What is “Consideration” in a Sweepstakes?

Posted by Jennifer Hibbs on March 31, 2014 in Articles, compliance, Consultation, Promotion Planning, Sweepstakes | 9 Comments

9 Responses to What is “Consideration” in a Sweepstakes?

  1. Valerie Wolf says:

    Thank you for a clear, concise explanation of the elements of what makes a contest legal or not. My husband – a life-long broadcast professional – would recite the “Prize, Chance, Consideration” mantra frequently, when pointing out the pitfalls of my efforts at charity fundraising that might (inadvertently) be illegal. This lays it out perfectly.

  2. Bryan says:

    Consideration can play a role as long as 100% of all procedes goes to a charitable organization correct?

    • Jennifer Hibbs says:

      Your question will need to be answered it 2 parts. The first is what is consideration – which in the example in your question is making a donation in order to enter; and therefore would require an alternate means of entry to be a legal sweepstakes.
      And, the second pertains to cause marketing and co-venture laws which is dependent upon the Charity and which States your promotion will run. For further information, please contact us directly @ expert@mardenkane.com.

  3. Brandon says:

    Is asking fir a name, address, phone number and email address falling under “consideration”? Furthermore, if I use this as a method of compiling an email list for marketing purposes, does it then become “consideration”?

    • Jennifer Hibbs says:

      Collecting personal information such as name and contact information to be used in awarding a prize does not typically fall into the realm of consideration. However, to use the collected information for other marketing purposes we recommend that you disclose this information and provide an opt-in (and opt-out mechanism if you ever use the collected data). For specific recommendations that might apply to you, contact us or your attorney.

  4. Steve Hutchinson says:

    my golf club is considering a sweepstakes funded by the club to attract attendance at our weekly happy hour. The club will supply $25 each week and a drawing will be held from a list of all member numbers. If the member is present they will win the prize. If not the club will add another $25 next week and so on. The event will be advertised and in fact be no purchase required. You must just be at the club at the time of the drawing and the time will be advertised and held the same time each week. Do you think we are okay? Is requiring people to be at the happy hour consideration? Thanks for your help. Steve

    • Jennifer Hibbs says:

      Legal experts might say that requiring people at the happy hour is consideration, although your risk may be low. There are other factors to consider as well, like if alcohol is served, and are all members able to be there or does the timing or location create a hardship. It only take one disgruntled person to file a lawsuit and create a problem. Best practice would be to get a promotional agency or lawyer to draft official rules and help you sort through the details.

  5. Melanie says:

    Is it “consideration” when you ask for entrants to like or follow you on social media to enter to win a pize?

    • Jennifer Hibbs says:

      That is not normally deemed “consideration” as long as the social platform is free, open to everyone, and the social platform’s promotion guidelines allow it. Facebook, for instance, has it in their promotion guidelines that you can’t require a “like” or “follow” for entry into a promotion.

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