California Legislature—2015–16 Regular Session

Assembly BillNo. 1395

Introduced by Assembly Member Salas

February 27, 2015

An act to amend Section 17539.1 of the Government Code, relating to business.


AB 1395, as introduced, Salas. 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 or sweepstakes, including, among others, misrepresenting the number of participants in a contest or sweepstakes or representing, directly or by implication, that any tie breaker puzzle may be entered upon the payment of money qualifying the contestant for an extra cash or any other type prize or prizes except as specified.

This bill would make nonsubstantive changes to these provisions.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

P1    1


Section 17539.1 of the Business and Professions
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:

P2    1(1) Failing to clearly and conspicuously disclose, at the time of
2the initial contest solicitation, at the time of each precontest
3promotional solicitation and each time the payment of money is
4required to become or to remain a contestant, the total number of
5contestants anticipated based on prior experience and the
6percentages of contestants correctly solving each puzzle used in
7the three most recently completed contests conducted by the person.
8If the person has not operated or promoted three contests he or she
9shall disclose for each prior contest if any, the information required
10by this section.

11(2) Failing to promptly send to each member of the public upon
12his or her request, the actual number and percentage of contestants
13correctly solving each puzzle or game in the contest most recently

15(3) Misrepresenting in any manner the odds of winning any

17(4) Misrepresenting in any manner, the rules, terms, or
18conditions of participation in a contest.

19(5) Failing to clearly and conspicuously disclose with all contest
20puzzles and games and with all promotional puzzles and games
21all of the following:

22(A) The maximum number of puzzles or games that may be
23necessary to complete the contest and determine winners.

24(B) The maximum amount of money, including the maximum
25cost of any postage and handling fees, that a participant may be
26asked to pay to win each of the contest prizes then offered.

27(C) That future puzzles or games, if any, or tie breakers, if any,
28will be significantly more difficult than the initial puzzle.

29(D) The date or dates on or before which the contest will
30terminate and upon which all prizes will be awarded.

31(E) The method of determining prizewinners if a tie remains
32after the last tie breaker puzzle is completed.

33(F) All rules, regulations, terms, and conditions of the contest.

34(6) Failing to clearly and conspicuously disclose the exact nature
35and approximate value of the prizes when offered.

36(7) Failing to award and distribute all prizes of the value and
37type represented.

38(8) Representing directly or by implication that the number of
39participants has been significantly limited, or that any particular
40person has been selected to win a prize unlessbegin delete suchend deletebegin insert thatend insert is the fact.

P3    1(9) Representing directly or by implication that any particular
2person has won any money, prize, thing, or other value in a contest
3unless there has been a real contest in which a meaningful
4percentage, which shall be at least a majority, of the participants
5inbegin delete suchend deletebegin insert thoseend insert contests have failed to win a prize, money, thing, or
6other value.

7(10) Representing directly or by implication that any particular
8person has won any money, prize, thing, or other value without
9disclosing the exact nature and approximate value thereof.

10(11) Using the word “lucky” to describe any number, ticket,
11coupon, symbol, or other entry, or representing in any other manner
12directly or by implication that any number, ticket, coupon, symbol,
13or other entry confers or will confer an advantage upon the recipient
14that other recipients will not have, that the recipient is more likely
15to win a prize than are others, or that the number, ticket, coupon,
16symbol, or other entry has some value that other entries do not

18(12) Using or offering for use any method intended to be used
19by a person interacting with an electronic video monitor to simulate
20gambling or play gambling-themed games in a business
21establishment that (A) directly or indirectly implements the
22predetermination of sweepstakes cash, cash-equivalent prizes, or
23other prizes of value, or (B) otherwise connects a sweepstakes
24player or participant with sweepstakes cash, cash-equivalent prizes,
25or other prizes of value. For the purposes of this paragraph,
26“business establishment” means a business that has any financial
27interest in the conduct of the sweepstakes or the sale of the products
28or services being promoted by the sweepstakes at its physical
29location. This paragraph does not make unlawful game promotions
30or sweepstakes conducted by for-profit commercial entities on a
31limited and occasional basis as an advertising and marketing tool
32that are incidental to substantial bona fide sales of consumer
33products or services and that are not intended to provide a vehicle
34for the establishment of places of ongoing gambling or gaming.

35(13) Failing to obtain the express written or oral consent of
36individuals before their names are used for a promotional purpose
37in connection with a mailing to a third person.

38(14) Using or distributing simulated checks, currency, or any
39simulated item of value unless there is clearly and conspicuously
40printed thereon the words: SPECIMEN--NONNEGOTIABLE.

P4    1(15) Representing, directly or by implication, orally or in
2writing, that any tie breaker puzzle may be entered upon the
3payment of money qualifying the contestant for an extra cash or
4any other type prize or prizes unless:

5(A) It is clearly and conspicuously disclosed that the payments
6are optional and that contestants are not required to pay money,
7except for reasonable postage and handling fees, to play for an
8extra cash or any other type of prize or prizes; and

9(B) Contestants are clearly and conspicuously given the
10opportunity to indicate they wish to enterbegin delete suchend deletebegin insert thatend insert phase of the
11contest for free, except for reasonable postage and handling fees
12the amount of which shall not exceed one dollar and fifty cents
13($1.50) plus the actual cost of postage and which shall be clearly
14and conspicuously disclosed at the time of the initial contest
15solicitation and each time thereafter that the payment ofbegin delete suchend deletebegin insert theend insert
16 fees is required. The contestants’ opportunity to indicate they wish
17to enter for free shall be in immediate conjunction with and in a
18like manner as the contestants’ opportunity to indicate they wish
19to play for an extra prize.

20(b) For the purposes of this section, “sweepstakes” means a
21procedure, activity, or event, for the distribution, donation, or sale
22of anything of value by lot, chance, predetermined selection, or
23random selection that is not unlawful under other provisions of
24law, including, but not limited to, Chapter 9 (commencing with
25Section 319) and Chapter 10 (commencing with Section 330) of
26Title 9 of Part 1 of the Penal Code.

27(c) This section does not apply to an advertising plan or program
28that is regulated by, and complies with, the requirements of Section

30(d) Nothing in this section shall be deemed to render lawful any
31activity that is unlawful pursuant to other law, including, but not
32limited to, Section 320, 330a, 330b, 330.1, or 337j of the Penal

34(e) Nothing in this section shall be deemed to render unlawful
35or restrict otherwise lawful games and methods used by a gambling
36enterprise licensed under the Gambling Control Act or operations
37of the California State Lottery.