(a) The commission may suspend or revoke any license issued under this subchapter if the commission finds that any factor listed as grounds for denial of a license under §401.153(b) of this title (relating to Qualifications for License) or any factor listed in subsection (b) of this section apply to the licensee. The commission shall inform the sales agent in writing of the decision to suspend or revoke a license for any of these reasons. In addition, in the event of a license suspension under this section, the director of the Lottery Operations Division shall also inform the licensee of the terms under which the suspended license may be reissued.
(b) Without limiting the commission's ability to consider factors listed in §401.153(b) of this title as grounds for suspension or revocation of a license issued under this subchapter, the commission may also suspend or revoke a license for reasons including, but not limited to, any of the following:
  (1) licensee engages in telecommunication or printed advertising that the director determines to have been false, deceptive or misleading;
  (2) licensee conditions redemption of a lottery prize upon the purchase of any other item or service;
  (3) licensee imposes a restriction upon the redemption of a lottery prize not specifically authorized by the director;
  (4) licensee fails to follow instructions and procedures for the conduct of any lottery game, lottery special event or promotion;
  (5) licensee and/or its employee(s) exhibit discourteous treatment including, but not limited to, abusive language toward customers, commission employees or commission vendors;
  (6) licensee fails to establish or maintain reasonable security precautions regarding the handling of lottery tickets and other materials;
  (7) licensee fails to deface a validated ticket;
  (8) licensee sells a draw game ticket for a draw that has already taken place;
  (9) licensee fails to follow validation procedures, including, but not limited to, paying a claim without validating the ticket, failing to pay a valid prize after validating a customer's winning ticket, or retaining a customer's winning ticket that has not been validated;
  (10) licensee violates any directive or instruction issued by the director of the Lottery Operations Division;
  (11) licensee violates any express term or condition of its license not specifically set forth in this subchapter;
  (12) licensee sells a scratch ticket from a game that has closed after the date designated for the end of the game;
  (13) licensee refuses to refund or properly cancel a Pick 3 or Daily 4 ticket;
  (14) licensee fails to return an exchange ticket to a prize claimant claiming a prize on a multi-draw ticket if an exchange ticket is produced by the licensee's terminal;
  (15) licensee fails to keep accurate and complete records of all tickets that have not been sold from confirmed, active, and settled packs;
  (16) licensee fails to meet any requirement under §401.368 of this title (relating to Lottery Ticket Vending Machines), if the licensee has been supplied with a self-service lottery ticket vending machine by the commission;
  (17) licensee fails to take readily achievable measures within the allowed time period to comply with the barrier removal requirements regarding the ADA;
  (18) licensee fails to prominently post license;
  (19) licensee sells tickets that were assigned to another licensed location;
  (20) licensee knowingly sells a ticket or pays a lottery prize to another person who is:
    (A) an officer or an employee of the commission;
    (B) an officer, member, or employee of a lottery operator;
    (C) an officer, member, or employee of a contractor or subcontractor that is excluded by the terms of its contract from playing lottery games;
    (D) the spouse, child, brother, sister, or parent of a person described by subparagraph (A), (B), or (C) of this paragraph who resides within the same household as that person;
  (21) licensee endangers the security and/or integrity of the lottery games operated by the commission;
  (22) licensee intentionally or knowingly sells a ticket at a price the licensee knows is greater than the price set by the executive director;
  (23) licensee charges a fee for lottery ticket purchases using a debit card and/or requires a minimum dollar amount for debit card purchases of only lottery tickets.
  (24) licensee sells tickets at a location that is not licensed;
  (25) licensee intentionally or knowingly sells a ticket by extending credit or lends money to enable a person to buy a ticket;
  (26) licensee intentionally or knowingly sells a ticket to a person that the licensee knows is younger than 18 years;
  (27) licensee intentionally or knowingly sells a ticket and accepts anything for payment not specifically allowed under the State Lottery Act;
  (28) licensee sells tickets over the telephone or via mail order sales, establishes or promotes a group purchase or pooling arrangement under which tickets are purchased on behalf of the group or pool and any prize is divided among the members of the group or pool, and the licensee intentionally or knowingly:
    (A) uses any part of the funds solicited or accepted for a purpose other than purchasing tickets on behalf of the group or pool; or
    (B) retains a share of any prize awarded as compensation for establishing or promoting the group purchase or pooling arrangement;
  (29) licensee intentionally or knowingly alters or forges a ticket;
  (30) licensee intentionally or knowingly influences or attempts to influence the selection of a winner of a lottery game;
  (31) licensee intentionally or knowingly claims a lottery prize or a share of a lottery prize by means of fraud, deceit, or misrepresentation; or aids or agrees to aid another person or persons to claim a lottery prize or a share of a lottery prize by means of fraud, deceit, or misrepresentation;
  (32) licensee intentionally or knowingly tampers with, damages, defaces, or renders inoperable any vending machine, electronic computer terminal, or other mechanical device used in a lottery game, or fails to exercise due care in the treatment of commission property;
  (33) licensee:
    (A) induces another person to assign or transfer a right to claim a prize;
    (B) initiates or accepts an offer to sell the right to claim a prize;
    (C) initiates or accepts an offer of compensation from another person to claim a lottery prize; or
    (D) purchases, for anything of value, a lottery ticket from a person who is not a licensed lottery retailer;
  (34) licensee intentionally or knowingly makes a statement or entry that the person knows to be false or misleading on a required report;
  (35) licensee fails to maintain or make an entry the licensee knows is required to be maintained or made for a required report;
  (36) licensee knowingly refuses to permit the director of the Lottery Operations Division, the executive director, commission, the lottery operator, the employees or agents of the lottery operator, or the state auditor to examine the agent's books, records, papers or other objects, or refuses to answer any question authorized under the State Lottery Act;
  (37) licensee intentionally or knowingly makes a material and false or incorrect, or deceptive statement, written or oral, to a person conducting an investigation under the State Lottery Act or a commission rule;
  (38) licensee commits an offense of conspiracy as defined in the State Lottery Act;
  (39) licensee sells or offers for sale any interest in a lottery of another state or state government or an Indian tribe or tribal government, including an interest in an actual lottery ticket, receipt, contingent promise to pay, order to purchase, or other record of the interest;
  (40) licensee incurs four (4) notices of nonsufficient fund transfers or non-transfer of funds within a 12-month period;
  (41) licensee fails to pay the full amount of money owed to the commission after a nonsufficient funds transfer or non-transfer of funds to the commission's account; or
  (42) licensee has violated a provision of the State Lottery Act, Government Code, Chapter 466, or a commission rule adopted under the State Lottery Act.

Source Note: The provisions of this §401.158 adopted to be effective July 1, 2002, 27 TexReg 5759; amended to be effective September 1, 2014, 39 TexReg 6828; amended to be effective June 18, 2015, 40 TexReg 3645; amended to be effective December 31, 2017, 42 TexReg 7385; amended to be effective August 30, 2020, 45 TexReg 5908