Sweepstakes, Contests and Lotteries: It’s Important to Know the Difference

Sweepstakes, lotteries, contests, giveaways…they all seem to be the same thing. Many of them may even sound a lot like gambling. But there are differences, with different laws that apply to each. You don’t want to run afoul of the law by not understanding what each one actually is.

Sweepstakes and Contests

Sweepstakes and contests are often used interchangeably, but they have different meanings.

A contest is just that—a competition. That means that people are entering something to be judged or evaluated, and that others (or the site or whomever is running the contest) are judging the entries for a winner. A typical contest to submit proposed names or designs, in which a winner will be picked, would be a contest, or a complex logic problem, where those who solve it correctly would receive some kind of prize would also be a contest.

As you can see, there is some degree of skill or creativity to a contest, and either an objective way to evaluate winners (such as a correct math solution) or a subjective evaluation (such as choosing the best piece of artwork).

Sweepstakes are simply random—enter and you may win if your entry is the one chosen. This is picking names out of a hat.

What About Lotteries?

In both contests and sweepstakes, people can enter for free. There’s a reason for that—if people have to pay to enter, and the winner is chosen at random, you are running a lottery, and that has strict rules, laws, and license requirements to enter.

Yes, many companies do require people to buy something to be entered to win a prize. But in many of them, there is a “free option,” whereby people can enter into the sweepstakes or contests without having to pay for anything or buy anything. You don’t want to violate criminal laws related to illegal lotteries, so always make sure that you have that free option for those entering into your contest or sweepstakes.

Terms and Conditions: They’re a Contract

Regardless of whether you are running a contest or sweepstakes, you need to make sure that you have legally binding terms and conditions, that set forth how to enter, how entries are judged, how to win, and who is holding, or sponsoring, the contest or sweepstakes.

These terms form the basis of a contract between you (as the one holding the contest or sweepstakes) and those entering the contest, and as such, you should ensure that your terms and conditions are clear, and that they sufficiently protect you.

Details about how to win, should be included, including the rules for entry, or whether to be selected, someone must be in a certain location or online at a certain time, should be included. Remember also intellectual property—if your contest relates to anything that users submit that could be copyrighted, you need to clarify who owns those works, should you select them as the winner.

Let us help you with marketing strategies, to make sure they’re legal and to keep you out of trouble. The West Palm Beach commercial litigation attorneys at Pike & Lustig help are prepared to assist you today.

Source:

learn.rafflecopter.com/why-run-a-giveaway/difference_between_contest_sweepstakes_lottery.html