In New York, if the value of the prize offered is more than ,000.00 the law requires that consumer sweepstakes be registered and bonded 30 days before the commencement of the sweepstakes. Depending on what you require entrants to do, you could be pushing the envelope on this element.
The state of Florida also has bonding requirements for sweepstakes. A lottery has three things: Prize, Chance and Consideration. Each state may have their own particular definition making it very difficult to manage.
Federal agencies with jurisdiction to regulate sweepstakes promotions include the Federal Trade Commission (“FTC”), the Federal Communications Commission (“FCC”), the United States Postal Service (“USPS”), and the United States Department of Justice (“DOJ”).Even more important, asking an entrant to go to a third-party site, navigate to find a product or services and then report back to your site is even more likely to be deemed consideration and thus placing your giveaway into the classification of illegal lottery. While online promotions seem to be everywhere, the laws pertaining to this realm have not been as quick to develop as the internet itself.As such, even by providing an easy and simple means of entering but providing additional entries conditioned upon doing certain things may result in your giveaway not complying with necessary laws. You will often see that a contest or sweepstakes is only open to those 18 years of age or older.Because the giveaway is often billed as a cross-blog promotion and involving many prizes, it would be advisable for the bloggers involved to ensure they are compliant to avoid potential civil and/or criminal violations.Tax Implications While this will not apply to all, bloggers need to be aware that any giveaway with a value of 0 or more must be reported to the Internal Revenue Service.