bill licensing lottery couriers

The text as introduced · 2,201 words

89R12913 BEE-F

By: Bucy
H.B. No. 3201

A BILL TO BE ENTITLED

AN ACT

relating to the licensing and regulation of lottery couriers by the

Texas Lottery Commission; requiring an occupational license;

authorizing a fee.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 411.108, Government Code, is amended by

adding Subsection (a-3) to read as follows:

(a-3) The Texas Lottery Commission is entitled to obtain

criminal history record information as provided by Subsection (a-2)

that relates to a person licensed under Subchapter K, Chapter 466.

SECTION 2. Section 466.002, Government Code, is amended by

adding Subdivision (5-a) to read as follows:

(5-a) "Lottery courier" means a person licensed under

this chapter to act as an agent for a player in purchasing a ticket.

SECTION 3. Section 466.201(a), Government Code, is amended

to read as follows:

(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 investigation of:

(1) a sales agent or an applicant for a sales agent

license;

(2) a person required to be named in a license

application;

(3) a lottery operator or prospective lottery

operator;

(4) an employee of a lottery operator or prospective

lottery operator, if the employee is or will be directly involved in

lottery operations;

(5) a person who manufactures or distributes lottery

equipment or supplies, or a representative of a person who

manufactures or distributes lottery equipment or supplies offered

to the lottery;

(6) 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;

(7) an employee or other person who works for or will

work for a sales agent or an applicant for a sales agent license;

(8) a person who proposes to enter into or who has a

contract with the commission to supply goods or services to the

commission; [ or ]

(9) a lottery courier or an applicant for a lottery

courier license; or

(10) if a person described in Subdivisions (1) through

(9) [ (8) ] 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

lottery-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:

(i) selling tickets; or

(ii) handling money from the sale of

tickets.

SECTION 4. Section 466.204, Government Code, is amended to

read as follows:

Sec. 466.204. ACCESS TO INTERNAL REVENUE SERVICE

INFORMATION. The executive director may obtain information

relating to a person's qualification for licensing, employment, or

contracting under this chapter from the Internal Revenue Service

under a contract between the comptroller and the Internal Revenue

Service on:

(1) a sales agent or an applicant for a sales agent

license;

(2) an employee or prospective employee of the

commission;

(3) a person required to be named in a license

application;

(4) a lottery operator or prospective lottery

operator;

(5) an employee of a lottery operator or prospective

lottery operator, if the employee is or will be directly involved in

lottery operations;

(6) a person who manufactures or distributes lottery

equipment or supplies, or a representative of a person who

manufactures or distributes lottery equipment or supplies offered

to the lottery;

(7) 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;

(8) an employee or other person who works for or will

work for a sales agent or an applicant for a sales agent license;

[ or ]

(9) a person who proposes to enter into or who has a

contract with the commission to supply goods or services to the

commission ;

(10) a lottery courier or an applicant for a lottery

courier license; or

(11) an employee or other person who works for or will

work for a lottery courier or an applicant for a lottery courier

license .

SECTION 5. Chapter 466, Government Code, is amended by

adding Subchapter K to read as follows:

SUBCHAPTER K. LICENSING AND OPERATION

OF LOTTERY COURIERS

Sec. 466.501. LICENSE REQUIRED; ISSUANCE. (a) A person may

not act as an agent for a player in purchasing a ticket unless the

person holds a lottery courier license issued under this

subchapter.

(b) The director may issue a lottery courier license only to

a person the director finds has the experience, character, and

general fitness to ensure the person's participation as a lottery

courier will not detract from the integrity, security, honesty, and

fairness of the operation of the lottery.

(c) As a condition to issuance of a lottery courier license,

a lottery courier shall implement, before offering a service as a

lottery courier, any independent testing required by commission

rule.

Sec. 466.502. LICENSE APPLICATION; FEE. (a) An applicant

for a license under this subchapter must:

(1) apply to the division under rules adopted by the

commission; and

(2) provide:

(A) information necessary to determine the

applicant's eligibility for a lottery courier license, including

whether the applicant demonstrates compliance with provisions of

this chapter regulating ticket purchases; and

(B) other information the commission considers

necessary.

(b) The applicant must include an application fee with each

application. The director shall set the application fee in an

amount at least sufficient to cover the costs incurred by the

commission and by the Department of Public Safety to process the

application.

Sec. 466.503. DENIAL OF APPLICATION OR SUSPENSION OR

REVOCATION OF LICENSE. (a) After a hearing, the director shall

deny an application for a lottery courier license or the commission

shall suspend or revoke a lottery courier license if the director or

commission, as applicable, finds the applicant or lottery courier:

(1) is an individual who:

(A) has been convicted of a felony, criminal

fraud, gambling or a gambling-related offense, or a misdemeanor

involving moral turpitude, if less than 10 years has elapsed since

the termination of the sentence, parole, mandatory supervision, or

probation served for the offense;

(B) is or has been a professional gambler;

(C) is married to an individual:

(i) described in Paragraph (A) or (B); or

(ii) who is currently delinquent in the

payment of any state tax;

(D) is an officer or employee of the commission

or a lottery operator; or

(E) is a spouse, child, brother, sister, or

parent residing as a member of the same household in the principal

place of residence of a person described by Paragraph (D);

(2) is not an individual, and an individual described

in Subdivision (1):

(A) is an officer or director of the applicant or

lottery courier;

(B) holds more than 10 percent of the stock in the

applicant or lottery courier;

(C) holds an equitable interest greater than 10

percent in the applicant or lottery courier;

(D) is a creditor of the applicant or lottery

courier who holds more than 10 percent of the applicant's or lottery

courier's outstanding debt;

(E) is the owner or lessee of a business the

applicant or lottery courier conducts or through which the

applicant will conduct a lottery courier business;

(F) shares or will share in the profits, other

than stock dividends, of the applicant or lottery courier; or

(G) participates in managing the affairs of the

applicant or lottery courier;

(3) has been finally determined to be delinquent in

the payment of a tax or other money collected by the comptroller,

the Texas Workforce Commission, or the Texas Alcoholic Beverage

Commission;

(4) is a person whose location for the lottery courier

business is:

(A) a location licensed for games of bingo under

Chapter 2001, Occupations Code;

(B) on land owned by:

(i) this state; or

(ii) a political subdivision of this state

and on which is located a public primary or secondary school, an

institution of higher education, or a state agency; or

(C) a location for which a person holds a wine and

malt beverage retailer's permit, mixed beverage permit, mixed

beverage permit with a retailer late hours certificate, private

club registration permit, or private club registration permit with

a retailer late hours certificate issued under Chapter 25, 28, 29,

or 32, Alcoholic Beverage Code, other than a location for which a

person holds a wine and malt beverage retailer's permit issued

under Chapter 25, Alcoholic Beverage Code, that derives less than

30 percent of the location's gross receipts from the sale or service

of alcoholic beverages; or

(5) has violated this chapter or a rule adopted under

this chapter.

(b) If the director proposes to deny an application for a

license or the commission proposes to suspend or revoke a license

under this section, the applicant or lottery courier is entitled to

written notice of the time and place of the hearing. A notice may be

served on an applicant or lottery courier personally or sent by

certified or registered mail, return receipt requested, to the

person's mailing address as it appears on the commission's records.

A notice must be served or mailed not later than the 20th day before

the hearing date. The commission shall provide for a formal

administrative hearings process.

Sec. 466.504. PROHIBITED TRANSACTIONS. A lottery courier

may not open an account or accept a request for lottery courier

services from a person who is:

(1) under 18 years of age;

(2) an employee, officer, director, or direct or

indirect owner of the lottery courier;

(3) related within the first degree by consanguinity

to an employee, officer, director, or direct or indirect owner of

the lottery courier; or

(4) identified on a restricted list, as prescribed by

commission rule.

Sec. 466.505. COMPLIANCE AUDITS; ANNUAL REPORTS. (a) At

the sole expense of the lottery courier, the lottery courier at

least annually shall contract with an independent auditor the

commission approves for an audit of the lottery courier. On

completion of the audit and the auditor's determination the lottery

courier is in compliance with this subchapter, the auditor shall

issue a certification of compliance to the lottery courier.

(b) A lottery courier shall provide to the commission, not

later than the 120th day after the last day of the lottery courier's

fiscal year:

(1) the lottery courier's financial statements audited

in accordance with generally accepted auditing standards and a copy

of the certificate of compliance issued as required under

Subsection (a);

(2) an evaluation of the lottery courier's management

in accordance with the Standards for Attestation Engagements 18

standard established by the American Institute of Certified Public

Accountants; and

(3) an anti-money laundering compliance statement on a

form the commission prescribes and executed by the lottery

courier's designated anti-money laundering compliance officer.

Sec. 466.506. INSURANCE. A lottery courier shall maintain,

with the limits, coverage requirements, and minimum insurer ratings

prescribed by commission rule:

(1) cyber liability insurance;

(2) errors and omissions insurance; and

(3) directors and officers liability insurance.

Sec. 466.507. RESPONSIBLE GAMING PROTECTIONS. A lottery

courier shall:

(1) maintain a self-exclusion list and provide a

mechanism for a player to register through the lottery courier to be

excluded from the lottery courier's services;

(2) ensure to the commission's satisfaction that any

player on the lottery courier's self-exclusion list is prevented

from requesting lottery courier services;

(3) establish a limit approved by the commission on

the number or amount of daily ticket purchases for all players using

the lottery courier's services;

(4) provide a system for an individual player to set a

lower personal daily ticket purchase limit;

(5) accept only the payment methods authorized for a

lottery customer purchasing a ticket directly from a sales agent;

and

(6) provide player support to respond to player

inquiries and disputes, as the commission prescribes.

Sec. 466.508. ADVERTISING AND MARKETING. A lottery courier

shall:

(1) display prominently on the lottery courier's

Internet website or mobile Internet application a problem gambling

assistance message;

(2) ensure the lottery courier's services are not

advertised to individuals who have registered for the lottery

courier's self-exclusion list; and

(3) comply with the advertising guidelines of the

North American Association of State and Provincial Lotteries.

Sec. 466.509. RULES. The commission shall adopt rules to

implement this subchapter, which must include rules prohibiting

ticket sales:

(1) on credit; or

(2) to individuals:

(A) under 18 years of age; or

(B) not physically located in this state at the

time of the sale.

SECTION 6. Not later than February 1, 2026, the Texas

Lottery Commission shall adopt the rules necessary to implement the

changes in law made by this Act.

SECTION 7. This Act takes effect September 1, 2025.