California Liquor Laws and Sweepstakes: Can Californians Enter Giveaways?
A Change in Sweepstakes Law that Every Californian Sweeper Should Know About
Can Residents of California Enter Alcohol Sweepstakes?
While this wasn't always the case, California residents are not prevented by law from entering sweepstakes offered by alcoholic beverage companies. In fact, recent amendments to California sweepstakes law makes the state among the more progressive when it comes to liquor marketing.
Why Were So Many Sweepstakes Void in California?
Starting way back in 1937, and enforced starting in the early 2000s, California liquor laws prohibited alcoholic beverage companies from sponsoring sweepstakes and contests to promote their products. California was the only one of the 50 United States to have such strict laws about marketing alcohol.
The law in question was Section 25600 of the Business and Professions Code (read the full text of the law), which read in part:
No licensee shall, directly or indirectly, give any premium, gift, or free goods in connection with the sale or distribution of any alcoholic beverage.
To comply with the law, sweepstakes sponsored by companies from small Napa Valley wineries to giants like Budweiser and Jack Daniels had two choices: they could either prohibit entry from residents of California or they could offer Californians an insignificantly small prize should they be chosen as winners.
According to an article in the Sacramento Bee, no prize could be awarded in alcohol-related sweepstakes worth more than "25 cents for beer-related contests, $1 for wine and $5 for distilled spirits."
For this reason, "void in California" was commonly seen in sweepstakes rules, although some sweepstakes would allow Californian winners to receive a minuscule prize, whereas winners from every other state would receive a huge prize like a boat. A frustrating situation for any sweeper who lived in "The Golden State."
The intent of the sweepstakes restrictions was to curb heavy drinking among young people, but in a court case objecting to the California sweepstakes laws, Coors argued that "sweepstakes tend to influence market share among suppliers but do not increase the overall consumption of alcoholic beverages." In other words, giveaways could influence which types of alcohol were chosen, but wouldn't make people drink more overall. Prohibiting sweepstakes didn't help solve the problem.
Good News for California Residents: The Laws Have Changed!
In January of 2012, the California Legislature passed Senate Bill 778, which amended Section 25600 of the Business and Professions Code to allow alcoholic beverage companies to conduct sweepstakes and contests with some restrictions. Those restrictions include:
- No alcoholic beverage purchase can be required, or even encouraged by offering game labels on corks, bottle caps, labels, or other alcoholic beverage packaging (as many soft drink companies do).
- Companies cannot require that people visit a retail location that sells alcohol to complete an entry. If entry forms are offered at liquor stores, bars, and other licensed retail locations, they must also be another way to get them.
- Sweepstakes information can be included on a neck hanger found on a bottle if, and only if, that information is also available through other methods, and that there is an alternate entry method available.
- And more restrictions designed to ensure that entry is freely available, without any pressure to buy products.
Violations of these rules can result in major fines and even being prohibited from conducting giveaways in California for up to a year.
With the passage of this amendment, most alcohol-related sweepstakes are once again available to residents of California. This is also good news for the many vineyards and other small liquor companies, who rely on sweepstakes to help them increase brand awareness in a heavily competitive industry.
But Wait... There's More!
In September 2015, California once again amended their sweepstakes laws, this time allowing alcoholic beverages to be part of a prize. This is something that many other states prohibit.
Alcoholic beverages cannot be the sole prize awarded; rather they must be an "incidental part of a prize package."
How incidental the alcoholic prize must be is unclear. But something like allowing the winner of a trip to Napa Valley to have a free glass of wine on a winery visit would now be allowed, whereas before it would not have been.
So if you're a resident of California who loves to enter sweepstakes, you can now rejoice in the knowledge that your state has gone from one of the strictest to one of the most progressive in terms of what you can win from alcohol companies.
"Void in California" is something you'll see a lot less often these days.