SNCT Negotiated Agreement on McCormac Report Consultative Ballot
SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS...
Transcript of SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS...
![Page 1: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/1.jpg)
SWEEPSTAKES AND CONTESTS
Brian S. McCormac
BrownWinick 666 Grand Avenue, Suite 2000
Des Moines, IA 50309-2510 Telephone: 515-242-2431 Facsimile: 515-323-8531
E-mail: [email protected]
![Page 2: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/2.jpg)
Overview • Types of Promotions
– Lotteries – Sweepstakes – Skill Contests
• Lotteries are illegal unless run by the government or with government permission
• Challenge is to structure your promotion as a sweepstakes or skill contest.
![Page 3: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/3.jpg)
Elements of a Lottery
• Prize • Chance • Consideration
![Page 4: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/4.jpg)
What is a Prize?
• Anything of value offered as an inducement to enter – Cash – Merchandise – Coupons – Discounts
![Page 5: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/5.jpg)
What is Chance?
• Any part of the winner selection process beyond the judgment or control of the participant.
• Examples: – Random drawing – Instant win code – Scratch card
![Page 6: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/6.jpg)
What is consideration? • Always includes payment of money to enter
– Entry fee – Purchase requirement
• May include “substantial effort” if required to enter – Traveling to a location/store visits – Lengthy survey – Waiver of legal rights (NJ AG: do-not-call waiver) – Attending a sales presentation (often separately
regulated)
![Page 7: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/7.jpg)
Structuring a Legal Promotion
• Must remove one lottery element – Remove consideration, you have a
sweepstakes – Remove chance, you have a skill contest – Remove prize, you have no participation
![Page 8: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/8.jpg)
Sweepstakes
• Key features – Prize awarded by random selection – No consideration required to enter
![Page 9: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/9.jpg)
Sweepstakes
• How do you remove consideration? – Offer a free alternate method of entry (AMOE)
• Mail/postcard • Online entry
– Must disclose AMOE in all advertising
![Page 10: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/10.jpg)
Alternate Method of Entry
![Page 11: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/11.jpg)
Alternate Method of Entry
• Must treat free and paid entries with “equal dignity” and “equal prominence” – Equal Dignity: treat all entries the same
• Avoid: – Different deadline dates – Different prize pools (Publishers Clearinghouse) – Different entry limits
– Equal Prominence: display AMOE in same manner as purchase entry
• No Purchase Necessary language usually covers this issue
![Page 12: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/12.jpg)
![Page 13: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/13.jpg)
![Page 14: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/14.jpg)
Special Consideration Issues
• Post consideration – Claiming prize requires payment or
expenditure of substantial effort • Requiring car winner to fly to pick up prize • Often arises with travel prizes where some
element of trip not included • Carefully describe travel prizes in rules (e.g., “ground transportation excluded”)
![Page 15: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/15.jpg)
Special Consideration Issues
• Preexisting Consideration – Customer only sweepstakes
• Entry limited to existing customers who have already paid consideration to sponsor
• Generally acceptable, but must limit frequency • Make no pre-purchase representations that a
sweeps will be offered
![Page 16: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/16.jpg)
Special Consideration Issues • Text messaging
– Deal or No Deal cases • Equal Dignity issue
– Internet AMOE much more cumbersome than texting – 1-800 number would have been better because of similarity to
text entry
• $ .99 text message premium held not to be an unlawful entry fee by Georgia Supreme Court
• Best to avoid text messaging as AMOE because of facial consideration requirement and risk of differing state laws
![Page 17: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/17.jpg)
Special Consideration Issues
• Internet access • 1-900 numbers • Refer-a-friend • “Like” on Facebook
![Page 18: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/18.jpg)
Special Consideration Issues • Consent to receive marketing emails • Open question • NY AG has opined that requiring persons
to accept a telemarketing call constitutes consideration
• Requiring consent to receive marketing emails could be deemed consideration – Avoid by using an opt-in so entry doesn’t
require consent
![Page 19: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/19.jpg)
Special Consideration Issues
![Page 20: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/20.jpg)
Skill Contests • Removes the element of chance • Winners selected in accordance with
objective criteria – There can be no element of randomness in
winner selection process • Consideration usually exists
– Substantial effort to enter – Cost of materials – Entry fee generally permitted
![Page 21: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/21.jpg)
Skill Contest
• Examples – Skintimate
• Good example
– Macaroni Grill • Bad example
![Page 22: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/22.jpg)
![Page 23: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/23.jpg)
Skill Contests
• Skintimate Contest rules set forth: – Entries judged by panel – Criteria: Use of brand assets (25%), Quality of
Execution (25%), Originality (25%), Creativity (25%)
– In the event of a tie, tied entrant with highest score in Creativity will be the winner
![Page 24: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/24.jpg)
![Page 25: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/25.jpg)
Skill Contests
• Macaroni Grill “Create Your Own Pasta” recipe contest. – Contest had two rounds
• First round was a random drawing to narrow field to 500 entrants
• In second round, panel of judges read the 500 recipes and judged them on: taste/flavor (50%), innovative ingredients (40%), creativity of name (10%)
• Tiebreaker: random drawing
• Problematic because of use of random selection
![Page 26: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/26.jpg)
Official Rules • All sweeps and contests should have official rules • Must Contain the following:
– “NO PURCHASE NECESSARY” – Void where prohibited – Eligibility/residency requirements – Start and end dates – Entry instructions – Description of selection process – Odds of winning – Description of prizes and ARV – Sponsor name and address – How to obtain winners list
![Page 27: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/27.jpg)
Official Rules
• Should contain other CYA clauses – Morals – Not responsible for late, illegible entries – Limitation of liability – Sponsor’s decisions final – Force majeure
![Page 28: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/28.jpg)
Promotions Gone Wrong • Kraft “Ready to Roll” Sweepstakes • Kraft inserted game pieces with cheese slices • Grand prize was car; odds 1:15,000,000 • Undetected printing error resulted in virtually
every game piece being a winner • Attempts to cancel brought class action litigation
and regulatory scrutiny • Kraft settled for $10 million • Moral: include a “Kraft clause” in rules to protect
against such errors
![Page 29: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/29.jpg)
Promotions Gone Wrong • McDonalds Monopoly Fraud • Security chief of contractor administering
promotion stole winning game pieces and claimed over $13 million in prizes
• No McDonald’s employees involved • McDonald’s voluntarily gave away $10 million in
store visit promotion to restore customer goodwill
• Moral: include a “McDonald’s clause” to protect against illegal or fraudulent acts
![Page 30: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/30.jpg)
Promotions Gone Wrong • Radio station “Hold your Wee for a Wii” • Contestants drank as much water as they could
without urinating—entrant who drank the most would win
• Entrant died from water intoxication • Contestant’s family filed wrongful death lawsuit • Jury awarded contestant’s family nearly $17
million in damages • Criminal charges explored but not brought
![Page 31: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/31.jpg)
![Page 32: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/32.jpg)
Questions ?
Brian S. McCormac BrownWinick
666 Grand Avenue, Suite 2000 Des Moines, IA 50309-2510 Telephone: 515-242-2431 Facsimile: 515-323-8531
E-mail: [email protected] Website: www.brownwinick.com
![Page 33: SWEEPSTAKES AND CONTESTSwebcasts.acc.com/handouts/08.09.12_SLD_LQH.pdf · SWEEPSTAKES AND CONTESTS Brian S. McCormac ... • Carefully describe travel prizes in rules ... of facial](https://reader031.fdocuments.in/reader031/viewer/2022021510/5ab341857f8b9ad9788dfd9d/html5/thumbnails/33.jpg)
Website: www.brownwinick.com
Toll Free Phone Number: 1-888-282-3515
OFFICE LOCATIONS:
666 Grand Avenue, Suite 2000 Des Moines, Iowa 50309-2510
Telephone: (515) 242-2400 Facsimile: (515) 283-0231
616 Franklin Place Pella, Iowa 50219
Telephone: (641) 628-4513 Facsimile: (641) 628-8494
DISCLAIMER: No oral or written statement made by BrownWinick attorneys should be interpreted by the recipient as suggesting a need to obtain legal counsel from BrownWinick or any other firm, nor as suggesting a need to take legal action. Do not attempt to solve individual problems upon the basis of general information provided by any BrownWinick attorney, as slight changes in fact situations may cause a material change in legal result.