Laws and Rules for Sweepstakes in Rhode Island

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.

Rhode Island (RI)

Rhode Island is among the states where you must register certain sweepstakes. If the prize is offered through a retailer and is valued at more than $500, you must register with the state. Registration is also needed if entry involves visiting the store to fill out a ballot or make a purchase.

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- Rhode Island Prizes and Gifts Act

  • In Rhode Island, sweepstakes that offer prizes valued at over $500 and offer entry opportunities at retail stores within the state require that the sponsor register the sweepstakes with the Rhode Island Secretary of State.
  • Sweepstakes rules must be clearly posted, and the sponsor must maintain records of winners and prizes awarded for 6 months.
  • Rhode Island limits the shipping and handling fees charged to receive a prize.
  • If a sponsor represents that a person has won a prize, the sponsor must provide the prize to the winner without any obligation or expense to the winner.
  • If an individual or an organization delivers a written or digital notice that tells the recipient that he/she has been or may be eligible to receive a gift, the sender must provide disclosures and further information. There are specific statutory requirements for placement, font, and wording of the disclosures.
  • Promotion disclosures or prize notifications are not required if the participant can submit an entry by mail, phone or at a local retail store and is not required to be present or listen to a sales presentation.

Prize Promotion Laws- Rhode Island Prizes and Gift Act- Telemarketing

  • If a prize or a gift is offered as part of a telephone solicitation campaign, the sponsor must register the campaign with the state and disclose the rules to the consumer or participant.

Legal Review Criteria: Dominant Factor Doctrine 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.

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