The three requisite components which constitute a lottery are: consideration, chance, and a prize. It is obvious that any sweepstakes is going to involve the elements of chance and prize; consequently, the element to dispense with in order to avoid legal complications is consideration. By making sure that the chance to win a prize is not tied to any requirement that could be viewed as consideration, it is possible to avoid the lottery issue and conduct a legally compliant sweepstakes. Thus, the words “No Purchase Necessary” are often the first words you will see in the Official Rules of any sweepstakes.
In addition to making sure that no purchase or other monetary expenditure is required, a sweepstakes promoter must guard against imposing obligations of time and/or effort sufficiently onerous to be deemed consideration.
Sweepstakes laws and regulations vary from state to state and from country to country, so a great deal of care and preparation are required to comply with the requirements of each jurisdiction in which the promotion is run.
A promotion which runs afoul of anti-lottery laws has the potential of seriously damaging the reputation of a business. Always seek legal counsel early in the planning stages to insure that promotional activities are legally compliant.
Tags: gambling, Law, promotion, sweepstakes, Utah law