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Florida Tightens Restrictions On Sweepstakes Registrations Though it has only had jurisdiction over game promotions since July 1, 2001, early observations indicate that the Florida Department of Agriculture and Consumer Services (the "DACS") will be taking a radically different approach to enforcement than did the Florida Department of State (the "DOS"). Based upon informal discussions with the DACS via an industry trade group, and based upon trade members' experiences to date, it appears as if the DACS has more stringent interpretations of various provisions of Florida Statutes §849.094 ("§849.094"). The following represents some areas that the DACS has indicated will be strictly enforced. Recently, a number of game sponsors attemptingto register their promotions in Florida, have had their sweepstakes filing materials rejected because of failure to include a provision in the official rules stating that "all prizes will be awarded." According to §849.094(2)(c), "[i]t is unlawful for any [game promotion] operator to...fail to award prizes offered." This provision has particular significance in instant-win promotions because it means that any leftover/unclaimed prizes at the end of the redemption period must be awarded in a random drawing, and this must be stated in the official rules. Internet programs are impacted as well, because such programs usually have language that allows the sponsor to cancel the program due to electronic malfunctions, bugs or errors. If such Internet language is present, there must now be language in the official rules stating that prizes that are not awarded due to reasons that are beyond the control of the operator will be awarded by some other mechanism-such as a random drawing. Previously, under the aegis of the DOS, game operators were permitted to make changes to the official rules up until the start date of the promotion without penalty. That will no longer be permitted. The DACS will not permit any changes to the official rules anytime inside the seven-day filing period. The DOS would also accept registration packages that were incomplete. For example, it was common practice to send the rules, registration form and filing fee to the DOS in advance of the seven-day filing period, and send the bond "under separate cover" some time before the start date of the promotion. The DACS has abandoned that policy and will require that all materials-rules, registration form, filing fee and bond-be present in the registration package, seven days before the start date of the sweepstakes. § 849.094(4)(b) states that game promotionsponsors may waive the bonding requirement if that sponsor has conducted game promotions in Florida for five consecutive years and has had a bond issued for each promotion during that period. The DOS interpreted this provision to mean that all entities of a filing corporation-such as the corporation's subsidiaries, affiliates, etc. - could apply for the bond waiver. The DACS, however, has been rejecting bond waiver applications if the filing entity itself was not theentity that filed bonds for five years. It, therefore, appears that bond waivers will now be granted only to the specific business entitythat has actually filed the bond for the required 5 consecutive years. Furthermore, when filing a bond waiver form, the DACS has informed some applicants that it is necessary to file an original bond waiver form, as opposed to a copy of the form, which was acceptable under the DOS enforcement practices. To make the application process even more onerous, the DACS has indicated that game promotion titles and game promotion dates must be consistent across all filed documents. In other words, the title of the game promotion must be exactly the same-word-for-word-on the application, bond/bond waiver and official rules. Likewise, the start and end dates of game promotions must be consistent on the application and official rules. It is also advisable that in a food-claim promotion that the food-claim date be the same as the end date of the promotion. The DOS was primarily concerned with consistency of dates between the application and the official rules. § 849.094(3) states that "[t]he operator of a game promotion shall conspicuously post the rules and regulations of such game promotion in each and every retail outlet or place where such game promotion may be played or participated in by the public and shall also publish the rules and regulations in all advertising copy used in connection therewith. Radio and television announcements may indicate that the rules and regulations are available at retail outlets or from the operator of the promotion." There have been varying interpretations of this provision in the past, such as requiring full rules on all point-of-sale materials and in all print advertisements. More recently, the DOS stated that it was permissible to use abbreviated rules on point-of-sale materials, as long as full rules were posted elsewhere at the point-of-sale, and consumers were told where they could obtain the official rules. The DOS always required that the full official rules appear in all print advertisements distributed in the state. The DACS position on this issue is currently unclear, but, based upon their tightening of restrictions in other areas, it appears likely that they will require full rules on point-of-sale materials. We hope that following the above guidelines and discussing any other outstanding issues with DACS will clarify any remaining ambiguities as to DACS interpretation and enforcement of the Florida sweepstakes laws. © 2001 Davis & Gilbert LLP |
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