Sweepstake and Contest Laws

Laws and Rules for Sweepstakes in Louisiana

First, it helps to understand the difference between a sweepstakes, contest and lottery. In a sweepstakes, winners are chosen randomly from all participants. In a contest, the winners’ entries are usually judged and are based on a skill or criteria. In a lottery, winners are chosen at random, but in order to enter, the participant must pay. A payment is called a consideration. Only states can hold lotteries, so all private lotteries are illegal.

To avoid being classified as an illegal lottery in any state, your promotion can only have 2 of these 3 elements: prize, chance and consideration. Keep in mind, consideration can mean anything of value, including a fee or even a significant effort (i.e., time spent shooting/submitting a photo, etc.)

Here are possible combinations:

• Prize + consideration + chance = illegal lottery or gambling
• Prize + consideration = legal contest (in most jurisdictions)
• Prize + chance = legal sweepstakes

All sweepstakes in the United States must meet the following regulations:

1. No purchase necessary. You can enter the sweepstakes without buying a product or service.
2. Winners are required to pay taxes on prizes they win.

Sweepstakes are regulated nationally and by state by the following organizations:

• Federal Trade Commission (FTC)
• Federal Communications Commission (FCC)
• United States Postal Service (USPS)
• United States Department of Justice (DOJ)

State Specific Sweepstakes & Contest Laws

Besides federal considerations, every state has its own specifics laws regarding sweepstakes and contests.

Louisiana (LA)

The state of Louisiana is very specific about winner notification. You must tell winners they’ve won using one of these methods: posting a printed list, instant-win scratch-off tickets/cards or pull-tab tickets/cards, in writing or by phone.

Contests: are allowed as long as the sponsor awards the prize based on skill and not chance.

Sweepstakes: are allowed as long as the sponsor awards the prize based on chance.

Prize Promotion Laws - Louisiana Trade and Commerce Laws/p>

• The sponsor must deliver the promised prize within 10 days.
• The sponsor cannot charge for shipping or handling of the prize, if the prize is advertised as free.
• Winners of promotions must be announced by one of the following methods; posted or printed list, scratch off tickets or cards, pull-tab tickets or cards, written or telephone contact of the winner(s). These requirements do not apply to promotions where only employees of the sponsor participate.
• If a sponsor makes a prize offer that includes an invitation or requirement for the consumer to participate in a sales presentation or promotional program in order to claim the prize, the offer must include a disclosure. If it's a written prize offer it requires a written disclosure. If it's a verbal, a verbal disclosure. 
• When using Direct Mail in Louisiana to promote a sweepstakes or contests, the sponsor must include odds of winning each prize offered.

Prize Promotion Laws - Louisiana Telephone Solicitation Laws - Telemarketing

• Telemarketers that offer prizes in combination with sales campaigns must register, bond and disclose requirements of the promotion with the state.

Legal Review Criteria: Uncertain.

Note: the information above is for informational purposes only and should not be construed as legal advice. Sweepstakes and Contest promotional laws change and the above may not reflect the must current laws.