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Why Can't Californians Enter Alcohol Sweepstakes?

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Question: Why Can't Californians Enter Alcohol Sweepstakes?
Sweepstakes sponsored by alcoholic beverage companies, ranging from Budweiser to Jack Daniels, prohibit entry from residents of California. Why can't Californians enter alcohol sweepstakes?
Answer: Most alcohol sweepstakes prohibit entry from Californians because of Section 25600 of the Business and Professions Code (read the full text of the law).

How Does California's Business and Professions Code Affect Sweepstakes?

Section 25600 of California's Business and Professions Code states:
No licensee shall, directly or indirectly, give any premium, gift, or free goods in connection with the sale or distribution of any alcoholic beverage...

According to the Sacramento Business Journal, a 1999 court decision upheld that Section 25600 of California's Business and Professions Code does apply to sweepstakes prizes.

Why Do Some Alcohol Sweepstakes Allow Entry from California Residents?

If you read the pertinent section of California's Business and Professions Code, you'll notice that it doesn't say that alcoholic beverage companies can't offer sweepstakes to Californian residents; it only stipulates that prizes of value can't be given for free.

That means that some sweepstakes from alcoholic beverage can let Californian residents enter if the prize value is very low.

According to an article in the Sacramento Bee, the prize value limit is "25 cents for beer-related contests, $1 for wine and $5 for distilled spirits."

There have been some sweepstakes from alcoholic beverage companies that offered large prizes like a boat, but stipulated that if a Californian resident wins the grand prize, he or she will receive a prize worth under $5 instead.

In these cases, watch out -- it's better for Californian residents to spend their time entering other sweepstakes, since the prizes they can win are so small, anyway.

Sources:
The Scramento Bee: Booze and Contests Don't Mix, State Says, January 31, 1999
Sacramento Business Journal: Court Ruling Upholds Ban on Alcohol Sweepstakes
Promo Magazine: Taking the Suds Out of Sweepstakes
Text of California's Business and Professions Code
Read these articles for more background on California's sweepstakes laws and alcohol companies.

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