frequently asked questions about
sweepstakes, games & contests
The following information does not constitute legal advice and is not meant to be comprehensive. Be sure to consult Counsel with experience in promotion law throughout any Sweepstakes, Game or Contest for current legal requirements.
- What's the difference between a Sweepstakes, Game and a Contest?
- Do the rules and communications materials need to be reviewed by a lawyer?
- Do we need to register or bond our Sweepstakes?
- Do we have to issue Affidavits of Eligibility, Publicity Releases or Liability Releases?
- Do we have to issue IRS 1099 forms to the winners?
- Are rules necessary for a Sweepstakes, Game or Contest?
- What are the minimum filing dates for registration in Florida and New York?
- Are there any states that have very strict Sweepstakes statutes?
- Who registers the Sweepstakes?
- What's required for bonding?
- Can the dates be changed for starting and ending the promotion?
- What information is required for a Sweepstakes or Game?
- What information is required for a Contest?
- What kind of prizes should be considered?
- Can I change the Prize Bank?
- Do all prizes need to be awarded?
- Who picks the winners and how are they selected?
- How are winners notified?
- What do we do about mail-in entries?
- Who is responsible for taxes on prizes and what are IRS 1099 forms?
- Who prepares and issues the letters, email messages and Affidavits of Eligibility and the Releases for Publicity and Liability?
- Who is legally liable for the Sweepstakes?
- Is there special language in the Official Rules used to protect our on-line sweepstakes from hackers and scammers and to protect our off-line sweepstakes from fraud and printing errors?
- What's required to allow entrants under the age of 13 to participate?
- What privacy issues are involved in fielding a Sweepstakes?
- What is the XFx Media Privacy Policy?
- Can my Sweepstakes pages be linked to my Privacy Page?
1. What's the difference between a Sweepstakes, Game and a Contest?
Sweepstakes and Games require random chance and no purchase. A Contest requires measurable skill with judging criteria and can ask for a proof of purchase in most states.
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2. Do the rules and communications materials need to be reviewed by a lawyer?
Absolutely. All rules and communication materials relating to any promotion must be reviewed and approved by Counsel familiar with both current state and federal regulations.
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3.Do we need to register or bond our Sweepstakes?
All consumer Sweepstakes with a total prize bank in excess of $5,000 must be registered and bonded in FL and NY. Consumer Sweepstakes with a total prize bank in excess of $500, which are conducted at retail locations, must be registered in RI. (RI does not require a bond.)
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4. Do we have to issue Affidavits of Eligibility, Publicity Releases or Liability Releases?
Absolutely. These documents help protect you from risk. The Affidavits and Releases confirm the eligibility of the winners, their permission to allow use of their personal information and their acceptance of any liability relating to acceptance of their prizes.
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5. Do we have to issue IRS 1099 forms to the winners?
Anyone who wins a prize over $600 must receive an IRS 1099 Form so that the government can count the prize value as income to the winner.
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6. Are rules necessary for a Sweepstakes, Game or Contest?
Definitely. Rules are a written contract outlining the conditions for the program between the Sponsor and its participants. They are designed to minimize risk and liability and must be reviewed by Counsel experienced with state and federal gaming statutes.
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7. What are the minimum filing dates for registration in Florida and New York?
30 days in NY. 7 days in FL.
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8. Are there any states that have very strict Sweepstakes statutes?
Florida , New York, Colorado and Texas have very strict statutes. Many other states have statutes relating to various methods of entry, distribution of materials and disclosure in materials.
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9. Who registers the Sweepstakes?
The Sponsor or Administrator must register the Sweepstakes in FL, NY and RI. You can do it yourself by requesting the appropriate forms OR XFx Media can handle registration for you.
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10. What's required for bonding a consumer Sweepstakes?
Bonds are required by Florida and New York if the value of the prize bank exceeds a minimum of $5,000. Bonds are issued by insurance companies to cover the total value of the prize bank to insure that all prizes will be awarded. Bonds for each state can be purchased for approximately 1% - 2% of the total prize bank value. The bonds are released once a notarized Winners List is submitted to the states requiring them. You can purchase the bonds yourself or XFx Media can handle the purchase for you.
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11. Can the dates be changed for starting and ending the promotion?
The start and end dates can be changed until your program is registered in NY, FL and/or RI. If your promotion doesn't require registration, the start and end dates can only be changed until your program starts. However, these dates cannot be changed once the rules have been published, even if the promotion has not begun.
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12. What information is required for a Sweepstakes or Game?
Some examples of required information: Start and end dates. Methods of entry including a no purchase necessary method. No purchase necessary to enter or win. Prize levels, description and approximate retail values. Odds of winning. Legal disclaimers. Sponsor's name and address.
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13. What information is required for a Contest?
Some examples of required information: Start and end dates. Judging date. Methods of entry including judging criteria. Type of proof(s) of purchase required. Prize levels, description and approximate retail values. Legal disclaimers. Sponsor's name and address.
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14. What kind of prizes may be considered?
The most popular prizes are money, trips, cars and electronic equipment. Please be aware that if the value of your total prize bank exceeds $5,000, the promotion must be bonded and registered in NY and FL.
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15. Can we change the Prize Bank?
The prizes, descriptions and values may be changed until your program is registered in FL,NY or RI. If your promotion doesn't require registration, the prize bank can be changed until your program starts. However, such information cannot be changed once the rules have been published, even if the promotion has not begun.
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16. Do all prizes need to be awarded?
Yes, all advertised prizes must be awarded if properly claimed.
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17. Who picks the winners and how are they selected?
We can choose the winners or you can do it yourself. XFx Media handles random drawings electronically for both online and offline programs. If the program includes instant winners, winning game pieces are seeded randomly and distributed with all other game pieces. Winners claiming match-and-win instant winner prizes in an online game may be notified of winning as soon as a match is verified electronically and confirmed by the submission of the winning game piece.
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18. How are potential winners notified?
Winners can be notified by email, telephone or mail. Each winner receives a customized letter or email message along with an Affidavit of Eligibility and Publicity/Liability Release. Once these documents are signed, notarized and verified, the potential winners become official winners and receive their prizes.
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19. In an online sweepstakes that offers a mail-in alternative entry method, how do we handle the mail-in entries?
Off-line entries must be gathered and counted. The exact number of entries is important because the final electronic drawing is based on total number of entries received.
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20. Who is responsible for taxes on prizes and what are IRS 1099 forms?
In most cases, winners are responsible for all taxes on their prizes. Each winner with a prize valued over $600 must receive an IRS 1099 form from the Sponsor so that taxes can be collected on the prize from the winner.
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21. Who prepares and issues the letters, email messages and Affidavits of Eligibility and the Releases for Publicity and Liability?
XFx Media creates these documents and email messages based on the input that's been provided. If desired, we can print the documents on your letterhead.
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22. Who is legally liable for the Sweepstakes?
The Sponsor is legally liable for the promotion. That's why we strongly recommend that all rules, communication materials and verification documents be reviewed and approved by Counsel familiar with state and federal gaming statutes.
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23. Is there special language in the Official Rules used to protect our on-line sweepstakes from hackers and scammers and to protect our off-line sweepstakes from fraud and printing errors?
Yes, our rules include special language to help minimize risk. However, statutes and technology change and we recommend that rules be reviewed by Counsel with expert knowledge of federal and state statutes.
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24. What's required to allow entrants under the age of 13 to participate?
The Children’s Online Privacy Protection Act (COPPA) is a federal statute that restricts the collection of personally identifiable information from children under 13. It also requires parental permission for participation by these children. You can review the COPPA requirements at http://www.ftc.gov/privacy/privacyinitiatives/childrens_lr.html. You can also review the BBB's Children's Advertising Review Unit Web site at www.caru.org to learn best practices for Sweepstakes, Games and Contests directed to children under 13.
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25. What privacy issues are involved in fielding a Sweepstakes?
Sponsors may use the information gathered from a Sweepstakes provided such use is consistent with the Sponsor’s stated privacy policy (if any). However, many Sponsors today provide a method of opting out of the sharing of this information with others. If such an option is provided, and the option is chosen by an entrant, it must be honored. If the entrant does not opt out, the Sponsor may use the information according to the terms included in its Privacy Policy.
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26. What is the XFx Media Privacy Policy?
Please review the XFx Media Privacy Policy. It can be adapted to meet your specific needs and policies.
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27. Can my Sweepstakes pages be linked to my Privacy Page?
Yes, we encourage each Sponsor to have a Privacy Page to reassure consumers about how any information that is provided for the Sweepstakes will be used.
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