October 10, 2019

app-sweepstakes
Mobile App Sweepstakes Law

The world’s population is increasingly reliant on smart phones and other similar mobile devices.  Businesses have been adjusting to this new reality by pursuing consumer outreach through mobile applications (or “apps”) that can be downloaded and accessed via smart phones.  Regardless of the medium or technology involved, one particularly potent means of attracting and interacting with consumers involves the use of sweepstakes and other promotional contests.  Unsurprisingly, given the emerging trends in smart phone usage and the concurrent proliferation of mobile apps, there has been a wave of mobile apps designed to provide business owners with a platform to host their mobile app sweepstakes.

While mobile app promotions may provide business owners with an ideal combination of technology and marketing reach, there is a complex system of laws, rules and regulations that apply to each separately, as well as unique legal issues that arise when they are used together. One such issue centers around whether sweepstakes sponsors need to offer consumers a free, alternative means of entry (often referred to as an “AMOE”) in addition to the entry process made available via the mobile app itself.

Do You Need to Offer Consumers an AMOE with Your Mobile App Sweepstakes?

Mobile App Sweepstakes: Alternative Means of Entry

Sweepstakes are, by definition, prototypical games of chance.  Games of chance, however, will be considered illegal lotteries under applicable law unless one of the following elements is removed: (1) a prize awarded to the winner; or (2) consideration for entry in the contest.  Removing the prize element is not practical, as a prize-less contest would fail to generate sufficient consumer interest.  Thus, for a sweepstakes promotion to comply with applicable law, consideration is the element most frequently removed.

“Consideration” can take many forms, including requiring that consumers: (a) pay an entry fee; (b) purchase a product; or (c) engage in a time-consuming or otherwise onerous activity in order to gain entry in the subject contest.  In the context of mobile app-based sweepstakes promotions, there is an inherent requirement that the consumer obtain a smart phone (or similar mobile device) capable of downloading and utilizing mobile apps. Given that many consumers may not own such a device, requiring that consumers obtain one in order to enter sweepstakes promotions may be deemed consideration.  In order to eliminate that de facto consideration element, mobile app operators should consider offering an alternative means by which to enter each of their respective sweepstakes contests via a mechanism other than the mobile app itself.  This AMOE can be accomplished, under certain circumstances, via a simple website entry form, or mail in entry.

The Importance of Retaining Attorneys Familiar with Mobile Apps and Sweepstakes

There are specific 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 highly specialized issues that arise in connection with emerging technology and marketing methods, it is crucial that business owners obtain the advice and counsel of qualified attorneys when commencing any sweepstakes promotion 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 connection with offering sweepstakes and other promotional contests by and through mobile apps.

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 promotion 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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