STAND. COM. REP. NO. 2615

Honolulu, Hawaii

RE: S.B. No. 3024

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committee on Judiciary, to which was referred S.B. No. 3024, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO CONSUMER PROTECTION,"

begs leave to report as follows:

The purpose and intent of this measure is to prohibit the sale of video games that contain a system of further purchasing a randomized reward or a virtual item that can be redeemed to receive a randomized reward to consumers under twenty-one years of age.

Your Committee received testimony in support of this measure from the Hawaii Youth Services Network. Your Committee received testimony in opposition to this measure from the Entertainment Software Association and TechNet. Your Committee received comments on this measure from the Department of Commerce and Consumer Affairs and Entertainment Software Rating Board.

Your Committee finds that the video game industry is a multi-billion dollar industry with a diverse consumer base that continues to grow substantially each year. Video games are increasingly prevalent and accessible, as smart phones, gaming consoles, and personal computers become more available. Increased access to video games has increased the popularity of an in-game mechanism known as a "loot box". Loot boxes are purchased with money or earned through gameplay, and contain randomized rewards that can help an individual progress in the game or are merely cosmetic. According to testimony received by your Committee, this mechanism is similar to gambling, and could lead to children and youth developing a behavioral addiction to gambling. Because parents and other responsible adults are often unaware of the randomized rewards that are available in video games, your Committee concludes that in order to reduce the exposure of children and youth to gambling and its harmful effects, the sale of video games that contain a system of further purchasing a randomized reward to children and youth should be prohibited.

Your Committee has amended this measure by inserting an effective date of July 1, 2050, to encourage further discussion.

As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3024, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 3024, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Judiciary,

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BRIAN T. TANIGUCHI, Chair