Lewis Roca Blog

As many businesses are temporarily shutting down and closing their front doors, companies are forced to reevaluate how they are interacting with customers to ensure the continuation of customer loyalty, connections, and the strength of their brands. Yet, despite this unprecedented time of social distancing, many opportunities still exist for businesses to develop and build those connections.

Most notably, social media has provided the opportunity for companies to not only publicize information on their products and services but also connect with the public through the use of contests and sweepstakes. For example, contests requiring user-generated content are becoming more common. Participants create and share content, such as a photo, video or song, as a condition of entry and those entries are judged against a set of criteria such as creativity, originality and promoting the company’s brand.

Sweepstakes, on other hand, are a type of promotion where a prize is awarded to a winner based on chance. Sweepstakes are a common marketing tool used by businesses to draw attention to a product and to reward existing customers. As there is no purchase necessary to enter, sweepstakes are an intriguing way to keep customers engaged in the current financial environment.

Sweepstakes and user-generated content promotions can thus be a fun and creative way to entertain customers while in-person social interactions are kept at a minimum. However, companies should be aware that such promotions also present opportunities for many pitfalls.

Most notably, states have unique (and sometimes cumbersome) requirements that must be followed to ensure compliance with state gambling and consumer protection laws. Many companies, for example, have already launched promotions that fail to state a start and end date or even have a set of Official Rules. Additionally, social media platforms have guidelines that must be adhered to when operating a promotion and the failure to do so could cause the promotion to be prematurely terminated by the social media platform. The Federal Trade Commission also advised that promotion related posts on social media platforms should have hashtags such as #Contest or #Sweepstakes, to make the connection clear.

Our publication “A Practical Guide for Offering Online Contests and Promotions” walks readers through the basic elements of gambling and provides guidance about common gambling issues to be aware of with online contests and sweepstakes offerings. This guide offers you potential ways to connect with your customers online as we all incorporate social distancing into our business lives.

If you have questions regarding sweepstakes or contests, please contact authors Karl Rutledge at krutledge@lrrc.com, Glenn Light at glight@lrrc.com, or Mary Tran at mtran@lrrc.com.

This material has been prepared by Lewis Roca Rothgerber Christie LLP for informational purposes only and is not legal advice. Readers should not act upon any information without seeking professional legal advice. Any communication you may have with a Lewis Roca Rothgerber Christie LLP, though this announcement or otherwise, should not be understood by you to be attorney-client communication unless and until you and the firm agree to enter into an attorney-client relationship.