AB 903, as introduced, Cristina Garcia. Unfair business practices: contests and sweepstakes.
Existing law generally regulates false advertising and specifically prohibits certain unfair acts or practices undertaken by, or omissions of, a person in the operation of a contest, including misrepresenting the odds of winning a prize or failing to award and distribute all prizes.
Existing law, with certain exceptions, prohibits using or offering to use any method intended to be used by a person interacting with an electronic video monitor to simulate gambling or play gambling-themed games in a business establishment, as defined, that directly or indirectly implements the predetermination of sweepstakes cash, cash-equivalent prizes, or other prizes of value, or otherwise connects a sweepstakes player or participant with sweepstakes cash, cash-equivalent prizes, or other prizes of value. A violation of this provision is a misdemeanor.
This bill would, instead, make violation of that provision punishable as a felony.
By increasing the duties of the local prosecutor, this bill would impose a state-mandated local program.
Existing law specifies that these provisions do not render unlawful or restrict otherwise lawful games and methods used by a gambling enterprise licensed under the Gambling Control Act or operations of the California State Lottery.
This bill would expand that exemption to include lawful, technologies, and software used by a gambling enterprise licensed under the Gambling Control Act or operations of the California State Lottery.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Section 17539.1 of the Business and Professions
2Code is amended to read:
(a) The following unfair acts or practices undertaken
4by, or omissions of, any person in the operation of any contest or
5sweepstakes are prohibited:
6(1) Failing to clearly and conspicuously disclose, at the time of
7the initial contest solicitation, at the time of each precontest
8promotional solicitation and each time the payment of money is
9required to become or to remain a contestant, the total number of
10contestants anticipated based on prior experience and the
11percentages of contestants correctly solving each puzzle used in
12the three most recently completed contests conducted by the person.
13If the person has not operated or promoted three contests he or she
14shall disclose for each prior contest if any, the information required
15by this section.
16(2) Failing to promptly send to each member of the public upon
17his or her request, the actual number and percentage of contestants
18correctly solving each puzzle or game in the contest most recently
19completed.
20(3) Misrepresenting in any manner the odds of winning any
21prize.
22(4) Misrepresenting in any manner, the rules, terms, or
23conditions of participation in a contest.
P3 1(5) Failing to clearly and conspicuously disclose with all contest
2puzzles and games and with all promotional puzzles and games
3all of the following:
4(A) The maximum number of puzzles or games that may be
5necessary to complete the contest and determine winners.
6(B) The maximum amount of money, including the maximum
7cost of any postage and handling fees, that a participant may be
8asked to pay to win each of the contest prizes then offered.
9(C) That future puzzles or games, if any, or tie breakers, if any,
10will be significantly more difficult than the initial puzzle.
11(D) The date or dates on or before which the contest will
12terminate and upon which all prizes will be awarded.
13(E) The method of determining prizewinners if a tie remains
14after the last tie breaker puzzle is completed.
15(F) All rules, regulations, terms, and conditions of the contest.
16(6) Failing to clearly and conspicuously disclose the exact nature
17and approximate value
of the prizes when offered.
18(7) Failing to award and distribute all prizes of the value and
19type represented.
20(8) Representing directly or by implication that the number of
21participants has been significantly limited, or that any particular
22person has been selected to win a prize unless such is the fact.
23(9) Representing directly or by implication that any particular
24person has won any money, prize, thing, or other value in a contest
25unless there has been a real contest in which a meaningful
26percentage, which shall be at least a majority, of the participants
27in such contests have failed to win a prize, money, thing, or other
28value.
29(10) Representing directly or by implication that any particular
30person has won any money, prize, thing, or other value
without
31disclosing the exact nature and approximate value thereof.
32(11) Using the word “lucky” to describe any number, ticket,
33coupon, symbol, or other entry, or representing in any other manner
34directly or by implication that any number, ticket, coupon, symbol,
35or other entry confers or will confer an advantage upon the recipient
36that other recipients will not have, that the recipient is more likely
37to win a prize than are others, or that the number, ticket, coupon,
38symbol, or other entry has some value that other entries do not
39have.
P4 1(12) Using or offering for use any method intended to be used
2by a person interacting with an electronic video monitor to simulate
3gambling or play gambling-themed games in a business
4establishment that (A) directly or indirectly implements the
5predetermination of sweepstakes cash, cash-equivalent prizes, or
6other prizes of value, or (B) otherwise
connects a sweepstakes
7player or participant with sweepstakes cash, cash-equivalent prizes,
8or other prizes of value. For the purposes of this paragraph,
9“business establishment” means a business that has any financial
10interest in the conduct of the sweepstakes or the sale of the products
11or services being promoted by the sweepstakes at its physical
12location. This paragraph does not make unlawful game promotions
13or sweepstakes conducted by for-profit commercial entities on a
14limited and occasional basis as an advertising and marketing tool
15that are incidental to substantial bona fide sales of consumer
16products or services and that are not intended to provide a vehicle
17for the establishment of places of ongoing gambling or gaming.
18begin insert Notwithstanding Section 17534, a violation of this paragraph is
19punishable as a felony.end insert
20(13) Failing to obtain
the express written or oral consent of
21individuals before their names are used for a promotional purpose
22in connection with a mailing to a third person.
23(14) Using or distributing simulated checks, currency, or any
24simulated item of value unless there is clearly and conspicuously
25printed thereon the words: SPECIMEN--NONNEGOTIABLE.
26(15) Representing, directly or by implication, orally or in
27writing, that any tie breaker puzzle may be entered upon the
28payment of money qualifying the contestant for an extra cash or
29any other type prize or prizes unless:
30(A) It is clearly and conspicuously disclosed that the payments
31are optional and that contestants are not required to pay money,
32except for reasonable postage and handling fees, to play for an
33extra cash or any other type of prize or prizes; and
34(B) Contestants are clearly and conspicuously given the
35opportunity to indicate they wish to enter such phase of the contest
36for free, except for reasonable postage and handling fees the
37amount of which shall not exceed one dollar and fifty cents ($1.50)
38plus the actual cost of postage and which shall be clearly and
39conspicuously disclosed at the time of the initial contest solicitation
40and each time thereafter that the payment of such fees is required.
P5 1The contestants’ opportunity to indicate they wish to enter for free
2shall be in immediate conjunction with and in a like manner as the
3contestants’ opportunity to indicate they wish to play for an extra
4prize.
5(b) For the purposes of this section, “sweepstakes” means a
6procedure, activity, or event, for the distribution, donation, or sale
7of anything of value by lot, chance, predetermined selection, or
8random selection that is not
unlawful under other provisions of
9law, including, but not limited to, Chapter 9 (commencing with
10Section 319) and Chapter 10 (commencing with Section 330) of
11Title 9 of Part 1 of the Penal Code.
12(c) This section does not apply to an advertising plan or program
13that is regulated by, and complies with, the requirements of Section
1417537.1.
15(d) Nothing in this section shall be deemed to render lawful any
16activity that is unlawful pursuant to other law, including, but not
17limited to, Section 320, 330a, 330b, 330.1, or 337j of the Penal
18Code.
19(e) Nothing in this section shall be deemed to render unlawful
20or restrict otherwise lawful gamesbegin insert, technologies, software,end insert and
21methods used by a gambling enterprise licensed
under the
22Gambling Control Act or operations of the California State Lottery.
No reimbursement is required by this act pursuant to
24Section 6 of Article XIII B of the California Constitution because
25the only costs that may be incurred by a local agency or school
26district will be incurred because this act creates a new crime or
27infraction, eliminates a crime or infraction, or changes the penalty
28for a crime or infraction, within the meaning of Section 17556 of
29the Government Code, or changes the definition of a crime within
30the meaning of Section 6 of Article XIII B of the California
31Constitution.
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