PART 9. TEXAS LOTTERY COMMISSION
CHAPTER 401. ADMINISTRATION OF STATE LOTTERY ACT
The Texas Lottery Commission (Commission) adopts amendments to 16 TAC §§401.101 (Lottery Procurement Procedures), 401.102 (Protests of the Terms of a Formal Competitive Solicitation), 401.103 (Protests of Contract Award), 401.104 (Contract Monitoring Roles and Responsibilities), 401.153 (Qualifications for License), 401.158 (Suspension or Revocation of License), 401.160 (Standard Penalty Chart), 401.301 (General Definitions), 401.302 (Scratch Ticket Game Rules), 401.304 (Draw Game Rules (General)), 401.355 (Restricted Sales), and 401.501 (Lottery Security) without changes to the proposed text as published in the December 6, 2024, issue of the Texas Register (49 TexReg 9855). The rules will not be republished.
The rule amendments are the result of the Commission's recent rule review conducted in accordance with Texas Government Code §2001.039, as well as the agency's recent review by the Texas Sunset Advisory Commission. Among the more significant changes, this proposal addresses issues identified as rulemaking gaps in the September 2024 Sunset Advisory Commission Staff Report With Commission Decisions (Sunset Report). Specifically, the Sunset Report noted that there was "[n]o clarification as to whether internet sales of lottery products are prohibited" (addressed in Rules 401.153(b)(12), 401.158(b)(27), 401.160(h), and 401.355(a)), and "[n]o explanation of what it means for a person to 'engage in a business exclusively as a (lottery) sales agent' for purposes of licensure" (addressed in Rule 401.153(b)(13)).
The rule amendments also clarify procurement procedures and the time period a bidder or proposer has to respond to an appeal of certain protest decisions issued by the agency in procurements; update several definitions; update a provision in the scratch ticket game rule to make it more consistent with the draw game rule; update the scratch and draw ticket prize claim processes; and update the language regarding lottery security to state that several divisions of the Commission are responsible for developing and maintaining security plans and procedures, and confirming that these plans and procedures are protected from required public disclosure as allowed under the Texas Public Information Act.
The amendments to Rule 401.101 clarify the rules governing the Invitation for Bid (IFB) procurement method by reorganizing the section and by adding language that describes the process used for IFBs. The amendments also clarify certain differences between the Request for Proposals (RFP) and IFB procurement methods.
The amendments to Rule 401.102 add language stating that the email address designated by the vendor for correspondence in the procurement will also serve as the email address for notice of proceedings and decisions under this section.
The amendments to Rule 401.103(g) clarify the time period a successful bidder or proposer has to respond to an appeal of an agency determination of a vendor's protest to a contract award resulting from a competitive solicitation. Also, the proposal adds language stating that the email address designated by the vendor for correspondence in the procurement will also serve as the email address for notice of proceedings and decisions under this section.
The amendments to Rule 401.104 clarify that the agency may assign designated personnel to monitor contract compliance and facilitate historically underutilized business participation, in addition to the existing divisions within the agency that handle these matters.
The amendments to Rule 401.153(b)(12) clarify that an application for a sales agent license will be denied if the applicant intends to sell lottery tickets via the internet, and the amendments to Rule 401.153(b)(13) reiterate the prohibition in the State Lottery Act that an application for a sales agent license will be denied if the applicant intends to engage in business exclusively as a Texas Lottery ticket sales agent (as defined in the proposed amendments). These changes address gaps that were identified by the Sunset Report.
The amendments to Rule 401.153 also add a provision that, based upon consideration of the factors in Rule 401.160(g), the director may determine a person or organization whose license has been revoked, surrendered or denied is not eligible to apply for another license for one year.
The amendments to Rule 401.158(b)(23) make it an express violation to require a purchaser to buy additional items when paying for lottery tickets with a debit card and the amendments to Rule 401.158(b)(27) make it an express violation to sell lottery tickets over the internet.
The amendments to Rule 401.160 update the penalty chart and correspond with the proposed amendments to Rules 401.158(b)(23) and (27) referenced above.
The amendments to Rule 401.301(1), (4), (51), and (55) make minor updates to multiple definitions to increase the clarity of those definitions. The amendments also add a definition of "Present at the terminal" that was deleted in a non-substantive rule amendment in August 2020. The purpose of re-inserting the definition, in combination with the related amendment to Rule 401.304(b)(3), is to dispel any misconception that the deletion was substantive and make clear that all aspects of a sales transaction under Rule 401.304 must take place at the retail location.
The amendments to Rule 401.302(a)(1) add language from Rule 401.304(b)(3) (Draw Game Rules (General)) regarding the requirement that all aspects of a ticket purchase must take place at a licensed retail location, to make Rule 401.302 more consistent with Rule 401.304. The amendments to Rule 401.302(e)(6) and (f)(2) update the rule by requiring all scratch ticket prize claim processes to be made in accordance with Commission procedures and deleting requirements that are inapplicable to mobile prize claims.
The amendments to Rule 401.304(b)(3) add language that was deleted in a non-substantive rule amendment in 2020 to reiterate and clarify that no part of a draw game ticket sale may take place away from the terminal. The amendments to Rule 401.304(d)(3) update the rule by requiring all draw ticket prize claim processes to be made in accordance with Commission procedures and deleting requirements that are inapplicable to mobile prize claims.
The amendments to Rule 401.355(a) clarify that retailers shall not sell lottery tickets via the internet, a gap that was identified by the Sunset Report, and the amendments to Rule 401.355(b) update a cross-reference.
The amendments to Rule 401.501 update the language regarding lottery security to state that several divisions of the Commission are responsible for developing and maintaining security plans and procedures, including information security, gaming security, and facility security as required by the State Lottery Act to ensure the integrity and security of the lottery games, and confirming that these plans and procedures are protected from required public disclosure as allowed under the Texas Public Information Act.
The Commission received no comments on the proposed amendments during public comment period.
SUBCHAPTER A. PROCUREMENT
These amendments are adopted under Texas Government Code §466.015(c), which authorizes the Commission to adopt rules governing the operation of the lottery, and §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on February 6, 2025.
TRD-202500424
Bob Biard
General Counsel
Texas Lottery Commission
Effective date: February 26, 2025
Proposal publication date: December 6, 2024
For further information, please call: (512) 344-5392
16 TAC §§401.153, 401.158, 401.160
These amendments are adopted under Texas Government Code §466.015(c), which authorizes the Commission to adopt rules governing the operation of the lottery, and §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on February 6, 2025.
TRD-202500425
Bob Biard
General Counsel
Texas Lottery Commission
Effective date: February 26, 2025
Proposal publication date: December 6, 2024
For further information, please call: (512) 344-5392
16 TAC §§401.301, 401.302, 401.304
These amendments are adopted under Texas Government Code §466.015(c), which authorizes the Commission to adopt rules governing the operation of the lottery, and §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on February 6, 2025.
TRD-202500426
Bob Biard
General Counsel
Texas Lottery Commission
Effective date: February 26, 2025
Proposal publication date: December 6, 2024
For further information, please call: (512) 344-5392
These amendments are adopted under Texas Government Code §466.015(c), which authorizes the Commission to adopt rules governing the operation of the lottery, and §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on February 6, 2025.
TRD-202500427
Bob Biard
General Counsel
Texas Lottery Commission
Effective date: February 26, 2025
Proposal publication date: December 6, 2024
For further information, please call: (512) 344-5392
These amendments are adopted under Texas Government Code §466.015(c), which authorizes the Commission to adopt rules governing the operation of the lottery, and §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on February 6, 2025.
TRD-202500428
Bob Biard
General Counsel
Texas Lottery Commission
Effective date: February 26, 2025
Proposal publication date: December 6, 2024
For further information, please call: (512) 344-5392
The Texas Lottery Commission (Commission) adopts the repeal of existing 16 TAC §§402.301 (Bingo Card/Paper) and 402.303 (Pull-tab or Instant Bingo Dispensers); the addition of new 16 TAC §§402.301 (Approval of Pull-Tab Bingo Tickets), 402.302 (Pull-Tab Bingo Manufacturing Requirements), 402.303 (Pull-Tab Bingo Sales and Redemption), 402.304 (Pull-Tab Bingo Record Keeping), 402.305 (Pull-Tab Bingo Styles of Play), 402.306 (Bingo Card/Paper Definitions), 402.307 (Bingo Card/Paper Approval), 402.308 (Bingo Card/Paper Manufacturing Requirements), 402.309 (Bingo Card/Paper Record Keeping), 402.310 (Bingo Card/Paper Styles of Play), and 402.311 (Pull-Tab or Instant Bingo Dispensers); and the amendments to 16 TAC §§402.102 (Bingo Advisory Committee), 402.103 (Training Program), 402.200 (General Restrictions on the Conduct of Bingo), 402.201 (Prohibited Bingo Occasion), 402.202 (Transfer of Funds), 402.203 (Unit Accounting), 402.210 (House Rules), 402.212 (Promotional Bingo), 402.300 (Pull-Tab Bingo), 402.324 (Card-Minding Systems--Approval of Card-Minding Systems), 402.325 (Card-Minding Systems--Licensed Authorized Organizations Requirements), 402.326 (Card-Minding Systems--Distributor Requirements), 402.334 (Shutter Card Bingo Systems - Approval of Shutter Card Bingo Systems), 402.400 (General Licensing Provisions), 402.401 (Temporary License), 402.402 (Registry of Bingo Workers), 402.404 (License Classes and Fees), 402.411 (License Renewal), 402.443 (Transfer of a Grandfathered Lessor's Commercial Lessor License), 402.500 (General Records Requirements), 402.502 (Charitable Use of Net Proceeds Recordkeeping), 402.600 (Bingo Reports and Payments), 402.601 (Interest on Delinquent Tax), 402.602 (Waiver of Penalty, Settlement of Prize Fees, Penalty and/or Interest), 402.702 (Disqualifying Convictions), 402.703 (Audit Policy), 402.706 (Schedule of Sanctions), and 402.707 (Expedited Administrative Penalty Guideline) without changes to the proposed text as published in the November 15, 2024, issue of the Texas Register (49 TexReg 9156). The rules will not be republished.
The Commission adopts the addition of new 16 TAC §402.105 (Postmarks, Timely Filing of Forms, Reports, Applications and Payment of Taxes and Fees); and the amendments to 16 TAC §§402.100 (Definitions) and 402.101 (Advisory Opinions) with changes to the proposed text as published in the November 15, 2024, issue of the Texas Register (49 TexReg 9156). The rules will be republished.
The amendments recommended for adoption include several changes to the proposed version made in response to public comment. These changes are a logical outgrowth of the published proposal that do not affect any new persons who were not affected by and on notice of the published proposal, and thus do not require republication.
In response to public comments, Rule 402.100(9), defining "premises," has been modified to include the grandfathering provision from Tex. Occ. Code §2001.403(b), which allows for more than one premises under a common roof or over a common foundation for licensees in existence on or before May 23, 1997. Also, new Rule 402.105(c)(1), regarding the timely filing of forms, reports, applications and payment of taxes and fees, has been modified to allow for contract carriers in addition to common carriers.
The Commission has also amended Rule 402.101(a)(3) to state that the Commission's authority to approve advisory opinions granted by Tex. Occ. Code §2001.059 "may be" (rather than "is") delegated to the Charitable Bingo Operations director or his or her designee. This amendment was not included in the published proposal but is being added by the Commission, not in response to public comments, but to reflect the Commission's recent directive to bring all bingo advisory opinions to the board for approval. That direction was given in response to the Texas Sunset Advisory Commission Staff Report with Commission Decisions (Sunset Report), which adopted a recommendation to "[m]odify [the] statute to remove the commission's authority to delegate approval authority for bingo advisory opinions." The Commission intends to approve all opinions, but the rule still allows for a delegation to the bingo director in the event the Commission is unable to hold a public meeting within the 60-day statutory deadline to issue an opinion. If the Legislature enacts the recommended statutory change, this rule will be further amended, as necessary, to reflect the new law. This amendment does not materially alter the issues raised in the proposal or affect any persons who were not already on notice of the proposal and, thus, does not require republication. This amendment relates entirely to an internal process of the Commission and does not impact the rights or privileges of the public.
The repeals, new rules, and amendments are the result of the Commission's recent rule review conducted in accordance with Texas Government Code §2001.039, as well as the agency's recent review by the Texas Sunset Advisory Commission. Among the more significant changes, this proposal addresses issues identified as rulemaking gaps in the Sunset Report. Specifically, the Sunset Report noted that there was "[n]o clarification of what classifies as a bingo hall's 'premises'..." (addressed in Rule 402.100), "[n]o clarification that bingo products may not be purchased using a credit card..." (addressed in Rule 402.200), "[n]o clarification of how certain grandfathered bingo licenses may be transferred" (addressed in Rule 402.443), and "[n]o definition of what constitutes a repeat violation..." (addressed in Rule 402.706). The Sunset Report also recommended considering a licensee's compliance history in audit determinations (addressed in Rule 402.703) and eliminating warnings for serious offenses and repeat violations of less serious offenses (addressed in Rules 402.706 and 402.707).
This proposal also amends aspects of the Bingo Advisory Committee (BAC) to ensure that it complies with the Bingo Enabling Act (BEA); breaks two comprehensive rules on pull-tabs and bingo paper into multiple smaller rules for ease of reference; creates a single standard for determining when a form, report, application, or payment has been mailed to the Commission; clarifies and updates agency processes; eliminates references to terms, laws, and processes that are no longer in place; and conforms the rules to the BEA.
The new Rule 402.105 establishes a single standard for determining the timeliness of filings by licensees. A form, report, application, or payment will be deemed filed or paid based on the postmark or receipt mark date, or, if filed electronically, the day that it was filed. Currently, there are different standards throughout the rules depending on the type of document or payment filed. The different standards will be deleted in this rulemaking and replaced by this single rule. This new rule was modeled on a similar rule adopted by the Comptroller of Public Accounts used to determine the timeliness of tax payments and related forms.
The new Rules 402.301, 402.302, 402.303, 402.304 and 402.305 are necessary to break the current Rule 402.300, regarding pull-tab bingo tickets, into smaller rules for ease of reference. There are no changes to the rule language from the current version.
The new Rules 402.306, 402.307, 402.308, 402.309, and 402.310 are necessary to break the current Rule 402.301, regarding bingo card/paper, into smaller rules for ease of reference. The Rules 402.306 and 402.310 also contain amendments allowing break-open bingo games to be pre-called, and will properly categorize braille and loteria cards as bingo equipment that require approval by the Commission. There are no other changes to the rule language from the current version.
The new Rule 402.311, regarding pull-tab or instant bingo dispensers, is currently at Rule 402.303 and needs to be moved to break Rule 402.300 into multiple parts. There are no changes to the rule language from the current version.
The amendments to Rule 402.100 include a definition of "premises" that conforms with the BEA. This change addresses a gap that was identified by the Sunset Report.
The amendments to Rule 402.101 change a reference to the bingo operations director from "his" to "his or her," provide that the issuance of an opinion "may be" delegated to the director, and eliminate the requirement that the general counsel approve a bingo advisory opinion before it is issued.
The amendments to Rule 402.102 eliminate the appointment of a substitute member to the BAC if a member from one of the required interest groups cannot be appointed; clarify that a member serves at the pleasure of the Commission or until they resign or are unable to serve; provide for virtual meetings; and clarify the BAC's annual reporting deadline and reappointment process.
The amendments to Rule 402.103 clarify that conductors may only choose an on-site bingo training program if one is available. The amendments also codify the agency's practice that non-regular conductors are not subject to training requirements.
The amendments to Rule 402.200 correct a typo and specify that formal complaints to the Commission must be in writing. The amendments also codify a prior bingo advisory opinion that organizations may not accept credit payments for bingo products. This change addresses a gap that was identified by the Sunset Report.
The amendments to Rule 402.201 codify the long-standing Commission practice and process of issuing cease-and-desist letters and copying local law enforcement in substantiated cases of illegal bingo.
The amendments to Rule 402.202 delete a reference to the timely submission of a transfer of funds form. This rule is no longer necessary due to the new rule on timeliness of submissions at Rule 402.105.
The amendments to Rule 402.203 delete a reference that allows the sale of pull-tab bingo tickets between organizations with the prior written consent of the Commission. The authority for an organization to sell certain bingo products to another organization with the prior approval of the Commission comes from Bingo Enabling Act §2001.407(f). That section does not provide for the sale of pull-tabs.
The amendments to Rule 402.210 require organizations to prohibit any person from offering to sell bingo products or offering to award bingo prizes to persons outside of a bingo occasion via a telecommunications device.
The amendments to Rule 402.212 clarify that approval for a promotional bingo event will only be issued if the request complies with all the requirements of the rule.
The amendments to Rule 402.300 are necessary to break the current Rule 402.300, regarding pull-tab bingo tickets, into smaller rules for ease of reference. There are no changes to the rule language from the current version.
The amendments to Rule 402.324 eliminate all references to the Commission's testing lab and require manufacturers to provide any forms and documentation necessary to ensure that their card-minding systems comply with required standards.
The amendments to Rule 402.325 provide that the voided receipts organizations are required to attach to the bingo occasion report must include all payments (cash or otherwise) for pre-sales.
The amendments to Rule 402.326 delete an obsolete reference to "dedicated modem phone lines."
The amendments to Rule 402.334 provide that a manufacturer must provide any software necessary to determine if its shutter card bingo system meets rule requirements.
The amendments to Rule 402.400 provide that the Commission will not return a license application when the applicant has failed to respond to a request for more information within 21 days.
The amendments to Rule 402.401 clarify that a regular organization that surrenders its regular license may retain up to 12 unused temporary licenses so long as their dates-of-use are designated within 10 days of the surrender. The amendments also correct references to two forms.
The amendments to Rule 402.402 eliminate the requirement for an applicant to list his or her race on an application for the worker registry.
The amendments to Rule 402.404 eliminate unnecessary references to "regular" licenses.
The amendments to Rule 402.411 allow the division to "provide" renewal notices rather than "mail" them, and delete a reference to the timely submission of license renewal applications, which is no longer necessary due to the proposed new Rule 402.105.
The amendments to Rule 402.443 provide that a grandfathered license held by a legal entity is not considered to be transferred due to changes to the legal entity so long as the entity's taxpayer number remains the same. This rule codifies the Commission's practice on the transfer of grandfathered lessor licenses and conforms with a previously issued Office of the Attorney General Opinion. This change addresses a gap that was identified by the Sunset Report.
The amendments to Rule 402.500 codify the Commission's practice that bingo operations must use cash basis accounting.
The amendments to Rule 402.502 eliminate unnecessary language related to the kinds of documentation that may be relied on to prove charitable distributions were properly made.
The amendments to Rule 402.600 delete references to the timely submission of bingo reports and payments. These references are no longer necessary due to the new rule on timeliness of all submissions at Rule 402.105.
The amendments to Rule 402.601 provide that a credit of $100 or less entered by an organization or lessor on its quarterly report will be accessible for viewing in the Bingo Service Portal, rather than preprinted on the quarterly report.
The amendments to Rule 402.602 eliminate waivers of penalties and interest due to the late payment of prize fees. Penalties and interest for late prize fee payments come from BEA §2001.504. That section does not provide for a waiver of the penalty and interest, in contrast to BEA §2001.451(k) which explicitly allows the director to waive net proceeds and charitable distribution requirements. The difference between those provisions indicates that the legislature did not intend to give the director the ability to waive penalties and interest for the late payment of prize fees.
The amendments to Rule 402.702 eliminate a reference to a statute that no longer exists.
The amendments to Rule 402.703 provide that a licensee's compliance history shall be considered as a risk factor in audit determinations. This change addresses a gap that was identified by the Sunset Report.
The amendments to Rule 402.706 eliminate warnings for first time violations of serious offenses or repeat violations of lesser offenses. The amendments also provide a definition of "repeat violation." This change addresses a gap that was identified by the Sunset Report.
The amendments to Rule 402.707 change the bingo operations director's pronoun from "his" to "his or her"; reiterate that formal complaints must be in writing; and eliminate warnings for repeat offenses. This change addresses a gap that was identified by the Sunset Report.
On December 4, 2024, the Commission held a public hearing to receive public comments on the proposed rules. No one from the public appeared at the hearing and no comments were received at the hearing.
On December 3, 2024, the Commission received written comments from Stephen Fenoglio on behalf of Texas Charity Advocates (TCA) and the Bingo Interest Group (BIG) in the form of a red-lined version of the rule proposal document. At the December 4, 2024 meeting of the BAC, Mr. Fenoglio elaborated on the written comments orally. In the following responses, TCA/BIG's written and oral comments have been combined and treated as a single public comment.
COMMENT: Rule 402.100(9), defining "premises," does not include the grandfathering provision from Tex. Occ. Code 2001.403(b), which allows for more than one premises under a common roof or over a common foundation for licensees in existence on or before May 23, 1997. TCA/BIG appreciates that the definition specifically excludes a virtual location or place.
RESPONSE: Staff agrees and has incorporated this comment into the adopted version.
COMMENT: Rule 402.102(n)(3), regarding the Bingo Advisory Committee's annual workplan, should be amended to include the following: "The workplan shall allow the BAC to review and comment on other states' laws." TCA/BIG comments that "...the Sunset Advisory Commission observed correctly that it makes no sense that the BAC cannot comment on other states' bingo activities..." and that there is no prohibition against it in the Bingo Enabling Act or the Rules.
RESPONSE: Staff does not recommend changing the rule at this time because the Sunset Report recommended modifications to the Bingo Enabling Act to "...ensure the BAC can fully advise the commission on all aspects of bingo by prohibiting the commission from restricting bingo-related topics the committee can discuss." The Commission looks forward to statutory guidance and will adhere to any direction that is provided by the Legislature.
COMMENT: New Rule 402.105, regarding the timely filing of forms, reports, applications, and payments, should allow for contract carriers as well as common carriers.
RESPONSE: Staff agrees and has incorporated this comment into the adopted version.
COMMENT: Regarding Rule 402.200(q) prohibiting the use of credit payments in bingo, TCA/BIG would like staff to explain what is meant by: "...regardless of how the transaction is structured."
RESPONSE: This rule is being amended in response to the Sunset Report's note that there is "[n]o clarification that bingo products may not be purchased using a credit card despite a 2017 bingo advisory opinion stating as much." The language of this amendment is taken verbatim from that opinion, 2017-0816-0004. "Regardless of how the transaction is structured" was likely included because the opinion request presented several hypothetical situations involving different payment structures. The intent of the language is to make it clear that credit payments will not be allowed under any circumstances. Staff does not recommend any changes to the proposed language in response to this comment.
COMMENT: Rule 402.201(b), relating to the agency's handling of complaints regarding illegal bingo, should be changed from "...will issue a cease and desist letter and copy local law enforcement..." to "...shall issue..." because "...'shall' is a stronger verb..." TCA/BIG would also like to require the agency to copy "...Facebook, Tiktok, Instagram, or other social media platform if the location is known."
RESPONSE: Staff does not recommend any changes based on this comment. There is no substantive difference between "will" and "shall" - both verbs require the agency to notify local law enforcement. As for notifying social media companies, the agency does not have unlimited resources to respond to complaints of online gambling. The Commission has reached out to social media companies in the past when it had their contact information available and it will continue to do so, but the agency should not require itself to establish and maintain those contacts in perpetuity. Illegal bingo is a crime and jurisdiction rests with local law enforcement, for which the agency has readily available contact information.
COMMENT: Rule 402.309(3)(A)'s requirement for organizations to maintain a disposable bingo card/paper sales summary showing a distributor's taxpayer number is unnecessary because that information is available on the Commission's website. TCA/BIG also recommends adding "for four years" to the requirement to maintain a perpetual inventory in (3)(C). They also comment that in subsection (3)(D), the Commission should be required to witness an organization's destruction of bingo cards/paper within 30 days of an organization's notification.
RESPONSE: Staff does not recommend any changes based on these comments. These record keeping requirements were discussed during the rule review process and staff determined that all of the required information in the rule was necessary to maintain the integrity of the audit process. The addition of "...for four years..." to (3)(C) is unnecessary because a 4-year maintenance requirement is already present in (4) for "[a]ll records identified in this subsection...." Staff does not recommend changing subsection (3)(D). The Charitable Bingo Operations Division will provide a staff member to witness the destruction of bingo paper/cards as soon as is practicable, but it should not bind itself by rule to a 30-day deadline that may be inappropriate due to any number of factors.
COMMENT: Rule 402.402(a)(9), the definition of "salesperson" should be amended to allow those employees to record sales of bingo cards and pull-tabs.
RESPONSE: Staff does not recommend amending this rule at this time. This comment is unique among the others in that it (1) addresses an issue that was not discussed at all during the rule review process and (2) appears only in TCA/BIG's written comment, without any explanation or mention in their oral comment. The current rule provides that only a cashier may record bingo card and pull-tab sales. Staff does not have any information to support an amendment, but we welcome discussion of this issue at future BAC meetings.
COMMENT: TCA/BIG supports the language used in Rule 402.443 regarding the transfer of a grandfathered lessor's commercial lessor license.
RESPONSE: No response necessary.
COMMENT: TCA/BIG's written comment on Rule 402.500(e), regarding the requirement to use cash basis accounting, states: "Do we care? The SEC mandates all publicly traded companies to use accrual accounting, not cash basis accounting." Their oral comment on the item was "My clients' conclusion was we like the cash accounting the way it is... So, after much discussion, they agreed to keep the language as it is."
RESPONSE: The agency declines to make any changes to the rule as proposed. The written comment was not formally withdrawn, but it appears from the oral comment that TCA/BIG has no issues with the rule as drafted.
COMMENT: Regarding Rule 402.600, Bingo Reports and Payments, TCA/BIG's written comment notes that "There are times when the Commission's system will not accept quarterly filings." Their oral comment included the following: "I've asked [the bookkeepers] for the specific example, and I haven't gotten one yet other than, '[w]ell, we've had this problem before.'"
RESPONSE: Staff does not recommend any changes to this rule because this comment does not suggest any issues with the rule language. The Charitable Bingo Operations Division will continue to collaborate with the BAC on improvements to the Bingo Service Portal in accordance with the Sunset Report.
COMMENT: TCA/BIG disagrees with the modifications to the Standard Administrative Penalty Chart in Rule 402.706 that eliminate warnings for first time offenses of Category 1 and 2 violations. They note that "[t]hese changes are designed to take money from the charities, even if an honest mistake has been made." They appreciate that the current rule - which allows for a warning - gives the bingo director the discretion to be more lenient on a case-by-case basis.
RESPONSE: Staff does not recommend making any changes to the rule based on this comment. The Sunset Report recommended that the agency revise its schedule of sanctions to better align penalties with the severity of the violation. The Sunset Report states: "Specifically, CBOD should...consider eliminating $0 penalties for the most serious violations." The agency appreciates the Texas Sunset Advisory Commission's review and is implementing its rulemaking recommendations. The new penalties start at $250 and they are not "designed to take money from the charities," but to deter violations.
SUBCHAPTER A. ADMINISTRATION
The amendments are adopted under Texas Occupations Code §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act, and Texas Government Code §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
§402.100.Definitions.
The following words and terms, when used in this chapter and Texas Occupations Code, Chapter 2001, shall have the following meanings, unless the context clearly indicates otherwise.
(1) State law--Texas statutes and reported court cases.
(2) Calendar week--A period of seven consecutive days commencing with Sunday and ending with Saturday.
(3) Calendar year--A period of 12 consecutive months commencing with January 1 and ending with December 31.
(4) Commission--The Texas Lottery Commission, the agency created by H.B. 54, 72nd Leg., 1st C.S. (1991), as amended by H.B. 1587 and H.B. 1013, 73rd Leg. R.S., 1993.
(5) Conductor--A licensed authorized organization.
(6) Director--The Director of the Charitable Bingo Operations Division, commonly known as the bingo division, of the Commission.
(7) Operator--A natural person designated pursuant to authority of the Bingo Enabling Act.
(8) 24-hour period--A period of 24 consecutive hours commencing at 12:00 midnight.
(9) Premises--The area subject to the direct control of and actual use by a licensed authorized organization or group of authorized organizations to conduct bingo. There may not be more than one premises under a common roof or over a common foundation, except under a license that was in existence on or before May 23, 1997. A premises must have an address. The term does not include a virtual location or place.
§402.101.Advisory Opinions.
(a) Time Period.
(1) The Commission shall respond to an advisory opinion request not later than the 60th day after the later date of when the Commission receives the written request containing sufficient facts or receives the additional information pursuant to a request for additional information to provide an answer on which the requestor may rely. However, if the Commission requests an attorney general opinion on a matter that is the subject of an advisory opinion request the deadlines are tolled until 30 days following the issuance of the attorney general opinion.
(2) The Commission shall notify the person making the request of the date the advisory opinion request is received and of the advisory opinion number.
(3) The authority granted by Occupations Code, §2001.059, may be delegated to the Charitable Bingo Operations Director or his or her designee. The Commission by separate order may delegate to an employee of the Commission the authority granted.
(4) The Commission retains the authority to issue advisory opinions pursuant to Occupations Code, §2001.059. The delegation of authority merely augments the Commission's ability to perform the duties and functions of the Commission with respect to issuing advisory opinions.
(b) Request for an Advisory Opinion.
(1) An officer, bingo chairperson, or authorized representative of a license holder or an attorney, accountant, or bookkeeper employed or retained by a license holder may request from the Commission an advisory opinion regarding compliance with this chapter and the rules of the Commission.
(2) A person requesting an advisory opinion shall do so by sending the request in writing addressed to Advisory Opinion, Charitable Bingo Operations Division, Texas Lottery Commission, and P.O. Box 16630, Austin, Texas 78761-6630 or by e-mail to Advisory.Opinion@lottery.state.tx.us.
(3) A request for an advisory opinion shall describe a specified factual situation. The request shall make clear that it is a request for an advisory opinion under Occupations Code, §2001.059, and state in sufficient detail all facts upon which the request for opinion is based to permit the Commission to provide a response to the request and shall contain the name and address of the person requesting the opinion. The request may be accompanied by supporting legal arguments and citations of law or rules as the requesting person deems pertinent. Any other person may also submit legal arguments, citations of law or rules, or legal briefs within 30 days of the date of the request for opinion.
(c) Request for Additional Information.
(1) If the Commission determines that the request for an advisory opinion does not contain sufficient facts to provide an answer, the Commission shall request additional written information from the requestor not later than ten calendar days after the request for advisory opinion was received by the Commission.
(2) If no additional information is supplied to the Commission within ten calendar days of the date of the Commission's request and the Commission determines that the request does not contain sufficient facts to provide an answer, then no opinion can be issued and the advisory opinion request file will be closed. In this instance, the requestor will be given a statement that no opinion can be expressed with regard to a given fact situation due to the failure to supply additional information.
(3) The response to a Commission request for additional information shall be addressed to Advisory Opinion, The Charitable Bingo Operations Division, Texas Lottery Commission, and P.O. Box 16630, Austin, Texas 78761-6630 or by e-mail to Advisory.Opinion@lottery.state.tx.us in order to permit the Commission to provide a response to the request.
(d) Subject of an Advisory Opinion.
(1) The Commission may refuse to issue an advisory opinion on a matter that the Commission knows to be in active litigation including a contested administrative case.
(2) An advisory opinion cannot resolve a disputed question of fact other than to provide a response which refers to the applicable statutes and rules.
(e) Response.
(1) A request for an advisory opinion that contains sufficient facts shall initially be referred to any appropriate personnel within the Charitable Bingo Operations Division for review and written comment.
(2) If the Commission determines that a request for an advisory opinion has already been answered by the Commission, then the Commission may provide a written response to the requestor that cites the prior advisory opinion.
(3) The Commission may publish the response on its website.
(4) The response shall clearly state that the opinion is advisory in nature and is restricted to the fact situation identified in the opinion.
(5) A requestor may rely upon an advisory opinion if the conduct is substantially consistent with the opinion and the facts stated in the request.
(6) The Commission cannot grant nor confer legal authority beyond the statute or rule which is the subject of the request for advisory opinion.
(7) A previously issued advisory opinion not in accord with the current Commission statutes and rules may be modified or revoked, but in such an instance the modification or revocation shall operate prospectively only.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on February 7, 2025.
TRD-202500439
Bob Biard
General Counsel
Texas Lottery Commission
Effective date: February 27, 2025
Proposal publication date: November 15, 2024
For further information, please call: (512) 344-5392
The new rule is adopted under Texas Occupations Code §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act, and Texas Government Code §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
§402.105.Postmarks, Receipt Marks, Timely Filing of Forms, Reports, Applications and Payment of Fees.
(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Common carrier--A person who provides transportation of persons or property to members of the general public for compensation in the normal course of business.
(2) Receipt mark--An official mark printed by a common carrier recording the date and place of mailing.
(3) United States Postal Service postmark--An official mark printed over a postage stamp by the United States Postal Service, canceling the stamp and recording the date and place of mailing. A postmark does not include dates recorded on postage purchased over the internet, pre-metered stamps, or postage from postage meters unless an actual postmark is generated.
(b) General Provisions.
(1) All forms, reports, and applications required to be submitted to the commission shall be filed on or before the due date for filing the form, report, or application.
(2) All payments required to be remitted to the commission shall be paid on or before the due date for making such payments.
(3) If the due date falls on a Saturday, Sunday, or legal holiday, the due date is the next business day.
(4) If a form, report, application, or payment is postmarked or receipt-marked on or before the due date, it will be considered timely filed.
(c) Timely Filing or Payment- Postmark or Receipt Mark.
(1) To determine whether a form, report, or application has been timely filed, or a payment timely made, the date of the United States Postal Service postmark or a receipt mark showing when a report or payment was delivered to a common carrier or contract carrier will be prima facie evidence of the date the filing or payment was made, so long as the envelope, or common carrier or contract carrier documentation, reflects a valid commission address.
(2) If a report or payment is received through the United States Postal Service and does not have a postmark, or is received through a common carrier and does not have a receipt mark, the date of the filing or payment is presumed, in the absence of evidence supporting the assertion of a different filing date, to be:
(A) if received through the United States Postal Service, three days prior to the date on which the form, report, application, or payment is physically received by the commission, as evidenced by commission records; or
(B) if received through a common carrier, one day prior to the date on which the report or payment is physically received by the commission, as evidence by commission records.
(3) If a licensee penalized for late filing or late payment can provide a postmark or receipt mark complying with the requirements of timely filing and timely paying but, through no fault of the licensee, the form, report, application, or payment arrived after the due date, the filing or payment will be considered timely. The licensee's testimony that the form, report, application, or payment was sent will not be considered as evidence of timely filing or payment.
(4) A form, report, application, or payment that is submitted electronically will be considered filed or paid on the date it is received.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on February 7, 2025.
TRD-202500440
Bob Biard
General Counsel
Texas Lottery Commission
Effective date: February 27, 2025
Proposal publication date: November 15, 2024
For further information, please call: (512) 344-5392
16 TAC §§402.200 - 402.203, 402.210, 402.212
The amendments are adopted under Texas Occupations Code §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act, and Texas Government Code §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on February 7, 2025.
TRD-202500441
Bob Biard
General Counsel
Texas Lottery Commission
Effective date: February 27, 2025
Proposal publication date: November 15, 2024
For further information, please call: (512) 344-5392
The repeals are adopted under Texas Occupations Code §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act, and Texas Government Code §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on February 7, 2025.
TRD-202500438
Bob Biard
General Counsel
Texas Lottery Commission
Effective date: February 27, 2025
Proposal publication date: November 15, 2024
For further information, please call: (512) 344-5392
The new rules are adopted under Texas Occupations Code §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act, and Texas Government Code §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on February 7, 2025.
TRD-202500443
Bob Biard
General Counsel
Texas Lottery Commission
Effective date: February 27, 2025
Proposal publication date: November 15, 2024
For further information, please call: (512) 344-5392
The amendments are adopted under Texas Occupations Code §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act, and Texas Government Code §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on February 7, 2025.
TRD-202500444
Bob Biard
General Counsel
Texas Lottery Commission
Effective date: February 27, 2025
Proposal publication date: November 15, 2024
For further information, please call: (512) 344-5392
16 TAC §§402.400 - 402.402, 402.404, 402.411, 402.443
The amendments are adopted under Texas Occupations Code §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act, and Texas Government Code §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on February 7, 2025.
TRD-202500445
Bob Biard
General Counsel
Texas Lottery Commission
Effective date: February 27, 2025
Proposal publication date: November 15, 2024
For further information, please call: (512) 344-5392
The amendments are adopted under Texas Occupations Code §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act, and Texas Government Code §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on February 7, 2025.
TRD-202500446
Bob Biard
General Counsel
Texas Lottery Commission
Effective date: February 27, 2025
Proposal publication date: November 15, 2024
For further information, please call: (512) 344-5392
The amendments are adopted under Texas Occupations Code §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act, and Texas Government Code §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on February 7, 2025.
TRD-202500447
Bob Biard
General Counsel
Texas Lottery Commission
Effective date: February 27, 2025
Proposal publication date: November 15, 2024
For further information, please call: (512) 344-5392
16 TAC §§402.702, 402.703, 402.706, 402.707
The amendments are adopted under Texas Occupations Code §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act, and Texas Government Code §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on February 7, 2025.
TRD-202500448
Bob Biard
General Counsel
Texas Lottery Commission
Effective date: February 27, 2025
Proposal publication date: November 15, 2024
For further information, please call: (512) 344-5392