Giveaway Rules and Regulations by State
Have you ever wondered why residents of some specific states seem to be restricted from entering many sweepstakes? The reason lies in state-specific giveaway rules and regulations that require sweepstakes sponsors to jump through unwelcome hoops.
Just as with sweepstakes that are void in Quebec and other regions, companies may find it more expeditious to prevent residents of those states from entering than to comply with the requirements.
If you’re running a giveaway yourself, it’s important to know these state-specific giveaway regulations so that you can decide whether you should follow them or restrict entry to residents of those states.
Here are some of the state requirements that companies need to know before running sweepstakes. Don’t forget to brush up on some important nation-wide giveaway regulations as well.
Florida and New York’s Giveaway Regulations
Both Florida and New York have stringent giveaway laws that are designed to protect the consumer. These include:
- A week before a giveaway starts, the company must register the giveaway. Registration costs $100.
- If the total prize value is more than $5,000, then the company must leave a bond to ensure the prizes are really awarded. (You’ll see many giveaways with an ARV of $4,999 for this reason).
- The company must submit the winners’ list within a certain time period after the giveaway ends.
While people who enter giveaways in these states can rest assured that the prizes will really be awarded, they also can’t enter as many, since many companies find the requirements too difficult to fulfill. That’s why you see many sweepstakes are void in Florida and New York.
Rhode Island’s Giveaway Regulations
Rhode Island’s giveaway laws are similar to those of New York and Florida, but they are a little less onerous.
All giveaways with a total prize value over $500 must be registered before they start (though not necessarily a week before). The filing fee is $150, but there is no bond requirement. Companies are required to have winners’ lists available, but they don’t have to send them to a regulatory agency.
Colorado, Maryland, Nebraska, North Dakota, and Vermont’s Contest Regulations
According to U.S. law, the difference between legal giveaways and illegal private lotteries is that you can’t charge a fee to enter if there is a prize that has a monetary value and if the winner is chosen at random.
Basically, that means that randomly-drawn sweepstakes cannot charge an entry fee, but skill-based contests—where the winners are chosen by judges—can. At least according to national law.
However, in Colorado, Maryland, Nebraska, North Dakota, and Vermont, even judged contests must be free to enter. So if you are running a fee-based contest, you’ll need to exclude residents of these states. And if you’re wondering why you can’t enter a contest, this may well be the reason.
Massachusetts, Michigan, and Virginia’s Tobacco Giveaway Rules
If you are a tobacco company, like Camel, Marlboro, or Skoal, you can forget running giveaways in Massachusetts, Michigan, or Virginia. These three states don’t allow any tobacco giveaways at all.
West Virginia’s Bottle Cap Giveaway Laws
Coca-Cola, Pepsi, and other beverage manufacturers often give away prizes under the bottle caps of their drinks. But in West Virginia, beverage manufacturers must supply retailers with free bottle caps to comply with no purchase necessary laws.
Alaska and Hawaii Are Often Restricted, Despite Having No Quirky Regulations
Although residents of Alaska and Hawaii, as well as U.S. territories like Puerto Rico, are often prohibited from entering sweepstakes, it’s not because they have restrictive giveaway regulations. Rather, it’s due to their location.
Due to their distance from the mainland United States, shipping prizes and paying for airfare for trip winners is much more expensive. To avoid these costs, many sweepstakes are open only to residents of the contiguous United States.
States That Have Removed Restrictive Giveaway Laws
State giveaway rules and regulations are not carved in stone. Over time, states may remove some of their more restrictive laws, and people who were often restricted may suddenly be able to participate again.
For example, for many years, California banned alcohol sweepstakes. This law was in place from 1937 until 2012. Now, residents of California can enter sweepstakes from companies like Coors or Michelob.
So if you’re frustrated because you can’t reach all of your customers with your giveaways, or because you’d like to enter more sweepstakes but are often restricted, don’t give up. Regulations could change and give you more flexibility down the road.