What an American would call a “sweepstakes” – a random prize draw promoting a commercial product – is likely to be labelled as a “prize draw” or “competition” in the UK. Companies or promoters may require a trade promotion lottery permit if the winner(s) are to be chosen via an element of chance, i.e. a competition draw. In Australia, a sweepstake is known as a competition, however the technical name for a consumer competition is a trade promotion lottery. Before home computers were popular, a common method of entry was a mailed, plain 3″ × 5″ index card with the entrant’s name and address. Firms that rely on sweepstakes for attracting customers, such as Publishers Clearing House and Reader’s Digest, have also found that the more involved the entry process, the more entrants. Notably, sweepstakes in Canada, Australia, and several European countries require entrants to answer a skill testing question such as solving an elementary-school-level mathematical puzzle, or answering a simple general knowledge question, making it (in theory, at least) a contest of skill in order to overcome requirements that would classify sweepstakes as a form of gambling under their country’s legal definition. Because of their potential for abuse, sweepstakes are heavily regulated in many countries.
Pepsi Stuff was Pepsi’s largest and most successful long-term promotion ever and it ran for many years in the US and in many countries around the world. Soft drink companies also sponsor many sweepstakes, such as the Pepsi Billion Dollar Sweepstakes game and the Pepsi Stuff loyalty rewards program that allowed Pepsi drinkers to accumulate points from packages and cups and redeem them for merchandise. The US, Canada, and individual US states all have laws covering sweepstakes, so there are special rules depending on where the entrant lives. Among the most popularly known sweepstakes in the United States were the American Family Publishers Sweepstakes (now defunct), Publishers Clearing House sweepstakes, and Reader’s Digest Sweepstakes, each of which strongly persuaded entrants to purchase magazine subscriptions by placing stickers on contest entry cardstock while promising multimillion-dollar (annuity) winners who will be “announced on TV”. Unlike in the U.S., entrants may be required to purchase a product in order to enter a trade promotion in Australia. A sweepstake is a type of contest where a prize or prizes may be awarded to a winner or winners.
No permits are required for competitions that do not involve an element of chance in determining the winner or winners. By definition, the winner is determined by pure random chance rather than skill. Since lottery tickets are considered to be bearer instruments under the Uniform Commercial Code, these lottery scratch card promotions can be entered with non-winning tickets that are picked up as litter. Laser printers that can mimic ink pen writing are also a problem for sponsors. In the United States, sweepstake sponsors are very careful to disassociate themselves from any suggestion that players must pay to enter, or pay to win, since this would constitute gambling. Massive computer-printed entries resulted in a new requirement that entries must be “hand-printed”. Sweepstakes must be carefully planned to comply with local laws and curtail forms of entrant fraud and abuse. Another example is that Tennessee state law prohibits sweepstakes agencies and sponsors from requiring sweepstakes prize winners to submit to “in perpetuity” publicity releases. The American Family Publishers sweepstakes used paid advertisements during NBC’s The Tonight Show to announce its grand prize winners (for many years, its celebrity spokesman was Ed McMahon). Sweepstakes with large grand prizes tend to attract more entries regardless of the odds of winning.
There is a tradition of office sweepstakes (known as office pools in the U.S.), which are usually based on major sporting events such as the Grand National and the World Cup. Colorado Attorney General’s Office. As an example of a state policy on sweepstakes promotions, Tennessee residents are prohibited by a policy of the Tennessee Alcoholic Beverage Commission (and not a state law) from entering sweepstakes online sponsored by manufacturers of wines and liquors; however, Tennessee residents may enter many of these same sweepstakes promotions by entries delivered by the US Postal Service. Businesses often obtain marketing information about their customers from sweepstakes entries. Sweepstakes began as a form of lottery that were tied to products sold. Tennessee Lottery. Play It Again Program – FAQ. The U.S. Federal Trade Commission exercises some authority over sweepstakes promotion and sweepstakes scams in the United States. U.S. Federal Trade Commission. In response, the FCC and FTC refined U.S. For horse racing events, the pot may be split between the horses that win, place, and show. Other sponsors may require the submission of a UPC of a company product (with provision for receiving a “free” UPC) for entry into the sweepstakes drawing. Most corporate-sponsored sweepstakes promoted in the United States limit entry to US citizens, although some allow entry by legal residents of both the United States and Canada.
