Legal Aspects of Online Sweepstakes Rules

Running an online sweepstakes or contest can be a great way to draw visitors to your website. Everyone loves a chance to win something, and they’re likely to tell their friends, spreading the word even further. However, without a solid legal basis to your official rules and terms, you could be opening yourself to serious consequences. A sweepstakes and contest lawyer is an essential resource who should be consulted early in the process of developing your promotion.

There are many reasons you might choose to run a sweepstakes. Movie tie-ins and book or new product release giveaways are very common. Perhaps you are a service provider who wishes to gain new business by giving away a free service. There’s almost no industry in which it doesn’t make sense.

There is a difference between sweepstakes and contests, from a legal standpoint. Sweepstakes winners are chosen by chance, as with a random drawing. Contests have criteria which must be met in order for entries to qualify, and to win. Sweepstakes entrants aren’t required to do anything beyond filling out a form, while contests involve doing or creating something, and may even involve an entry fee.

This leads to the primary area of risk, the fine line between contests and illegal gambling. The most prominent element is consideration, in other words, requiring a purchase or cash payment in order to enter the contest. Some states define the term more broadly, to include any time or effort put out by contestants. Thus, contests for which entries are made by uploading a video could be determined to be consideration.

There’s a lot to get right. Simply copying the rules from another sweepstakes in a similar niche isn’t enough. There’s no guarantee that they’ve got it right, that regulations haven’t changed since they were drafted, or that your particular sweepstakes doesn’t require different, additional, or fewer points. Mobile entries, via text message for example, are a recent development and may require specific language in order to be compliant.

There are state and federal laws to consider. Online contests and sweeps need to be compliant with laws in all states, or specify in which states they are not valid and residents therefore cannot enter. An internet sweepstakes lawyer can help you to navigate all of these so that you can have confidence in the compliance of your official rules.

It is possible to offer an international sweeps or contest, but it becomes even trickier to get the legal language right. For example, Canadian law restricts games of chance to being run by the government only. Corporations have gotten around this regulation by, for example, including a clause in the rules that a Canadian winner must perform a prescribed test of skill. Australia has a similar rule.

Having the official rules for your sweepstakes or contest drafted by an experienced lawyer is critical in order to ensure that you are following all current laws and regulations and that the language is appropriate. They’ll consult with you to develop a promotion which will attract wide participation while being completely compliant. They’ll also be there in the event that contestants should make claims against the contest.