Residents of New York receive millions of invitations to participate in sweepstakes each year. But since many of those invitations are fraudulent, the state’s attorney general and consumer protection divisions keep a watchful eye on all sweepstakes (even those run by legitimate brands and sponsors) to ensure residents are not scammed.
New York-based brands and companies must adhere to a variety of sweepstakes laws. And since New York enforces its laws rigorously, you must follow them even if your promotion is national or international.
What is a Sweepstakes?
A sweepstakes (also called a game of chance) is a type of promotion in which a prize (or prizes) is awarded by chance, such as a random drawing or randomly programmed instant win. Entry must be free of consideration, which means you can’t require entrants to pay or purchase a product to enter or put forth too much effort to enter, such as taking a lengthy survey. In a sweepstakes, a free alternate method of entry (AMOE) must always be available, regardless of the states you are advertising to.
Bonding and Registration
Bonding and registration is required by New York for sweepstakes that meet certain criteria. Its primary purpose is to ensure consumers are protected from brands who may intend to advertise a big prize in an effort to collect information without actually awarding the prize.
The registration ensures the state’s legal agencies know the promotion is running (including its legal structure), and the bond ensures that if a sponsor does attempt to flake on awarding the prize, the winner will still get paid (via the bond, like insurance).
If your game of chance is open and advertised to residents of New York and your total prize pool exceeds $5,000, you will need to submit a registration and obtain a bond from a reputable insurance company (which must also be submitted at time of registration).
Certified Winner List
To show the state you have fulfilled your obligations and adhered to sweepstakes law, all sponsors who bond and register in the state of New York must submit a certified winners list to the state to close out the registration and terminate the bond within 60 days of determining the winner(s).
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 through which you are conducting the sweepstakes: Whether you’re running your sweepstakes on social media, via text message, online, or direct mail, each individual medium has its own requirements that must be adhered to.
Let us know if you’ll be running your next sweepstakes in the state of New York or opening it up to include New York residents. We’ll examine your promotion structure to ensure you are adhering to sweepstakes laws in New York, as well as any applicable federal or industry requirements. Give us a call at (888) 744-3217 or submit a quote request here for a response within 24 hours or less!