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RULE §401.153Qualifications for License

(a) Before issuing a license to any person under this subchapter, the director shall consider:

  (1) the financial responsibility and security of the applicant and the business or activity in which the applicant is engaged. Consideration of this factor may include the analysis of the applicant's credit record, compliance with tax laws of other jurisdictions, status of permits and licenses, results of criminal background check, adequacy of security procedures against theft, whether the location is fixed and permanent, whether the applicant can provide appropriate security, and any other factor that may assist the director in such evaluation;

  (2) the public accessibility of the applicant's place of business or activity. Consideration of this factor may include analysis of the applicant's hours of operation, proximity to major transit routes, proximity to large employers, public parking availability, and any other factor that may assist the director in such evaluation;

  (3) the sufficiency of existing sales agents to serve the public convenience. Consideration of this factor may include analysis of number and proximity of other sales agents in a given market area, and/or number of "minority businesses" (as that term is defined in the Government Code, §466.107(b)) licensed in a given market area, with the possibility that additional licenses for any given market area may be denied if the area is determined to be adequately served by existing licensees;

  (4) whether individuals under 18 years of age constitute a majority of the applicant's customers or as customers provide a majority of the applicant's sales volume;

  (5) the volume of expected lottery sales at the applicant's place of business or activity; and

  (6) any other factor that is helpful in determining whether the applicant's experience, character, and general fitness are such that the applicant's participation as a sales agent will not detract from the integrity, security, honesty, or fairness of the operation of the lottery. An example of the type of factor considered in this regard is the analysis of the type of product sold or form of service provided by the applicant.

(b) The director may grant or deny an application for a license under this subchapter based on any one or more factors listed in subsection (a) of this section. In addition, the director shall deny an application for a license under this subchapter upon a finding that the applicant:

  (1) 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;

  (2) is or has been a professional gambler. A "professional gambler" is a person whose profession is, or whose major source of income derives from, playing games of chance for profit;

  (3) has been finally determined to be:

    (A) delinquent in the payment of a tax or other money collected by the comptroller, the Texas Workforce Commission, or the Texas Alcoholic Beverage Commission;

    (B) in default on a loan made under Chapter 52, Education Code;

    (C) in default on a loan guaranteed under Chapter 57, Education Code; or

    (D) any reasons listed in Chapter 232, Family Code as cause for license suspension;

  (4) has 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 in paragraph (1), (2), or (3) of this subsection;

  (5) has violated the Act or a rule adopted by the commission in furtherance of the State Lottery Act;

  (6) is not an individual, and an individual described in one or more of paragraphs (1) - (5) of this subsection:

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

    (B) holds more than 10% of any class of issued and outstanding stock in the applicant;

    (C) holds an equitable ownership interest greater than 10% in the applicant;

    (D) is a creditor of the applicant to the extent of more than 10% of the applicant's outstanding debt at any time after the application is filed but before the director acts to grant or deny the license;

    (E) is the owner or lessee of a business that the applicant conducts or through which the applicant will conduct a ticket sales agency;

    (F) shares or will share in the profits, other than stock dividends, of the applicant or sales agent;

    (G) participates in managing the affairs of the applicant; or

    (H) is an employee of the applicant who is or will be involved in selling tickets or handling money from the sale of tickets;

  (7) provided false or misleading information on the application form, or failed to provide information required as part of the application;

  (8) failed to provide fingerprint identification for individuals for which such identification is requested in a form acceptable to the division following the division's request for such identification;

  (9) has previously had a sales agent's license revoked, unless the director is satisfied the person will comply with the State Lottery Act and the rules under this chapter; or

  (10) failed to certify to the director the applicant's compliance with the federal Americans With Disabilities Act.

(c) Without limiting the foregoing grounds for denial of a license under this subchapter, the director shall deny a license to any person whose location for the sales agency is either:

  (1) a location licensed for games of bingo under the Bingo Enabling Act (Occupations Code, Chapter 2001);

  (2) on land owned by the State of Texas; or a political subdivision of this state and on which is located a public primary or secondary school, an institution of higher education, or an agency of the state; or

  (3) a location for which a person holds a wine and beer retailer's permit, mixed beverage permit, mixed beverage late hours permit, private club registration permit, or private club late hours permit issued under the Alcoholic Beverage Code, Chapter 25, 28, 29, 32, or 33.

(d) Any applicant whose application is denied under this subchapter, or who is granted a license the terms of which are more restricted than those applied for, shall be notified by the director in writing of the denial or restriction and of the reasons therefore. The applicant may appeal the director's decision in accordance with rules adopted by the commission for that purpose.

(e) A license issued under this chapter may by its terms limit the type of games and/or method of sales authorized by the license. A determination of appropriate limitations on any license are within the director's sole discretion, provided that the director shall furnish the licensee with a written explanation or the reasons for any such limitations.

Source Note: The provisions of this §401.153 adopted to be effective March 30, 1992, 17 TexReg 1913; transferred effective December 27, 1993, as published in the Texas Register January 4, 1994, 19 TexReg 78; amended to be effective March 14, 1996, 21 TexReg 1756; amended to be effective July 1, 2002, 27 TexReg 5759; amended to be effective September 1, 2011, 36 TexReg 5361

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