Laws and Rules for Sweepstakes in California
Last reviewed: March 2026
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.)
Here are possible combinations:
- Prize + consideration + chance = illegal lottery or gambling
- Prize + consideration = legal contest (in most jurisdictions)
- Prize + chance = legal sweepstakes
All sweepstakes in the United States must meet the following regulations:
- No purchase necessary. You can enter the sweepstakes without buying a product or service.
- Winners are required to pay taxes on prizes they win.
Sweepstakes are regulated nationally and by state by the following organizations:
- Federal Trade Commission (FTC)
- Federal Communications Commission (FCC)
- United States Postal Service (USPS)
- United States Department of Justice (DOJ)
State Specific Sweepstakes & Contest Laws
Besides federal considerations, every state has its own specifics laws regarding sweepstakes and contests.
Understanding California Sweepstakes & Contest Regulations
Running a sweepstakes or contest in California can be a powerful way to engage your audience and grow your brand — but it also comes with specific consumer protection requirements that differ from other states. Unlike some states that require prize bonding or advance registration, California's focus is on fairness, clarity, and transparency in how sweepstakes are presented to participants.
Why Compliance Matters in California
California law prohibits requiring any payment or purchase as a condition of entering or winning a sweepstakes, and each sweepstakes must prominently state that no purchase is necessary to enter or win. The law ensures that every entrant has an equal chance to win, regardless of whether they made a purchase or not. This is a foundational element of sweepstakes compliance and helps prevent activities from being treated as illegal lotteries.
Beyond the basic no-purchase requirement, California's Business and Professions Code also requires sponsors to clearly and conspicuously disclose important sweepstakes information, including the odds of winning, prize values, eligibility criteria, and the sweepstakes' start and end dates. These disclosures must appear in both marketing materials and the official rules for the sweepstakes to avoid misleading participants.
Sweepstakes vs Contests
While both sweepstakes and contests are popular types of promotions, they differ in how winners are chosen:
- Sweepstakes rely on chance, with winners selected randomly from eligible entries.
- Contests are based on skill or judging criteria, such as creativity, knowledge, or performance.
This distinction is important because contests do not require the same "no purchase necessary" language as sweepstakes, but they do require transparent judging standards and clear criteria for how winners are determined.
Best Practices for California Sweepstakes
To maximize engagement while staying compliant:
- Clearly highlight that no purchase is necessary to enter or win the sweepstakes.
- Include detailed information about all sweepstakes prizes and how winners are selected.
- Make official sweepstakes rules easy to access and understand for all participants.
- Respect California privacy laws and data-use requirements when handling entrant information.
Primary Sources — California Sweepstakes Law
- California Attorney General — Prize Promotions
- California Business and Professions Code § 17537 — Prize promotion requirements
California (CA)
In California, you can't award alcohol as the only prize. Booze can be part of a prize package, however. The state also has other restrictions related to alcohol: you can't force entrants to buy alcoholic beverages as part of entry or force them to visit a liquor store, bar or licensed retailer as part of their entry or to get entry forms. Forms must be available elsewhere as well.
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 and the sponsor follows all Prize Promotion Laws prize disclosures.
Prize Promotion Laws - California -Contests
- Sponsored is required to provide a refund to any participant unable to participate in the contest through no fault of his or her own and who requests a refund in writing within one year.
- Awarding the prize cannot be conditioned upon a minimum number of entries or contest participants.
- Exempt from providing refunds are: sporting events, performances, tournaments of skill, power or endurance between participants who were actually present at the contest.
Prize Promotion Laws - California- Gifts as Sales Incentives
- The sponsor cannot tell a consumer he/she has won a gift and in order to receive the gift, the consumer must make a purchase or pay unreasonable shipping or handling charges.
Prize Promotion Laws - California- Telemarketing
- If a prize or a gift is offered as part of a telephone solicitation campaign, the sponsor must register the campaign with the state and disclose the rules to the consumer or participant.
California Cannabis or Marijuana Sweepstakes or Contest Laws
- Cannabis or any product containing cannabis, such as food or drinks are not allowed as prizes.
- Purchases of any related products can't be required for entry.
- Make sure that your sweepstakes is only open to entrants age 21 or older with proof of age.
- Any ads must have a disclaimer about the state's legal age for marijuana products, if any.
- Similar to the tobacco and vaping industries, brands cannot use any type of marketing that can be construed as trying to appeal to children (characters, mascots, games, etc.)
- Don't advertise your brand or giveaway in public (or private) places where children may be present, including billboards, buses/vehicles, television, and radio.
- Don't use Facebook, Google, or any other advertising or marketing channel that specifically prohibits promotions involving illegal drugs to promote your giveaway.
- Do not allow mail-in entries as this could be considered as interstate commerce.
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.
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