H.B. No. 3980 seeks to regulate fantasy contests in Texas by establishing Chapter 2053 in the Occupations Code. This chapter defines key terms related to fantasy contests, clarifies that they do not constitute gambling under Texas law, and outlines the Texas Lottery Commission's responsibilities in overseeing these contests. The bill requires operators to obtain a license from the commission, which will enforce rules, collect fees and taxes, and ensure compliance to protect participants and prevent fraud. Additionally, operators must implement measures to prevent underage participation and verify participant identities, while the commission will establish standards for compulsive and problem gaming.

The bill also introduces new regulations for fantasy contest operators, including background checks and licensing fees based on adjusted gross fantasy contest receipts, with a minimum fee of $5,000 for new operators. It outlines the licensing process, including background investigations and reasons for license denials, and sets a four-year license expiration with a renewal process. The bill emphasizes responsible gaming practices, requiring operators to provide gambling assistance information and maintain a self-exclusion list. It establishes penalties for violations, not exceeding $5,000, and amends existing laws to expand the Texas Lottery Commission's authority to obtain criminal history information. The commission must adopt rules for Chapter 2053 by February 1, 2026, and fantasy contest operators will not be required to pay associated taxes until July 1, 2026, with the bill taking effect on September 1, 2025.

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