(a) After a hearing, the director shall deny an application for a license or the commission shall suspend or revoke a license if the director or commission, as applicable, finds that the applicant or sales agent:
(1) is an individual who:
(A) 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;
(B) is or has been a professional gambler;
(C) is married to an individual:
(i) described in Paragraph (A) or (B); or
(ii) who is currently delinquent in the payment of any state tax;
(D) is an officer or employee of the commission or a lottery operator; or
(E) is 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 by Paragraph (D);
(2) is not an individual, and an individual described in Subdivision (1):
(A) is an officer or director of the applicant or sales agent;
(B) holds more than 10 percent of the stock in the applicant or sales agent;
(C) holds an equitable interest greater than 10 percent in the applicant or sales agent;
(D) is a creditor of the applicant or sales agent who holds more than 10 percent of the applicant’s or sales agent’s outstanding debt;
(E) is the owner or lessee of a business that the applicant or sales agent 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; or
(G) participates in managing the affairs of the applicant or sales agent;
(3) has been finally determined to be delinquent in the payment of a tax or other money collected by the comptroller, the Texas Workforce Commission, or the Texas Alcoholic Beverage Commission;
(4) is a person whose location for the sales agency is:
(A) a location licensed for games of bingo under Chapter 2001, Occupations Code;
(B) on land that is owned by:
(i) this state; or
(ii) 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
(C) a location for which a person holds a wine and malt beverage retailer’s permit, mixed beverage permit, mixed beverage permit with a retailer late hours certificate, private club registration permit, or private club registration permit with a retailer late hours certificate issued under Chapter 25, 28, 29, or 32, Alcoholic Beverage Code, other than a location for which a person holds a wine and malt beverage retailer’s permit issued under Chapter 25, Alcoholic Beverage Code, that derives less than 30 percent of the location’s gross receipts from the sale or service of alcoholic beverages; or
(5) has violated this chapter or a rule adopted under this chapter.
(b) If the director proposes to deny an application for a license or the commission proposes to suspend or revoke a license under this section, the applicant or sales agent is entitled to written notice of the time and place of the hearing. A notice may be served on an applicant or sales agent personally or sent by certified or registered mail, return receipt requested, to the person’s mailing address as it appears on the commission’s records. A notice must be served or mailed not later than the 20th day before the date of the hearing. The commission shall provide for a formal administrative hearings process.

(b-1) A hearing under this section must be conducted by the State Office of Administrative Hearings and is subject to § 2001.058(e).
(c) At a hearing, an applicant or sales agent must show by a preponderance of the evidence why the application should not be denied or the license suspended or revoked.
(d) The director shall give an applicant or sales agent written notice of a denial of an application or a suspension or revocation of a license.
(e) The director may not issue a license to a person who has previously had a license under this chapter revoked unless the director is satisfied the person will comply with this chapter and the rules adopted under this chapter. The director may prescribe the terms under which a suspended license will be reissued.
(f) The director may not issue a license to an applicant who fails to certify to the director the applicant’s compliance with the federal Americans with Disabilities Act of 1990 (42 U.S.C. § 12101 et seq.).
(g) For purposes of Subsection (a)(3), the comptroller, Texas Workforce Commission, and Texas Alcoholic Beverage Commission shall each provide the executive director with a report of persons who have been finally determined to be delinquent in the payment of any money owed to or collected by that agency. The commission shall adopt rules regarding the form and frequency of reports under this subsection.