Sweepstakes and Prize Contest Law

For decades, sweepstakes and prize contests have been popular ways for companies to build brand identity and promote products and services. Moreover, the availability of internet and mobile device technology to advertise sweepstakes and prize contests to a vast number of consumers has heightened the enthusiasm for these types of promotions. However, the drive to take advantage of game promotion fever is not risk-free.

When a company conducts a sweepstakes or prize contest, the company must structure the game to avoid characterization as a lottery under federal and state law. Non-government sponsored lotteries are illegal. Moreover, a variety of federal and state laws govern sweepstakes and contests. Such laws require registration, prohibit certain practices and restrict the limits of lawful promotions. These laws have changed much over the years and they are so broadly drafted that they can apply to just about every kind of promotion imaginable. State attorney generals’ office interpretations of game promotion laws are inconsistent, even as to the most common forms of regulations.

Because of this patchwork of law, a poorly considered promotion can open up a jackpot of problems for the unwary sponsor. Retaining a marketing firm to administer the promotion may not avoid the risks. The sponsor may still face government investigation, regulatory enforcement action, civil lawsuits and even criminal sanctions for the marketing firm’s failure to follow relevant laws. The embarrassing publicity associated with a mismanaged promotion may defeat the entire purpose of the effort.

It’s important to understand that there is no “one-size-fits-all” form of promotion. Because the purposes and circumstances of sponsors vary, the rules appropriate for one promotion may not apply well for another. Therefore, to minimize exposure to regulatory investigations and costly litigation, review of any proposed promotion by a competent, experienced attorney is critical.

Our Sweepstakes and Prize Contest Attorneys help clients navigate the rules and regulations that govern direct mail and internet sweepstakes and contests. While our clients focus on developing effective promotions that sell products and services, we focus on making sure our clients comply with the law and minimize risk.

Our services include:

• A legal compliance review of the mechanics of the promotion, the website and any marketing material.
• Ensuring that the promotion is properly registered, bonded and satisfies all legal requirements.
• Drafting official game promotion rules, disclosures, disclaimers, privacy policies and releases.
• Assisting clients with the tax implications, intellectual property matters, privacy and data security issues, issues associated with direct e-mail solicitations, issues associated with promotions directed towards children and overseas promotions.

Although internet and mobile technology makes sweepstakes and prize contests appealing from a marketing perspective, the lack of geographical boundaries makes compliance with pertinent laws more burdensome. But with our legal knowledge and guidance, our clients will be able to comply with applicable game promotion laws and achieve their goal of running a successful sweepstakes or prize contest.