Have you been considering running a sweepstakes to promote your Massachusetts-based brand? Marketing promotions such as sweepstakes and contests can boost brand awareness, generate leads, increase sales, and engage customers.
In the U.S., federal and state laws govern sweepstakes. Before running a promotion, ensure that you follow the Massachusetts contest & sweepstakes laws.
What Are Sweepstakes?
Sweepstakes are giveaways where participants receive free prizes based on random promotional drawings. The idea of sweepstakes appeals to both businesses and consumers. Massachusetts allows businesses to hold contests and sweepstakes but not lotteries.
Marketing contests and sweepstakes in Massachusetts must follow the rules and regulations created by the following agencies:
- Federal Trade Commission (FTC)
- Federal Communications Commission (FCC)
- United States Department of Justice (DOJ)
- United States Postal Service (USPS)
Sweepstakes in Massachusetts are not subject to any additional state-specific requirements beyond those associated with common promotion law. For example, the sponsor must alert winners to pay taxes on prize winnings, and prizes over $600 must receive a 1099 form. Businesses will be subject to fines and lawsuits if they do not adhere to Massachusetts contest and sweepstakes laws.
Sweepstakes Laws in Massachusetts
For sweepstakes and contents to be legal, they must distinguish themselves from lotteries. A promotion characterized as an illegal lottery will have three elements: consideration for entering, chance, and a prize. However, a legal sweepstake consists of only two elements, a prize and chance.
To qualify as a valid promotional sweepstakes, the giveaway should have three key characteristics:
- Participants have the opportunity to win money or a valuable prize.
- A random drawing will select the winner(s).
- Participation is free, and participants do not need to buy a product or service.
Before running sweepstakes in Massachusetts, you must consider the “no purchase necessary” laws. These laws prohibit you from asking users to buy or provide any form of monetary consideration to enter sweepstakes. You are also not allowed to ask entrants to put forth non-monetary consideration, such as an absorbent amount of time or effort to enter. Other Massachusetts contest and sweepstakes laws suggest creating official rules to minimize liability, such as:
- Announcing the entry and closing dates of the sweepstakes
- Instructions on how to enter or participate
- Number of entries allowed per household or individual
- How the winner selection process works and the prize award date
- The prize’s approximate retail value based on the current fair market value
- Any prize restrictions that may apply
- Prizes such as guns requiring a transfer via a Federally Licensed Firearm Dealer
- Using the proper channels to contact all winners
- A sweepstakes winner who does not respond within a certain period can become disqualified, and the winner may be redrawn
- Provide the winner’s list to the public on request
Marijuana or Cannabis Contest and Sweepstakes Laws in Massachusetts
Massachusetts prohibits all sweepstakes related to tobacco products but allows marijuana promotions.
- Prizes cannot contain marijuana or cannabis, including food and beverages
- No purchase is required for entry
- You may not offer mail-in entries
- Participants must be 21 or older and show valid proof of age to enter
- Businesses cannot use marketing materials such as toys or games that may encourage children to use tobacco or marijuana
- Do not advertise sweepstakes where children are likely to see them, such as on buses, television, or billboards
- Avoid social media platforms, including Facebook, Instagram, or Google, that prohibit promotions associated with unsafe substances
Work With a Professional Sweepstakes Management Company
Sweepstakes and contests can be extremely effective promotional tools for businesses. At National Sweepstakes Company, LLC, we can design, run, and manage sweepstakes promotions that comply with Massachusetts contest and sweepstakes laws. Get in touch with us to work with an experienced sweepstakes administrator to plan your next marketing promotion.
Contact us at National Sweepstakes Company, LLC, in Newark, NY, today to promote your business using innovative sweepstakes and contests. Call us at (888) 744-3217.