Each state has specific promotion laws that you should take into consideration when developing new online marketing campaigns, like sweepstakes. Utah has some crucial differences in its state-specific sweepstakes and contest laws, including stipulations on the odds of winning and rules around random drawing.
If you need legal advice on local gambling laws, official rules, and the regulations around sweepstakes, contests, or lotteries, call on the experienced team at National Sweepstakes Company.
Sweepstakes and Contests
The United States’ promotional sweepstakes law is technical, and it is important to understand which legal provisions apply to your promotional campaign. Each type of promotion comes with its own rules and regulations.
There are three elements when it comes to sweepstakes: prizes, chance, and consideration. Federal laws require that a legal promotional campaign include only TWO of these three elements. For example, if the promotion involves a prize and consideration, it is a contest; if it involves a prize and chance, it is a sweepstakes.
In a contest, the winner is chosen for some specific skill, but sweepstakes winners are chosen at random. A lottery would be a promotion in which all three elements combine, and this type of promotion is illegal for any private company or individual to hold (only a state may host lotteries). The United States has strict laws banning private lotteries, and it is wise to avoid classification as an illegal lottery in Utah.
Federal Sweepstakes Law
Awareness of federal promotions law in Utah is also crucial to marketers who want to adhere to federal and state guidelines. The following organizations regulate the federal sweepstakes laws in the United States:
- Federal Trade Commission
- United States Postal Service
- Federal Communications Commission
- United States Department of Justice
The organizations create legal provisions for promotional campaigns nationwide, which work alongside the Utah sweepstakes law. Federal law regarding sweepstakes requires that there is no purchase necessary for someone to enter the sweepstakes or win a prize. The chosen winner must also pay taxes on the prizes won if they exceed $600.
If the prize value exceeds the threshold of $600, the sponsor must provide the winner with a 1099 form. There are other specific federal provisions; for example, if the prize is a firearm, its transfer must be with a licensed firearm dealer of the United States.
Utah’s Promotion Law
Utah has its own law regarding online promotional campaigns. If a sponsor is offering prizes in the state of Utah, the winner must receive them within 30 days of being named. The Notices Regulation Act further requires that Utah-based sponsors fully disclose a prize notice in the promotion rules and legal disclaimers with a specific font, language, and placement.
The sponsor must also provide the winner with a written prize notice before payment. If the prize is an incentive toward a sales presentation, then the presentation cannot run until after the winner is announced.
Did you know that Utah encourages all sponsors to have a prize notice or official rules in their promotional campaign? Call the National Sweepstakes Company team today at 888-744-3217 if you would like to know more about Utah sweepstakes law or national regulations.