Promotional contests and sweepstakes are an effective and cost efficient means to generate buzz and often sales of a given product or service. Consumers are often incentivized to make a purchase by the allure of the chance to win a valuable prize.
However, when designing a sweepstakes, it is important to be mindful of the fact that if you charge money to enter the sweepstakes – even if entry in the sweepstakes is achieved through the purchase of a product or service – you must also provide consumers with an alternative, free means of entry (often referred to as an “AMOE”). Without an AMOE, there is a good chance that your game of chance will be deemed an illegal lottery under applicable law.
Separate Ways to Enter, Equal Prizes
When establishing an alternative, free means of entry, or AMOE, it is important to remember a few basic principles. First and foremost, contestants utilizing the AMOE must be given the exact same opportunity, with the exact same odds, to win the prize, or prizes, made available via the sweepstakes.
Thus, sweepstakes operators and sponsors are not permitted to offer AMOE entrants a limited number of entries compared to paying entrants, nor may paying entrants be afforded any advantage in terms of increased odds or other opportunities to win.
No Purchase Necessary: Make it Easy
In addition to giving AMOE entrants the same opportunity, and same odds, to win the subject prizes, sweepstakes sponsors must also take pains to ensure that the AMOE process is not overly burdensome, or time consuming. While some foreign jurisdictions, such as Canada, are somewhat more lenient in terms of allowing sweepstakes operators to require AMOE entrants to satisfy onerous entry requirements, most jurisdictions in the United States require that entrants be afforded a relatively easy, pain-free entry process.
While requiring that AMOE entrants answer a few survey questions or submit a self-addressed stamped envelope will likely pass muster in most jurisdictions, requiring the submission of an essay will most likely not.
Rules, Rules, Rules
As should be apparent, it is crucial that you determine the parameters of the contest’s alternative, free means of entry ahead of time in order to account for potential issues with the odds afforded to AMOE entrants, as well as to ensure that the entry procedure is relatively simple. It is recommended that you retain qualified legal counsel to ensure that you get the alternative, free means of entry method right in advance, as well as to help you navigate any related issues that may arise during the course of your promotion.
If you are interested in learning more about this topic or pursuing a sweepstakes-related venture, 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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