Online Sweepstakes, Games, and Contests: Navigating Legal Issues and Cheats
Online sweepstakes, games and contests have become increasingly popular thanks to the widespread use of social media and iOS apps. However, companies often overlook the need to include the proper documentation and guidelines required by state or federal laws and regulations. Also, today’s new technology often allows web/app users to submit cloned tickets or circumvent online rules. Similarly, the collection of personal information for sweepstakes, online games, and contests can trigger a variety of completely different legal issues, often without the knowledge of the host company. Care should be taken before launching new online sweepstakes, games or contests.
One of the biggest challenges with online sweepstakes and gaming is the differences in rules and regulations from state to state. Before launching a new sweepstakes, online contest or game, the host must verify that it complies with the laws of each state where it is available. This often requires an analysis of each state’s laws, as many sweepstakes, games, and contests are available to residents of all 50 states due to the nature of the Internet and iOS/Android applications. Some states require registration for certain types of contests.
In addition to state laws, online game hosts must verify compliance with federal laws and regulations, such as the Children’s Online Privacy Protection Act (“COPPA”) and similar privacy laws. Given the global nature of the Internet, attention should be paid to whether compliance with foreign laws is necessary or whether access to the Internet sweepstakes, game or contest is limited to United States participants. The laws of European countries, for example, set stricter privacy restrictions than US e-commerce laws.
While businesses can achieve compliance with state and federal regulations on their own, it is advisable to retain an e-commerce attorney due to the complexity of the legal landscape. The first step is to evaluate the associated promotional material and online rules to ensure that federal and state laws, including online privacy laws, are not being violated. Next, the eCommerce attorney will likely review the entire framework of the contest, game, or sweepstakes to ensure overall compliance with state and federal laws that apply to the client. As mentioned, this may require registration in certain states and the posting of bonuses. Finally, the lawyer will draft the general guidelines as a reference for use in future promotions. These guidelines can be used to reduce the costs of future sweepstakes, contests and online games.
Disclaimer: As with any discussion of legal topics, this article is intended to be educational only and does not replace legal advice, provide legal advice, or form an attorney-client relationship with the reader. Please seek legal advice before making any decision. Also, please note that this article may not be updated, so the law and circumstances may have changed at the time you read this article.
