Sweepstakes and Promotions



Venable attorneys consistently deliver practical solutions for companies seeking to execute promotional sweepstakes and contests. Although sweepstakes and contests are an integral part of the marketing mix for many consumer product and service companies, they are marketing strategies that can be wrought with legal hazards and pitfalls for the inexperienced. Venable is known for working with clients to keep sweepstakes and contest language both clear and straightforward, as well as to comply with the rules, regulations and laws that apply to this highly specialized area of sales and marketing.

Each sweepstake or promotional program presents legal questions that can and should be addressed before execution ensues. From the inception of a given program through its implementation, Venable’s advertising and marketing attorneys advise on such issues as campaign strategy and contest structure, as well as compliance with both state and federal laws to ensure the company is shielded from regulatory scrutiny and potential consumer claims. Our advertising and marketing team is known for anticipating obstacles and mitigating risk before it can emerge as real threat.

Venable attorneys understand what it takes to conceive of and execute sweepstakes, contests and other promotions in today’s dynamic and complex marketing environment. The firm has counseled organizations operating in practically every industry and spanning a wide range of unique promotional programs. Our team has been involved in virtually all aspects of devising and marketing sweepstakes and promotions, including:

  • Determining whether a specific promotion is a legal contest or an illegal lottery
  • Drafting program guidelines and rules
  • Complying with the ever-evolving and highly technical regulatory landscape
  • Executing the administrative details of registration
  • Structuring and negotiating the host of agreements such as spokespersons, talent and joint ventures, among others
  • Handling bonding requirements in states where it is required
  • Reviewing advertising and direct marketing materials
  • Addressing specialized social media policies and procedures
  • Providing strategic counsel in areas such as implementation and post-launch support
  • Negotiating solutions when conflicts arise and, when necessary, advocating our client’s rights in litigation and on appeal
  • Representing clients in regulatory hearings before the Federal Trade Commission and the Better Business Bureau, among others

Our attorneys have partnered with several large consumer product and service organizations, working directly with their marketing and advertising departments to prepare and launch new contest promotions, as well as to provide the requisite legal counsel needed on regular basis. Recognizing that each client has different needs, Venable offers the full menu of promotion-related legal services.

Structuring the Promotion

Clients typically call on us to analyze a basic concept for a promotion and to identify and address any potential problems before the promotion begins. Drawing upon Venable’s extensive, firm-wide capabilities in both federal and state investigations and enforcement actions, our attorneys determine whether a specific promotion is a legal contest or an illegal lottery. Where relevant, our team also reviews the given promotion to ensure it is compliant with other specialized rules, such as Facebook guidelines and other social media venues. If a potential problem is identified, our team suggests both creative and practical alternatives, and often, the “fix” is a matter of inventiveness and judgment.

Drafting Rules

The next step in the promotional process is to create the “Official Rules” that set forth both the framework for the contest and the “contract” between the consumer and the promoter. Venable has created forms and agreements for many different types of sweepstakes and contests, which can be modified as appropriate to fit each specific program. Additionally, our clients have also provided the firm with existing promotional rules for our review and analysis. In either circumstance, Venable has proven to be highly effective when it comes to analyzing or creating these forms. The firm’s historical perspective and size allow our attorneys access to the extensive resources and knowledge needed to keep our clients ahead of the curve.

Registration and Bonding

If the client prefers, our attorneys file the registration and bond the sweepstakes in any state where such registrations are required. Venable works with an online sweepstakes bonding company to provide sweepstakes bonds and same-day filing in the relevant jurisdictions. Our national network of dependable relationships forged over decades of practice consistently save our clients both time and resources, which are often considered intangible assets and a value-added bonus for clients requiring a law firm that is both nimble and acutely responsive.

Advertising Messaging Review

In addition to reviewing contest structure and rules, our attorneys review and evaluate advertising copy for print, radio, television, the Internet or any other promotional medium. Our comprehensive and collective understanding of advertising and direct marketing law provides the much-needed infrastructure our clients require to remain competitive throughout all media channels today.

Promotion Fulfillment and Follow-up

Once the contest is launched, the smooth operation and ultimate financial success of the program becomes the steadfast focus. Venable attorneys have executed affidavits of eligibility and releases for use from program winners. Because our attorneys understand the direct and subtle aspects of proper and protective documentation, our team is able to quickly tailor standard forms to a specific promotion. Many clients choose to assume the responsibility for executing the remainder of the promotion (drawings, filing winners’ lists, etc.) after the initial launch. However, our team stands ready and able to assist going forward and as needed, should our client require immediate assistance.

Privacy and Other Regulatory Challenges

Seemingly simple contests can be subject to surprisingly complex regulations. In particular, Internet and social media-based contests involving the collection of marketing information may create privacy concerns. Our attorneys quickly identify these issues and ensure that they do not become future investigations and enforcement actions.

Global Promotions

Increasingly, many promotions have become global. Sweepstakes and contest laws can vary significantly from country to country. Some countries require that the rules of the promotion be translated into the local language and registered accordingly with a notary. Some prohibit pure games of chance altogether, and certain alterations must be made as to the way the game is played in order for the promotion to be considered legal. Others place limitations on the value of the prizes that may be given away. To ensure full legal compliance for the promotion in each of the countries where potential entrants reside, the legal structure and terms and conditions of such a promotion should be reviewed by local counsel.

Venable has established an extensive network of local legal counsel around the world who understand both advertising and promotions law, as well as what is needed to comply with regional rules and regulations. Venable’s diverse team of marketing and advertising lawyers, coupled with a network of national and international contacts, allows our attorneys to consistently assemble the right mix of legal prowess and geographic reach. Our attorneys can quickly obtain estimates and negotiate fees with local counsel around the globe, as well as coordinate such reviews to ensure compliance and avoidance of potential criminal and civil liability.

Sweepstakes and Promotions Resources

To educate and assist our clients, the firm has created a Sweepstakes and Promotions Manual. This pragmatic guide to creating legally compliant prize promotions includes guidelines and form rules for multiple prize promotion formats, such as random draw and user-generated content promotions on Facebook, Twitter, Pinterest and other social media platforms. Our attorneys regularly work from these forms, or from a company’s existing documentation if preferred, to create a viable sweepstakes and contest infrastructure.

Venable has also published a book, The Guide to Federal and State Regulation of Advertising, edited by Venable partner Melissa Landau Steinman, which includes a section on Internet sweepstakes and gambling. Ms. Steinman has written extensively on the subject of prize promotions and charitable gaming: she contributed chapters on charitable promotions and social media law to the American Bar Association’s Consumer Protection Law Handbook and its upcoming handbook on advertising substantiation. She has also contributed chapters for a new treatise on International Advertising Law from Globe Law & Business as well as several editions of the Brand Activation Association’s (formerly the Promotion Marketing Association’s) treatise on Promotion Marketing Law. Her commentary on the promotions and sweepstakes has appeared nationally in publications as prominent as the Los Angeles Times and she is a frequent speaker on the topic. Additionally, Venable partner Ian Volner published a law review article on the often unclear distinction between permissible games of chance and impermissible lotteries.

A National Leader in Advertising and Marketing Law

Venable’s advertising and marketing team includes attorneys with breadth and depth of practice specifically in sweepstakes and promotions law. Venable is nationally recognized as a leader in the field of advertising and marketing law, with a long and proven track record of successfully representing clients engaged in the development, manufacturing, sale and distribution of products and services to consumers. As a full-service law firm, our clients enjoy full access to Venable’s firm-wide resources, ensuring that cross-disciplinary questions receive the focus required to achieve the most favorable outcome possible.

REPRESENTATIVE MATTERS

  • Assisted a major wireless handset provider in an international, cross-media, multi-promotional effort in its launch of a “bet-the-company” product. Venable advised the client on concept review, as well as assisted in negotiating agency contracts, joint promotion and promotion services agreements, created terms and conditions, and supervised clearance and registration globally of multiple sweepstakes, contests and other promotions. In conjunction with this effort, Venable seconded two attorneys, at the client’s request, to act as part-time in-house counsel for approximately six months.
  • Assisted a multinational software company in developing and launching an international prize promotion in conjunction with one of the world’s most prominent soccer franchises that ran in the United States, Canada, the United Kingdom, France, Germany, Italy, Spain, and Japan. Venable attorneys developed the structure of the promotion and advised the client on the creation of marketing materials for the campaign for compliance with U.S. law, as well as supervised the legal clearance of the promotion in the listed countries utilizing our network of international counsel. The matter was an outgrowth of the firm’s ongoing work for the client in developing its new social media application that interfaces with a user’s Facebook account to create a Craigslist-like platform that is limited to the users’ social graph (i.e., their friends and friends-of-friends on that particular social media platform).
  • Performed a comprehensive assessment and update of a leading bank’s regulatory database to ensure that all future promotions were compliant with federal and state regulations such as the federal CARD Act, lottery and prize promotions laws, state gift card laws, and state UDAAP (unfair, deceptive, abusive advertising practices) statutes.
  • Provided comprehensive advertising counsel to an international hospitality company as it prepared a new global re-branding campaign, including review of all advertising, social media outreach, and sweepstakes and promotions efforts.
  • Advised a leading children’s television cable network on the risk mitigation of a national Halloween costume contest. The network faced significant children’s privacy and intellectual property rights issues after a service provider, hired to create the rules for the contest, made significant errors in the structuring of the contest and thus exposed the network to significant legal risk.
  • Reached an inclusive, multi-state settlement to charges in all 50 states that Publishers Clearinghouse sweepstakes mailings were deceptive. Negotiated terms that satisfied all states and therefore eliminated the pending threat of nationwide litigation.
  • Conducted a 50-state survey of the law of sweepstakes and promotional games for a major consumer electronics company. This included an evaluation of the legality of a proposal to create a major “pay-to-play” gaming website.
  • Advised a leading clothing retailer on legal and Facebook platform compliance issues relating to the launch of its Facebook page. Advice included drafting “Rules of Play” for the page, advising on the placement of buttons and disclosures, assisting in rules creation for a related social media contest, and updating the company’s Terms of Use and Privacy Policy for its website.
  • Analyzed whether the pay-to-enter “road show” version of a major game show would constitute illegal gambling under state or federal law.

If you are interested in learning more about Venable’s sweepstakes and promotions capabilities, please contact Melissa Landau Steinman at 202.344.4972.