Sweepstake and Contest Laws

Laws and Rules for Sweepstakes in South Carolina

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.

South Carolina (SC)

Awarding prizes in South Carolina must be done within 10 days of the announcement and at no expense to the winner. Winners also can’t be asked to attend a seminar or sales presentation to claim a prize.

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- South Carolina Prizes and Gift Act

• South Carolina requires that sponsors of sweepstakes or contests provide disclosures and further information about the promotion and prizes (i.e. Official Rules) offered. There are specific statutory requirements for placement, font, and wording of the disclosures when a company combines a promotion with a sales campaign.
• South Carolina prize promotion law prohibits deceptive practices such as simulated checks or charging for excessively for shipping and handling of prizes.
• If a sponsor represents that a person has won a prize or gift, the sponsor must deliver that prize within 10 days and without any expense to the recipient.

Prize Promotion Laws- South Carolina Prizes and Gift Act - Telemarketing

• South Carolina has additional restrictions and disclaimer requirements for prize promotions offered as part of a telemarketing sales campaign and disclose the rules to the consumer or participant.

Legal Review Criteria: Uncertain.

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.