Sweepstakes Rules - Carved in Stone - Klein Moynihan Turco LLP

Sweepstakes Rules: Carved in Stone

Promotional contests and sweepstakes are increasingly popular marketing methods. However, many prospective sweepstakes operators may not be aware of or fully understand the importance of the sweepstakes rules governing the applicable contests. Unlike other marketing means, sweepstakes promotions cannot be adjusted or terminated mid-campaign, based simply on the desires of the sponsor. The parameters of the sweepstakes promotion that are established in the rules prior to commencement of the sweepstakes (including contest length and prizes to be awarded) must be adhered to, even if the subject promotion is unsuccessful.

Sweepstakes rules are your contract with the contest entrants. This means that the rules of the game must be the same for people who enter on day one as they are for people who enter near the end of the contest term. As such, the rules must be set in stone when the sweepstakes period commences and they cannot be changed.

Sweepstakes Rules Should be Against Perpetuity

The duration of a sweepstakes promotion should be set in the rules, and the duration set in the rules must be allowed to play out, even where the sweepstakes operator wants to terminate the contest prior to the conclusion of that period of time.  Similarly, the amount to be awarded and the number of prize drawings as set forth in the rules must be adhered to, even where the expense associated with the prize(s) exceeds the perceived value of the sweepstakes as a marketing tool.

Thus, it is recommended that newcomers to the sweepstakes model set-up short lived contests, with a manageable number of prize drawings. With shorter contest periods and fewer prize drawings, sweepstakes operators can limit their exposure and commitment to promotions that fail to deliver the intended benefit and return on investment.

On the other hand, nothing prevents a sweepstakes operator from conducting consecutive contests if the results from the first short-term promotion meet expectations. As a simple rule: successive short-run contests are preferable to long term variations.

Tailor and Tinker With the Sweepstakes Rules to Fit Your Needs

Additionally, there are other aspects of a given sweepstakes promotion that need to be included in the sweepstakes contest rules, such as entry method and the alternative free means of entry afforded prospective contestants, if applicable.

Sweepstakes operators generally value flexibility (and the ability to tinker and fix bugs) with respect to these and other variables. Again, therefore, it is advisable to pick shorter, more easily managed sweepstakes contest durations to allow for this. That way, a problem that arises with one sweepstakes promotion can be addressed in the next contest, with less of a likelihood of creating a lingering headache.

Prevention: Measure Twice, Cut Once

It is crucial that you determine the parameters of any given sweepstakes contest ahead of time. You need to pick a realistic and modest timeline and prize pool so as to mitigate risk and exposure. It is recommended that you retain qualified legal counsel to ensure that you get the sweepstakes rules 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 setting up a sweepstakes-related venture, please e-mail us at info@kleinmoynihan.comor 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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This blog post was originally published on October 7, 2014 and updated on October 27, 2021.

Photo by Emilio Takas on Unsplash

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David Klein

David Klein is one of the most recognized attorneys in the technology, Internet marketing, sweepstakes, and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

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