How to Avoid Legal Trouble When Creating Sweepstakes or Contest
Avoiding legal trouble when running a sweepstakes or contest can be tricky as there are federal, state and even local laws that your sweepstakes must comply with. The key to running a successful sweepstakes promotion is to make sure that you have all of these concerns covered!
Before your sweepstakes launches, make sure to review the following:
Official Rules and Abbreviated Rules
The official rules and abbreviated rules will define the rules of your promotion. Make sure that you have covered everything that is required to run a sweepstakes in every jurisdiction where your promotion will be valid. Make sure to also mention where your promotion is void (e.g. “void where prohibited”).
As Sweepstakes Administrators we can help create Official Rules for your promotion.
See hundreds of examples (right here) of Official Rules at our Official Rules Center.
Registration and Bonding
If you plan to offer high-value prizes (worth more than $5,000), namely in the states of New York, Florida, and Rhode Island, you may be required to register and bond your promotion before your sweepstakes launches.
As Sweepstakes Administrators we can help provide the services needed to bond and register your sweepstakes.
Winner Affidavit and Liability Releases
These are the documents that your winners will have to complete that confirm their eligibility to win the prizes. Furthermore, they also release your company from liability in regards to liability resulting from sweepstakes participation or prize claims.
Compliance With State Alcohol Boards
If your promotion is sponsored by an alcohol brand, you are required to register your promotion and ensure compliance with 7 state alcohol boards.
Alabama (AL), Indiana (IN), Maine (ME), Maryland (MD), North Carolina (NC), Vermont (VT) and West Virginia (WV) are the 7 states that require sweepstakes approval if printed ads will be placed in stores.
There may also be additional industry compliance concerns if the sponsor of your promotion is in an industry with significant regulation including the finance, medical, tobacco or firearms industries.
Indemnification and Insurance
It may be necessary to obtain insurance for your promotion in order to protect your business against lawsuits from sweepstakes entrants and other parties.
Compliance With Social Media Terms of Service
Social media platforms, such as Facebook, Instagram, and Pinterest, all have their own rules when it comes to sweepstakes and contests advertised on their platforms. You’ll need to make sure that your sweepstakes complies with their rules to avoid having your promotion shut down.
- What Are Instagram Contest Rules & Best Practices?
- Facebook Contest Rules and Ideas
- Guidelines for Running a TikTok Contest
Request Your Sweepstakes Legal Review to Avoid Legal Trouble
A full-service sweepstakes management company will provide the services that you need to ensure that your sweepstakes is ready to launch. All legal compliance matters, including filing of the required paperwork for registration and bonding, will be handled as required by law.