Date: 04/29/2014
Final
BILL SUMMARY for HB14-1392
HOUSE COMMITTEE ON BUSINESS, LABOR, ECONOMIC, & WORKFORCE DEVELOPMENT
| Votes: View--> | Action Taken: |
Adopt amendment L.002. The motion passed without o
Adopt amendment L.003. The motion passed on a vote
Refer House Bill 14-1392, as amended, to the Commi |
PASS
PASS |
02:49 PM -- HB 14-1392
Representative Lawrence and Representative Becker presented House Bill 14-1392, concerning a prohibition on the use of simulated gambling devices. An internet sweepstakes café is an electronic machine, computer terminal, or similar device that simulates gambling conditions or gambling results through any one of a number of commercial pretexts identified in this bill. The bill prohibits the operation of internet sweepstakes cafés, and creates the new class 3 misdemeanor crime of unlawful offering of a simulated gambling device.
Unlawful offering of a simulated gaming device occurs when a person offers, facilitates, contracts for, or otherwise makes available any simulated gambling device for money or other consideration, in which use of the device, admission to a café, or a related purchase creates the expectation of a prize. District attorneys and the Attorney General's Office are empowered to prosecute cases and obtain injunctive relief and treble damages. In addition, for one year after a violation, the bill provides a private right of action if the property interest of a gaming licensee has been injured as a result of unlawful offering of a simulated gambling device. The bill does not apply to: gaming activities specifically authorized by Colorado law; the purchase of recognized financial instruments; existing legal requirements for sweepstakes; or the operations of telecommunications providers in the normal course of business.
The sponsors responded to questions from the committee about how these facilities have averted prosecution thus far and how sweepstakes are currently regulated in statute.
The following individuals testified on the bill:
02:59 PM -- Dan Corsentino, representing Cyber GT Systems, testified in opposition to the bill. Mr. Corsentino stated that the bill represents an express prohibition on sweepstakes without outside validation that sweepstakes represent gambling. He stated that this issue needs to be studied before it is rushed through the legislative process. Mr. Corsentino responded to questions from the committee. Representative Becker discussed the state of the industry and the funding beneficiaries of the state's Limited Gaming Fund.
03:13 PM -- Nick Gonzales, representing You Bux, testified in opposition to the bill. Mr. Gonzales discussed how sweepstakes do not include two of the three definitions of gambling: chance, because these are games of skill with predetermined winners; nor consideration, because you can play for free. Mr. Gonzales responded to questions from the committee about his business model.
03:23 PM
The committee continued to ask the witness about how the games in internet sweepstakes cafes work.
03:33 PM
Questions from the committee continued about sweepstakes rules. Mr. Gonzales stated that 80 percent of these sweepstakes games are web-based and will be continued to be played with or without his internet cafe because people enjoy sweepstakes games. Representative Becker offered an explanation of the three elements of gambling and discussed the grey areas in statute around these internet sweepstakes cafes.
03:42 PM -- Ron Kammerzell, Department of Revenue, testified in support of the bill. Mr. Kammerzell stated that the bill would clarify the ambiguities in the gaming law. He discussed the negative impact internet sweepstakes cafes have on the state. He stated his concern that the passage of this bill would encourage proliferation of these internet sweepstakes cafe.
03:49 PM -- Matthew Durkin, representing the Attorney General's Office and the Colorado District Attorney's Council, testified in support of the bill.
03:49 PM -- Peg Ackerman, representing the County Sheriffs of Colorado, testified in support of the bill. She stated that her association had voted unanimously to support the bill.
03:50 PM -- Mark Grueskin, representing the Colorado Gaming Association, testified in support of the bill. He distributed a handout to the committee (Attachment E). Mr. Grueskin responded to questions from the committee.
140429 AttachE.pdf
03:55 PM
The sponsors distributed and discussed Amendments L.002 and L.003 (Attachments F and G, respectively).
140429 AttachF.pdf
140429 AttachG.pdf
03:56 PM -- Duane Gall, Office of Legislative Legal Services, came to the table to answer questions from the committee about the amendments.
 | |
| BILL: | HB14-1392 | |
| TIME: | 03:59:50 PM |
| MOVED: | Kraft-Tharp |
| MOTION: | Adopt amendment L.003. The motion passed on a vote of 9-2. |
| SECONDED: | Holbert |
| VOTE |
| Exum | Yes |
| Hamner | Yes |
| Holbert | No |
| Navarro | No |
| Nordberg | Yes |
| Rosenthal | Yes |
| Ryden | Yes |
| Szabo | Yes |
| Wright | Yes |
| Kraft-Tharp | Yes |
| Williams | Yes |
| | |
YES: 9 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS |
04:01 PM
The sponsors made closing remarks. Representative Becker stated that internet sweepstakes cafes are unregulated, untaxed, and erode the legal gaming system in the state.
| |
| BILL: | HB14-1392 | |
| TIME: | 04:01:31 PM |
| MOVED: | Kraft-Tharp |
| MOTION: | Refer House Bill 14-1392, as amended, to the Committee of the Whole. The motion passed on a vote of 10-1. |
| SECONDED: | Hamner |
| VOTE |
| Exum | Yes |
| Hamner | Yes |
| Holbert | Yes |
| Navarro | No |
| Nordberg | Yes |
| Rosenthal | Yes |
| Ryden | Yes |
| Szabo | Yes |
| Wright | Yes |
| Kraft-Tharp | Yes |
| Williams | Yes |
| | |
Final YES: 10 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS |
04:03 PM
The committee adjourned.