Florida's Amendment to Laws Regarding "Game Promotions" and "Drawings by Chance"

The State of Florida has amended its laws regarding "game promotions" and "drawings by chance." The amendments as well as an April 11, 2013 press release issued by the Florida Division of Consumer Services has raised numerous questions regarding the impact on non-profit organizations. Not all is clear, but here's what we know so far.

The new Florida laws provide that a game promotion may only be conducted by a for-profit commercial entity. A game promotion is defined under Florida law as "a contest, game of chance, sweepstakes, or gift enterprise ... in connection with and incidental to the sale of consumer products or services, and in which the elements of chance and prize are present." The new Florida amendments prohibit a non-profit organization from operating a game promotion - i.e., a sweepstakes in connection with and incidental to the sale of consumer products or services.

However, Florida law continues to allow a non-profit organization to operate a "drawing by chance" so long as 1) it is not a "game promotion"; and 2) no consideration (donation) is required to participate. Non-profit organizations are defined under the Florida law as organizations that are exempt from federal income tax requirements pursuant to 501(c)(3), (4), (7), (8), (10), or (19) and which have a current determination letter from the IRS.

Unfortunately, the outright ban on non-profit organizations from operating a "game promotion" is confusing. A determination as to what constitutes a "game promotion" versus a "drawing by chance" as it relates to non-profit organizations remains unclear. Nor is it clear what "incidental to the sale of consumer products or services" means.

Under the revised law, a non-profit organization may still engage in chance drawing activities which generate donations as long as it is not a "game promotion", but it must continue to do so in accordance with Section 849.0935 of the Florida Statutes. Importantly, that means that any entry into a chance drawing cannot require a contribution and cannot be incidental to the sale of a consumer good or service. In addition, non-profit organizations cannot use pre-selected or instant win promotions.

Any non-profit organization offering a sweepstakes to Florida residents should be aware of these developments and be sure that its promotion complies with the new laws. We are working with the Promotion Marketing Association in attempting to seek further clarification on these matters.

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