California Weighs Regulations To Tackle Deceptive Gambling Advertising

March 4, 2024
The California Gambling Control Commission has delayed a hearing on whether to begin a formal rulemaking process to address advertising by cardroom licensees that could be deceptive or do not include responsible gambling information.

The California Gambling Control Commission (CGCC) has delayed a hearing on whether to begin a formal rulemaking process to address advertising by cardroom licensees that could be deceptive or do not include responsible gambling information. 

A meeting to discuss the proposed rules was scheduled for Friday (March 8) but has now been rescheduled for April 16 to allow the industry to review updated regulations and comment on them. The CGCC has set a March 17 deadline for any licensee to submit additional comments.

Originally proposed in December 2022, the commission decided to act after finding numerous examples of advertisements from cardrooms and third-party providers that fail to include responsible gambling information.

The CGCC noted that some of the advertisements for cardrooms did not contain referral services for problem gamblers, violating existing regulations.

"Further, the existing regulations do not specify how information must be presented, which has resulted in some advertisements delivering the information in an unclear and inconspicuous manner," the agency said.

The effective period for proposed action on the regulations expired on December 29, 2023, causing the commission to host another regulation meeting to consider commencing the formal rulemaking process for advertising regulations.

Among the revisions to the second set of draft regulations dated January 31, 2024 is additional language to clarify what regulators are trying to accomplish with its proposed regulations.

For instance, the regulations clarify the criteria that the California Bureau of Gambling Control (BGC) must consider when determining whether an advertisement is deceptive, including if it “depicts gambling as a means to become wealthy or resolve a financial burden.”

An advertisement will also be considered deceptive if it targets or appeals to children or adolescents or encourages those under 21 years of age to gamble. The BGC will also monitor cardroom advertisements to make sure they do not depict, illustrate, portray, or refer to any games or activities that have not been approved by the bureau.

The BGC is a division within the California Department of Justice that enforces state regulations on gambling, whereas the CGCC has the power to establish rules and make licensing determinations.

In terms of age confirmation in advertising, the CGCC eliminated a previously proposed requirement that would have required any visitor to a website or social media landing page for a gambling operator to “affirm he or she is 21 years of age or older before being allowed access.”

Cardrooms are also prohibited from using “Nevada style” or “Vegas style” in their advertisements because they are not permitted to offer house-banked casino games that would be found on the gaming floor of a typical Las Vegas casino.

Overall, the regulations govern how the BGC will regulate and in some cases disapprove advertisements used by cardrooms and third-party providers of proposition player services (TPPPS).

Many in California’s cardroom industry believe the proposed regulations exceed the CGCC’s authority, however.

“The proposed advertising regulation is not consistent with or necessary under the Gambling Control Act, exceeds the commission’s authority under existing statutes, violates our members’ constitutional rights to free speech, and imposes unnecessary costs and burdens on our members without improving public welfare or safety,” the California Gaming Association (CGA) said in comments submitted to the CGCC.

“These regulations can have damaging effects on our members,” wrote the CGA, which represents a majority of licensed cardrooms in California.

David Fried, a gaming attorney who represents the California Grand Casino and the Oaks Card Club, said Friday (March 1) that he planned to submit comments on the amendments by the deadline.

Fried has previously said that the proposed advertising regulations violate California rulemaking standards, as well as commercial speech rights under the First Amendment of the U.S. Constitution and California Constitution. 

Newsom Names Baxter To Commission

California Governor Gavin Newsom, a Democrat, has appointed Stacey Luna Baxter to the CGCC to fill a vacancy for an individual with governmental experience on the five-member panel. Baxter is scheduled to be sworn in on March 15 and will remain the CGCC executive director until then. 

Jason Pope, CGCC's chief counsel, will be the acting executive director until a successor is hired. 

Baxter has been executive director of the commission since 2015. Before the CGCC, she served in several roles at the Department of Justice from 2001 to 2015, including assistant bureau chief in the Bureau of Gambling Control.

She is a member of the Tribal-State Association, International Association of Gaming Regulators, Problem Gambling Advisory Group, and the California Gaming Policy Advisory Committee. This position requires Senate confirmation, and the compensation is $175,578 per year.

Baxter is registered as a voter without party preference.

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