By Junell, et al. H.B. No. 2530
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to certain prohibitions applicable to a person offering a
1-3 sweepstakes or operating a video sweepstakes; providing a civil
1-4 penalty.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Title 4, Business & Commerce Code, is amended by
1-7 adding Chapter 43 to read as follows:
1-8 CHAPTER 43. SWEEPSTAKES
1-9 Sec. 43.001. DEFINITIONS. In this chapter:
1-10 (1) "Imply" means all methods and means by which an
1-11 implication can be conveyed, including a statement, a question, a
1-12 request, conduct, a graphic, a symbol, lettering, coloring, font
1-13 size, font style, or formatting.
1-14 (2) "Sweepstakes" means a contest that awards one or
1-15 more prizes based on chance or the random selection of entries.
1-16 (3) "Video sweepstakes" means a coin-operated machine
1-17 with a video interface operated for pleasure that dispenses as a
1-18 reward for play money or items redeemable for money or merchandise.
1-19 Sec. 43.002. OFFENSES. (a) A person offering a sweepstakes
1-20 primarily through the mail, exclusive of mailed newspapers and
1-21 magazines, may not:
1-22 (1) require an individual to order or purchase a good
1-23 or service, or promise to purchase a good or service in the future,
1-24 to enter a sweepstakes;
2-1 (2) automatically enter an individual in a sweepstakes
2-2 because the individual ordered or purchased a good or service or
2-3 because the individual promised to order or purchase a good or
2-4 service;
2-5 (3) solicit business using an order form or purchasing
2-6 mechanism that has any role in the operation of a sweepstakes;
2-7 (4) use a mechanism for entering a sweepstakes that:
2-8 (A) has any connection to ordering or purchasing
2-9 a good or service;
2-10 (B) is not identical for all individuals
2-11 entering the sweepstakes; and
2-12 (C) does not have printed on the front and back
2-13 of the entry form in a font size not less than 400 percent larger
2-14 than the next largest font size used on the entry form the
2-15 following language: "Buying Will Not Help You Win. Your chances of
2-16 winning without making a purchase are the same as the chances of
2-17 someone who purchases something. It is illegal to give any
2-18 advantage to buyers in a sweepstakes.";
2-19 (5) solicit an individual to enter a sweepstakes by
2-20 invitation or other opportunity and allow the individual to choose
2-21 or indicate the preferred characteristics of a prize to be awarded
2-22 in the sweepstakes, unless those choices:
2-23 (A) are made on the sweepstakes entering
2-24 mechanism; and
2-25 (B) do not appear on and are not connected in
2-26 any way to an order form or other purchasing mechanism;
2-27 (6) offer any non-sweepstakes prize, gift, premium,
3-1 giveaway, skill contest, coupon, rebate, or other incentive of any
3-2 kind, other than a competitive price on goods or services, during
3-3 the same calendar year in which the person offered an opportunity
3-4 to enter a sweepstakes;
3-5 (7) offer any opportunity to enter a sweepstakes
3-6 during the same calendar year in which the person offered a
3-7 non-sweepstakes prize, gift, premium, giveaway, skill contest,
3-8 coupon, rebate, or other incentive of any kind other than a
3-9 competitive price on goods or services;
3-10 (8) ask an individual for any information or any
3-11 action by that individual that would be consistent with the
3-12 individual winning a sweepstakes prize, unless the individual has
3-13 won a sweepstakes prize;
3-14 (9) provide an individual who has not yet won the
3-15 sweepstakes with any document or other item that simulates any
3-16 event, circumstance, or condition connected with being the winner
3-17 of the sweepstakes;
3-18 (10) send material accompanying or relating to a
3-19 sweepstakes or an offer to enter a sweepstakes that states or
3-20 implies that an individual must comply with a restriction or
3-21 condition to enter the sweepstakes, unless all individuals entering
3-22 the sweepstakes are required to comply with the identical
3-23 restriction or condition;
3-24 (11) use a scratch-off device or any other game piece
3-25 that suggests an element of chance or luck to convey information
3-26 about a sweepstakes or an offer to enter a sweepstakes;
3-27 (12) send material accompanying or relating to a
4-1 sweepstakes or an offer to enter a sweepstakes that:
4-2 (A) states or implies that an individual's
4-3 chances of winning a prize in the sweepstakes are raised, lowered,
4-4 or different in any way because of a factor or circumstance that
4-5 has no relation to the manner in which a winner of the sweepstakes
4-6 is selected;
4-7 (B) states or implies that a winner of a
4-8 sweepstakes prize will be selected at a time or place or in a
4-9 manner that is different from the actual time or place at which or
4-10 manner in which a winner is selected;
4-11 (C) states or implies falsely that the
4-12 individual receiving the advertisement has received any special
4-13 treatment or personal attention from the offeror of the sweepstakes
4-14 or any officer, employee, or agent of the offeror of the
4-15 sweepstakes;
4-16 (D) states or implies that an individual who
4-17 orders or purchases a good or service will receive a benefit in the
4-18 sweepstakes or be treated differently in the sweepstakes compared
4-19 with an individual who did not order or purchase a good or service;
4-20 (E) states or implies that an individual who
4-21 does not order or purchase a good or service will suffer a
4-22 disadvantage in the sweepstakes or be treated differently in the
4-23 sweepstakes compared with an individual who ordered or purchased a
4-24 good or service; or
4-25 (F) states or implies that the recipient of the
4-26 material:
4-27 (i) is a winner if the recipient is not a
5-1 winner;
5-2 (ii) may be a winner;
5-3 (iii) will be a winner if certain
5-4 conditions are met or if certain events occur in the future;
5-5 (iv) is, may be, or will be among the
5-6 group from which a winner will be selected; or
5-7 (v) has in any way a better chance than
5-8 another individual of being chosen as a winner;
5-9 (13) publish or cause to be published different
5-10 advertisements for the same sweepstakes that contain inconsistent
5-11 descriptions of the grand prize awarded through the sweepstakes;
5-12 (14) offer more than one sweepstakes at the same time;
5-13 (15) award multiple prizes in a sweepstakes unless all
5-14 prizes are awarded on the same date and through the same selection
5-15 process;
5-16 (16) publish or cause to be published official rules
5-17 of a sweepstakes that do not uniquely identify the prizes to be
5-18 awarded and the date they will be awarded; or
5-19 (17) provide for entry in a sweepstakes by mail and
5-20 use:
5-21 (A) more than one address to accept entries in
5-22 the sweepstakes; or
5-23 (B) the address for entry in the sweepstakes for
5-24 any purpose other than entry in the sweepstakes.
5-25 (b) A person may not operate a video sweepstakes in this
5-26 state.
5-27 (c) The prohibition of operating a video sweepstakes as set
6-1 out in Subsection (b):
6-2 (1) does not authorize any otherwise illegal activity;
6-3 and
6-4 (2) does not apply to a facility operated by a
6-5 nonprofit organization of military veterans.
6-6 Sec. 43.003. ACTS NOT PROHIBITED. Section 43.002(a)(12) does
6-7 not prohibit a person from making a statement in the official rules
6-8 of the sweepstakes describing the method to be used in choosing a
6-9 winner or prohibit a person from notifying the winner after the
6-10 sweepstakes has ended.
6-11 Sec. 43.004. CIVIL PENALTY. (a) The attorney general may
6-12 initiate an action under this section by filing suit in a district
6-13 court in Travis County or in any county in which a violation
6-14 occurred.
6-15 (b) For each violation found, the court shall award the
6-16 plaintiff a civil penalty of not less than $5,000 or more than
6-17 $50,000.
6-18 (c) If the material accompanying or relating to a
6-19 sweepstakes or an offer to enter a sweepstakes contains multiple
6-20 statements, implications, representations, or offers that are
6-21 prohibited by this chapter, each statement, implication,
6-22 representation, or offer is a separate violation and shall result
6-23 in a separate civil penalty. If the material is sent by mail,
6-24 facsimile, electronic mail, or other similar mass distribution,
6-25 each individual who receives the material constitutes an additional
6-26 and separate group of violations of this chapter.
6-27 (d) If another person knew or should have known that a
7-1 person was offering a sweepstakes in violation of this chapter, and
7-2 if that other person provided names and addresses of residents of
7-3 this state to the person offering the sweepstakes or provided any
7-4 services connected with the mailing, sending by facsimile,
7-5 electronic mail, or other similar mass distribution of information
7-6 about the sweepstakes or an opportunity to enter the sweepstakes,
7-7 the other party is jointly and severally liable with the person
7-8 offering the sweepstakes for the cumulative civil penalties that
7-9 result from providing those names and addresses or services.
7-10 (e) If the attorney general substantially prevails, the
7-11 court shall award the attorney general reasonable expenses incurred
7-12 in recovering a civil penalty under this section, including court
7-13 costs, reasonable attorney's fees, reasonable investigative costs,
7-14 witness fees, and deposition expenses.
7-15 (f) A civil penalty recovered under this section shall be
7-16 deposited in the state treasury.
7-17 (g) A court may also award injunctive relief or other
7-18 equitable or ancillary relief that is reasonably necessary to
7-19 prevent future violations of this chapter.
7-20 SECTION 2. This Act takes effect September 1, 2001.