Last month, we reported on the achievement of Georgia amusement operators. They have worked with state legislators to craft a regulatory proposal that will create transparency and accountability in the operation of games that often pose troubling questions for law enforcement officials. In this month’s issue, we explore the subject of redemption regulation in much greater depth.
The Georgia measure, which was signed into law as this issue of RePlay was going to press, provides a framework including monitoring and revenue sharing with the state for overseeing games that allow for credit carryovers from one play of the game to another, an attribute that many detractors argue makes them operate more like gambling devices than amusement games. The Georgia law mandates skill predominance and limits prize redemption.
We have an overview of the legislative landscape inside this issue as it relates to the operation of games that offer prizes. Redemption as a broad category represents a vital source of revenue for operators, especially as video games and touchscreens face increasing competition from consumer and mobile platforms. Of particular note, a Florida law also recently enacted could have dire consequences for redemption and possibly even prize game operators, although lack of legislative clarity has already spawned diverging interpretations of what the law means both legally and practically. On its face, the law prohibits ticket redemption except in arcades with 50 or more games.
Georgia and Florida represent just two examples of states that are grappling with the legality of playing games for prizes. Law enforcement and legislatures are responding to a number of trends they view as troubling including the operation of sweepstakes games, the operation of games that have the look and feel of casino equipment even though they may comply with the redemption rules of a state and the trend of high-value prizes (and even cash) in amusement prize games. Finally, game play in some traditional arcade pieces closely emulates what happens in a casino.
Each of these trends, even cash prizes, presents scenarios that can comply with the law of the various states, if operated in the proper context. Yet, all of these trends present public relations challenges, if nothing else, because average consumers remain unaware of the nuanced interrelationship between state prohibitions on gambling and the various exemptions for bona fide amusement equipment based on several standards including a skill requirement, a prize limitation or both.
During March’s meeting of California operators hoping to form a new state association, the California Entertainment Merchants Association (CEMA), several participants stressed the need for what they termed self-policing within the trade. We agree that an internal response offers the best chance to avoid restrictive regulation or consumer lawsuits.
In the 1990s, when the industry faced pressure over violent video game content, the trade adopted a voluntary rating system. We’re not sure the operation of redemption games would be well suited to such a universal scheme. But operating responsibly is incumbent on every operator to help ensure the viability of this important aspect of the industry.
In the end, game players want to have fun and a fair chance to win something of value. Successful formulas for providing value while still turning a profit have been around for decades. Setting aside all the technicalities of both prize redemption and legal regulation, we can all rely on that seemingly rare phenomenon –– our common sense –– to provide us with a general notion of what we should and should not do to keep our customers happy.
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