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Play By the Rules: Legal Considerations for Running Social Media and Mobile Sweepstakes & Contests

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Play By the Rules: Legal Considerations for Running Social Media and Mobile Sweepstakes & Contests

Social media and mobile phone contests and sweepstakes may seem like a no-brainer for many businesses, but are you equipped to help clients set up and conduct them legally? This course outlines the legal issues involved in conducting sweepstakes and contests, otherwise known as chance and skill prize promotions, when conducted via social media or mobile devices. It will cover applicable state gambling laws, how to handle user-generated content per the Digital Millennium Copyright Act, the Communications Decency Act, and the Consumer Review Fairness Act. It will also outline practical considerations such as privacy concerns, specific platform requirements, and FTC endorsement guidance so your clients’ social media and mobile contests can run smoothly.

Presenters

Rob LaPlaca
Partner
Verrill Dana LLP

Transcript

Rob Laplaca: Hi, my name is Rob Laplaca. I'm an attorney at Verrill Dana in Westport, Connecticut, and I'm here to present Play by the Rules, legal considerations in social media and mobile sweepstakes and contests. For the past 25 years, I have been representing major brands and ad agencies who represent brands in all different types of promotions, and here we're going to focus on the different types of prize promotions that companies typically run. And it's the kind of material that cannot be gone into lightly with someone who has a client that suggests, "Hey, I want to run a sweepstakes. Is this okay?"

  You need to have a good solid background with the laws in terms of running these types of promotions because they are regulated in all 50 states and to run a nationwide promotion you're going to need to know essentially what states allow and what states don't allow so that this could be run successfully for both you and your client. It starts off with a look at lotteries and what lottery means in the states. And generally the states have the same definitions for a lottery. And the point being that companies, private companies cannot run a lottery. Lotto and games like that are specific to the state governments themselves.

  Companies need to steer clear of running a illegal lottery and the three elements that make up a lottery are prize, chance and consideration. To keep things legal in a prize promotion, a company's going to need to eliminate one of those three elements, whether you can eliminate prize, chance or consideration, and let's look into how that could be done for each of particular items. First we need to see what is a prize. It seems obvious enough from anybody who's ever watched TV or seen commercials that a prize is essentially anything of value. It could be money, it could be a trip, it could be products, it could be anything that has a value.

  And the value may not necessarily have to be a specific dollar amount, because if you are running a prize promotion where you are saying that the winner could come and meet and greet some celebrity, for example, it might not be something that you could buy from a store or on the street to have this opportunity, but it has a value to it. That would also be something that would be considered a prize. The real only items that have been litigated to some extent recently with regard to whether this is really a prize comes up in the issue of in game rewards for people.

  And I bring this up because it has been litigated in a couple states recently, and there, unfortunately is no consensus nationwide. But if the example would be that you're playing a game with a chance to win items within the game itself that are only valuable within the game itself, so you get coins for more plays within the game, or you get certain really fun looking widgets or other items that you could use while playing the game or a super sword or things like that. And the issue is can that be a prize? And in these areas, courts have gone both ways and said, well, if it can't be redeemed for cash, then it's really not a prize.

  And other courts have said, well, it is a prize because it does have some kind of value. Unfortunately, this is one of these areas, but I wanted to point it out because it's not common that you have the issue of whether you actually have a prize whether something is an illegal lottery, but it would come up in the context of if you wanted to argue that, well, this free sword that I'm giving the winners isn't really a prize because it can only be used in the game. It can't be bought for cash in any particular way. And it's really not a prize.

  Therefore, we're allowed to have the other two elements of a lottery specifically chance and consideration so we could require people to pay, to enter this prize promotion because they’re not really winning a prize. And that's where that issue comes up. It's not really a theoretical issue on whether this thing is a prize. It really comes up in a practical sense of, can we require the person to pay and only pay to play this game? An area that's still in a little flux, but worth pointing out. While we're on the prize topic, it's worth pointing out that many states prohibit specific types of prizes.

  Even alcohol companies or retailers, they cannot give alcohol as a prize. Tobacco and many states prohibit animals, and oddly enough, some states even go into detail along what types of prizes are prohibited, what types of animal prizes are okay. But if that comes up that you're go going to be giving away alcohol, tobacco, or an animal you need to look into specifically what is being given away and know that that should put a little buzz in your head that this may not be okay.

  The real issue on lottery comes up with the element of chance, and chance is easy enough to understand that it's not something that's going to be won based upon any skill that you have, based upon any just inherent advantage that you have, but it's really just going to be the luck of the draw that you win. A random draw is a typical chance promotion where everybody gets entered into a sweepstakes and they're going to randomly pick a winner from everybody that enters. That's your traditional games of chance.

  Now, when you do get into the chance issue and once again, someone wants to be able to say, "Well, we could require people to pay and only require people to pay to play our game, because it's really not chance it's really a skill game." And most recently this has come up with fantasy sports games, where there has been a lot of litigation still pending in New York even, where the issue came up, are fantasy sports chance or are they skill games? With the argument being, well, you need a lot of skill, you need a lot, let's say football knowledge to be able to pick the right players, to get a high score, and that is showing an actual skill.

  The counterargument is you're not in charge of these players, things happen every day. People get hurt. People have bad days, and it's really up to chance on whether or not you're going to get more points in your fantasy league. That has been litigated and what the courts have traditionally looked at in the issue of chance versus skill, they apply three different tests. And most states apply what's called the predominant element test. Is chance the predominant element in the selection of the winner? Or is skill the predominant element?

  And to use again, as the example of the fantasy football, because it really fits in well in this chance versus skill issue, the issue being, is it because you have some kind of skill in looking up and knowing statistics and knowing players and knowing their tendency, is that why you have a better opportunity to win than someone else? Or is it really just predominantly chance and me, you and anybody else who plays this have basically the same chance of winning as someone who really knows their sports?

  And that is the way the courts have looked at this and that's the predominant element test. The other tests are the material element test and really close to the predominant element test. And to tell you the truth, tough to say exactly that there's a significant difference between that test, where the courts would look at whether chance is present to any material degree. And then the last one used in a few states is the any chance test. So if there's any chance that may be involved and it's not a pure skill situation, a court will say that in those states chance is present and therefore you can't basically require everyone to pay to play this game.

  Those are the three tests on chance. Prize, chance, the last item that you could eliminate to make this a legal prize promotion would be consideration. And that's what you normally will do when you know you have a chance promotion. You know you have a random draw type of situation, or you're going to pick a winner in some random way. And what you're going to have to do is then eliminate the element of consideration of any payment of money to have to participate.

  Consideration, as I said, is usually payment of money of some kind, easily enough where if you buy this hamburger, you're automatically entered into the food stores sweepstakes to win a big prize. That would be consideration. I had to buy the hamburger to be able to play in this game. What do we do to eliminate that? We give a free method of entry, which I will get into. Payment of money of some kind to participate is definitely consideration. You have to think of other ways that money and having to pay money could be involved in participating in the game.

  So, if you have a game where it's a text message to enter, still not completely decided, but generally premium text messages where you're going to get charged a premium by your text message company to send a text, those would be considered having to pay consideration to play. Other items that you may not off the top of your head think about as requiring money to pay are if you're requiring someone to send in a UPC or to even submit the numbers on a UPC or take a photograph of a UPC. Generally, to get the UPC, you have to purchase the product.

  I understand that you may be able to get it without purchasing the product, but do you really need to get into that argument? It's safer to just, if you're going to require a UPC to also have an alternate at form of entry besides that. If you have a essay contest or some kind of tweeting contest where you need to review a product or give your thoughts about a product or take a picture of you using the sponsor's product, those are also going to be elements that require consideration to play the game.

  Because you're going to need to have purchased the product itself in order to play in this game, which would then keep you in the consideration and require you to have another alternate free method of entry where you don't have to purchase the product to participate. Other items, you see a lot of times within a event itself. You're at a country fair and there are different games of chance that might be involved within that country fair, but to get into the country fair, you had to pay a $10 entry fee just to get into the fair, to do all types of things.

  But you had to pay to get into the fair itself and you're needed to be inside of the fair in order to participate in this game of chance that's being offered by one of the companies who happen to be at the fair. That would need to be something you think about, because that would be consideration. I can't play this game without having to pay an entry fee to get into the fair. You need to have some kind of work around for that type of situation. And all of these do have ways of getting around when you go through that. And you think about them.

  For instance, as I said, the UPC requirement, you may have to have a separate method of entry. The picture of your product or something with the product where you're having an explanation of how much you like the product. Maybe you could cut that off, that it needed to be before the contest started, that you had to have shown some prior picture of yourself with the product itself. And you could submit that as an entry and therefore you weren't required to buy the product to enter the sweepstakes because the sweepstakes didn't exist when you bought the product.

  The venue entry fees, you work around that by saying it's only open and you only advertise it once people are inside the fair. You don't advertise it outside of the fair, come to the fair, and you'll be able to play this game of chance sponsored by XYZ company, once you're inside the fair you make the advertisements. And then you could legitimately say that people did not pay money to enter the fair in order to enter this game of chance. It's simply a way of getting around on some of these issues when you might have consideration involved.

  It's worth noting that throughout the years, items as the way I'm thinking about some of these that I've just mentioned have been questioned on whether or not they are consideration or are not consideration. Postage is actually by statute, not considered consideration, that's why you see that for the free method of entry, very often a sponsor will require that the entrant mail in a three by five card to enter for free without having to buy the hamburger. And I understand it costs money to have a stamp and mail this, but because it's exempt by statute, that's okay to do.

  The standard messaging charges also are typically not considered consideration and way back, I recall when the internet was first coming about that the issue was whether that would be consideration because you needed to have a computer, you needed to have access, you needed to have a modem, you needed to have hookup, and would all of that be considered as paying money to having to enter a game of chance? Initially that was seriously considered and nowadays no one considers internet entries as entries that require consideration.

  You also have to consider not just what it costs to play the game, but what it costs, if anything, to win the prize. There could be what's called post consideration elements that you need to consider. So, if there are any costs involved in a person having to get their prize, they could be deemed a form of consideration making it an illegal lottery if you don't have a separate free method of entry. And I say this, that there are 15 states that have specific statutes that require certain disclosures about the prize that may come up, if you have possible costs involved in accepting the prize.

  Loyalty programs also have the issue that you need to think about for post consideration. If you need to, let's say redeem your points to get a prize, and it costs you money to get those points, that could be post consideration. If you are only giving tickets so the prize are tickets to a concert, not travel to the concert, or the prize is a free hotel in Bermuda, but the travel expenses are not involved, that is something that you need to think about whether that would be post consideration.

  Because it's going to be an excessive amount of costs for someone, if the concert tickets are for Madison Square Garden in New York City, and this promotion is open to all 50 states that a winner in Oregon may basically not be able to win that prize. A sponsor would need to consider whether they want to limit the entrance to people who could reasonably get to the venue or to provide cash to cover the expense that may be involved in the transportation. Once again, issues that you need to think about.

  There might not be that I could tell you a straightforward answer for everything that I give you examples of, but it's just pointing out that these are issues that need to be considered when a client or a sponsor is suggesting that they want to run a promotion where they would like this to happen. Coupons, never a good idea as a prize, if it's a sense off coupon and you can't get an item for free. Also that if you can get items for free, that would be something you'd have wanted to point out in your rules or in your advertising, that you can get items for free with this coupon.

  But I wouldn't advertise that you can win a big screen TV if the retailer who does have items for a hundred dollars or less is only giving a coupon for a hundred dollars and you can't get a big screen TV for a hundred dollars. That's one of those no-nos on post consideration. Over time, we've had to consider the issue of non-monetary consideration. Basically you didn't have to pay money, but you had a significant amount of effort in order to enter was required. This does not come up much anymore. It may be looked at on a case by case basis.

  For instance, if the bigger issue now in a practical sense comes up with regard to disclosing personal information where this isn't substantial effort, but it's a non-monetary type of consideration your personal information that you have to disclose in order to participate. And that needs to be considered in terms of whether this would be an illegal lottery. In conjunction with the lottery laws, you have to consider the gambling laws. They're very similar to lottery in terms of prize, chance and consideration being involved, but gambling specifically gets at that issue of that you're wagering anything of value.

  It's more of the wager concept in the gambling laws and what really needs to be thought about when this comes up is the issue of the gambling instinct. There's certain games that just are avoided in terms of sweepstakes and prize promotions that a company may run. If you're running casino games or gambling, or poker games, if that's the way your promotion is going to run, you really just need to think about whether you might be violating gambling laws in particular, just the inherent gambling instinct is the way it's thought about by the states and by the courts on that's a no-no.

  The big thing in games of chance, as I mentioned, is to eliminate consideration. That's typically. You don't typically eliminate the prize. We'll talk about eliminating chance, but if you're going to have a chance promotion, you're going to need to eliminate consideration. We talked about the forms of what might be consideration. How do we have a free method of entry? And the term of art you used in this area is the AMOE, the alternate method of entry. And that could be any free method of entry.

  You could always require or you could always allow someone to enter by buying your product, or by paying a fee and getting something in return. That's the key part. Let me just go back with regard to the gambling. You can't just require someone to pay money to enter the sweepstakes, but they could buy something and in return, get an entry along with the product that they're buying. Think of the hamburger example, as I said. You need to provide a free method of entry if you're going to have people who could enter by buying your hamburger.

  And the key is the free method of entry must have equal dignity to the person who entered by making a purchase. What does that mean? That means if you get one entry for buying a hamburger, you get one entry for your free method, that if you could enter up to 10 times by buying a hamburger, you're allowed to enter up to 10 times by having your free method of entry. What's a free method of entry? Typically, it could be an email, it could be a toll free number or just usually it's mailing a three by five card to a PO Box address.

  That is why you see in all of the sweepstakes and games of chance rules or advertisements, no purchase necessary. You could enter by purchasing a hamburger, but it is not necessary. There is a free method to enter without doing this. Everything needs to be the same. You can't have different deadlines. The people who purchase can't have a longer or more chances to win, there can't be just prizes for the people who paid and just prizes for the people who entered for free, and they need to have the same pool. They're all in the same pool with the same chance of winning.

  When you run games of chance, you need to consider in particular, three states that have registration or bonding requirements to get your promotion off the ground. The key is that in New York and Florida, if the prizes for all of the prizes that are available are over $5,000, you're going to have to fill out the forms and register ahead of time with the particular departments in the states of New York and Florida, and provide a surety bond for the amount of all of the prizes that you will get back once you prove that all the prizes were paid out. That's a big thing.

  A lot of times you're always going to have to disclose what the approximate retail value of the prizes are in your promotion, at least in your rules, and that is why companies may look to the issue of whether or not they go over this $5,000 amount, because at that point in time, the registration in New York and Florida kicks in. Rhode Island is something that people don't want to also forget that a much lower threshold. You don't need the bond, but you do need to file a registration form in Rhode Island if the promotion is at a retail establishment to promote the retail establishment.

  If the store itself is running a promotion and it's in Rhode Island, they have a store in Rhode Island. You're going to have to register in Rhode Island for almost all promotions since the threshold is only $150 for all prizes. Now, we get into skill contests. The point of the skill contest is I could require consideration either monetary or substantial effort for someone to play in order to possibly win a prize. And I do this by eliminating chance, or at least eliminating a chance to a very substantial or material degree. And I provide that the entry is by some method of skill.

  What is skill? The very broad term. All types of items may come up with regard to skill. There may be skill with mental skill. It could be physical acuity. It could be any type of item that gives a person with that skill an advantage over people without that skill. Think of, let's say a singing contest, and you're literally going to pick the winner based upon their singing abilities. People with better singing abilities are going to have a distinct advantage over people without singing abilities to win that contest. The keys to this are the winner is selected based upon that skill.

  And they're typically selected by judges who are able to judge that skill. The singing contest is or should be judged by professionals in the singing or the music industry that could decide that this is a better singer than the others. And that would be the key. It can't be where it becomes a popularity contest. That takes it out of the skill element that even if the singers singing might have some singing skill, but if they're just being voted on, let's say by the public based upon the public's ability who are not necessarily experts in music and they're just making it a popularity contest, then that might take this out of the skill contest domain.

  That's what I was getting at here. Even though the skill does take out the consideration in Colorado, Maryland, and North Dakota, you cannot require any monetary payments, even in skill contests, but in the other states, you can require a payment of money to enter a skill contest. In Arizona, there's an issue with regard to registration for skill contests, which you need to also be aware of. Next in this part, I want to just highlight for you a number of areas where issues, questions, suggestions may come up where a client, a brand, an ad agency says, "Wouldn't this be great if we ran this type of promotion?"

  And there are certain industries that in certain states get very specific and may actually make it impossible for someone involved in that business to be running a promotion in that state. These industries would be the milk and dairy industry, motor fuel, tobacco, firearms, banking, and alcohol. They're all specially regulated areas that if your promotion is going to involve any of these types of items or companies that sell these types of items, or that's the items that are being promoted, you need to look a little bit deeper because these are special areas.

  The other types of promotions itself, not the things being promoted, but the type of promotion being run that also have special rules that you need to consider. If you have a direct mail promotion, which are obviously less and less popular these days, but 20 years ago, 10 years ago were still popular. And in the early 2000s, an actual federal law was passed regulating everything that has to be said in disclosures and mailings regarding a direct mail promotion. Be aware there are regulations regarding a direct mail promotion.

  If you ever see in a set of rules, no purchase necessary, a purchase may not increase your chance of winning. That last sentence about increasing your chance of winning actually comes from the federal direct mail law. But people still use that in all kinds of promotions, but it came from there. Children under 13 on the internet are something that need to be seriously considered because you have the child online privacy protection act that needs to be considered when children under 13, the promotion involves or they're capable of entering in those types of promotions.

  If that's not necessary that you're not specifically trying to target children under 13, you'll see online promotions at the very least being 13 and older as the requirements. Product reviews. Once again, get into the issue of, is there an element of consideration for having to purchase the product to make a review, but it also gets in to the federal laws regarding promoting a product or reviewing a product by a person.

  And there's requirements that are involved if someone is being compensated in some way, which could include being provided an entry into a sweepstakes or a contest by providing this review, that there are regulations on the federal level that need to be followed when that is the topic of your promotion. And the last one I want to mention here are donations. A whole seminar could be discussed in terms of promotions regarding charities and many private companies may want to run a promotion where they are accepting donations for a charity as you get an entry by making a donation.

  That is something, again, that's regulated in the charitable area. Many states have laws that may prohibit or require registration of a company as a fundraiser, if they're receiving money or as a charitable trustee, if they're receiving and holding money on behalf of a charity. Any types of sweepstakes or contests that involve charitable donations need to also consider the various charitable laws that are involved. Social media sweepstakes and contests are very common, very easy to do, and very popular with the younger audience.

  And initially, the platforms had very extensive rules in terms of what you can and cannot do, in terms of running a promotion, a prize promotion on their site. But what has happened since those very detailed rules has been, the platforms have basically said, "Look, this isn't our problem. If you're running a sweepstakes or a contest, and it happens to be on our platform, you are totally responsible for that. All we really care about is just make sure that you make it clear that we're not running this promotion."

  And you'll see that, "This promotion is in no way sponsored or endorsed by Facebook." For example, "...and that we're released from any claims that may come up from this." The rules in the release language, in an officials set of rules will detail that Facebook or the platform is not liable for anything that goes on with regard to this promotion. I listed here that Facebook now besides those two requirements you need to do it on pages or within apps. They don't want it run on the timelines.

  YouTube only wants free skill contests, and they do not want you being the sponsor to be able to get the rights to the video, exclusive rights to the video that you would normally get if it were not on YouTube and someone was just submitting a video to the sponsor directly where the sponsor would want at least a license to use, publish, etc. the video. Twitter just says that "Don't make it easy for people or tell them they shouldn't have multiple accounts or require multiple posts in order to enter, keep it simple.

  And they have the @reply with the entry is a good idea, so that therefore you could stay in contact with the entrant. I listed here to Pinterest has their own minor requirements as does Snapchat, as does Instagram. A lot of these online media ask, when you're having a promotion on an online media, the sponsor asks the entrant to provide some type of user generated content. Send me a video, send me a picture, do something where you're posting some kind of content that you, the entrant generated on the site.

  When you are asking as a sponsor for the entrant to provide their own content, in order to enter the promotion, there are a number of considerations that need to be made. First, what are the risks when you do this? Well, there's maybe some type of intellectual property infringement. You really don't have a great idea as a sponsor on whether Joe Shmoe submitting this video or submitting a picture is a picture of him or a picture of someone else.

  Is the picture or the video going to have all other kinds of trademarks, other companies' logos in the video that you're now going to have posted on your platform for the sweepstakes or for the contest that that other company is going to get a little upset that it looks like they are somehow promoting your brand? You get into the issues of defamation. If you're asking for people to give reviews, if you're asking the people to say things about either a competitor or your own company. You don't know what they're going to say.

  You have issues of privacy and you have issues of defamation that could come up in this situation. Now, there are some laws to help you as the sponsor, when you're asking for user generated content, and one is the Digital Millennium Copyright Act. Now that will protect you the sponsor from copyright infringement. So if you ask for an essay to be sent to you online about anything in particular and the person who entered it actually copied that essay from someone else, that would be a copyright infringement.

  Now, if you, as the sponsor had no knowledge of it, when the original writer gets in touch with you and somehow you find out that this is their work and not the entrant's work, you work to quickly take this down. Those are things, you have certain steps you need to take under the Digital Millennium Copyright Act to make sure that you now cannot be sued for copyright infringement when someone else is infringing upon someone else's copyright. And it happens to be as part of your promotion. The other federal law that could help you is the Communications Decency Act.

  And that provides protection for defamation, essentially. And if you're asking someone to write something and it potentially is defamatory, that as long as you just put it up there as is, and you don't modify the content and you don't have anything to do with it, you could have the protection under Communications Decency Act and is not going to be your responsibility. Now, what you want to do to protect yourself is in your rules, you want to provide a full release from any claims that may come about because of what the person is submitting.

  It might be impractical to get a signed release from every single entrant, but at least the finalists and the winners could sign a release so you're not responsible for bad things that happened. And I point out that usually you would get some kind of license to use what was submitted for your own purposes. Once you start using it for your own purposes, you got to watch those issues about copyright, etc. and make sure they're all okay. But the Consumer Review Fairness Acts.

  If it's a consumer view, you can only get a nonexclusive license, meaning the entrant himself or herself can continue to use that review if they wanted to, for some reason. Mobile marketing is another area that is very popular and has come about since everybody walks around with the phone. As I mentioned before you're going to have a consideration issue if you're having a text message sweepstakes that generally it's prudent and if the method of entry is text message to also allow for a separate free method of entry in the off chance that premium rates could apply to some of your entrants.

  And they can't enter without paying these premium rates. If you limit it to people with standard rates, that's a better thing. That may eventually change, but right now, text only is something you're not entirely on safe ground, just doing a text only without a separate free method of entries. There are mobile marketing guidelines that exist that help in the mobile marketing area. They do recommend that the AMOE is provided for any kind of mobile sweepstakes, that you say the magic words of, "Message and data rates may apply."

  And you get the confirmation to send the text and give them the information on how to opt out. I mentioned before that product reviews would be an area of user generated content, and they are an area that need to be considered. As I mentioned, they may involve making a purchase or may require making a purchase. And they do trigger the FTC endorsement guidelines where certain things need to be done if you are asking for product reviews as part of an entry into a sweepstakes or contests, and including that you need to identify the connection that they were given an entry on behalf of this.

  And online, you could put a #endorsed or #sponsored so people apparently know that this review was sponsored or endorsed in some way by the sponsor itself and not just freely given by the person making the review. The main thing that's going to work and necessary for any sweepstakes or contest are the official rules. They're usually on a website, if it's a non-internet sweepstakes there's something that could be posted at retail or could be mailed to people upon request.

  But the key is that the official rules form the contract with the entrant that you need to contain all the material terms and conditions, and you must make them available to the entrants, so every time you see a little ad, no purchase necessary, must be 18 or older, see official rules at and give them the opportunity to review and see the rules before they make the decision, before they make the decision to enter. And if you do that and they are given the opportunity, then therefore they will be bound by the official rules, which is key.

  Some particular items, I just want to go over when you're doing your official rules that are worthwhile putting in. You're obviously going to have to include how to enter, the age restrictions, the restrictions on which states apply, what the free method of entry is, the deadlines, the number of entries if there's any limit on that, a full description of the prize, where they know the number of the prizes, what the prize is going to be. You don't want any complaints about what the people thought they were getting.

  The advertisement should match the description in the official rules or the advertisements, if not, preferably, but, should at least mention that it doesn't fit the actual prize that's being awarded. If there's any limitations or costs involved. As I said, I went over that, this is just tickets only for the Madison Square Garden concert. You're not getting transportation to the event. That needs to be made very clear in the rules. If you want to make sure that you're not giving... If there's a lot of prizes, a lot of times you don't want to give a lot of prizes to the same people in the same household.

  That seems to be a common event. You want to spread the joy. You might limit it to one person per household, that's an item. For specific items, you have trip prizes, they need to have very detailed descriptions of what the transportation is, when people need to make the trip, what are the hotel accommodations? Are they double occupancy? Are they single occupancy? Are you going to get ground transportation from your home to the airport? Are you going to get meals? How many guests are involved? That everybody needs to travel on one itinerary. And are there any blackout dates?

  If this is just a broad trip to an island or something like that. Need to think through that people know, and then can complain about what they were given for the prize. Automobiles. You need to make sure you're very specific about the make and the model and the year, and what options exist for the winner. Can the winner pick the color? Can the winner pick upgrades? Or is it as is, this is the particular car you're getting? How is the winner going to get the automobile? Is it going to be delivered to the winner or is the winner have to pick it up at the dealership?

  If the winner has to pick it up at the dealership, then you need to be thinking about the issue is, do I have post consideration? As we talked about before, where there's going to be a cost involved for the person to pick up the automobile, a significant cost involved to pick up the automobile. You need to, with a car, confirm that they are a licensed driver, that they have insurance, that they could register the car. These are just typical disclosures that need to be made while we're disclosing the prizes, right adjacent to the prize should always be the odds for a chance promotion.

  Where, what are the odds of winning? Typically, the odds are just stated as the odds depend upon the number of entries, but they may be different at times. Maybe it is one in a hundred will win. You need to make sure you disclose what the odds are adjacent to the prize. You need to disclose when you're going to pick the winner, how the winner is going to be selected. If it's a skill contest, you need to describe what is going to be judged, that will it be judged by judges or by the sponsor itself?

  Are there rounds that are involved and in particular, what would be the criteria for a tiebreaker if two people or more end up tying at the end of the day for the first prize? After telling them in the rules, all of that information about the prize, you need to then disclose and bind by having them in the official rules, the things that are going to happen with regard to the prize fulfillment, that the person's not a winner until they're verified, and they're going to need to do these things. They're going to need to sign an affidavit of eligibility. They're going to need to sign a release in order to be awarded the prize.

  That they need to respond to any prize notice within a certain amount of time, or they're going to be disqualified and you're going to move on to the next alternate winner. Those are some general requirements that need to be fulfilled by the entrant or the winner before they're awarded the prize and you want to make sure you put them in the rules. You need to put in the rules, many states require this, how they could obtain, how anyone could obtain a copy of the winner's list by writing to sponsor at PO Box da, da, da, da, da, da.

  You need to have the exact name and street address of the sponsor in all of your rules. Those are, generally you'll see a lot of different items in the rules. It's tough to go through every single thing because every set of rules may be different, but those are the big items that you want to make sure that you cover. You can't change the rules once they are out there and in the public in particular, Florida says, "Don't change the rules." You can't say, "Well now I'm going to have more prizes or I'm going to stop this in September instead of October."

  No. Once you've started the promotion and you have a set of rules you need to continue to be bound, you yourself as the sponsor are bound by those rules and not just the people who have entered. In conjunction with the rules, you're going to have advertisements about your promotion and the states require specific disclosures about the prize promotion in any advertising. Now, just generally, you're going to want to make sure that the ads are consistent with the official rules. The dates are the same. The people who are eligible to enter are the same.

  The ads must fairly depict and represent the promotion. If you're giving away a little candy bar, you can't have a mountain of chocolate in the picture as the main part of this promotion. It is important that you explain that there are the availability of entering without a purchase depending on how much you are pushing the purchase, purchase, purchase way of entering may dictate how clearly you may want to disclose in your ads, what the free method of entry is. At the very least, you're going to want to put in the ads somewhere that no purchase is necessary.

  And maybe, that for free entry instructions, see the official rules available at... And give where someone could get those rules. The main things in the ad disclosure are going to be make sure they know the name and address of the sponsor. As I said, the no purchase necessary, the start and end dates, who's eligible, 18 or older, US only. If you want a description of the prize and how to get the free rules is very, very key. With mobile promotions, you're going to have to try as best you can to abbreviate all of these items as best you can, but make a link. You want to be able to link to the rules is my idea.

  Give them a hint that no purchase is necessary. You got to be 18 and older. But before you enter, please take a look at my rules, and here is a link for the rules, which you could do in all types of promotion. That generally covers what you need to know for the basics to play by the rules and the basic legal considerations for sweepstakes and contests. And hopefully, you have enough information to identify the issues and know when you need to dig a little deeper and know enough to know the differences between a sweepstakes and a contest and the general elements on how to make each of them legal.

  Thank you.

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1h 1m 06s

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