DALLAS -- CEC Entertainment Inc., parent company of Chuck E. Cheese's, has reportedly agreed to work with California state lawmakers to amend the state's amusement industry regulations, forcing a $10 prize value limit on redemption operations. Such a restriction could apply to cranes, merchandise-dispensing machines and the value of tickets or plays that players can win from arcade games.
The story is detailed in the latest edition of The Redemption Report, a newsletter that analyzes amusement industry trends.
According to the newsletter, CEC is backing the $10 limit as part of a "confidential agreement" with Debbie Keller, the California mother who sued Chuck E. Cheese's in 2010, charging that its redemption games made the pizza-arcade chain a "kiddie casino." Keller's suit was later dropped from federal court, and then re-filed in state court, after which it was reportedly dropped.
The specific statute that would be affected by a $10 prize limit is California laws Sections 330b (f), TRR reported. The publication said its staff has seen the recommended language and that "The proposed changes would also do away with the current 'exemption' of redemption games from the California Penal Code."
TRR termed the pending California prize limit "a potential nationwide industry disaster," presumably in part because other states frequently follow California’s lead on legislation.
In addition, TRR questioned whether CEC's settlement agreement with Keller may oblige the Texas-based chain to support a $10 limit in all 50 states. CEC operates more than 500 venues in 48 states.
TRR noted that similar licenses already exist in a few other states. Ohio has a $10 limit and Illinois a $25 limit; Georgia has just adopted a $5 limit.
The current California regulatory and enforcement scheme for redemption and entertainment merchandisers is confusing and contradictory, according to industry legal expert Bob Snyder. | SEE STORY
The industry at large is investigating the situation and seeking to recommend a course of action to the Amusement and Music Operators Association and the American Amusement Machine Association, TRR noted.
CEC officials had no comment on the story when contacted by Vending Times.