Legality involving a sales contest

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Legality involving a sales contest

I publish a local paper and want to give away tickets to a local sporting event

in exchange for donating food to a local food bank or purchasing something from one of my advertisers. For the food bank I was going to come up with a specific location and hours, say 10 am-2 pm and I will be there personally so when they drop off the food I will give them an entry form. Same goes for my advertiser if they buy an item at their store the employees there will give them the same entry form to fill out. I read about sweepstakes and that is clearly not what I am doing but I don’t know what legal requirements I need to fulfill for this.

Asked on November 5, 2018 under Business Law, Colorado

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

This is very possibly illegal. Giving someone an entry to win a prize in exchange for either a donation or purchase meets the criteria to be gambling: in exchange for consideration (something with value; the donation or purchase), someone gets a chance (opportunity governed by some factor[s] beyond that person's control) to win a prize (tickets to a sporting event). When you have consideration, chance and prize, you have gambling; and all gambling is illegal except to the extent licensed or otherwise authorized by the state. Exceptions for legal gambling, including promotions of this type, do exist but are very techincal and are easy to NOT fall under. So unless you are willing to hire a local attorney--preferrably one with some gambling experience--to review exactly what you propose to do and how and make sure you bring it under an exception to the general prohibition on gambling (if indeed there is some relevant exception in your state), it is not worth doing this, since it would be too easy to violate the law.


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