There are specific requirements for operating a contest or sweepstakes in certain states and provinces when the element of chance, prizes and the sale of products or services are present. This is something that is often overlooked by companies who are not familiar with running game promotions, but government regulations and stiff penalties apply when the requirements are not met. The following outlines the general guidelines for surety bonds and registration requirements for contest or sweepstakes promotions. However, like most aspects of a contest, support from a great games company (like WSP) will alleviate any issues and ensure the proper government requirements are met.
The purpose of registering and or creating a bond for a game promotion is to protect consumers against fraud or companies failure to redeem prizes due to lack of resources or other reasons. Which is why there are not only registration and bond requirements, in most cases a specific list of winners is required to be filed after awarding the prizes.
New York Contest Requirements
In New York, when the total value of prizes for the duration of a game promotion exceeds $5,000, contest administrators are required to register and bond their contest with state authorities. The Secretary of State requires contest administrators to file their official rules and the details outlining their game promotion 30 days prior to the launch of the promotion. A filing fee also applies and a trust account or surety bond must be obtained in the amount equal to the total prize value offered.
Florida Contest Requirements
In Florida, the same requirements as New York occur however, contest administrators file to the Department of Agriculture and Consumer services. The only other difference is that the registration and bond must be filed at least 7 days before the start of the promotion. But like New York, a filing fee also applies and a trust account or surety bond must be obtained in the amount equal to the total prize value offered.
Rhode Island Contest Requirements
Rhode Island statute requirements are slightly different. Contest administrators must file an application and official rules with the Secretary of State along with a filing fee. There is no trust account or surety bond requirement. Registration is only required if the game promotion is conducted in a retail establishment with prizes exceeding $500.
Arizona Contest Requirements
In Arizona, contest administrators are required to complete a registration form that outlines the contest details and submit to the Arizona Attorney General. They must also submit a sworn statement under oath that no addition has been added to the determined purchase price for the product in affiliation with the contest. Within 10 days of awarding all prizes, the names and addresses of the winners must also be submitted.
Quebec Contest Requirements
In Canada, those who decide to run a contest in the province of Quebec must abide by the regulatory laws of the Régie des alcools, des courses et des jeux (Régie). If the contest prize value is greater than $100, contest administrators are required to submit contest details to the Régie. There is a registration requirement to the Régie if the total prize value exceeds $2,000. The official rules and other contest details must be filed at least 10 days before the start of the contest. A 10% fee of the total prize value is imposed when the contest is open to residents from Quebec only. This fee becomes 3% when the contest is open to contestants from Canada only including Quebec. Lastly, 0.5% is enforced when the contest is open to any group of contestants including Quebec.
You may notice that some game promotions exclude these states and provinces from participating. That is because many companies would rather avoid the fees and hassle that comes with it. However, from our experience, because Quebec, New York and Florida customers are so often prohibited from playing in national promotions, customers in these areas are often the hungriest for these types of promotions, which can turn into big benefits and sales returns.
For more information, check out the Department of Agriculture and Consumer Services page at: http://www.freshfromflorida.com/Divisions-Offices/Consumer-Services/Business-Services/Game-Promotions-Sweepstakes2 or NY Secretary of State page at: http://www.dos.ny.gov/corps/miscregs.html or the Regie at: http://legisquebec.gouv.qc.ca/en/ShowDoc/cr/L-6,%20r.%206 or the Arizona Attorney General page at: https://www.azag.gov/consumers/raffles.