Recent revisions to Florida’s Game Promotion statute (Florida Section. 849.094, F.S.), which became effective on April 10, 2013, were intended to prohibit the controversial practice of operating electronic sweepstakes cafes from within the state but instead may have unintended consequences for companies and non-profits that regularly open up their sweepstakes to residents of Florida. The specific changes to the Game Promotion statute definitions that will change the way brands and non-profit organizations operate sweepstakes in Florida include the following:
- A game promotion may only be conducted by a for-profit commercial entity on a limited and occasional basis as an advertising and marketing tool in connection with and incidental to the bona fide sales of consumer products or services.
- Non-profit entities and charitable organizations may not operate a game promotion.
With these changes, Florida appears to be telling for-profit companies that offer sweepstakes as a marketing tool that they should only be offering sweepstakes to residents of Florida on a limited and occasional basis and incidental to substantial bona fide sales of consumer products or services. Neither the revised Game Promotion statute nor the legislative history shed light on what is meant by the terms “limited” and “occasional”. Until such time as the Florida Department of Agriculture and Consumer Services (who is charged with enforcing the Florida Game Promotion statute in the state) provides guidance on what is meant by the terms “limited” and “occasional”, companies should be careful not to offer sweepstakes that are open to Florida residents on a regular or continual basis. Edwards Wildman is working with the Promotional Marketing Association (recently rebranded as the Brand Activation Association) to obtain positive clarification from the Florida regulators at the Florida Department of Agriculture and Consumer Services so that legitimate brands and companies can continue to operate sweepstakes within the state without fear of enforcement.
Also, with the apparent outright prohibition on operating sweepstakes by non-profit entities and charitable organizations, Florida will become the first and only state to prohibit charities and non-profits from offering legitimate sweepstakes to its residents.
Unfortunately, for those hoping that Florida would eliminate the requirements with respect to registration and bonding of a sweepstakes that offers prizes valued at over $5,000, you will be disappointed, as this portion of the Game Promotion statute went unchanged. In case these requirements are new to you, in Florida, each sweepstakes sponsor must submit registration materials (including final official rules), a $100 filing fee and a surety bond for the stated value of all prizes to the Florida Department of Agriculture and Consumer Services at least seven (7) calendar days in advance of the start of the sweepstakes (which is strictly enforced and companies are subject to fines for failure to comply). Also, full rules for such a promotion must be posted in every retail location in Florida where the promotion may be participated in or played.Note that instead of posting a bond, the sponsor can get a bond waiver in Florida by proving it has run sweepstakes in Florida without incident for the past five (5) consecutive years (typically by registering promotions previously and fulfilling all requirements without being subject to a fine).For the bonding requirements, sponsors typically use a surety or insurance company to issue the bond and the surety usually requires a power of attorney form, short indemnity agreement to issue the bond, and financial statements if the stated value of the prizes is large enough.Also, for sweepstakes that must be registered and bonded in Florida, Florida requires filing of a list of all winners for prizes valued at more than $25 within sixty (60) days after winners are finally determined, including each winner’s name (at least first initial and last name), full address, prize description and date the prize was awarded.