The Prize Wheel software was designed to offer a
legitimate legal means to run promotional give-a-ways or
sweepstakes while collecting contact data.
It is important that you understand the
legalities of running this type of
promotion. Laws vary from state to
state. We include extensive
OFFICIAL RULES and a
PRIVACY STATEMENT prepared by a law
firm with this software package. You
will need to simply edit your information
and post to your Official Rules page.
If you are uncertain we recommend that you
consult an attorney.
Please Note: This
information is only a general overview and
should NOT be considered legal advice
Overview Of
Promotional Games
There are several bodies that regulate
lotteries: the Federal Communications
Commission regulates the broadcast of
lotteries over the airwaves; the Federal
Trade Commission regulates unfair or
deceptive acts and schemes involving
elements of chance; and the Postal Service
regulates lotteries involving the use of
mail. However, the vast majority of
regulation regarding online promotions takes
place on a state level. Because of this,
online promoters must either comply with the
laws of all 50 states or clearly and
specifically exempt entries from certain
states.
The test for whether an online promotion is
“legal” turns on whether or not it can be
classified as a as a lottery. A lottery is
defined as a promotion which has three
elements: (1) prize; (2) chance; and (3)
consideration. If the online promotion has
all three elements, it is an illegal
lottery; if any one of the elements is
missing, it is not. What this means is that,
if the online promotion offers something of
value, the winners of the prize are
determined by chance (for example, a random
drawing, or spinning of a wheel), and some
form of consideration is required for a
person to participate in the promotion (for
example, the purchase of a product), then a
lottery has been created under federal law
and the laws of the 50 states. Therefore, to
create a legal online promotion, one of the
three elements must be eliminated. In the
case of the Winning Prize Wheel, the third
element of consideration (value provided by
the player) is eliminated.
While there are differences among the
various state laws, there are several
definitions and concepts which basically
remain the same. For example, as noted
above, all 50 states define lotteries with
the same three elements: (1) prize; (2)
chance; and (3) consideration. A prize is
generally defined as anything of tangible
value, no matter how small. However, a prize
can also be something intangible, like
bragging rights. Chance, in promotions,
usually involves some type of random
selection for the winners. Chance occurs
when the entrants cannot control the
possibility of winning a prize.
Consideration can be a purchase of a product
or service, a straight fee or payment to the
sponsor to enter, or a substantial
expenditure of time or effort. A few states
have interpreted consideration to mean
anything which benefits the sponsor, such as
private contact information, increased
business or customer traffic including
requirements to purchase the product, time
spent filling out information on a
questionnaire or survey, or time spent
reading the pages of a web site in order to
find the information necessary to enter the
promotion. The Winning Prize Wheel requires
entrants to submit their names and email
addressed. The vast majority of states would
find that the required submission of such
minimal information does not constitute
consideration. However, there are states
that define consideration more broadly, and
for sponsors to fully be covered, the
following is advised: To avoid the
uncertainties of what may constitute
consideration for online sweepstakes,
sponsors should always provide an alternate
means of entry. Mail-in entries or toll-free
telephone calls are popular alternate means
of entry which remove the element of
consideration. The sponsor should also make
sure that the online entry is easy to
understand and only requires a minimal
amount of time to complete. That way, the
sponsor can argue that the cost/time to
enter is no more than handwriting a mail-in
entry or making a local or toll-free call.
It is also a good idea to limit eligibility
based on those with pre-existing Internet
access and/or email. This means that the
sponsor is not requiring anyone to go out
and purchase Internet access or obtain an
email address in order to participate in the
promotion.
State Specific
Regulations and Laws
A national promotion must comply with all
states' laws. Almost half of the states have
prize promotion statutes which regulate
sweepstakes promotions. Generally, the prize
promotion statutes require the sponsor to
disclose the name and address of the
sponsor; include a clear and bold statement
that no purchase is necessary (if that is
the case); provide a clear description of
how to enter the promotion; set forth the
odds of winning a prize (in Arabic
numerals); provide a description of the
prizes and the number and verifiable retail
value of each of the prizes; include a
statement that entry in the promotion means
that the entrant consents to the use of his
or her name, likeness, and image; and
include a complete listing of the rules and
eligibility requirements to enter the
promotion. The names of the winner must also
be disclosed and made available. In addition
to these general disclosure requirements, a
few state laws contain provisions to ensure
that these disclosures are clear and
conspicuous. In New York, material
disclosures must appear on the first page of
the prize notification document (web site).
Violation of this requirement results in a
civil penalty not to exceed $1,000 for each
violation. In Connecticut, the odds of
winning a prize must appear in immediate
proximity to the announcement of the prize.
Violation of this requirement results in a
civil penalty of up to $5,000 per violation.
Please Note:
This information is only a general overview
and should NOT be considered legal advice
Financial Caps On
Total Values Of Offered Contests And Games
There are also a few states that require a
sponsor to register with the state before
conducting the promotion. In Florida, if the
total value of the prize exceeds $5,000, the
sponsor must file a copy of the rules and
regulations of the promotion, and a list of
all prizes with the Florida Department of
State at least seven days before the
commencement of the promotion. Sponsors must
also post a bond or establish a trust
account with sufficient funds to cover the
value of the prizes. Violation of the filing
requirement is a class B misdemeanor which
carries a fine of up to $1,000. Until
recently, Florida required all online
promotions to provide a free alternative
means of entry. Florida's Department of
State has now indicated that it will no
longer impose such a requirement for
promotions that do not otherwise require
consideration for entry.
In New York, if the total value of the prize
exceeds $5,000, the sponsor must file a
registration statement with the New York
Secretary of State containing the number of
prizes to be awarded, the number of winning
entries, the odds of winning, the value of
the prizes, the rules of the promotion, and
the duration of the promotion. The sponsor
must also post a bond or establish a trust
account with sufficient funds to cover the
value of the prizes. The registration must
occur 30 days prior to commencement of the
promotion. Failure to register is a class B
misdemeanor.
Several states require certain disclosures
in the promotion’s rules. For example, Iowa,
California, Minnesota, Tennessee and
Arkansas require the sponsor to state the
odds of winning; and Iowa, Minnesota and
Arkansas require that the sponsor state the
exact number of “notices distributed.” The
requirement for disclosure of the number of
written notices is not translatable to the
Internet. Therefore, it may be difficult for
sponsors to comply with these strict
disclosure requirements. Several states have
very specific disclosure requirements, and
each should be reviewed before commencing an
online promotion.
In Rhode Island, retail establishments
proposing to engage in any promotion that
offers the opportunity to receive gifts,
prizes, or gratuities valued at more than
$500, as determined by chance, must file
with the Rhode Island Secretary of State a
statement disclosing the number and value of
prizes, and the rules and regulations of the
promotion. Failure to file is a misdemeanor
resulting in a fine. The Rhode Island
Attorney General's definition of “retail
establishments” includes all retailers that
sell directly to consumers and that offer a
game of chance to the general public as a
method of improving their business. The
Attorney General has not yet issued an
opinion as to whether this law applies to
online retailers. However, Rhode Island
retailers that have web site promotions
should comply with the registration
requirements.
In conclusion, the Winning Prize Wheel
sponsors are responsible for complying with
state and federal regulations. Therefore, it
is important that Winning Prize Wheel game
sponsors conduct the necessary research
prior to utilizing the promotion. If a
sponsor determines that it cannot comply
with a particular state regulation, it may
restrict the game to all such state’s
residents by expressly and clearly
articulating the restriction in the official
game rules.
Please Note:
This information is only a general overview
and should NOT be considered legal advice
Below are our most popular Prize Wheels. Our Prize Wheels are very
versatile and capable of 1000's of promotions. Please contact us for a Prize
Wheel to suit your instant win promotion.
This version is perfect for
kiosks or countertops at your location or at a
tradeshow. Touch, Swipe, Auto-Print Barcoded receipts. Click Here for More Info
Need to collect opinions? This Prize
Wheel will create an incentive for
people to tell you what they think.
This can also be done with a Coupon
Wheel. It's genius! Click
Here for Demo
Our Optional Facebook App allows
people to post to all their friends
Wall after they Spin!
This is a list of the United States
and its Territories in alphabetical
order:
Alabama
Alaska
American Samoa
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Guam
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Northern Marianas Islands
Ohio
Oklahoma
Oregon
Pennsylvania
Puerto Rico
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Virgin Islands
Washington
West Virginia
Wisconsin
Wyoming
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