Under both federal and Georgia laws, non-government lotteries are illegal. For this reason it is critical that the structure of sweepstakes and prize contests are designed so that they do not meet the legal definition of a lottery. Some states require that some contests be registered and may prohibit certain practices. In addition, the government may apply restrictions or limits to lawful promotions, such as geographical or the value of the prize. This specific issue has become more problematic due to internet and mobile technology as well as social media platforms.
If errors are made in the structure of these contests the sponsors may face a variety of problems, including government investigation, regulatory enforcement actions, civil lawsuits and criminal sanctions. Some sponsors choose to work with marketing firms to administer the promotion, but this will not shield them from liability if a problem with the sweepstakes or prize contest is found.
How Thrift McLemore Can Help
Structuring a sweepstakes or prize contest that meets all applicable laws and regulations is difficult. Our expert business attorneys routinely assist clients in developing and administering compliant events and minimize risk. Our services include:
- Creating and/or analyzing the structure of your sweepstakes;
- Advising on alternative methods of entry and equal dignity;
- Conducting a legal compliance review of any marketing materials and websites used for the event;
- Drafting sweepstakes rules and disclosures, terms and conditions;
- Reviewing and advising on privacy and data collection concerns;
- Preparing winner affidavits and releases and submitting winners list to appropriate governmental entities;
- Handling legal issues relating to sponsorship and licensing contracts;
- Drafting prize fulfillment agreements; and
- Advising on the tax implications of the contest.
Our aim is to help you structure, administer and conclude your sweepstakes or prize contest that is compliant with all relevant state and federal laws. Our attorneys will assist in this process to assure that the event is successful.