Sweepstakes Guidelines Help Ensure Fair Play
State and federal governmental bodies in the United States have established a comprehensive framework of laws, rules, and regulations applicable to sweepstakes promotions. These sweepstakes guidelines are designed to limit potential abuse and help ensure that sweepstakes and similar promotions are conducted as part of a fair and open process, where entrants have a legitimate and equal chance of winning the featured prizes.
As a result, while sweepstakes promotions remain an attractive means of marketing and consumer outreach for myriad business types and charities, the various sweepstakes guidelines enacted by the respective governmental bodies can be complex and confusing. Given that the potential exists 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.
What Sweepstakes Guidelines Apply to My Business?
State and federal sweepstakes guidelines represent an evolving array of laws which have adapted over the years to keep pace with technological advances, emerging marketing trends and ongoing concern for consumer well-being. Some key legal considerations to be aware of include the following (which is by no means 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), then a free alternative means of entry must be provided to prospective entrants. On the other hand, if the contest is a pure game of skill, while no alternative means of entry is required, clear criteria must be established for judging or determining the winner(s) based on applicable skill component(s).
- The aggregate prize value offered to all potential prize winners in a given sweepstakes may trigger state-level registration and bonding requirements. Paying careful attention to the approximate retail value of all prizes may help avoid the time and expense associated with the registration and bonding process.
- Marketing laws and guidelines apply to the promotion of sweepstakes games to the public, including disclosure requirements applicable to social media/influencer marketing, as well as standard disclosures associated with specific features of the sweepstakes promotion itself.
- Clear and concise rules will need to be drafted, published, and made available to prospective entrants. These contest rules must include several consumer-facing disclosures, such as how entrants may obtain a list of contest winners and/or a hard copy of the rules themselves.
Sweepstakes Lawyers Can Help You Comply with Applicable Sweepstakes Guidelines
Because so many states have established their own respective sweepstakes guidelines, the laws and regulations can be difficult to navigate. Due to the sensitivity of the subject matter, there is the potential for significant legal liability if a sweepstakes sponsor does not take the necessary precautions to ensure that its promotional contest is compliant with all applicable laws, rules, and regulations. Proper planning and qualified legal guidance from experienced sweepstakes lawyers are crucial to ensuring that promotional campaigns meet all legal and regulatory requirements.
Please note that this is only a brief overview of some of the legal issues involved in running a sweepstakes promotion. 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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