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.)
Besides federal considerations, every state has its own specifics laws regarding sweepstakes and contests.
Like Florida, New York also requires that you bond and register any sweepstakes where the prize exceeds $5,000 or more. This must be done 30 days before the start date. Winners’ names and addresses must also be provided afterwards.
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- New York Prize Award Schemes
Prize Promotion Laws- New York Telemarketing and Consumer Fraud and Abuse Prevention Act.
New York Cannabis or Marijuana Sweepstakes or Contest Laws
Legal Review Criteria: Material Element Test when assessing whether or not chance determines the outcome of a promotion.
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.