Marketing promotions like sweepstakes, contests, and instant-win games are effective tactics for boosting brand awareness, generating new leads, increasing sales and engagement, and much more, when done correctly. When operated incorrectly, however, marketing promotions can actually have catastrophic legal implications for your business.
With a number of federal and state laws regulating contests and sweepstakes, understanding the legal do’s and don’ts of promotional marketing can make the difference in your brand running an effective marketing promotion and running its last-ever promotion. Protect your brand’s image and its investment in your next promotional campaign and abide by the laws below.
*Note: Running a promotional campaign on social media? You might be surprised to find out that different platforms have their own set of policies enforcing promotions. Check out our social media giveaway rules guide to learn more!
Federal Contest and Sweepstakes Laws
On the federal level, a number of different agencies regulate “legal lotteries.” In fact, Title 18 of the U.S. Code (the code of permanent laws and regulations U.S citizens must abide by), is largely dedicated to regulating lotteries.
The federal agencies involved in regulating lotteries and marketing promotions are:
- United States Department of Justice
- United States Postal Service
- Federal Trade Commission
- Federal Communications Commission
Together, these agencies work to ensure that, other than state-sanctioned lotteries, all marketing promotions remain compliant. Fail to adhere to these federal contest and sweepstakes laws and your business will be slapped with devastating fines and lawsuits.
Some of the rules your brand should be particularly aware of while running a marketing promotion include being sure to pay taxes on any prizes won, recording promotion winnings with the government, and not transferring firearms.
A “legal lottery” has three essential elements: prize, chance, and consideration. Only the federal or state government can run a legal lottery, meaning your brand must eliminate one of the three elements. More on that in our Sweepstakes Vs. Contest blog here.
“Legal Lottery” = Prize + Chance + Consideration
Contest and Sweepstakes Laws by State
In addition to the above federal laws, each state has their own restrictions when it comes to contests and sweepstakes. For example, some states do not allow contests to be run that require a payment for entry. Below we have compiled a list of the different contest and sweepstakes laws by state.
Click on a state listed below to view the contest and sweepstakes laws specific to the selected state.
Alabama
i. All sweepstakes and contests in Alabama that involve alcoholic beverages must be submitted (with all marketing and advertising materials and the complete official rules) and pre-approved by the state alcohol control board.
ii. In Alabama, all other contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Alabama must still follow standard promotion law.
Alaska
i. In Alaska, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Alaska must still follow standard promotion law.
Arizona
i. Contests in Arizona that involve purchase of a product for entry must be registered with the state’s Attorney General. In addition, a sworn statement shall be submitted stating that the value of any product(s) associated with the contest was not increased during the promotion to increase sales. And lastly, within ten days of all prizes being awarded, a list of all contest winners must be given to the state.
ii. In Arizona, sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Arizona must still follow standard promotion law.
Arkansas
i. In Arkansas, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Arkansas must still follow standard promotion law.
California
i. In California, any contests or sweepstakes involving alcoholic beverages must follow the guidelines set forth by the California Department of Alcoholic Beverage Control. See all rules and regulations regarding alcoholic beverages here.
ii. Contests and Sweepstakes in California must still follow standard promotion law.
Colorado
i. In Colorado, contests cannot require a purchase for entry into the promotion. In addition, Colorado has a list of prohibited practices and required disclosures in regards to contests and sweepstakes that you can view here.
ii. Contests and Sweepstakes in Colorado must still follow standard promotion law.
Connecticut
i. In Connecticut, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Connecticut must still follow standard promotion law.
Delaware
i. In Delaware, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Delaware must still follow standard promotion law.
Florida
i. Sweepstakes “offering prizes totaling more than $5,000 must file with the Florida Department of Agriculture and Consumer Services (FDACS) seven days prior to commencement of the game promotion”- Florida Department of Agriculture and Consumer Services. See more detailed information here: https://www.fdacs.gov/Business-Services/Game-Promotions-Sweepstakes
ii. In Florida, contests do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Florida must still follow standard promotion law.
Georgia
i. In Georgia, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Georgia must still follow standard promotion law.
Hawaii
i. In Hawaii, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Hawaii must still follow standard promotion law.
Idaho
i. In Idaho, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Idaho must still follow standard promotion law.
Illinois
i. In Illinois, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Illinois must still follow standard promotion law.
Indiana
i. All sweepstakes and contests in Indiana that involve alcoholic beverages must be submitted (with all marketing and advertising materials and the complete official rules) and pre-approved by the state alcohol control board.
ii. In Indiana, all other contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Indiana must still follow standard promotion law.
Iowa
i. In Iowa, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Iowa must still follow standard promotion law.
Kansas
i. In Kansas, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Kansas must still follow standard promotion law.
Kentucky
i. In Kentucky, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Kentucky must still follow standard promotion law.
Louisiana
i. In Louisiana, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Louisiana must still follow standard promotion law.
Maine
i. In Maine, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Maine must still follow standard promotion law.
Maryland
i. In Maryland, contests cannot require a purchase for entry into the promotion.
ii. Sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Maryland must still follow standard promotion law.
Massachusetts
i. Any promotions relating to tobacco in Massachusetts is prohibited.
ii. In Massachusetts, contests and sweepstakes do not have any additional state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Massachusetts must still follow standard promotion law.
Michigan
i. Requiring promotion participants to visit a store is deemed consideration, and thus prohibited for sweepstakes in Michigan.
ii. Any promotions relating to tobacco in Michigan is prohibited.
iii. In Michigan, contests and sweepstakes do not have any additional state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Michigan must still follow standard promotion law.
Minnesota
i. In Minnesota, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Minnesota must still follow standard promotion law.
Mississippi
i. In Mississippi, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Mississippi must still follow standard promotion law.
Missouri
i. In Missouri, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Missouri must still follow standard promotion law.
Montana
i. In Montana, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Montana must still follow standard promotion law.
Nebraska
i. In Nebraska, contests cannot require a purchase for entry into the promotion.
ii. Sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Nebraska must still follow standard promotion law.
Nevada
i. In Nevada, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Nevada must still follow standard promotion law.
New Hampshire
i. In New Hampshire, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in New Hampshire must still follow standard promotion law.
New Jersey
i. In New Jersey, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in New Jersey must still follow standard promotion law.
As of January 23rd, 2023, there is a proposed law impacting hospitality loyalty programs*
It shall be a violation of the “Franchise Practices Act,” P.L.1971, c.356 (C.56:10-1 et seq.) for a hospitality franchisor or an entity owned or controlled by the franchisor or affiliated under common ownership by the franchisor to…
j. Sell points or credits in a hospitality franchisor’s loyalty program to a guest for the purpose of permitting the guest to redeem points for a specific stay at a specific franchisee’s facility without compensating the franchisee for the stay at no less than the franchisee’s lowest publicly advertised rate for that stay or the value of the points sold, whichever is less;
New Mexico
i. In New Mexico, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in New Mexico must still follow standard promotion law.
New York
i. Sweepstakes in New York with a prize pool valued at over $5,000 must be registered and bonded.
ii. In New York, contests do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in New York must still follow standard promotion law.
North Carolina
i. In North Carolina, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in North Carolina must still follow standard promotion law.
North Dakota
i. In North Dakota, contests cannot require a purchase for entry into the promotion.
ii. Sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in North Dakota must still follow standard promotion law.
Ohio
i. In Ohio, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Ohio must still follow standard promotion law.
Oklahoma
i. In Oklahoma, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Oklahoma must still follow standard promotion law.
Oregon
i. In Oregon, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Oregon must still follow standard promotion law.
Pennsylvania
i. In Pennsylvania, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Pennsylvania must still follow standard promotion law.
Rhode Island
i. Sweepstakes offered at a retail location in Rhode Island with a prize pool valued at over $500 must be registered.
ii. In Rhode Island, contests do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in New York must still follow standard promotion law.
South Carolina
i. In South Carolina, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in South Carolina must still follow standard promotion law.
South Dakota
i. In South Dakota, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in South Dakota must still follow standard promotion law.
Tennessee
i. In Tennessee, winners are not required to submit an “in perpetuity” publicity release.
ii. Contests and Sweepstakes in Tennessee must still follow standard promotion law.
Texas
i. In Texas, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Texas must still follow standard promotion law.
Utah
i. In Utah, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Utah must still follow standard promotion law.
Vermont
i. In Vermont, contests cannot require a purchase for entry into the promotion.
ii. Sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Vermont must still follow standard promotion law.
Virginia
i. Requiring promotion participants to visit a store is deemed consideration, and thus prohibited for sweepstakes in Virginia.
ii. Any promotions relating to tobacco in Virginia is prohibited.
iii. In Virginia, contests and sweepstakes do not have any additional state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Virginia must still follow standard promotion law.
Washington
i. In Washington, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Washington must still follow standard promotion law.
West Virginia
i. In West Virginia, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in West Virginia must still follow standard promotion law.
Wisconsin
i. In Wisconsin, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Wisconsin must still follow standard promotion law.
Wyoming
i. In Wyoming, contests and sweepstakes do not have state-specific legal requirements that differ from the common promotion law. Contests and Sweepstakes in Wyoming must still follow standard promotion law.
Ensure Your Brand Remains Compliant with Contest and Sweepstakes Laws
You have an accountant do your taxes, a mechanic fixes your car, and a doctor ensures your health. Who do you have to protect your brand? Partner with us be sure your contest or sweepstakes remains compliant in all 50 states.
For even more on contest and sweesptakes and how to choose which is right for your brand, check out our defintive guide here.
