<p>District Attorney Ravitch Announces Multimillion-Dollar Judgment Against Pong Game Studios, Permanently Halts Illegal Gambling Operation</p><p></p>

Sonoma County District Attorney Jill Ravitch today announced that her office, in conjunction with California Attorney General Rob Bonta, and multiple District Attorneys throughout the state, obtained a multimillion-dollar stipulated judgment against Pong Game Studios Corporation (Pong). Under the terms of the judgment, Pong will pay $3.5 million in civil penalties, costs, and attorney fees, and is ordered to permanently halt its illegal gambling operations in California.

District Attorney Ravitch stated, “The Sonoma County District Attorney’s Office is proud of our work with Attorney General Bonta, and prosecutors throughout the state, in securing this important result. Illegal gambling operations prey on vulnerable communities and attract crime to our neighborhoods.”

Pong provided gambling software to sweepstakes cafes throughout California, including in Santa Rosa. These cafes operate as mini-casinos, offering interactive gambling-themed games on computer gambling devices, which are predominantly marketed to vulnerable, low-income consumers. Lured by the interactive gameplay of casino-style games, patrons paid money for the opportunity to win cash prizes. In California, these sweepstakes cafes have become synonymous with illegal local gambling dens operating under the guise of lawful promotional sweepstakes used to prey upon unsuspecting consumers. The American Gaming Association estimates that the sweepstakes cafe “industry,” earns more than $10 billion a year through unlawful gambling operations that are located in the storefronts, strip malls, and commercial districts of cities and towns across the United States. Under California law, the gambling software offered on these sweepstakes systems constitute unlawful slot machines or gambling devices. Despite a ruling by the California Supreme Court in 2015 expressly declaring that the use of sweepstakes gambling systems was unlawful, Pong, undeterred by previous law enforcement efforts, continued its unlawful gambling operations.

California prosecutors filed suit against Pong in 2016 in Solano County Superior Court under the California Unfair Competition Law and False Advertising Law. As part of the lawsuit, prosecutors sought, among other things, to permanently halt Pong’s illegal activities in the state and civil penalties for Pong’s manufacture, distribution, and use of illegal gambling devices, and deceptive acts or practices in connection with the marketing and licensing of those devices in California. Pong may also be held liable for as much as $15 million if it fails to comply with the terms set out in the final judgment. In addition, Pong is required to relinquish all rights to seized assets described in the complaint and the California Department of Justice is authorized by law to destroy all such seized equipment.

District Attorney Ravitch was joined in the prosecution of the case by California Attorney General Rob Bonta, and the District Attorney’s Offices of Contra Costa, Fresno, Kern, Merced, Riverside, San Diego, Solano, and Tulare, as well as the Los Angeles City Attorney’s Office.

Deputy District Attorney Matt Cheever handled the matter on behalf of the Environmental and Consumer Protection Division (ECLD) of the Sonoma County District Attorney’s Office. Consumers may report false advertising or unfair business practices to ECLD by calling (707) 565-5317 or emailing ECLD@sonoma-county.org.

Case information: People v. Pong Marketing and Promotions, Inc., et al., Case No. FCS047090, Solano County Superior Court.