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Does Internet Access Count as Consideration for Online Sweepstakes?

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The issue of consideration is decided in state courthouses.

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Question: Does Internet Access Count as Consideration for Online Sweepstakes?
Do online sweepstakes have to offer an alternate entry method in order to be legal? Does internet access count as consideration when it comes to entering sweepstakes?
Answer:

First, Some Background about Consideration:

If you're not familiar with the term, consideration basically means financial benefit. The difference between sweepstakes and illegal lotteries is that sweepstakes don't have an element of consideration, or financial benefit to the sponsor. When lotteries sell tickets, that's consideration. And that's also why you can recognize sweepstakes scams that ask for any money to enter or to claim a prize.

However, consideration doesn't only include charging money to enter. Consideration can also include requiring entrants to make a purchase or do other things that financially benefits the company sponsoring the sweepstakes.

It is difficult to know exactly what those "other things" include. Each state has its own laws governing consideration and what it entails. Referring friends could fall under consideration, as could signing up for newsletters, or even needing to spend a large amount of time or effort entering, if they are requirements of the sweepstakes -- depending, of course, on how the laws of each state. (If you have the same odds of winning the same prizes whether or not you make a purchase or sign up for a newsletter, it's not consideration).

So Is Internet Access Consideration?

The short answer is -- maybe. Because laws vary by state and can change over time, it's hard to give a more concrete answer. In the article, Don't Gamble with Internet Sweepstakes, the National Law Review writes:
There has been some concern that requiring a computer and/or Internet access to enter a sweepstakes could be deemed consideration. However, as long as consumers are not specifically induced to purchase Internet access and/or a computer for the purpose of participating in a promotion, Internet sweepstakes are not likely to be deemed an illegal lottery on that basis alone.

Meanwhile, Dale Joerling of Thompson Coburn's Advertising, Marketing and Promotion Law group writes:

Is getting online 'consideration'?

Another consideration quandary pops up when deciding whether it constitutes consideration to require a person to go on to the Internet to enter a sweepstakes. Many argue the Internet is so ubiquitous and accessible that requiring someone to enter online can't be considered consideration. Others argue equally forcibly that only about 70 percent of Americans have Internet access at home, so not everybody can enter an online sweepstakes or play a game free of charge. They also argue that while most U.S. residents are familiar with use of the Internet, some still may not be comfortable registering for a sweepstakes online on.

Playing It Safe with Internet Access and Consideration:

There are a few ways to remove the question of whether the internet access for online sweepstakes is consideration or not. Here are some of the methods I've seen:
  • Offering alternate methods of entry. If internet is not required to enter, it's not consideration. Offering a mail-in entry method is a popular choice, since everyone has equal access to the mail.

  • Suggesting free ways to access the internet. Not everyone in America has internet at home, but there are free ways to get online. One example is using the free computers and internet access provided by most public libraries. I've seen sweepstakes rules suggest using free internet access to enter online sweepstakes.

  • Restricting entry to people who have internet. Some sweepstakes state in their rules that only people who already had internet before the sweepstakes started are eligible to enter. If no one is allowed to buy internet access in order to enter, the consideration issue is avoided. A similar tactic is to specifically state that you are not allowed to buy a computer or internet access in order to enter the sweepstakes.
An attorney familiar with sweepstakes law can help you determine which of these options you should use, or if they protect you from consideration questions in every state, or whether there is another option that is better for your sweepstakes.

Disclaimer:

Note that this article is for informational purposes only, and is not intended to be legal advice. For specific advice about sweepstakes you want to run, please consult an experienced sweepstakes lawyer.

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