I thought I’d take a break from our Sweepstakes Boot Camp series to look back at the most popular Sweepstakes Law Blog posts over the last year. I ran the analytics on our site, and the results are illuminating.

Our readers are clearly drawn to information about sweepstakes fundamentals, such as registration and consideration. But they’re also interested in more cutting-edge topics, like Facebook promotions and ongoing questions surrounding the concept of vote farming.

I also see that blog visitors flocked to my Q&A with Liz Compton, the chief of the Bureau of Compliance at the Florida Department of Agriculture and Consumer Services. It appears many of you are keen to know more about marketing promotions in Florida, home to some of the country’s most stringent regulations for sweepstakes and contests.

What other blog topics should I tackle over the next year? E-mail me at djoerling@thompsoncoburn.com, or tweet me a suggestion at @SweepsLawBlog.

Top 10 Sweepstakes Law Blog posts: March 2012-March 2013

1. Do you need to register your sweepstakes?
2. Are you violating the Facebook contest rules?
3. Consider this: How do states define “Consideration”?
4. Consult this checklist before promoting your next sweepstakes
5. 5 pitfalls of refer-a-friend sweepstakes options
6. ‘Void in California’ no more: Alcohol beverage producers free to market sweepstakes
7. Lawyer who lost $100,000 contest prize spurs debate about ‘vote farming’
8. The IRS wins every sweepstakes
9. An exclusive interview with Florida’s top sweepstakes regulator – Part One
10. An exclusive interview with Florida’s top sweepstakes regulator – Part Two

Dale Joerling is the chair of Thompson Coburn’s Advertising, Marketing and Promotion Law group. He is editorial director of the Sweepstakes Law Blog. You can find Dale on Google+ and Twitter, and reach him at (314) 552-6058 or djoerling@thompsoncoburn.com.

It’s not too late to register for our free upcoming webinar on Oct. 10. This one-hour session will provide a great overview of the legal issues surrounding sweepstakes, contests, and other type of promotions.

For attorneys, the webinar can qualify as CLE in a number of jurisdictions. For non-attorneys, it simply provides a helpful introduction to sweepstakes law. And it’s all offered through TCLE, Thompson Coburn’s user-friendly webinar series.

Our webinar will focus on the following questions:

• - How do I make sure that my sweepstakes is not illegal gambling?
• - Do I need to register it in any states?
• - What is the difference between a sweepstakes and a contest?
• - What needs to be included in official rules?
• - What are the pitfalls that must be avoided?

Click here to register for “Sweepstakes, The Essentials: What You Need to Know.”

I will be leading the webinar with associate Felicia Williams. We hope to see you there!

Dale Joerling is the chair of Thompson Coburn’s Advertising, Marketing and Promotion Law group. He is editorial director of the Sweepstakes Law Blog. You can reach Dale at (314) 552-6058 or djoerling@thompsoncoburn.com.

For such a tiny state, Rhode Island packs a big regulatory punch for any company that fails to properly register its sweepstakes: a possible misdemeanor criminal charge. That penalty is nothing to sniff at, and it looms for any improperly registered Rhode Island sweepstakes with an approximate retail value of at least $500.

As the Sweepstake Law Blog has discussed previously, just three states in the U.S. require certain types of sweepstakes to be registered: Florida, New York, and Rhode Island. Of the three, Rhode Island arguably has the least stringent registrations laws. But it also has the lowest monetary threshold of the states requiring registration.

Under Rhode Island law, any game, contest or other promotion offering the opportunity to win prizes valued over $500 must be registered with the secretary of state if the promotion takes place in a retail establishment. In other words, if the total announced value of the prizes is in excess of $500, then the in-store sweepstakes must be registered. (This is in contrast to the $5,000 prize values that compel registration in both Florida and New York.) Regardless of the prize amount, Rhode Island does not require sponsors to post a bond or establish a trust account.

At the time of registration, the sweepstakes sponsor must pay a filing fee of $150 and provide all of the standard information requested, including:

• The minimum number of participating objects available;
• The minimum number of prizes available;
• The proportionate opportunity of winning prizes;
• The geographic area covered by the contest, and all its rules and regulations.

Sponsors should closely adhere to these procedures, as failure to register a qualifying sweepstakes is a misdemeanor criminal offense under Rhode Island law.

Like many other states, Rhode Island also requires that information be posted concerning the sweepstakes rules and available prizes. The information must be posted in a conspicuous and prominent location in every retail store that participates in the contest. In addition, once the contest has ended, the sponsor must keep records of each prize winner for at least six months – although the sponsor is not required to file a winners list. As with registration itself, failures to post this information and to maintain records constitute misdemeanor offenses.

The Rhode Island requirements are critical for any companies offering promotions that include any locations in the state. After all, it only makes sense that nationwide sweepstakes open to all U.S. residents must comply with the laws of all 50 states, as well as federal law.

Thompson Coburn’s sweepstakes attorneys have helped companies register numerous promotions in Rhode Island. If you need any assistance in making sure your sweepstakes is up to snuff in the Ocean State, please contact us.

Felicia Williams is an associate in Thompson Coburn’s Advertising, Marketing and Promotions Law group. You can reach her at (314) 552-6277 or fwilliams@thompsoncoburn.com.

In yesterday’s post, we met Liz Compton, the chief of the Bureau of Compliance at the Florida Department of Agriculture and Consumer Services.

Liz kindly agreed to an interview, and told us about her journalism background, her role in Florida’s job creation efforts, and the strangest sweepstakes she’s ever encountered: A promotion for a New York-style colonoscopy.

Today in our discussion with Liz, we tackle some real sweepstakes issues encountered by companies across the country who register their promotions in Florida. 

Dale Joerling:  If, for whatever reason, a sponsor does not register a sweepstakes that is required to be registered in Florida, what should it do if:

a. The sweepstakes has not begun, but the deadline for filing the registration has passed;
b. The sweepstakes has begun and is underway but no winners have been selected; and,
c. The sweepstakes is over, the winners have been selected and the prizes delivered?

Liz Compton: In all instances, you must file a registration.  Penalties will be assessed for late filings.

Dale Joerling:  What should a sponsor do if the actual value of a prize was estimated to be under $5,000 but turns out (after the sweepstakes is over) to exceed $5,000 and the sweepstakes has not been registered in Florida?

Liz Compton: If the prize amount adds up to more than $5,000 they have to register with the Florida Department of Agriculture and Consumer Services. If they don’t register seven days in advance of the start of the sweepstakes, they are subject to penalties. Sweepstakes with prizes close to $5,000 that could go over should err on the side of caution and register with the department.

Dale Joerling:  What are the most common mistakes made by those registering sweepstakes in Florida?

Liz Compton: The number one occurrence is not filing in a timely manner. Another issue we see is not properly identifying the promotion’s operator.

Dale Joerling: How do you define “operator”? How do sweepstakes registrants fail to properly identify the operator? Can you give an example?

Liz Compton: An “operator” is any person, firm, corporation, or association or agent or employee thereof who promotes, operates, or conducts a game promotion, except any charitable nonprofit organization.  The operator noted in the rules is not always the operator noted on all other filing documents (application and financial security). Here’s a few examples of the operator not being properly identified on the filing documents: The promoter will list their company as the operator, a subsidiary of the operator would be listed as operator, or an entirely different company not mentioned in the rules as operator would be noted on all other filing documents.

Dale Joerling:  If a 12-month sweepstakes has a drawing every month from all accumulated entries (i.e. entries that were received from the beginning of the promotion) and the prize is $1,000 at each drawing, must it be registered in Florida? Or are these drawings considered separate sweepstakes that do not meet the dollar amount of the registration threshold? 

Liz Compton:  If your monthly entries are included in all subsequent drawings, this would be considered one promotion and one filing would need to be provided. The total of all prizes for each month must be added together for all months to arrive at the grand total. Based on the $1,000 prize example, you would need to file one promotion valued at $12,000. 

Dale Joerling:  What about monthly drawings from only from the entries received during each month of the promotion?

If your monthly entries are not included in any subsequent drawings, each month would be considered a separate promotion. Filing would be required for only those months in which the total of all prizes offered exceeds $5,000.  Based on your example, filings would not be required since there are no months during which the prize total exceeds $5,000.

Anyone with questions may contact the Florida Department of Agriculture and Consumer Services at:
1-800-HELP-FLA (435-7352) - Florida only
1-800-FL-AYUDA (352-9832) - En Español
850-410-3800 - Calling from outside of Florida

Dale Joerling is the chair of Thompson Coburn’s Advertising, Marketing and Promotion Law group. He is editorial director of the Sweepstakes Law Blog. You can reach Dale at (314) 552-6058 or djoerling@thompsoncoburn.com.

In this 2003 file photo, instant sports pariah Steve Bartman bungles a potential catch by Cubs outfielder Moisés Alou. (AP Photo/Amy Sancetta)

Baseball fans love clambering for soaring fly balls, and it’s generally a harmless endeavor. Except when the entire happiness of a Word-Series-bereft ball club depends on it. In the infamous Steve Bartman Incident, a spectator’s impulsive grab for the ball interfered with a possible out by Cubs left fielder Moisés Alou. Right idea, Steve; wrong time.

In sports, as in sweepstakes, the lesson holds true: Sometimes trying to do the right thing at the wrong time can lead to trouble.

That’s what happened recently when a client asked us to help create a relatively standard nationwide sweepstakes. The online sweepstakes offered an alternative mail-in entry method. The prize? A to-die-for winter vacation package to the Caribbean.

We told the client that awarding a travel vacation package for only one person was unusual. Typically a travel prize of this type included two people. However, the marketing budget apparently would only allow a prize for one person’s travel.

The prize, which included airfare, hotel, meals, and ground transportation, etc., was valued at $3,500. Because the prize’s Approximate Retail Value (ARV) was well below the $5,000 threshold for registration under New York and Florida’s statutes, the client didn’t need to register the sweepstakes in either of these states.

The nightmare began about three weeks into the five-week term of the sweepstakes. The client’s in-house lawyer reviewed the ads for the promotion and discovered that the prize had been increased from a trip for one to a vacation for two. And the ads listed an ARV of $5,200.

In a frantic telephone call to the marketing department, the in-house lawyer learned that, at the last minute, the company’s marketing department had decided to follow our advice, increased the prize package and revised the official rules accordingly.

But because the ARV of the prizes exceeded $5,000, they had unwittingly created a sweepstakes that should have been registered in both Florida and New York but wasn’t.

I explained to the perturbed in-house lawyer that the best way to deal with the failure to register this sweepstakes was to immediately contact the regulators in both New York and Florida and be completely upfront with them. We called both states and explained the situation. While the client did incur nominal fines, the effects of failing to register could have been much worse if the regulators had discovered this on their own.

What could have been done to prevent this nightmare from occurring?

Here are a few suggestions:

1. Make certain marketing personnel realize that no changes can be made to the official rules, abbreviated rules, ads, etc., after they are approved by the legal department, unless the same lawyers specifically approve the changes.

2. Also, make certain the marketing department understands that if the ARV of the prizes exceeds $5,000 and the sweepstakes is available in New York or Florida, it will probably need to be registered in those two states before it can be launched.

3. Be honest and up-front when dealing with enforcement personnel in New York and Florida (or any other state or federal authorities who have jurisdiction over your sweepstakes). I have found these people to be very understanding and appreciative if you are straightforward with them about your compliance with their regulations.

4. Carefully check the ads, e-mails, point-of-sale signage and other promotional materials that will be used in connection with a sweepstakes. Confirm that they do not conflict with or misrepresent the official rules, and that all disclaimers are accurate and appear in a clear and conspicuous manner.

5. Circle back with the marketing people responsible for the sweepstakes two days before the launch date to determine if there are any problems, questions or potential changes they want to make to the sweepstakes.

In most instances, changes can be made to a sweepstakes virtually up until the time it is launched. If the promotion must be registered, however, changes can only be made up until the registration is filed.

After a sponsor launches a sweepstakes, rules changes are generally not an option. If changes are absolutely necessary, consult an experienced sweepstakes lawyer.

Please note: We compiled this example from some of our actual cases. We modified the products and details to protect the parties’ privacy.

Dale Joerling is the chair of Thompson Coburn’s Advertising, Marketing and Promotion Law group. He is editorial director of the Sweepstakes Law Blog. You can reach Dale at (314) 552-6058 or djoerling@thompsoncoburn.com.

Do sweepstakes need to be registered? Yes. In fact, there are three states that require certain types of sweepstakes be registered before they can be implemented in their state. These states’ regulations include significant fines for companies that fail to comply.