Does Your Business Need a Sweepstakes Opinion Letter?

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Does Your Sweepstakes Need a Sweepstakes Opinion Letter?- Klein Moynihan Turco LLP
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Sweepstakes and similar promotional contests have been a popular marketing and brand outreach tool for decades. Recently, businesses have been utilizing the sweepstakes promotional model in conjunction with social media websites and other online and mobile marketing venues.  These mobile and online mediums can be employed to vastly expand the visibility and reach of the subject promotional contests.

However, most social media websites/online service providers have established rules that businesses must comply with in order to operate sweepstakes promotions while using the subject websites/services. For example, many venues and service providers require sweepstakes operators to submit a sweepstakes opinion letter from a law firm confirming compliance with applicable law.  Given the value in obtaining access to these services and venues, it is essential that businesses retain attorneys with experience in sweepstakes promotions law in order to ensure regulatory compliance.

What Can a Sweepstakes Opinion Letter Do for Your Business?

In order to permit sweepstakes sponsors to collect money and/or promote their sweepstakes via social media, payment processors and social media websites often require that sponsors obtain a sweepstakes opinion letter from a qualified law firm.  This sweepstakes opinion letter may need to be updated regularly with each sweepstakes offering that features materially different terms, features, and/or prizes.

The sweepstakes opinion letter must establish that, upon a review of the contest rules and the associated business practices of the sponsor, the sweepstakes contest complies with applicable state and federal laws and regulations.  In particular, the sweepstakes opinion letter must assert that the entry, prize winner selection and other contest parameters do not violate any applicable state or federal gambling statutes. In connection with the foregoing, sweepstakes opinion letters should discuss some of the key legal considerations set forth below (which is not an exhaustive list):

  • Is the contest in question a game of chance or a game of skill? 
  • If the contest is a game of chance, and there is any form of consideration associated with the entry process (e.g., the purchase of a product or service), is there a free alternative means of entry provided to prospective entrants?
  • Does the free alternative means of entry provide those entrants with the same opportunities and odds to win a prize in the sweepstakes as those who pay to enter?

Sweepstakes Lawyers Can Provide You with Sweepstakes Opinion Letter Guidance

Businesses that are unable to obtain payment processing services and/or promote their sweepstakes Businesses that are unable to obtain payment processing services and/or promote their sweepstakes via social media will not be able to maximize the effectiveness of their respective promotional contests.  In order to gain access to those services and venues, businesses must be able to show, through a sweepstakes opinion letter, that the sponsor complies with applicable state and federal laws and regulations.  For those reasons, it is essential to retain experienced, knowledgeable sweepstakes attorneys to review the applicable sweepstakes contests and, if compliant, provide the subject businesses with the requisite sweepstakes opinion letters.

Please note that this is only a brief overview of some of the legal issues involved in obtaining a sweepstakes opinion letter.    

If you are interested in learning more about this topic or require assistance in connection with sweepstakes offerings, 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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Photo by Nick Fewings on Unsplash

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