Balancing Internet Sweepstakes' Promotional Opportunities and Legal Challenges

Sweepstakes are a popular tool that businesses, marketers and agencies use to build customer loyalty, drive traffic, increase response and collect valuable contact information about potential consumers. Cookie cutter rules may not provide sufficient protections and can create significant exposure. We have seen companies "grab" rules from the Internet and later discover that the rules do not provide the protections they needed. Rather, sweepstakes need to be planned from the beginning and structured properly to reflect the promotion being offered.  Otherwise a company's great promotional advertising campaign can be subject to challenge for running afoul of various federal and state laws.

The Internet sweepstakes attorneys at Olshan work with in-house marketing departments, marketing and advertising agencies, other law firms, and sweepstakes administrators to help ensure the structural integrity and legal compliance of online sweepstakes, user-generated content contests, and mobile promotions.

Sweepstakes Basics

A Sweepstakes is a promotion in which a prize is awarded to a participant on the basis of chance, not skill. The prize can be monetary or non-monetary, such as a free product or trip. The sweepstakes sponsor cannot require people to purchase a product or to invest "considerable" time or effort in order to enter the sweepstakes. Without properly structuring your promotion, you can run the risk of reclassification of your game of chance (sweepstakes) into an illegal lottery.

Official Rules

All sweepstakes must have official rules and those rules CANNOT change once the sweepstakes has begun. 

Official rules must contain the following kinds of information:

Sweepstakes Requirements

Many states have their own sweepstakes requirements; Florida and New York require the sponsor to register and bond the sweepstakes if the total retail value of the prizes is greater than $5,000. In addition, Rhode Island requires the sweepstakes to be registered as a retail store promotion when the prize value is greater than $500. Our sweepstakes attorneys make sure you understand the requirements in each of the states in which your sweepstakes will operate and will assist with the registration and bonding processes.

Some states require additional disclosures, which vary based on the value of the prizes and the channels through which they are offered. Telemarketing sweepstakes have mandatory oral disclosures, whereas direct mail sweepstakes must include written disclosures in the copy that may vary depending on the type of promotion and where it is offered.

Additional Considerations

There can be additional considerations for a sweepstakes promotion, such as:


At Olshan, our sweepstakes lawyers stay on top of all legal actions in the fast-changing arena of sweepstakes law and online contests and promotions. We can assist you in structuring the promotion, drafting sweepstakes rules, reviewing promotional advertising and winner's affidavits, analyzing the structure of your promotion, and ensuring that registration and bonding issues have been addressed. Promotions we routinely advise on include:

Don’t Risk Lawsuits or Regulatory Action

At Olshan, our sweepstakes lawyers will help you steer clear of legal conflicts with private plaintiffs as well as the FTC, the U.S. Postal Service, attorneys general and district attorneys. Contact our law office to speak to a lawyer who understands your sweepstakes and online contest needs.

"Praised for their experience in sweepstakes and contest law."
Chambers USA, Notable Practitioners
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