	offense under this section is a Class A misdemeanor.
	SECTION 2. Section 47.02(c), Penal Code, is amended to read
	as follows:
	(c) It is a defense to prosecution under this section that
	the actor reasonably believed that the conduct:
	(1) was permitted under Chapter 2001, Occupations
	Code;
	(2) was permitted under Chapter 2002, Occupations
	Code;
	(3) consisted entirely of participation in the state
	lottery authorized by the State Lottery Act (Chapter 466,
	Government Code);
	(4) was permitted under the Texas Racing Act (Article
	179e, Vernon's Texas Civil Statutes); [or]
	(5) consisted entirely of participation in a drawing
	for the opportunity to participate in a hunting, fishing, or other
	recreational event conducted by the Parks and Wildlife Department;
	or
	(6) was permitted under Chapter 2004, Occupations
	Code.
	SECTION 3. 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 the premises of a licensed operator under
	Chapter 2004, Occupations Code, at which poker gaming may be
	conducted under the license; or
	(2) to another jurisdiction where the possession or
	use of the device, equipment, or paraphernalia was legal.
	SECTION 4. 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; [or]
	(C) the Texas Racing Act (Article 179e, Vernon's
	Texas Civil Statutes); or
	(D) Chapter 2004, 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 5. Section 411.108, Government Code, is amended by
	adding Subsection (a-2) and amending Subsection (b) to read as
	follows:
	(a-2) The Texas Lottery Commission is entitled to obtain
	from the department criminal history record information maintained
	by the department that relates to a person for whom the commission
	may request criminal history record information under Chapter 2004,
	Occupations Code.
	(b) Criminal history record information obtained by the
	commission under Subsection (a), [or] (a-1), or (a-2) may not be
	released or disclosed to any person except on court order or as
	provided by Subsection (c).
	SECTION 6. Section 467.035(a), Government Code, is amended
	to read as follows:
	(a) The commission may not employ or continue to employ a
	person who owns a financial interest in:
	(1) a bingo commercial lessor, bingo distributor, or
	bingo manufacturer; [or]
	(2) a lottery sales agency or a lottery operator; or
	(3) a licensed operator or other license holder under
	Chapter 2004, Occupations Code.
	SECTION 7. Section 2001.416(a), Occupations Code, is
	amended to read as follows:
	(a) A game of chance other than bingo, poker gaming
	conducted under Chapter 2004, or a raffle conducted under Chapter
	2002 may not be conducted or allowed during a bingo occasion.
	SECTION 8. Article 18, Texas Racing Act (Article 179e,
	Vernon's Texas Civil Statutes), is amended by adding Section 18.09
	to read as follows:
	Sec. 18.09. POKER GAMING PURSE PROCEEDS. (a) To protect the
	public and ensure continued support for the horse and greyhound
	racing industry in this state, the commission shall adopt rules to
	establish procedures governing the deposit, accounting, audit,
	investment, and use of money required to be deposited into a purse
	fund under Section 2004.413, Occupations Code.
	(b) Other than limited administrative expenses authorized
	by commission rule, the money deposited into a purse fund under
	Section 2004.413, Occupations Code, may be used only to promote the
	horse and greyhound racing industry in this state by providing
	money for competitive purses.
	SECTION 9. Not later than January 1, 2014, the Texas Lottery
	Commission shall adopt the rules, develop the applications and
	forms, and establish the procedures necessary to implement Chapter
	2004, Occupations Code, as added by this Act.
	SECTION 10. This Act takes effect September 1, 2013.