The state of Colorado follows general promotion laws and guidelines, including the requirement for material terms (aka official rules and legal disclaimers) that reflect the promotion start and end dates, how to enter, description of how winners will be selected, prize details, and more.
Games of chance in the US must also remove all elements of consideration before launching. Monetary consideration is the requirement to purchase a product or pay a fee. Nonmonetary consideration is the requirement for the entrant to put forth too much effort or time in order to earn entry into the sweepstakes.
In addition to general promotion and sweepstakes law, Colorado has strict requirements about advertising promotions to Colorado residents via direct mail.
Direct Mail Consumer Disclosure Requirements
Direct mail sweepstakes, contests, and games are closely regulated in Colorado. These tight regulations require brands to explicitly and conspicuously disclose certain material terms about the promotion within the direct mail piece. These material terms (also called consumer disclosures) require the sponsor to place certain language on the physical pieces themselves, in a prescribed format, including clearly advising the recipient of the mailing that they have not yet won, that a purchase or payment is not required and will not increase their chances of winning, the value of each prize, and the odds of winning in a stipulated format.
In addition to the above, sponsors are required to include the full official rules and legal disclaimers on the pieces. As you can imagine, this limits marketing space significantly. We work with our clients to help maximize the limited ad space while staying compliant with Colorado sweepstakes rules and contest law.
Additional Requirements for Cannabis-Related Promotions
Marijuana is legal in Colorado, but cannabis promotions are regulated at the state level. Given the inherent sensitivity of the product, we recommend any cannabis seller clear all sweepstakes, contests, and games with the governmental entity that licenses its activities before launch.
Other Sweepstakes Laws to Consider in Colorado
In addition to state laws, other federal laws apply to all games of chance. These laws may impose restrictions on how certain elements of your sweepstakes are structured, including but not limited to:
- The type of brand sponsoring the promotion: Certain industries, such as the financial, alcohol, and tobacco industries may have additional requirements or ban sweepstakes altogether depending on how they are structured.
- The audience you are advertising to: The federal government has strict requirements on how and who you advertise to, including the information you collect and ways in which you share that information with the public. Marketing to minors is a slippery slope and carries very specific requirements to protect children under the age of 18.
- The channels and mediums you use to conduct the sweepstakes: Whether you’re running your sweepstakes on social media, via text message, online, or direct mail, each medium has its own requirements.
Let us know if you plan to include Colorado residents in your next promotion. If so, we’ll help you determine the best way to structure your sweepstakes so you meet your objectives and stay on the up and up. Give us a call at (585) 326-9075 or submit a quote request here for a response within 24 hours!