November 26, 2014
A frequent topic of our blog posts has been the benefits associated with the use of promotional contests and sweepstakes as exciting vehicles for marketing your business. Promotional contests and sweepstakes often appear on social media platforms, which provide companies with a free and effective means to increase the number of consumers participating in their respective contests.
While companies must be knowledgeable of the laws governing “games of chance” throughout the Unites States, if a promotional contest or sweepstakes is offered through social media, the respective forum’s promotional contest policies must also be understood and followed. This blog focuses on contests appearing on Twitter.
Twitter: Tweet to Win
If you decide to host a promotional contest or sweepstakes on Twitter, please be sure to read the guidelines governing promotions that appear on Twitter. Specifically, Twitter requires that all sweepstakes promotions include a provision in their respective contest rules that prohibits users from creating and using multiple accounts to enter the contest. Twitter usually suspends accounts from further activity that it suspects to be linked to a single user and created for purposes of entering a contest multiple times. Twitter also cautions contest sponsors to discourage their entrants from posting duplicate Tweets, as users posting duplicate Tweets will be in violation of Twitter’s “Rules.”
Twitter encourages sweepstakes promotion sponsors to require their entrants to include an “@reply” to the respective sweepstakes sponsors so that all entries will be received and considered. Additionally, Twitter requires that contest sponsors follow the Twitter “Rules,” best practice guidelines and Twitter 101 for Business guide. Of course, Twitter also cautions that contest sponsors must comply with all applicable state and federal laws and regulations in addition to their guidelines.
Sweepstakes Promotions
Outside of the applicable Twitter guidelines, it is important to remember that the contest rules for a sweepstakes promotion are your contract with the contest entrants. This means that the rules of the game must be set in stone when the sweepstakes contest period commences, and should not be abandoned or changed mid-stream.
It also is important to note that sweepstakes are considered games of chance and, therefore, illegal lotteries under applicable law unless one of the following elements is removed: (1) a prize awarded to the winner; (2) chance in determining the winner; and (3) consideration for entry in the game. Consideration, or monetary payment, is the element most frequently removed by providing a free, alternative method of entry into the sweepstakes.
Further, as we have reported, prizes above certain cash (or cash equivalent) thresholds may trigger specific sweepstakes registration and bonding requirements in several states, namely Florida, New York and Rhode Island.
In sum, it is crucial to understand all applicable laws, as well as social media promotional contest guidelines, as appropriate, when preparing to run a sweepstakes. It is recommended that you retain qualified legal counsel to ensure that you get the rules right in advance, as well as to help you navigate any related issues that may arise during the course of your sweepstakes promotion.
If you are interested in learning more about this topic or setting up a sweepstakes-related venture, please e-mail us at info@kleinmoynihan.com or call us at (212) 246-0900.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
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