Sweepstake and Contest Laws

Do you know the laws and rules that regulate sweepstakes and contests in the U.S.?
See below for insight into the various laws that apply by state.

Laws and Rules for Sweepstakes in Montana


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:
  1. No purchase necessary. You can enter the sweepstakes without buying a product or service.
  2. 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.




Montana (MT)

It may be difficult to have a contest recognized as such in Montana since the state recognizes 'any chance' in a promotion. Remember, a contest or sweepstakes can only have 2 of these 3 elements: prize, chance and/or consideration. Contests generally have prize and consideration (time and effort to submit an entry that will be judged based on skill). Most skill games have an element of chance, however, and courts here look at any chance that affects the outcome.

Contests: are allowed as long as the sponsor awards the prize based on skill and not chance.

Sweepstakes: are allowed as long as the sponsor awards the prize based on chance.

Prize Promotion Laws- Montana- Raffles

  • In Montana any person or organization may offer a raffle.
  • In Montana, raffles are defined as “form of lottery in which each participant pays valuable consideration for a ticket to become eligible to win a prize.”
  • No license or permit is required to offer a raffle in Montana
  • Raffle sponsors must own all the prizes before selling any raffle tickets and the value of the raffle prize may not exceed $5,000.
  • Raffle sponsors may sell tickets only at events and only to participants within Montana.
  • Sponsors may use the internet to advertise a raffle but it's prohibited to sell raffle tickets over the internet.
  • All raffle rules must be available to the public before the sale of any tickets.
  • Raffle sponsors must retain records for 12 months related to the proceeds, winners, and prize(s) awarded.

Montana 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.

Prize Promotion Laws- Montana Telemarketing Registration and Fraud Prevention Act

  • If the telemarketing campaign includes a prize, in Montana, the offer must include a disclosure or statement clarifying what actions or obligations the person must make to receive the prize.

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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