First, it helps to understand the difference between a sweepstakes, contest and lottery. In a sweepstakes, winners are chosen randomly from all participants. In a contest, the winners' entries are usually judged and are based on a skill or criteria. In a lottery, winners are chosen at random, but in order to enter, the participant must pay. A payment is called a consideration. Only states can hold lotteries, so all private lotteries are illegal.
To avoid being classified as an illegal lottery in any state, your promotion can only have 2 of these 3 elements: prize, chance and consideration. Keep in mind, consideration can mean anything of value, including a fee or even a significant effort (i.e., time spent shooting/submitting a photo, etc.)
Like Alabama, Arkansas also frowns on implying that someone won a prize (or is a finalist or likely to win) as a tactic to sell a product or service or to make contact with prospects. The state also expects sweepstakes winners to claim any prize they've won within 30 days after the sweepstakes ends.
Contests: are allowed as long as they do not charge a consideration. If the contest includes an element of consideration the sponsor must award the contest prize based on skill and not chance and follow all Prize Promotion Laws prize disclosures.
Sweepstakes: are allowed as long as participants do not pay consideration.
Prize Promotion Laws
Legal Review Criteria: Dominant Factor Doctrine when assessing whether or not chance determines the outcome of a promotion.
Note: the information above is for informational purposes only and should not be construed as legal advice. Sweepstakes and Contest promotional laws change and the above may not reflect the must current laws.