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Contest And Sweepstakes Laws Around The World Are Complicated

Written by George Manty  · December 21, 2007

Several people have asked me why our 500 dollar contest/giveaway was only for US citizens. Well, here’s the deal…

Contest And Sweepstakes Laws Are Complicated

It’s hard enough to comply with US laws regarding contests but having to comply with the laws of every country in the world is pretty close to impossible. US laws are fairly difficult to comply with. If you don’t believe me, just read this article on US contest law.

Big US Companies Don’t Even Try It

You would think the lawyers for big companies would be able to draft up contest/sweepstakes rules that would comply with international laws, but you would be wrong…

Most US based companies restrict their contests to the United States. Here are some of the things that US companies have said about this.

The Discovery Channel says:


Different rules and regulations associated with games of chance in other countries make it difficult to administer sweepstakes and games outside the United States.


StarTrek.com
says:


We certainly understand that Star Trek fandom is not limited by national boundaries. We know there are millions of fans around the world just in the United States and we regret not being able to allow everyone to participate in our giveaways.

In order for us to hold a giveaway or sweepstakes on our site we must comply with the legal requirements in every territory in which the contest is available (on the Web, this means virtually the entire planet). However, it is simply beyond the scope of our group to comply with contest laws around the world. Thus, our posted rules satisfy the requirements for U.S. participants only.

When Canada and other countries simplify their requirements for on-line contests, we will be able to allow our giveaways to cross international borders.

An Example Of The Difficulty Of Complying With Other Countries Laws

Read this story (and the comments). Essentially, in order to open a contest up to Canadian residents, Starbucks had to add the following clause to their contest rules:


If a resident of Canada is selected as a winner, they will be required to correctly answer, without assistance of any kind, whether mechanical or otherwise, a timed, mathematical skill-testing question, to be administered by Marden- Kane, Inc. either by mail, telephone, e-mail, or fax (at its sole discretion) before the awarding of the prize.

The reason for this is that according to some Canadian law you can’t run a sweepstakes/contest that just gives away money (like our contest). In order to comply with Canadian law I would need to give the “winner” a test of skill. If I wanted to open the contest to every country imagine how difficult it would be to comply with ALL the contest laws around the world?

The Bottom Line

The bottom line is that I don’t want to lose my business because of a sweepstakes or contest. I am very sorry for the inconvenience. I wish that international contest laws weren’t so complicated and I will try to find a way to reward all my readers in some other way.


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Comments

7 Responses to “Contest And Sweepstakes Laws Around The World Are Complicated”

  1. Justin Dupre on December 21st, 2007 11:12 am

    Wow.. Thanks for the insight! I was thinking about running a contest just to get some early traffic. I’ll have to rethink it now.

    Justin

  2. George Manty on December 21st, 2007 11:21 am

    Justin,

    You are welcome. I am not saying you shouldn’t run a contest, but you should definitely look at the laws in your country and the countries you want to run the contest.

  3. Holly on January 8th, 2008 12:03 pm

    Aren’t you confusing the issue further – just a bit? Even in the U.S., there is a difference between “contest” and “sweepstakes” – to rightfully be called a “contest,” an entrant has to do something involving some skill, and be chosen by a judge – not simply picked out of a hat at random. You can run either one, depending on the circumstances, but the rules differ. For one thing, you cannot require a purchase for a sweepstakes entry; I’m not sure about contest entries, but I think you CAN require a purchase there (like, “Solve the jigsaw puzzle in this box, follow all the clues, and if you’re one of the first five people to correctly name the place the treasure is hidden, you win $1000”).

    You’re right, though – trying to comply with international laws (in any venture) is tough. U.S. laws fill entire libraries with no help from other countries.

  4. George Manty on January 8th, 2008 12:35 pm

    Holly,

    Thanks for your input. I wasn’t trying to confuse things. However, you bring up a good point about the distinction between “Contests” and “Sweepstakes”. In fact, one of the problems with running sweepstakes in many counties is the differences in the way some countries define “contests” and “sweepstakes”. In some countries they mean the same thing, in some countries they have a totally different definition than in the US. These differences make it even more difficult to comply with other countries laws.

  5. Jay on November 11th, 2008 12:47 am

    Does anyone know if I can hold a “contest” that requires an entry fee (in Michigan)and award my house as the prize? If this is possible, do you know anyone I could talk to?

    Desperate Michigan homeowner,

    jascenc1@comcast.net

  6. George Manty on November 11th, 2008 7:27 am

    Jay,

    I have seen that sort of contest in my state of Texas, but I don’t know if it is legal in Michigan. Also, laws are always changing (especially in more liberal states). I suggest contacting an attorney. Although a Michigan Real Estate agent should also be able to answer your question.

  7. Pepe Franco on April 5th, 2011 4:39 pm

    I never realized there were so many legal ramifications when it came to running contests! I guess I won’t be having an international contest any time soon.





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