Bonding and Registration

Promotional contests and sweepstakes have become increasingly popular marketing tools due to their ability to generate significant publicity and enhance brand visibility at a low cost. However, when designing a sweepstakes, it’s crucial to consider the total prize value, as exceeding certain cash or cash-equivalent thresholds can trigger mandatory registration and bonding requirements in states like Florida, New York, and Rhode Island.

These legal obligations are often overlooked by companies unfamiliar with game promotions, but non-compliance can result in government penalties and other legal repercussions. The primary purpose of registration and bonding is to protect consumers from fraud or a company’s inability to deliver prizes due to financial constraints. Therefore, in addition to registration and bonding, companies are required to file a list of the winners after prizes have been awarded.

State-Specific Requirements

New York

In New York, if the total value of prizes (ARV) for a promotion exceeds $5,000, the contest must be registered and bonded with state authorities. Contest administrators are required to submit the official rules and promotional details to the Secretary of State 30 days before the promotion begins. A filing fee is also required, and a trust account or surety bond must be secured for an amount equal to the total prize value.

Florida

Florida has similar requirements to New York, but filings are made with the Department of Agriculture and Consumer Services. The key difference is that registration and bonding must be completed at least 7 days before the promotion starts. Like in New York, a filing fee is required, and a trust account or surety bond must be secured for the total prize value.

Rhode Island

In Rhode Island, the requirements differ slightly. Registration is only necessary if the promotion is conducted in a retail setting with prizes exceeding $500. Contest administrators must file an application and official rules with the Secretary of State, along with a filing fee. There is no requirement for a trust account or surety bond in Rhode Island.

Arizona

In Arizona, for a contest that includes the purchase of a product, administrators must complete a registration form detailing the contest and submit it to the Arizona Attorney General. They must also provide a sworn statement under oath confirming that no additional costs have been added to the product price due to the contest. Additionally, within 10 days of awarding prizes, the names and addresses of the winners must be submitted.

Quebec, Canada

Marketers rejoice, as of October of 2023 there are no longer any requirements to register, bond or even report winners in the Canadian province of Quebec. Nor does one need to have anything translated to be legal. What once was the typical “excluded in Quebec” notice on nearly all sweepstakes and contests has now passed. So go ahead and include Quebecois who’ve been waiting a long time to participate!

Exclusions

You may notice that some game promotions exclude certain states or provinces from participation. This is often because companies prefer to avoid the associated fees and administrative burden. However, from our experience, customers in areas like Quebec, New York, and Florida—where national promotions frequently exclude them—tend to be highly enthusiastic about such opportunities, leading to significant benefits and sales returns for businesses willing to engage these markets.

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