Laws and Rules for Sweepstakes in Ohio

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.

Ohio (OH)

Ohio allows machines or sweepstakes terminal devices, as long as they’re registered and certified annually by the attorney general’s office.

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- Ohio Anti-Gambling Laws

In 2013, in an effort to combat by internet cafes, Ohio changed its views on what is seen as a consideration:

  • If less than 50% of the goods or services sold by a sponsor in exchange for game entries are used or redeem by the participant at any one location.
  • If less than 50% of the participants who purchase goods or services at one location do not use the goods or services sold.
  • There is a consideration if a sponsor pays out in prize money more than 20% of the gross revenue received at one location.
  • There is a consideration if a participant pays for more than the approximate retail value of the goods or services offered by the sponsor in exchange for one or more entries.
  • In other words, like in all other states, Ohio doesn't want you selling entries to a sweepstakes by exchanging worthless or low value products for entries.

Prize Promotion Laws- Ohio Prize Promotion Protection - Telephone Solicitor Laws

  • Under Ohio's telephone solicitor’s law, the company must register, bond and disclose the prize offer. Disclosures need to include the value, terms and the conditions that the consumer must complete to receive the prize.
  • All prize disclosure must include a statement that no purchase is necessary to compete or receive the prize.
  • An informational statement about the promotion must be filed with the attorney general 14 days prior to the start of the promotion.
  • In Ohio, companies that make telephone solicitations infrequently or solicit for religious, political or charitable purposes are exempt from Telephone Solicitor Laws compliance.

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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