USE OF THE TERM “SWEEPSTAKES
Sweepstakes are promotional devices by which items of value (prizes) are awarded to participants by chance without the promoter’s requiring the participants to render something of value (consideration) to be eligible to participate. The co-existence of all three elements—prize, chance and consideration—in the same promotion constitutes a lottery. It is illegal for any private enterprise to run a lottery without specific governmental authorization.
When skill replaces chance, the promotion becomes a skill contest. When gifts (premiums or other items of value) are given to all participants independent of the element of chance, the promotion is not a sweepstakes. Promotions that are not sweepstakes should not be held out as such.
Only those promotional devices that satisfy the definition stated above should be called or held out to be a sweepstakes.
NO PURCHASE OPTION
Promotions should clearly state that no purchase is required to win sweepstakes prizes. They should not represent that those who make a purchase or otherwise render consideration with their entry will have a better chance of winning or will be eligible to win more or larger prizes than those who do not make a purchase or otherwise render consideration. The method for entering without ordering should be easy to find, read, and understand. When response devices used only for entering the sweepstakes are provided, they should be as easy to find as those utilized for ordering the product or service.
CHANCES OF WINNING
No sweepstakes promotion, or any of its parts, should represent that a recipient or entrant has won a prize or that any entry stands a greater chance of winning a prize than any other entry when this is not the case. Winners should be selected in a manner that ensures fair application of the laws of chance.
Sweepstakes prizes should be advertised in a manner that is clear, honest, and complete so that the consumer may know the exact nature of what is being offered. For prizes paid over time, the annual payment schedule and number of years should be clearly disclosed.
Photographs, illustrations, artwork, and the situations they represent should be accurate portrayals of the prizes listed in the promotion.
No award or prize should be held forth directly or by implication as having substantial monetary value if it is of nominal worth. The value of a non-cash prize should be stated at regular retail value, whether actual cost to the sponsor is greater or less.
All prizes should be awarded and delivered without cost to the participant. If there are certain conditions under which a prize or prizes will not be awarded, that fact should be disclosed in a manner that is easy to find, read, and understand.
Premiums should be advertised in a manner that is clear, honest, and complete so that the consumer may know the exact nature of what is being offered.
A premium, gift or item should not be called or held out to be a “prize” if it is offered to every recipient of or participant in a promotion. If all participants will receive a premium, gift, or item, that fact should be clearly disclosed.
DISCLOSURE OF RULES
All terms and conditions of the sweepstakes, including entry procedures and rules, should be easy to find, read, and understand. Disclosures set out in the rules section concerning no purchase option, prizes, and chances of winning should not contradict the overall impression created by the promotion.
The following should be set forth clearly in the rules:
- No purchase of the advertised product or service is required in order to win a prize.
- A purchase will not improve the chances of winning.
- Procedures for entry.
- If applicable, disclosure that a facsimile of the entry blank or other alternate means (such as a 3”x 5” card) may be used to enter the sweepstakes.
- The termination date for eligibility in the sweepstakes. The termination date should specify whether it is a date of mailing or receipt of entry deadline.
- The number, retail value (of non-cash prizes), and complete description of all prizes offered, and whether cash may be awarded instead of merchandise. If a cash prize is to be awarded by installment payments, that fact should be clearly disclosed, along with the nature and timing of the payments.
- The estimated odds of winning each prize. If the odds depend upon the number of entries, the stated odds should be based on an estimate of the number of entries.
- The method by which winners will be selected.
- The geographic area covered by the sweepstakes and those areas in which the offer is void.
- All eligibility requirements, if any.
- Approximate dates when winners will be selected and notified.
- Publicity rights regarding the use of winner’s name.
- Taxes are the responsibility of the winner.
- Provision of a mailing address to allow consumers to receive a list of winners of prizes over $25.00 in value.