“Sweepstakes” can be generally defined as random drawings for prizes. All sweepstakes are regulated by federal law and also by the law of the state in which they are held. The key to holding a lawful sweepstakes is to take the appropriate steps to avoid its being characterized as a lottery, which is generally illegal unless run by a governmental agency.
One way of ensuring the legality of a sweepstakes is to eliminate “consideration” on the part of the consumer. That is, generally speaking, if the consumer pays money or contributes or parts with something else of value to participate in the sweepstakes, then the sweepstakes is likely in violation of the law.
A second absolute requirement for holding a lawful sweepstakes is to publish a disclosure and list of rules that contain all of the elements required by state and federal law.
Sweepstakes law can be a minefield for the unwary. For more information about sweepstakes law, or to schedule a consultation, contact attorney Debra Witter.