The following is provided for information purposes, and not meant to be legal advice.
There are many federal, state, local laws and regulations governing sweepstakes. This is an area of law that is uncertain and frequently changed.
Generally, a sweepstakes becomes a lottery, and thus, may be illegal under federal and state laws, if all of the following elements are present: (1) prize, (2) consideration, and (3) chance.
Consideration falls under two categories: (1) monetary, where a participant must expend something of value to play, such as making a purchase, (2) non-monetary, where a participant must expend time or effort in such a way that the sponsor benefits, such as going to a store to get an entry form, or to fill out a survey.
Change involves selecting a winner from random, where participants exercise no control.
Some states, such as Florida, Rhode Island, and New York, require sweepstakes to be registered with the state and that a deposit be made or bond posted to cover the value of the prizes if the value of the prizes exceed a certain amount. The bond or deposit insures that winners will be paid if the sponsor defaults, and needs to be filed prior to the start of the sweepstakes.
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