One of the core administrative services necessary when a sweepstakes prize structure exceeds $5,000 is the registration and bonding of the promotion in Florida, New York and potentially Rhode Island depending on the nature of the concept structure. Much to the chagrin of marketers in for-profit companies, the recent revisions to Florida’s Game Promotion statute which became effective April 10th does not absolve marketers of this requirement.
The revisions were created for an altogether different purpose. Florida has seen a steady increase in the volume of electronic sweepstakes cafes and thus put in place legislation aimed to prohibit this practice and shut down tenacious café owners who have allegedly been misinforming patrons. Nevertheless there are few details that may have created unintended limitations for legitimate marketers as noted below.
Before we discuss the potential the impact of the change it may be helpful to review how you will remain compliant.
- Each for-profit sponsor will continue to submit registration materials consisting of FINAL official rules, a filing fee and a surety bond for the stated value of all prizes to the Florida Department of Agriculture and Consumer Services.
- These are due at least seven calendar days prior to the start date of the promotion (this has not changed). Sponsors continue to face a fine for non-compliance within this time period, and it is strictly enforced.
- A lesser known part of the statue deals with obtaining a bond waiver. If the sponsor has run a promotion for five consecutive years in the state of Florida without incident you may file a bond waiver. Incidents refer to administrative violations, typically failing to register in time for a previous promotion or not closing out the promotion by providing a winners list. They have nothing to do with the performance, perceptions or commentary by consumers about the creative or offer.
- There is also no change to the need to present Florida with a winners list of all winners for prizes valued at more than $25. This is due no later than sixty days after winners have been finalized
So what has actually changed? If you are a for-profit sponsor, the rules say you can only use sweepstakes occasionally among other tactics in your marketing toolbox. Occasional use may be the first area of the new law that is tested and further defined in the coming months. But if for example you want to run consecutive sweepstakes over a long period of time you will want to do some legal due diligence on whether or not what you meet the requirements.
We’ll update this information as we learn more from industry associations such as the Brand Activation Association, formerly the PMA. For more information on this and other issues related to registration and filing of promotions please contact Marden-Kane, via firstname.lastname@example.org.
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