Sweepstakes and similar promotional contests can be cost-effective means of marketing a product, service or brand based, in part, on the buzz generated by the allure of prizes. Sweepstakes can also be a useful method for generating sales/purchases. However, various laws can make generating sales via promotional contests a risky endeavor if the purchase of a product or service is a requirement for obtaining entry in a sweepstakes.
While a sweepstakes operator may allow entry in a sweepstakes promotion via the purchase of a product or service, unless a free alternative means of entry (“AMOE”) is also provided, it is likely that the sweepstakes would violate applicable lottery laws. Given the potential for severe legal repercussions for violation of any of these laws or regulations, it is essential that sweepstakes sponsors retain attorneys who have experience in sweepstakes promotions law prior to offering such contests to consumers.
When Can a Sweepstakes Require a Purchase to Enter?
As mentioned above, a sweepstakes can allow for contest entry to be achieved through a purchase, but only where an AMOE is provided as well. Below are some key legal considerations to be aware of when designing an AMOE (which is by no means an exhaustive list):
- Entrants who utilize the AMOE must be given the exact same opportunity, with the exact same odds, to win each sweepstakes prize.
- Sweepstakes sponsors are not permitted to offer paying entrants the opportunity to obtain more entries than are available to AMOE entrants.
- The AMOE method may not be overly burdensome or time consuming. If this rule is not adhered to, the AMOE entry method could run afoul of the “consideration” element, thus rendering the promotion an illegal lottery.
- Clear and concise disclosures should be included in the contest rules, as well as in all applicable marketing material, that no purchase is necessary to enter the sweepstakes, and that a purchase will not increase the odds of winning.
Sweepstakes Lawyers Can Help You Comply with the Law
The criteria for establishing an AMOE that complies with the complex patchwork of jurisdictional laws can be difficult to fully account for. Further, significant legal and regulatory liability may result if a sweepstakes sponsor does not take the necessary steps to ensure that its promotional contest is compliant with those laws. Where a sweepstakes sponsor plans to require a purchase to enter a sweepstakes, obtaining legal guidance from experienced sweepstakes lawyers is crucial to ensuring that the game meets all legal and regulatory requirements related to offering an AMOE of equal dignity.
Please note that this is only a brief overview of some of the legal issues involved in implementing a compliant AMOE. As such, remember to obtain guidance from an experienced sweepstakes attorney prior to conducting any game promotion or sweepstakes.
If you are interested in learning more about this topic or require assistance in connection with your sweepstakes campaigns, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
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