Bill Text: CA AB1439 | 2013-2014 | Regular Session | Chaptered
Bill Title: Unfair business practices: contests and sweepstakes.
Spectrum: Moderate Partisan Bill (Democrat 28-9)
Status: (Passed) 2014-09-26 - Chaptered by Secretary of State - Chapter 592, Statutes of 2014. [AB1439 Detail]
Download: California-2013-AB1439-Chaptered.html
BILL NUMBER: AB 1439 CHAPTERED
BILL TEXT
CHAPTER 592
FILED WITH SECRETARY OF STATE SEPTEMBER 26, 2014
APPROVED BY GOVERNOR SEPTEMBER 26, 2014
PASSED THE SENATE AUGUST 25, 2014
PASSED THE ASSEMBLY AUGUST 26, 2014
AMENDED IN SENATE AUGUST 21, 2014
AMENDED IN SENATE AUGUST 4, 2014
AMENDED IN SENATE JUNE 16, 2014
AMENDED IN ASSEMBLY MARCH 24, 2014
AMENDED IN ASSEMBLY MARCH 20, 2014
INTRODUCED BY Assembly Members Salas, Bonta, and Frazier
(Coauthors: Assembly Members Achadjian, Bigelow, Bocanegra,
Bonilla, Brown, Ian Calderon, Campos, Conway, Cooley, Daly, Eggman,
Fox, Gonzalez, Gray, Grove, Roger Hernández, Holden, Jones-Sawyer,
Levine, Medina, Melendez, Mullin, Nazarian, Nestande, Perea, V.
Manuel Pérez, Quirk-Silva, Rendon, Ting, Waldron, and Wilk)
(Coauthors: Senators Lara, Pavley, and Vidak)
JANUARY 6, 2014
An act to amend Section 17539.1 of the Business and Professions
Code, relating to sweepstakes.
LEGISLATIVE COUNSEL'S DIGEST
AB 1439, 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,
including misrepresenting the odds of winning a prize or failing to
award and distribute all prizes. A violation of this provision is a
misdemeanor.
This bill would apply the prohibition described above to unfair
acts or practices undertaken by, or omissions of, a person in the
operation of a sweepstakes, as defined. The bill would prohibit 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.
By creating new crimes, the bill would impose a state-mandated local
program. The bill would also except from this prohibition game
promotions and sweepstakes conducted on a limited basis as an
advertising and marketing tool incidental to substantial bona fide
sales of consumer products or services, as specified.
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.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 17539.1 of the Business and Professions Code is
amended to read:
17539.1. (a) The following unfair acts or practices undertaken
by, or omissions of, any person in the operation of any contest or
sweepstakes are prohibited:
(1) Failing to clearly and conspicuously disclose, at the time of
the initial contest solicitation, at the time of each precontest
promotional solicitation and each time the payment of money is
required to become or to remain a contestant, the total number of
contestants anticipated based on prior experience and the percentages
of contestants correctly solving each puzzle used in the three most
recently completed contests conducted by the person. If the person
has not operated or promoted three contests he or she shall disclose
for each prior contest if any, the information required by this
section.
(2) Failing to promptly send to each member of the public upon his
or her request, the actual number and percentage of contestants
correctly solving each puzzle or game in the contest most recently
completed.
(3) Misrepresenting in any manner the odds of winning any prize.
(4) Misrepresenting in any manner, the rules, terms, or conditions
of participation in a contest.
(5) Failing to clearly and conspicuously disclose with all contest
puzzles and games and with all promotional puzzles and games all of
the following:
(A) The maximum number of puzzles or games that may be necessary
to complete the contest and determine winners.
(B) The maximum amount of money, including the maximum cost of any
postage and handling fees, that a participant may be asked to pay to
win each of the contest prizes then offered.
(C) That future puzzles or games, if any, or tie breakers, if any,
will be significantly more difficult than the initial puzzle.
(D) The date or dates on or before which the contest will
terminate and upon which all prizes will be awarded.
(E) The method of determining prizewinners if a tie remains after
the last tie breaker puzzle is completed.
(F) All rules, regulations, terms, and conditions of the contest.
(6) Failing to clearly and conspicuously disclose the exact nature
and approximate value of the prizes when offered.
(7) Failing to award and distribute all prizes of the value and
type represented.
(8) Representing directly or by implication that the number of
participants has been significantly limited, or that any particular
person has been selected to win a prize unless such is the fact.
(9) Representing directly or by implication that any particular
person has won any money, prize, thing, or other value in a contest
unless there has been a real contest in which a meaningful
percentage, which shall be at least a majority, of the participants
in such contests have failed to win a prize, money, thing, or other
value.
(10) Representing directly or by implication that any particular
person has won any money, prize, thing, or other value without
disclosing the exact nature and approximate value thereof.
(11) Using the word "lucky" to describe any number, ticket,
coupon, symbol, or other entry, or representing in any other manner
directly or by implication that any number, ticket, coupon, symbol,
or other entry confers or will confer an advantage upon the recipient
that other recipients will not have, that the recipient is more
likely to win a prize than are others, or that the number, ticket,
coupon, symbol, or other entry has some value that other entries do
not have.
(12) Using or offering for 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
that (A) directly or indirectly implements the predetermination of
sweepstakes cash, cash-equivalent prizes, or other prizes of value,
or (B) otherwise connects a sweepstakes player or participant with
sweepstakes cash, cash-equivalent prizes, or other prizes of value.
For the purposes of this paragraph, "business establishment" means a
business that has any financial interest in the conduct of the
sweepstakes or the sale of the products or services being promoted by
the sweepstakes at its physical location. This paragraph does not
make unlawful game promotions or sweepstakes conducted by for-profit
commercial entities on a limited and occasional basis as an
advertising and marketing tool that are incidental to substantial
bona fide sales of consumer products or services and that are not
intended to provide a vehicle for the establishment of places of
ongoing gambling or gaming.
(13) Failing to obtain the express written or oral consent of
individuals before their names are used for a promotional purpose in
connection with a mailing to a third person.
(14) Using or distributing simulated checks, currency, or any
simulated item of value unless there is clearly and conspicuously
printed thereon the words: SPECIMEN--NONNEGOTIABLE.
(15) Representing, directly or by implication, orally or in
writing, 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 unless:
(A) It is clearly and conspicuously disclosed that the payments
are optional and that contestants are not required to pay money,
except for reasonable postage and handling fees, to play for an extra
cash or any other type of prize or prizes; and
(B) Contestants are clearly and conspicuously given the
opportunity to indicate they wish to enter such phase of the contest
for free, except for reasonable postage and handling fees the amount
of which shall not exceed one dollar and fifty cents ($1.50) plus the
actual cost of postage and which shall be clearly and conspicuously
disclosed at the time of the initial contest solicitation and each
time thereafter that the payment of such fees is required. The
contestants' opportunity to indicate they wish to enter for free
shall be in immediate conjunction with and in a like manner as the
contestants' opportunity to indicate they wish to play for an extra
prize.
(b) For the purposes of this section, "sweepstakes" means a
procedure, activity, or event, for the distribution, donation, or
sale of anything of value by lot, chance, predetermined selection, or
random selection that is not unlawful under other provisions of law,
including, but not limited to, Chapter 9 (commencing with Section
319) and Chapter 10 (commencing with Section 330) of Title 9 of Part
1 of the Penal Code.
(c) This section does not apply to an advertising plan or program
that is regulated by, and complies with, the requirements of Section
17537.1.
(d) Nothing in this section shall be deemed to render lawful any
activity that is unlawful pursuant to other law, including, but not
limited to, Section 320, 330a, 330b, 330.1, or 337j of the Penal
Code.
(e) Nothing in this section shall be deemed to 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.
SEC. 2. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
