Games of chance having a total prize pool over $5,000 or more are typically subject to bonding and registration requirements in certain states. Bonding and registration requirements are set forth by these states to ensure consumers are protected when a Sponsor promises the award of a prize. The bond ensures a consumer payout if a Sponsor does not award the prize as promised once the sweepstakes ends. The registration and agreement to the terms of the states at time of filing ensures the Sponsor understands the additional legal ramifications (criminal penalty) of not following through with awarding prizes.
Do I have to bond and register my sweepstakes?
If you are running a game of chance and your total prize pool exceeds $5,000 in value, you will probably need to bond and register in the following states (assuming you are opening the sweepstakes up to residents of these states and advertising to those residents):
- New York: The final approved official rules, registration paperwork and bond must be submitted a minimum of 30 days prior to the promotion start date. It is industry standard to submit New York registrations within the Florida timeline below. In the event New York elects to enforce the 30 day filing deadline and impose a fine, such fine and enforcement will be determined by the state at time of penalty.
- Florida: The final approved official rules, registration paperwork and bond must be submitted a minimum of 7 business days prior to the promotion start date. Failure to submit the registrations by the date required may result in a fine up to $1,000. If you are running a game of chance and your total prize pool exceeds $500 in value, you will probably need to bond and register in the following states (assuming you are opening the sweepstakes up to residents of these states and you have a retail outlet in the state).
- Rhode Island: The state of Rhode Island does not enforce a filing deadline. It is industry standard to submit the approved official rules and registration paperwork within the Florida timeline above.
The structure of your game of chance will play a role in determining the bonding and registration requirements necessary.
For example, if you are running a game of chance with daily entry periods (with prizes under $5,000) and the entries are not carrying over and eligible for subsequent daily drawings, you may not need to bond and register. However, if you are running a game of chance with daily entry periods (and daily prizes exceed $5,000 or you are carrying over eligible entries to subsequent daily drawing), you may not only have to bond and register the entire sweepstakes, you may need to register each entry period individually).
We’ll walk you through what you need to do to ensure the most cost effective structure if bonding and registration is required.
Do I have to bond and register my skill based contest?
US based contests of skill do not require bonding and registration in the states of NY, FL and RI. However, if they are open and advertised to residents of Arizona, and there is a purchase involved, bonding and registration will be required there.
What about international promotions?
If the US is included in an international promotion, the above requirements apply. There may be additional bonds, registrations and permits required depending upon the other countries involved.