A brief guide to sweepstakes structure and sweepstakes management essentials. How you know whether your promotion is a legal sweepstakes or an illegal lottery and what you need to ensure its success.
Sweepstakes are the foundation of motivational or incentive marketing.
They motivate your target audience to take an action. With sweepstakes, you can build product awareness and your audience’s product knowledge, collect email addresses and/or other contact information and increase sales and followers.
Skill contests and instant-win games are other forms of incentive marketing promotions.
All promotions need to avoid being a lottery by not requiring the participant to pay or make a purchase for a chance to win a prize. A lottery has three components:
- Consideration (a purchase of the chance to win the prize)
To remain legal, unless you are a State lottery organization, you must eliminate one of the above. A sweepstakes, prize giveaway, or instant-win game eliminates consideration – thus No Purchase is Required. A contest of skill technically eliminates chance. That’s why contests can require a purchase and still remain legal. Key to a true contest of skill, though, is that each and every entry must be judged by a consistent set of judges using a set of judging criteria provided to each entrant at the time of entry – typically in the Official Rules.
Do I need rules?
In a word, Yes.
There are two main reasons for rules – information you are required to publish (“mandatory disclosures”) and to protect yourself, the sponsor.
The mandatory disclosures include the information that tells your audience the complete story of the promotion. The Federal Government and/or the States have decided they need to know up front who’s eligible, how and when to enter or play, how many entries do the players get, prize details, their values, and an important handful of other information.
Then, you want to protect yourself as strongly as possible. Privacy disclosures are key. Communication management is big. If someone has a complaint, you get to prescribe how they complain, so that you can best manage the situation. The rules protect you against and give you a means to combat hackers that attempt to compromise your program. There are many elements to our rules that keep the sponsor in control.
Talking to and engaging professionals such as Promosis will ensure that:
You have your legal bases covered
- The rules will be complete for the style of promotion you run
- They will keep you compliant with social media platform requirements
- If photos or other upload is involved, what are each party’s rights?
- That you follow both age-related and spam regulations for the players whose data you collect
- That your sweepstakes is bonded and filed where and when necessary
- We will select or judge your winners fairly and notify them
- We will provide the legal paperwork to the winners that verifies they are in compliance with the eligibility requirements
- Issue an IRS 1099 misc income form to winners and the IRS when required
- Your advertising will comply with what can be said about the opportunity to win
- When we write the rules, Promosis will indemnify your promotion, backed by industry-leading insurance in sweepstakes, contests, and games
Your sweepstakes will be as strong and impactful as possible
- Experience – We have over two decades of experience structuring and running thousands of sweepstakes, contests, and games for almost 100 clients
- We will help with fine-tuning headlines and copy to maximize response
We want to help you navigate the complete set of promotion issues, so you can concentrate on the marketing that you do best.