GT Alert

Florida Relaxes Sweepstakes Advertising Rules; New York Steps Up Sweepstakes Enforcement

December 2005

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The law in Florida has recently become more hospitable to advertisers of sweepstakes and other promotional games of chance. Until now, Florida has required that the full official rules of any game promotion be printed in all advertising. However, effective November 22, 2005 print advertisements of games of chance or sweepstakes in Florida need only include the “material terms” of the promotion, rather than the complete rules of the promotion or sweepstakes, so long as the advertisement also includes a website address, toll-free telephone number or mailing address from which the full rules can be obtained. Although the law itself does not define what terms in the official rules are “material”, the Department of Agriculture and Consumer Affairs, which regulates games of chance in Florida, has determined that at least the following five (5) terms are material:

(1) Name of the promotion and operator;

(2) A statement that “no purchase is necessary to enter or play the game or promotion”;

(3) Start and end dates;

(4) Eligibility requirement with respect to age and geographic locations;

(5) Disclosure of where the game promotion is void.

Depending on the facts or circumstances of a given promotion, other terms and conditions also may be material, and a game operator should consult with knowledgeable counsel when preparing advertising materials.

Although the change in Florida law eases the burden on advertisers of promotional games of chance, Florida still requires promoters to file with the Department of Agriculture and Consumer Affairs, a copy of the complete rules and regulations at least seven days before launch, and promoters must still post the entire set of rules at all retail locations where a person can enter the game if the value of the prize exceeds $5,000.

Meanwhile, New York State Attorney General Eliot Spitzer has stepped up its enforcement of New York games of chance and advertising laws to challenge some sweepstakes activity. In a May 2005 settlement agreement joint sponsors paid $50,000 each in penalties as a result of a sweepstakes rule that stated “By completing the form, entrant grants [Sponsor] permission to place courtesy calls to their household to offer more information and a free estimate for [Sponsor’s] products and services. This permission supersedes any provision or subsequent registration on any state or federal ‘Do Not Call List.’” The official rules for this sweepstakes were not printed on the entry form and according to the NY Attorney General were likely never seen by the consumer.

In a different case a sponsor agreed to injunctive relief where the sweepstakes rules provided a “free method of entry,” but many of the outlet stores had no such free method and had no copy of the complete rules. In yet another case, fines of $123,000 were agreed to by a sponsor whose print and television advertisements stated “no purchase necessary” in fine print at the bottom of the page and screen as juxtaposed with prominent placement given to the instruction, “For your chance to win, buy [Sponsor’s] product.”

As these enforcement actions illustrate, complying with the basic requirements of the New York games of chance laws (which require bonding and registration of sweepstakes where the prize exceeds $5,000) is only the first step. All advertisements in all mediums must be carefully vetted for compliance with advertising laws. Sweepstakes rules should not be used as vehicle for waiving consumer protection measures such as the “do not call” lists. Additionally, staff at retail outlets, where a consumer can enter the game, must be made knowledgeable about the free method of entry.

This Alert was written by Alan Sutin in the New York office and Judy Scolnick in the New Jersey office. Please contact Mr. Sutin at 212.801.9286 or Ms. Scolnick at 973.360.2364 or your Greenberg Traurig liaison if you have any questions regarding the subject matter of this Alert.

© 2005 Greenberg Traurig

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