How Sweepstakes Registration and Bonding Works for Businesses

Sweepstakes can boost brand recognition and increase people’s interest in what companies have to offer. They also encourage entrants to have fun and feel excited, given the inherent element of chance. Depending on where a brand operates, it’s essential to know who handles sweepstakes registration and bonding requirements.

Get Professional Guidance

Legal mistakes can cause companies to lose out on all the benefits of running sweepstakes. One of the best ways to avoid issues is to hire specialists who understand the intricacies of this area of law and can guide clients through them. This ensures that organizations can follow the necessary steps to maintain legitimacy and avoid pitfalls. Those involved in these promotions can then obtain clarification about the best course of action, based on entrant eligibility location and the value of the prizes offered.

The professionals at Olshan have built a nationally recognized advertising, marketing and promotions practice, making them highly capable of dispensing proactive legal advice to build and protect brands. They can assist entities in developing and implementing sweepstakes while remaining compliant.

Who Handles Sweepstakes Registration and Bonding Requirements?

When hiring legal professionals, such as those at Olshan, business professionals often need to clarify their promotional plans. Sweepstakes differ from contests in that people win them by chance, whereas their counterparts typically involve a skill-related element. Sweepstakes also do not require individuals to make purchases or pay to enter, but many contests have associated fees.

New York, Florida and Rhode Island require applicable businesses to register their sweepstakes, but not in every instance. The former two states require entities to do so when the total prize value awarded exceeds $5,000. The Department of Agriculture and Consumer Services oversees registrations in Florida, while the Department of State is the relevant entity in New York and Rhode Island.

More State-Specific Registration Details

Filing the paperwork is one of several conditions required to keep sweepstakes legal. Florida requires the registration to occur at least seven days before the event. That relatively short window emphasizes why it is essential to know who handles sweepstakes registration and bonding requirements in your location, and strongly consider allowing experienced legal professionals to handle the necessary filings.

Florida and Rhode Island’s requirements also stipulate that businesses must register if they make their sweepstakes open to the state’s residents, even if the brand associated with the promotion operates elsewhere. Rhode Island has additional specifics, such as registration requirements that apply to retail businesses operating sweepstakes with a total prize value exceeding $500.

Mandating sweepstakes registration ensures fairness for participants. Although the submission requirements vary slightly among the three states, they require applicants to provide numerous details, such as how the game will run and entrants’ odds of winning. Transparency about those details increases confidence through visibility.

Legal professionals from Olshan assist clients in preparing the necessary paperwork, reducing the possibility of initial rejections due to incompleteness or other issues. They can advise how to write a game’s rules for maximum clarity. Those details are crucial because businesses cannot change them once a sweepstakes begins, and applicants must provide this information when registering.

Get to the Bottom of Bonding Basics

Bonds in the context of games of chance provide assurances that those running these promotions will award the prizes as promised. Rhode Island does not have a bonding requirement, but New York and Florida do.

Parties operating games of chance open to Floridians must include surety bonds or statements of trust with their registrations. However, the state may waive that requirement for entities that have conducted sweepstakes in Florida for at least five consecutive years, provided that they have not violated the rules during that period.

New York requires the submission of a Game of Chance Surety Bond or Certificate of Deposit with each sweepstakes registration. Those running sweepstakes in either state must get bonds for the value of prizes awarded.

Follow the Specifics When Confirming the Winners

Businesses planning sweepstakes in states with bonding requirements must abide by additional rules even after the sweepstakes has concluded. New York requires operators to certify winners within 90 days of completion by submitting the names and addresses of all parties who won prizes valued at $25 or more. This step occurs when affected parties file paperwork with the Department of State, and the submitted documents must also describe the prize and when the winner received it.

Florida is similar but has a few more rules. The certified winners’ list must be submitted to the Department of Agriculture and Consumer Services within 60 days of the sweepstakes’ conclusion. This document contains the names and addresses of all parties who received prizes valued at $25 or more. It also includes the value of each prize and the date on which it was won.

The sweepstakes operator must fulfill the request of anyone seeking a list of winners and provide it at no charge. Alternatively, that entity has the option of publishing the details in a Florida general-circulation newspaper within 60 days of determining the winners. Businesses choosing that option must provide a certified copy of the relevant publication to the authorities. Finally, they must keep the winning entries for at least 90 days after a sweepstakes finishes.

Let Legal Professionals Lead the Way

These state-specific details reveal why representatives from businesses running sweepstakes must know much more than who handles sweepstakes registration and bonding requirements before proceeding. Failing to follow all the requirements could result in penalties and damage to the brand, especially if the shortcomings lead consumers to doubt their trust in the respective companies. Hiring experienced legal professionals from Olshan can help organizations follow law-related mandates to keep these games of chance fair, fun and transparent.