NO PURCHASE NECESSARY

A “sweepstakes” is any procedure for distributing anything of value by lot or chance. A sweepstakes must not violate any provision of law, including the law that prohibits lotteries. B&PC §17539.5(a)(12).

Consumers often confuse sweepstakes, lotteries and contests. The main difference between a sweepstakes and a lottery is that the lottery participants have paid or promised to pay value for the chance to win the prize. Penal Code §319. The main differences between a sweepstakes and a contest are that the contest participants must use at least some skill to win the prize and must pay some value to participate in the contest. B&PC §17539.3(e), (f).

In regards to sweepstakes, however, solicitation materials containing sweepstakes entry material or selling information regarding sweepstakes (hereafter “solicitation materials”) must include a clear and conspicuous statement that no purchase or payment is necessary in order to enter the sweepstakes. This statement must be included in the solicitation materials in either the official rules or the entry form and must be in readily understandable terms. If the statement is included in the official rules, it must be set out in a separate paragraph and be printed in capital letters in contrasting type. The statement cannot be smaller than the largest type used in the official rules. B&PC §17839.159(b).

A sweepstakes sponsor may not charge a fee as a condition of receiving a monetary distribution or obtaining information about a prize or sweepstakes. B&PC §17539.15(l). The official rules must disclose information about the date(s) the final winner(s) will be determined. B&PC §17539.15(j).

The operator of the sweepstakes must treat entries that are not accompanied by orders the same as entries that are accompanied by orders. That is, the operator cannot subject an entry that is not accompanied by an order to any disadvantage in the winner selection process that an entry accompanied by an order would not be subjected to. B&PC §17539.15(c). In addition, the solicitation materials cannot represent that an entry accompanied by an order may win or may win more prizes than an entry not accompanied by an order, and cannot represent that an entry not accompanied by an order will have a reduced chance of winning. B&PC §17539.15(d).

Solicitation materials, or solicitation materials selling sweepstakes information, cannot represent that the recipient is a winner or has already won a prize or any particular prize unless the recipient has in fact won a prize or any particular prize. Any such representation is evaluated taking into account the context in which the representation is made (for example, the emphasis, print, size, color, and presentation of the representation and any qualifying language). B&PC §17539.15(a).

It is also unlawful for sweepstakes offerors to make the following representations in solicitation materials if they are not true: that a person has been specially selected, B&PC §17539.15(e), is receiving special treatment or personal attention, B&PC §17539.15(f), is receiving a second or final notice of the opportunity to receive or compete for a prize, B&PC §17539.15(g), or that a notice is urgent or to otherwise convey urgency by the use of description, phrasing, or similar factors. B&PC §17539.15(h). An indication of urgency in solicitation materials may, however, be used when there is a limited time period in which the recipient must take some action to claim or be eligible to receive a prize and the date by which that action must occur is clearly and conspicuously disclosed in the solicitation materials. Id. Solicitation materials also must not mislead the public into believing that the materials are from (or authorized by) any court, official, U.S. or state agency, lawyer, law firm, insurance or brokerage company, or be misleading as to their source, authorization or approval. B&PC §17539.15(i).

Solicitations offering people in California the opportunity to participate in a sweepstakes must disclose the odds of receiving each prize offered. The disclosure must be clear and conspicuous in a format such as “1 chance in 100,000” or “1:100,000.” If more than one prize is offered, the odds of winning each prize must be separately stated. The disclosure of odds must appear immediately adjacent to the first identification of the prize to which it relates, or in a separate section called “Official Rules” or “Consumer Disclosure.” If the disclosure appears in the Official Rules or Consumer Disclosure, there must be a clear and conspicuous statement close to the description of the prizes that directs the recipient to the appropriate section. B&PC §17539.5(e).

Any person who violates the provisions concerning the operation of contests or sweepstakes is guilty of a misdemeanor (B&PC §17534), and may be prosecuted by the Attorney General or by a district attorney. These provisions also are enforceable by civil court actions, which can be filed by private parties, district attorneys, city attorneys, county counsel, the Attorney General and other agencies of the State. Depending on the nature of the action, remedies may include civil penalties of up to $2,500 for each violation, injunction, and restitution. B&PC §§17535,17536. A contest or sweepstakes which violates these provisions also may be subject to an additional civil penalty of up to $2,500 for each violation as an unlawful business practice. B&PC §§17200,17206.