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Business Law Today

March 2024

March 2024 in Brief: Business Regulation & Regulated Industries

Margaret M Cassidy, Dredeir Roberts, Perry N Salzhauer, and Latif Zaman

March 2024 in Brief: Business Regulation & Regulated Industries

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Antitrust Law

FTC Workshop Argues that Private Equity Incentives Are Not Aligned with Quality Health Care

By Barbara T. Sicalides, Troutman, Pepper, Hamilton, Sanders, LLP

On March 5, the FTC hosted a public workshop entitled “Private Capital, Public Impact: An FTC Workshop on Private Equity in Health Care.” The event is part of the agency’s effort to publicize and encourage enforcement targeting private equity (PE) investments in health care. The speakers from five federal and state agencies included all three sitting FTC commissioners; Jonathan Kanter of the U.S. Department of Justice (DOJ) Antitrust Division; the Inspector General of the U.S. Department of Health & Human Services (HHS); the Principal Deputy Administrator and Chief Operating Officer at the Centers for Medicare & Medicaid Services (CMS); and the Attorney General of the State of Rhode Island. The workshop also included health care providers, academics, and policy professionals, all of whom were critical of PE ownership.

The speakers and agency representatives argued that the PE model and the incentives that drive those models have led and will continue to lead to negative consequences in health care. Speakers identified certain practices as harmful to health care and argued that such practices are more likely to occur and uniquely problematic with PE ownership. The harmful activities identified include sale and leaseback arrangements of real estate on which health care facilities are located, staff reductions, elimination of less profitable services, use of lower-quality equipment, and negotiating higher reimbursement rates.

Presenters seemed to have a monolithic view of PE firms. They asserted that PE invests with the intent to exit in approximately three years and seeks quick profits by cutting costs and burdening the operating companies with massive debt. This short investment horizon, in the speakers’ view, conflicts with providers’, patients’, and operating companies’ long-term interests.

The workshop also highlighted concerns regarding the ability of the agencies to police PE. For example, presenters noted that a significant number of PE health care deals fall below the Hart-Scott-Rodino Act (HSR) reporting thresholds, and the structure of investments often makes it difficult to identify owners and pierce the corporate veil of the operating companies to reach their equity-holders.

The event concluded with a “Fireside Chat” between FTC Commissioner Rebecca Kelly Slaughter and Rhode Island Attorney General Peter F. Neronha. Their discussion highlighted the collaboration between the agency and states on enforcement and the growing number of state laws requiring premerger notification at the state level regardless of any HSR notice obligations. Both enforcers urged all states to use every tool, regulation, or statute available to them to examine and challenge PE health care transactions.

This FTC Workshop is not the only effort by the FTC and DOJ to target PE acquisitions. For example, the December 2023 Merger Guidelines target roll-up or serial acquisitions and partial ownership transactions. agencies have also targeted PE by unwinding or opposing overlapping directors under Section 8 of the Clayton Act. We should expect the focus on PE to continue.

PE firms buying health care providers should be clear in their investment committee communications and other documents analyzing the transaction if they do not have a short-term, cost-slashing investment philosophy. Regardless of philosophy, firms should be clear that patient outcomes matter; you should not assume that this is self-evident in the current enforcement environment. To the extent a firm already has substantial market share, consider whether another acquisition in the same market or any acquisition that increases leverage in negotiations is necessary to achieve the firm’s investment goals.

Employers Beware: Worker Misclassification as Anticompetitive Conduct?

By Kasia Hebda, Troutman, Pepper, Hamilton, Sanders, LLP

Speaking at the Global Competition Review: Law Leaders Global Summit in February, Commissioner Alvaro M. Bedoya of the Federal Trade Commission (“FTC”) argued that the FTC could—and should—combat worker misclassification under Section 5 of the FTC Act, as an unfair method of competition. Commissioner Bedoya advocated that worker misclassification—when an employer classifies a worker who should be an employee as an independent contractor—satisfied the criteria, established by the FTC in its November 2022 policy statement, for when conduct constitutes an unfair method of competition. Specifically, the commissioner stated that worker misclassification distorts competitive conditions when it allows employers to underbid employers that correctly classify employees. Additionally, worker misclassification may be coercive, exploitative, and abusive when workers who know they are being misclassified feel that they have no choice but to accept such treatment. Commissioner Bedoya also suggested that an employer’s efforts to limit the independence of a worker classified as an independent contractor could constitute an illegal vertical restraint on trade.

According to Commissioner Bedoya, the FTC’s role in combating worker misclassification would complement—not duplicate—work by the Labor Department and the National Labor Relations Board (“NLRB”). That is because the FTC’s authority allows it to stop incipient unfair practices, before they harm workers and markets.

Although worker misclassification has historically been treated as a labor law or employment law issue, the commissioner’s speech was not antitrust enforcers’ first foray into worker misclassification. In July 2022, the FTC and the NLRB entered into a Memorandum of Understanding (“MOU”) describing “labor market developments relating to the ‘gig economy’ and other alternative work arrangements” and the classification of workers as areas of common regulatory interest between the agencies. Likewise, in September 2022, the FTC announced its Policy Statement on Enforcement Related to Gig Work, highlighting misclassification as an issue that the FTC should combat. In August 2023, the FTC also entered into an MOU with the Department of Labor that stated that the agencies shared an interest in protecting workers from unfair methods of competition, such as “the use of business models designed to evade legal accountability, such as the misclassification of employees . . . .”

The Antitrust Division, Department of Justice (“DOJ”) has expressed a similar view. In February 2022, DOJ filed a brief as amicus curiae in NLRB’s Atlanta Opera matter, in which it suggested that adoption by the NLRB of an ambiguous definition of “employee” could result in competitive harm if it encourages employers to misclassify workers. DOJ has also entered into MOUs with the Department of Labor, in March 2022, and the NLRB, in July 2022, that referenced the misclassification of employees as an area of shared interest for the agencies.

The effects of the FTC’s and DOJ’s interest in worker misclassification remain to be seen. Commissioner Bedoya’s speech, however, shows a commitment to expanding the FTC’s Section 5 enforcement to conduct clearly addressed by other already existing laws (antitrust or non-antitrust) based on the argument that here it allows the agency to stop the misclassification before harm to the worker(s) or the market materializes.

Banking Law

Minnesota, Nevada, and Rhode Island Propose DIDMCA Opt-Outs

By Rachael Aspery and Robert Savoie, McGlinchey Stafford, PLLC

Minnesota, Nevada, and Rhode Island are the most recent additions to the list of jurisdictions that have proposed legislation to opt out of the Depository Institutions Deregulation and Monetary Control Act (DIDMCA). Sections 521–523 of DIDMCA empower states by allowing FDIC- or NCUA-insured, state-chartered banks and credit unions to contract for the interest rate permitted by the state where the bank is located and export that interest rate into other states pursuant to its home state’s interest-rate authority. Conversely, section 525 of DIDMCA permits states to opt out of sections 521–523 via legislation. Opting out would then require application of the state law where the loan is “made.”

On February 12, 2024, Rhode Island introduced SB 2275, which proposes a DIDMCA opt-out of sections 521–523 and would seek to require state-chartered banks to comply with Rhode Island’s usury limitations. On March 5, 2024, Rhode Island introduced HB 7941, which mirrors SB 2275. If signed into law, the proposed effective date is October 1, 2024.

Similarly, on February 28, 2024, Minnesota introduced HF 3680, which proposes an opt-out of sections 521–523 and would also seek to require out-of-state banks and credit unions to comply with Minnesota’s usury limitations applicable to consumer loans to Minnesota residents, whether physically located in the state or if the transaction is conducted electronically. The proposed effective date of the legislation is August 1, 2024.

In Nevada, a nonprofit corporation proposed a ballot initiative that seeks to opt Nevada out of sections 521–523 and impose an all-in rate cap of 36 percent subject to the Military Lending Act annual percentage rate calculation. However, the rate cap excludes certain credit card fees for cards that are “network-branded and the fees collectively each year do not exceed 15% of the credit line.” The ballot initiative also seeks to apply the DIDMCA opt-out to payday loans and “loans,” which are defined to include, among others, installment loans, lines of credit, and retail installment sales contracts, that are made, brokered, and purchased by a Nevada resident, whether in the state or electronically. Licensed earned wage access services providers will be exempt.

Minnesota, Nevada, and Rhode Island join the District of Columbia in proposing an opt-out. Colorado will join Iowa and Puerto Rico when its opt-out legislation becomes effective on July 1, 2024.

While intended to curb evasion of state consumer lending and consumer protection laws, the effectiveness of a DIDMCA opt-out remains unclear. This is because federal law controls where a loan is “made” for opt-out purposes, and interpretations of the federal banking agencies suggest that where a loan is “made” is often not the borrower’s location.

Given that there have been three jurisdictions exploring a DIDMCA opt-out since January 2024, we would expect this trend to continue. Financial services companies should remain aware of the changing landscape as products, services, and programs are developed and maintained.

Missouri and Washington Introduce True Lender Bills

By Rachael Aspery and Robert Savoie, McGlinchey Stafford, PLLC

Missouri and Washington introduced new true lender bills intended to regulate companies, largely FinTechs, that operate under bank partnership models with federally insured depository institutions. Under these models, the partner bank originates the consumer loan or line of credit, and the non-bank partner engages in activities for the bank, including but not limited to facilitating, brokering, servicing, and collection activities.

Many states have enacted or proposed consumer credit laws designed to regulate companies that operate under bank partnership models with federally insured depository institutions, or that otherwise seek to regulate service providers to banks. Debt collector licenses are a traditional example, while the new “true lender” laws represent a more expansive attempt to curtail activities for bank and non-bank partnerships. Generally, these laws are structured to exempt depository institutions while regulating the non-bank entities with whom they partner, by treating the non-bank as if it is the lender in the credit transactions—i.e., the “true lender.” The true lender language in the Washington bill is more limited than other true lender laws in terms of the tests employed, but it contains two primary tests seen in prior legislation: the predominant economic interest standard and a totality of the circumstances test. Washington and Missouri’s bills both incorporate anti-evasion provisions, similar to prior legislation (previously enacted in Illinois, Maine, Minnesota, and New Mexico; proposed in the District of Columbia, Maryland, and Florida).

Missouri introduced HB 2642 to add six new sections relating to small loans and consumer installment loans, including an all-in rate cap of 36 percent and anti-evasion provisions. Under HB 2642, a person is prohibited from offering, making, assisting a borrower in obtaining, or brokering a loan, in whole or in part, from a third party or while acting as an agent for a third party, regardless of whether the third party is exempt from licensing; from charging, if authorized under any applicable section of Missouri law, any application fee for providing credit or any fee for participation in a credit plan without including the fee in the calculation of the annual percentage rate (“APR”) as prescribed; and from making, assisting a borrower in obtaining, or brokering a loan at an APR that exceeds the permitted APR. The proposed new section provides that combined interest, fees, and finance charges cannot exceed an APR of 36 percent. Further, small loans, consumer installment loans, and title loans will be subject to this rate cap.

Washington’s SB 6025 was signed by the governor on March 25. The bill proposes that the license requirement under the Consumer Loan Act (“CLA”) would apply to each “loan” made by a licensee, or persons subject to the CLA, to a resident of or a person physically located in Washington. The bill also proposes true lender language, including the predominant economic interest standard, the prohibition applicable to bank agents and servicers, and a totality of the circumstances test. SB 6025 appears to incorporate the provisions from its companion bill, HB 1874, that define “loan” and impose a residency requirement when determining whether the CLA applies.

As more states begin to put forth legislative proposals that mirror existing true lender legislation, it is apparent that regulating bank partner programs is a priority among some legislators and consumer advocates as these programs continue to expand and gain further popularity among consumers. We would expect more true lender legislation on the horizon.

Cannabis Law

Support for Marijuana Rescheduling Grows

By Daniel Shortt, McGlinchey Stafford PLLC

Support for marijuana rescheduling has been pouring in as the Biden administration considers moving marijuana from Schedule I to Schedule III of the Controlled Substances Act (CSA). The Department of Health and Human Services (HHS) has recommended that the Department of Justice and Drug Enforcement Administration (DEA) reschedule marijuana from Schedule I (the most restrictive Schedule) to Schedule III. As the public waits for the DEA to make a final decision on rescheduling, politicians and attorneys general are staying involved in the discussion.

The marijuana rescheduling petition is currently waiting on action from the DEA, which under the CSA may either (i) concur with the HHS recommendation and initiate rulemaking under the Administrative Procedures Act to reschedule to Schedule III, or (ii) request that HHS reevaluate its position based on additional data (as it did with the proposed rescheduling of Hydrocodone Combination Products). DEA may also conceivably suggest rescheduling marijuana to Schedule II. There is an important distinction between Schedule II and Schedule III, because business activities related to Schedule II substances are subject to IRC 280E, while Schedule III substances are not.

On March 15, Vice President Kamala Harris said the DEA must reschedule marijuana “as quickly as possible,” as reported by Marijuana Moment: “I cannot emphasize enough that they need to get to it as quickly as possible. And we need to have a resolution based on their findings and their assessment.”

In February, the Law Enforcement Leaders to Reduce Crime and Incarceration (LEL) group wrote a letter to the Biden administration urging rescheduling. The Hill reports that the letter stated the following: “We are current and former police chiefs, sheriffs, federal and state prosecutors, and correctional officials from across the country dedicated to protecting public safety and reducing unnecessary arrests, prosecutions, and incarceration.”

LEL stated that marijuana’s status as a Schedule I substance has had a devastating impact on communities and is out of step with state law and public opinion.

On January 12, 2024, a group of twelve current attorneys general issued a letter in support of rescheduling cannabis from Schedule I to Schedule III. The letter was from Colorado Attorney General Phil Weiser, who was joined by attorneys general of California, Connecticut, Delaware, Illinois, Maryland, Massachusetts, Nevada, New Jersey, Pennsylvania, Oregon, and Rhode Island. In addition, in January a group of senators—including Elizabeth Warren, Chuck Schumer, and John Fetterman—wrote a letter urging Biden to deschedule marijuana, which would remove it from the CSA entirely.

Although there has been significant support for rescheduling, some groups have voiced opposition. For example, former Attorney General William Barr has claimed that legalizing marijuana was a mistake, as reported by Reason. In addition, in December 2023, a group of twenty-nine former federal prosecutors wrote a letter to Attorney General Merrick Garland and DEA Administrator Anne Milgram, pleading for the agencies not to reschedule marijuana.

Despite opposing viewpoints, support for marijuana reform continues to build. While this does not mean that marijuana is certain to be rescheduled to Schedule III, the move to reschedule has some powerful supporters. As noted above, the decision to reschedule at this point falls squarely on the DEA and Department of Justice, which have a history of opposing marijuana reform. For now, all the public can do is wait to see how things shake out.

Consumer Finance Law

Seventh Circuit Finds No Standing for Plaintiff Not Notified of Consequences for Failing to Timely Respond to Requests for Admission

By Tyler Hamilton, Pilgrim Christakis LLP

On March 21, 2024, the Seventh Circuit Court of Appeals vacated a judgment in Patterson v. Howe on the grounds the plaintiff lacked Article III standing to pursue claims under the Fair Debt Collection Practices Act (“FDCPA”). The decision arose out of a state court collections case where the plaintiff was served with four requests for admission in addition to the summons and complaint. The plaintiff failed to timely respond to the requests for admission, which were deemed admitted under applicable civil procedure rules. While the collections case remained ongoing, the plaintiff filed a separate federal lawsuit against the creditor’s attorney that alleged his failure to disclose the consequences for failing to respond to the requests for admission constituted an unfair debt collection practice under the FDCPA. The district court entered judgment in favor of the plaintiff.

On appeal, the Seventh Circuit vacated the district court’s judgment and held that the plaintiff lacked Article III standing because he did not suffer concrete harm when he failed to timely respond to the requests for admission. The plaintiff argued two related theories to establish standing: (1) he would have denied the requests had he known of the consequences for failing to do so; and (2) admission of the requests resulted in a loss of negotiating power. In denying both arguments, the Court relied on the Supreme Court’s explanation in TransUnion that “intangible harms” suffered by plaintiffs must be sufficiently concrete and bear a “close relationship” to a harm traditionally recognized as a basis for lawsuits in American courts to confer standing. The Court held the plaintiff did not suffer concrete harm because the admissions were neither used nor threatened to be used against him in the collections action. In other words, while the plaintiff may have been confused as to the process, the plaintiff did not show he suffered actual harm. Additionally, the Court found the plaintiff’s decrease in negotiation power—to the extent it existed—was pure speculation as the collections case did not settle until four months after the federal lawsuit had been filed. Finally, the Court found the plaintiff failed to establish that the injury associated with failing to timely respond to requests for admission bears a “close relationship” to a traditionally recognized basis for standing. The Seventh Circuit’s decision builds upon a string of cases in the Seventh Circuit and Supreme Court.

Intellectual Property Law

When the Test Is a Fail

By Emily Poler, Poler Legal, LLC

The Second Circuit recently issued another decision in the long-running dispute between bridalwear designer Hayley Paige Gutman and her former employer, JLM Couture, Inc., over ownership of Instagram and Pinterest accounts Gutman created while employed by JLM.

The Second Circuit reversed the District Court’s 2022 decision, which held JLM owned the accounts. More notably, the Second Circuit rejected the lower court’s six-factor test, which considered how the account describes itself; whether the account was promoted on the employer entity’s advertisements or publicity materials and linked to other internet platforms of the entity; whether it promoted the business; and whether employees of the entity (other than the account creator) had access to and managed the account.

In reversing the lower court, the Second Circuit held social media accounts “should be treated in the first instance like any other form of property,” and, in figuring out who currently owns one, courts should look to who owned it when it was created and whether there is any evidence the account was ever transferred to someone else. “The law has long accommodated new technologies within existing legal frameworks,” the Second Circuit wrote. Translation: “Enough with the new tests already. We have plenty.”

Overall, the Second Circuit’s conclusion makes a lot of sense. Courts don’t need new tests to determine whether a social media account belongs to a business or an individual associated with the business. They should instead look to existing and well-established legal frameworks to determine ownership.

Hopefully, this is what will happen when the District Court takes up Gutman’s case again. Here, the Second Circuit sent the case back to the lower court with a note that the ownership of the social accounts may turn, at least in part, on the terms of service of the relevant social media platforms and, specifically, whether “ownership” of a social media account includes the right to transfer the account to another. The Second Circuit also suggested that the District Court might want to separate the ownership of content posted on the accounts from the ownership of the accounts themselves, noting that rights to the accounts and rights to the accounts’ content may or may not be the same.

And on it goes. It will be particularly interesting to see what the District Court says about the role of the terms of service for social media accounts. As most people know, social media companies change their terms of service—a lot. Does this approach give an outsized role to the terms of service even though the litigants in cases over ownership of social media accounts have no input into the terms of those agreements? Second, how will courts factor in changes to terms of service that parties may or may not be aware of, particularly as at least one of the parties to a dispute over ownership of a social media account probably never agreed to the terms of service? These issues may mean the District Court downplays the significance of the terms of service and instead looks at doctrines governing the ownership of other intangible property. Because tests that are well established . . . tend not to fail.

Labor & Employment Law

Texas Law Prohibits Private Employers from Adopting or Enforcing Coronavirus Vaccine Mandates

By Tori Bell, Boulette Golden & Marin L.L.P.

A new Texas law prohibits private employers from adopting or enforcing coronavirus vaccine mandates. Senate Bill 7, which adds Chapter 81D to the Texas Health and Safety Code, became effective on February 6, 2024.

Under the new law, “An employer may not adopt or enforce a mandate requiring an employee, contractor, applicant for employment, or applicant for a contract position to be vaccinated against COVID-19 as a condition of employment or a contract position.” Tex. Health & Safety Code 81D.002. Further, “An employer may not take an adverse action against an employee, contractor, applicant for employment, or applicant for a contract position for a refusal to be vaccinated against COVID-19.” Tex. Health & Safety Code 81D.003. “Adverse action” is defined as “an action taken by an employer that a reasonable person would consider was for the purpose of punishing, alienating, or otherwise adversely affecting an employee, contractor, applicant for employment, or applicant for a contract position.” Tex. Health & Safety Code 81D.001(1).

The new law does not create a private right of action. Instead, an employee, contractor, or applicant may file a complaint with the Texas Workforce Commission (“Commission”) against an employer who violates the law. Tex. Health & Safety Code 81D.004. The Commission will then investigate. The Commission may request that the attorney general bring an action for injunctive relief against the employer to prevent further violations of the law, and/or impose an administrative penalty in an amount equal to $50,000 for each violation, unless the employer “makes every reasonable effort to reverse the effects of the adverse action,” including hiring an applicant or reinstating a terminated employee or contractor with back pay from the date the employer took the adverse action. Tex. Health & Safety Code 81D.005–6. If the Commission determines the employer violated the law, the Commission may also recover from the employer reasonable investigative costs incurred by the Commission in conducting the investigation, even if the employer made every reasonable effort to reverse the effects of the adverse action. Tex. Health & Safety Code 81D.006(b).

Outside of termination, what constitutes an “adverse action” against unvaccinated employees or contractors remains to be determined. Texas employers should examine their policies regarding COVID-19 vaccines to ensure they are compliant with the new law.

Gaming Law

Recent Analysis of Historical Horse Racing Machines in Two States Demonstrates State-Specific Considerations

By Amanda Z. Weaver, Ph.D., Snell & Wilmer

While historical horse racing (“HHR”) machines have seen success in various states, a recent Arizona Attorney General Opinion and a Louisiana district court decision, respectively, speak to the state-specific concerns that may bear on HHR in other states throughout the country.

HHR machines rely on anonymized running and generation of previously run horseraces from across the country. The HHR machines generally permit a bettor to place a bet and then choose a horse identified by a number. See, e.g., Appalachian Racing, LLC v. Family Tr. Found. of Kentucky, Inc., 423 S.W.3d 726, 730 (Ky. 2014). The machines provide only some statistical data regarding the horses for those “bettors who wish to place their bets with some degree of deliberation,” but they do not provide information from which bettors can identify the specific horse or race. Id. Upon placing the bet, the HHR machine may then either display a video recording of the race, or allow the bettor to immediately see the outcome of the race and the bettor’s wager. Id. HHR machines have evolved to resemble traditional slot machines but do not rely on random number generators like slot machines do. Ariz. Att’y Gen. Op. I24-003 (Feb. 22, 2024).

An Arizona state senator recently requested that Arizona Attorney General Kris Mayes render an opinion regarding whether state legislation authorizing HHR machines would implicate tribes’ right to certain gaming exclusivity provisions pursuant to the Arizona Amended Tribal-State Gaming Compact (“Amended Compact”) under the Indian Gaming Regulatory Act (“IGRA”).

Attorney General Mayes concluded HHR machines would trigger the exclusivity provisions. Ariz. Att’y Gen. Op. I24-003 (Feb. 22, 2024) (“2024 Opinion”). The prior Tribal-State Gaming Compact “gave tribes an exclusive right to conduct certain gaming activities on tribal lands,” in exchange for the tribes’ agreement “to contribute a portion of their gaming proceeds to the State and . . . limitations on the scope of permitted gaming on tribal lands.” Id. citing Compact § 3(h). However, if the Arizona Legislature authorized any of the gaming listed under the exclusivity provisions, then the “tribes may be released from certain of the Compact’s gaming limitations and may reduce their contributions to the State.” Id. citing Compact § 3(h).

A 2018 Arizona Attorney General Opinion had concluded that HHR machines would trigger the exclusivity provisions in the prior Tribal-State Compact. Ariz. Att’y Gen. Op. I18-010 (Aug. 23, 2018). The 2024 Opinion concluded that although the Amended Compact expanded certain definitions of gaming the state legislature could authorize without triggering the exclusivity provisions, still would not allow HHR machines under the expanded definitions without triggering the Amended Compact’s exclusivity provisions. Ariz. Att’y Gen. Op. I24-003 (Feb. 22, 2024).

Louisiana was faced with questions on HHR machines recently as well. A Louisiana court found that HHR machines could not operate in the state until the voters in the “parish where historical horseracing is to be conducted” approve it by majority vote consistent with Louisiana’s constitution. Fremin, et al. v. Boyd Racing, LLC, et al., Docket No. C-725,007 (19th Judicial Dist. Ct., Parish of E. Baton Rouge, La., Feb. 27, 2024). The Louisiana court also determined that the Louisiana Legislature’s passage of a 2021 act authorizing HHR machines was unconstitutional since there was no vote. Id.

These two recent examples of HHR machines’ permissibility illustrate the state-specific issues that legislation authorizing HHR machines may continue to face.

Sports Law

Louisiana Could Be Second Seat at the Table for Ban on Sports Betting Advertisements

By Megan Carrasco, Snell & Wilmer

Last month, Kansas state representatives introduced a bill to become the first state to ban gaming advertisements online. This month, a Louisiana state representative introduced House Bill 727 to completely ban all sports betting advertisements.

Unlike the Kansas bill, the Louisiana bill, HB 727, does not have bipartisan support. Its only sponsor is the representative who introduced it.

If enacted, HB 727 would likely prohibit fantasy sports and sports wagering licensees from advertising their respective products in any format. Again, in contrast to the Kansas bill, the text of the Louisiana bill appears to ban advertising in any form, not just online. The Louisiana bill includes provisions that require license revocation in the event that a licensee violates the ban on advertising. There appears to be no discretion or warnings.

In an interview, the sponsor of the Louisiana bill explained that he introduced the bill to “help gambling addicts” because it is the first step to reducing gambling addictions while not being an outright gaming ban. The bill’s sponsor acknowledged that HB 727 is not particularly business friendly—especially given the considerable investment in Louisiana gaming from large casinos like Harrah’s Hotel & Casinos.

The Louisiana bill may be signaling a shift from state legislatures on the pervasiveness of gaming advertisements. While the trend does not yet have sweeping public support, state representatives are sufficiently concerned, as evidenced by the fact that it is no longer a lone state making a run at the casino industry.

As of April 1, 2024, HB 727 has been referred to the House Committee on Administration of Criminal Justice.