Bill > HB3980

This bill establishes a comprehensive regulatory framework for fantasy contests in Texas, creating a new chapter in the state's Occupations Code that defines and legitimizes fantasy contests as a skill-based activity distinct from gambling. The bill requires fantasy contest operators to obtain a license from the Texas Lottery Commission, submit to background checks, and pay an initial license fee of either 8% of adjusted gross receipts or $500,000. Operators must be at least 18 years old, use geolocation technology to ensure participants are in Texas, and implement robust measures to prevent fraud, money laundering, and participation by minors. The bill imposes a 10% tax on adjusted gross fantasy contest receipts and mandates that operators develop programs to address compulsive gaming, including maintaining a voluntary self-exclusion list. Operators must also conduct independent audits, report potential misconduct to the commission, and cooperate with investigations. The legislation provides detailed definitions of fantasy contests, distinguishing them from gambling by emphasizing participant skill, statistical outcomes, and predetermined prize structures. The bill will take effect on September 1, 2025, with the first tax payments due no earlier than July 1, 2026, giving operators time to adapt to the new regulatory environment.

Government Affairs

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB3980