Have you thought about hosting a contest or sweepstake for your business or non-profit? It’s a great way to engage and build relationship with your community. Just be careful, there are rules and regulations that you’ll want to abide.
Here’s a punch list developed by Jesse Body and Allan Friel to help you understand the basic requirements.
Important Legal Considerations for Contests and Sweepstakes
1) Same start and end dates for all entry methods
2) No payment or purchase needed to receive or claim a prize
3) Disclose prize details, including the approximate retail value of the prize(s)
4) Disclose eligibility requirements in the official rules
5) Perform all aspects of the promotion, including winner selection, verification, prize redemption, and other aspects described in the official rules
6) Store and process entries in a secure location
7) Keep all promotion entries and winner lists for a minimum of four years from the date the last prize is redeemed
Specifics for Sweepstakes
1) Make sure there is no purchase necessary to win
2) All participants must be treated equally
3) If the total retail value of all prizes is over $500 and offered through a retail establishment and open to the residents of Rhode Island, the sweepstakes must be registered in Rhode Island
4) If the total retail value of all prizes is over $5,000 and open to residents of Florida and New York, the sweepstakes will need to be registered and bonded in Florida and New York
Specifics for Skill Contests
1) Make sure that the actual “bona fide skill” determines the winner rather than the chance (otherwise the promotion is a sweepstake)
2) Disclose the objective judging criteria that will be used to determine the winner(s) and the weight that each will be given in the official rules
3) Judges must be qualified and have the expertise to judge the entry using the stated criteria
4) Judges should use score cards for each entry
5) Disclose a tie breaking method, it case it is needed in the official rules
6) If purchase is needed, see state rules for specific requirements
When to Seek Counsel for Additional Legal Compliance
1) Seek local counsel when open to those outside of the U.S.
2) When advertising for the promotion or entry materials are sent by the U.S.P.S.
3) Where a survey, questionnaire or repeat visits to a website are required
4) Where participants are invited to create and submit video or other works associated to the promotion and the entry will be used in other ways
5) Where participants are asked to post content on a third party’s website
6) When the public is involved in ranking, voting, or is otherwise involved in determining the winner
7) Where any part of the promotion occurs via text message
8) Where the promotion is aimed at an under aged audience
* Before you host a contest or sweepstake, we recommend that you seek your own counsel. This is in no way legal advice.