Playing by the Rules – Contests, Sweepstakes and Lotteries!

May 5, 2010 | 0 Comments

No matter where and how you are advertising your community, be it in print, online, or through social media websites, you have many creative ideas about how to entice people to visit you and consider you for their new apartment home.  But do you know the differences between a contest, a sweepstakes and a lottery?  This is very important, since the first two are legal; but a lottery is not legal (only States have the power to run a lottery).  So you need to be careful that you do not run a promotion that can actually be criminal!

Let’s look at the differences between a contest, a sweepstakes and a lottery.  There are 3 elements to consider:            chance…..consideration…..prize

Essentially, if you have 2 of these it is legal; if you have 3 of these it is NOT.

Consideration + Prize = Contest (A contestant has to do something to win a prize, such as write the best essay or come up with the best slogan or best design; this is the “consideration” that is required of them).   In theory, though, there is no “chance” since the “best” entry will win (in other words, it is not random).

Chance + Prize = Sweepstakes (The entrant doesn’t really have to do anything – give consideration – to win, but winning is based on chance, i.e. a random drawing.)  It has been held that sticking a stamp on an envelope is not enough to be called consideration, nor is filling out the entry form or using a piece of paper instead.  Even an online questionnaire with a limited number of required fields is most likely okay.  But you have to be careful not to require that people visit your community or perform in some other way (such as sign a lease) in order to qualify for the drawing, because then…

you have all 3 elements and this is BAD!

Because now there is a LOTTERY and this is illegal!

 

Chance (random drawing) + consideration (you are requiring of the prospect) + prize

IS A LOTTERY

 

This article was posted by Nadeen Green, Senior Counsel with For Rent Media Solutions®.  However, while Nadeen is the attorney for FRMS, she is not your attorney. So her information is not to be considered legal advice and both Nadeen and FRM strongly recommend that you consult with your own attorney as to any legal questions or problems you may have.  Nadeen’s alter-ego is Fair Housing Lady, but she has just demonstrated that she knows more than just fair housing stuff.  Her next posting will be about the “mouse print” you must use when you conduct your sweepstakes.

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Category: General Information, Property Managers & Owners