Laws and Rules for Sweepstakes in Tennessee

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.

Tennessee (TN)

Tennessee is the only state that restricts publicity releases. Here, you can’t ask sweepstakes winners to sign away publicity rights “in perpetuity.” Sweepstakes by alcohol brands are also restricted somewhat in that residents can’t enter them online (due to policy, not state law), but may enter them if entries were delivered by mail.

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 - Tennessee Consumer Protection Act

  • Tennessee law defines gambling as “risking anything of value for a profit whose return is to any degree contingent on chance”.
  • If a sponsor is running a sweepstakes or a contest for the purpose of a sales campaign and it tells the customer that he or she may receive a prize in exchange for the purchasing a product or service, incurring a financial obligation, visiting business, attending a sales presentation or contacting a salesperson, the sponsor must provide prize disclosures in Tennessee.
  • In Tennessee, a sponsor offering a contest or a sweepstakes as part of a sales campaign may not make the receipt of a prize contingent upon the use of the winner’s name for promotional purposes. The sponsor may obtain expressed written or oral consent from the winner before using the winner’s name for promotional purposes in connection with mailing promotions to others.
  • If a sponsor requires payment as a condition to competing, receiving or obtaining information about a prize, the sponsor must provide a prize notice to the potential participant. Prize disclosures must follow specific requirements as to placement and font size.

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.

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