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If your company is running a contest or sweepstakes, you can’t ask entrants to purchase something as a means of entry.And if your company isn’t a non-profit, you cannot run a raffle.Before continuing, be aware that while many countries have laws surrounding gambling, lotteries, and sweepstakes, we’ll be focusing on the US for the sake of this article.Additionally, we’ve seen many giveaways run through our platform and while we feel confident in talking about the subject and promise to offer the best knowledge we possibly can, we’re not lawyers.Just a disclaimer ;) First, let’s discuss the differences between a sweepstakes promotion, contest, and a lottery.To understand the differences, it’s important to become familiar with the word “”.When you hear the word consideration, it’s referring to the entrant’s time, effort, or money.It can come in several forms, such as sending a text message, a 900 number phone charge, subscription fees, making a purchase, or engaging in activities that require a considerable amount of time (like filling out an in-depth survey for example or making multiple in-store visits). Typically when we refer to a giveaway on our blog, we’re referring to what is technically known as a sweepstakes promotion.
Lotteries in this country are exclusively government run, and prohibited outright in a large handful of states.Like the FTC, the FCC doesn’t directly oversee sweepstakes, but will step in if they see a promotion violating these rules.To fall in compliance with the FCC, it’s best to communicate the ‘NO PURCHASE NECESSARY’ clause when advertising your giveaway, no matter if that’s on your website or a radio ad.Every state’s laws pertaining to raffles are a little different, but the one rule that’s consistent for all raffles is that they’re specifically meant for non-profit organizations.
The organizations that host these events often find that they are a great way to raise funds and to promote awareness for their causes.And unless if you’re the government, it’s illegal to run a lottery.