Government Affairs Update - February 2012

Oklahoma Video Game Tax (H.B. 2696)

EMA provided an analysis to Oklahoma state legislators considering a video game tax (House Bill 2696). The bill would have imposed additional 1% sales and use taxes on sales of “violent video games” (defined as those rated “Teen” and above) in the state to fund outdoor education and anti-bullying programs for children.

EMA’s analysis noted that singling out certain video games for disparate taxation based on their content is likely unconstitutional. It also informed the legislators that the “Teen,” “Mature,” and “Adults Only” ratings do not necessarily mean that a game contains depictions of violence and that a state cannot give the voluntary ratings the force of law. Finally, the analysis indicated that the implications in the bill that video games lead to obesity and bullying are not supported by scientific consensus.

The bill was rejected in committee.

U.S. v. Alvarez

EMA signed on to a “friend of the court” brief in the U.S. Supreme Court case of U.S. v. Alvarez, which is a challenge to the federal Stolen Valor Act. The Stolen Valor Act makes it a federal offense to claim to have received a military decoration that one did not actually earn.

In the “friend of the court” brief, EMA and others argue that the Stolen Valor Act violates the First Amendment’s guarantee of freedom of expression by criminalizing non-fraudulent false statements. The brief argues that, if the government’s position that non-fraudulent false statements are not protected by the First Amendment and may be restricted were to be adopted, it would allow governments “to restrict any false factual speech in which the government can plausibly claim a ‘strong interest.’” This could conceivably allow governments to punish retailers and distributors for selling movies and other entertainment containing false statements that the government finds objectionable.

The U.S. Supreme Court heard oral arguments in the case in February. A ruling is expected by the end of June.

Video Privacy Protection Act Amendment (H.R. 2471)

EMA provided the Senate staff handling the consideration of the Video Privacy Protection Act Amendment (H.R. 2471) with the letter EMA wrote to House Judiciary Committee Chairman Lamar Smith taking issue with statements about the home video industry contained in the House report accompanying the bill. The staff were provided the letter in advance of a Senate hearing on H.R. 2471.

The House report stated that video stores are obsolete and that they have been replaced by cable and internet video-on-demand. EMA’s letter noted that industry statistics show that traditional video stores captured 26% of the rental market in 2010, belying the assertion that they are obsolete, and that packaged home video accounted for 42% of the consumer motion picture and video spending in 2010, which far outpaced the cable and internet video-on-demand markets.

Brown v. EMA

In the final installment of the successful challenge to the 2005 California video game restriction law, the state of California agreed to pay the Entertainment Software Association (ESA) $950,000 to reimburse ESA for the costs and fees it incurred in challenging the  law before the Supreme Court. When reimbursements for lower court costs and fees are considered, the total state reimbursement to ESA was more than $1.3 million. ESA will use a portion of the reimbursement to fund after-school educational programs for underserved communities in two California cities.

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