On virtually every contest run by a consumer product, the small print will include the words “No Purchase Necessary”, and give instructions on how to send a SASE to Blair, NE, and get a free game piece. What is the legal history behind requiring contests to provide this option - why, when, who?
Thanks.
I’m not sure of all the details but my understanding is that it is because if you have to buy something in order to enter the contest it is considered a lottery. Since lotterys are illegal in most places they have to give you an entry if you ask in order to avoid being classified as such.
Exactly. It’s a technicality in the definition of gambling. There are something like 3 main points that must be satisfied so that it’s legal. Consideration (i.e. cost of participating), skill vs. chance, and something else (I think relating to the payoff).
By providing a free method of entry, the contest is removing the “consideration” necessary to enter the contest, and thus skirts the legal definition of gambling.
Bear in mind that, without a rigid set of legal standards, it might not be easy to tell when such a promotion actually is a lottery. “Now on sale for $10.00-these beautiful, individually-numbered certificates are suitable for framing! This is a limited edition-only ten thousand of these gorgeous pieces of artwork have been printed! And don’t forget our special sweepstakes-one lucky buyer will win a grand prize of $50,000! A once-in-a-lifetime opportunity!”
It might not always be that obvious, naturally …
To be a lottery
- You “perform consideration” (buy a chance) to
enter - You have a prize.
- Not everyone can win.
It is NOT a lottery
- If it is free to enter.
- There is no PROMISE OF a prize.
- Everyone gets the same consideration (prize).
Chain letters are a lottery because it costs
to enter and there is a promise of a prize.
While almost everyone in a chain letter is a
loser, the starter gets some money.
In some states, “Winner must be present to win.”
is considered “performing consideration” and
thus makes it a lottery. However I have noticed
a few local agencies ignore it when this happens.
I don’t know if this has anything to do with the lottery prohibition, but employees and their families are not eligible and they must tell you who the winner is if you ask.
Thats why TV chat shows ask stupid multiple choice questions in their phone-ins (like - what colour is Kermit the Frog - red, green or blue). So they a game of ‘skill’ and not a lottery.
I bet you’re Canadian. They require a “skill” question in order to win a prize. In the U.S., that’s usually not required.
Actually, I’m from NI. In the UK.
Except where prohibited.