All In: Sweepstakes and Contests in the Age of Ubiquitous Betting
Reed Smith and the Miami Heat examined sweepstakes and contest regulations in an era of widespread legalized gambling. The speakers explored key legal distinctions between promotional games and gambling, focusing on recent case law developments and enforcement actions that shape how marketers must structure their promotions.
Key Takeaways
The fundamental elements of lottery law (prize, chance, and consideration) remain critical for analyzing promotional games, with recent cases reinforcing the importance of proper structuring to avoid classification as illegal gambling.
The Alternative Method of Entry (AMOE) remains a key promotional exception in most states, but must meet specific requirements including equal dignity, availability, and clear communication to participants.
Virtual currency and loyalty points present unique considerations when used in promotions, particularly when they can be converted to real currency or have measurable value.
Arbitration clauses in sweepstakes rules require careful drafting and prominent placement following the Supreme Court's decision in Coinbase versus Suski.
Recent cases highlight the importance of clear communication about promotion mechanics and careful winner verification processes to avoid consumer protection issues.
Action Steps
- Review existing promotions against current gambling law standards.
- Evaluate AMOE implementation to ensure equal dignity and proper communication.
- Assess virtual currency and loyalty point programs for potential gambling implications.
- Update arbitration provisions in official rules to reflect recent case law.
- Implement robust winner verification procedures.
- Review state-specific requirements for games involving cards or dice.
- Document promotion mechanics and winner selection processes.
- Consider including alternate dispute resolution mechanisms.
- Monitor evolving state gambling regulations and enforcement priorities.
- Maintain clear distinction between promotional games and gambling activities.
CLE Materials
Source
"All In: Sweepstakes and Contests in the Age of Ubiquitous Betting." John Feldman, partner at Reed Smith LLP; Toam Rubinstein, VP, associate general counsel of Miami Heat. ANA Masters of Advertising Law Conference, 11/11/24.