TX HB3980

Requires fantasy contest operators to obtain a license from the Texas Lottery Commission to offer paid fantasy sports contests in Texas, with licenses valid for four years and initial fees ranging from $5,000 for new operators to $500,000 or 8% of adjusted gross receipts for existing operators

Imposes a 10% tax on fantasy contest operators' adjusted gross receipts (entry fees collected minus prizes paid, multiplied by the Texas location percentage), with monthly reporting and payment required beginning July 1, 2026

Establishes that fantasy contests conducted under the chapter do not constitute gambling under Texas law, defining qualifying contests as skill-based games where participants assemble rosters of actual athletes and outcomes are based on statistical performance

Prohibits participation by individuals under 18 years of age, self-excluded persons, and sports insiders (athletes, coaches, referees, trainers, staff members) in contests involving their sport's governing body

Requires operators to implement identity verification, geolocation technology, fraud prevention measures, and anti-money laundering procedures, with administrative penalties up to $5,000 per day for violations