"We will show you how to safely gamble, bet and play online."
B. Paul, Editor, Bonusgambler.com
|
Sweepstakes and contests
Sweepstakes and contests are two promotional tools that can increase brand awareness; however, there are many federal, state and local laws and regulations governing sweepstakes and contests. For some, it is difficult to understand the difference between the two. As a general rule, a sweepstakes or contest becomes a "lottery" and, thus, illegal under federal and state laws, if all of the following three elements are present:
Prize - A prize is always present in such promotions.
Consideration - Consideration generally means that the entrant has to make a purchase or payment (e.g., buy the product) or in some states do something substantial (e.g., go to the store to get or deposit the entry form).
Chance - A chance means that the winner is selected at random (e.g., a drawing, a pre-selected number, a rub-off card randomly distributed, etc.).
The distinction between a sweepstakes and a contest is that in a sweepstakes, the element of consideration must be eliminated because the winner is selected by chance; the entrant does not have to pay or do anything substantial to enter. In a contest, the element of chance is eliminated; the winner is selected on the basis of skill. In a contest, it is permissible to require a purchase in order to enter except in certain states. With respect to sweepstakes, the laws and interpretations among the different states as to what constitutes consideration are highly uncertain and frequently changed. With respect to contests, similar controversy exists as to what constitutes "skill". All sweepstakes and contests should be accompanied by official rules, which are clear and unambiguous. Disclosures required in advertising a sweepstakes or contest will vary depending on the nature of the promotion and the state in which it is running. Special care should be taken that advertising of the promotion is consistent with the rules. It should also be noted that the States of Florida and New York require that most sweepstakes be registered with the state and that a deposit be made or bond posted to cover the value of the prizes. Rhode Island requires registration of sweepstakes in which local retail stores are involved. Arizona requires registration of skill contests.
Source: BonusGambler.com Editors' Choice
|
Gambling Help Resources:
