April 15, 2019

app-contest
Mobile App Contests

Mobile App Contests: A Potent Marketing Pairing

Over the past few years, businesses have discovered that mobile applications (or “apps”), when used to conduct sweepstakes and other promotional contests, represent a potent means to attract new customers and create positive interactions with existing customers.  Unsurprisingly, given these trends in merging marketing with technology, there has been a proliferation of mobile apps designed specifically to provide business owners with a platform through which to host their mobile app contests.

While mobile app contests provide business owners with a marketing match made in heaven, there is a complex array of legal regulations and rules that apply to each separately, as well as unique legal issues that arise when they are used together. Given the numerous distinct and overlapping laws that apply to mobile apps and contests, it is essential that business owners retain attorneys who have experience in each of these areas prior to initiating a mobile app contest.

What Laws Apply to Mobile App Contests? 

While certain mobile app platforms may provide assistance to business owners in connection with mobile app-based contests, there is no guarantee that such platforms will be able to help business owners navigate the intricate network of laws that apply to mobile apps, as well as contests conducted through mobile apps. For example, certain mobile apps might require/be capable of tracking the physical location of end-users.  This might be necessary for a contest that takes place, at least in part, in a given geographic area.  Prior to engaging in such geolocation tracking, however, app operators must ensure that they obtain informed end-user consent in order to avoid unwanted regulatory scrutiny.

In addition, there are, generally speaking, two categories of promotional games: games of “skill” and games of “chance.” Games of skill are typically easier to operate because they have fewer regulatory filing requirements, but most contests do not involve a sufficient degree of skill to meet the standard of skill required in most jurisdictions. Games of chance, on the other hand, are considered illegal lotteries in each state, unless one of the following three elements that comprise a lottery is removed: (1) a prize awarded to the winner; (2) chance in determining the winner; and (3) consideration for entry in the game.

Because removal of the prize undermines the promotional aspect of the game for businesses, and because chance is hard to eliminate entirely (many states find that even a small trace of chance in determining the winner satisfies the “chance” element), consideration is the element most frequently removed.  Given the need to eliminate consideration, mobile app operators must ensure that their respective promotional contests are free to enter, or, in the alternative, that there are free alternative means to enter the contests.

Retain Attorneys Familiar with Mobile Apps and Contests

As mentioned above, there are various laws that apply separately to mobile apps and sweepstakes, as well as unique legal issues that arise when mobile apps and sweepstakes are used in combination.  Due to the interplay of local, state and federal laws, rules and regulations, and the considerable risks to businesses that do not comply with same, it is essential that business owners obtain the advice and counsel of qualified attorneys when commencing any sweepstakes or contest, whether through a mobile app or otherwise.

Please note that this is only a brief overview of some of the legal issues involved in running sweepstakes and other promotional contests by and through mobile applications.

If you are interested in learning more about this topic or require assistance in connection with your mobile app and/or social media-related sweepstakes and promotional campaigns, 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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