If you want your business to run a sweepstakes or contest you must be careful to structure the promotion so it is not characterized as a lottery under state and federal law, as lotteries are illegal unless sponsored by government entities. Some states, such as Florida, New York, and Rhode Island have registration requirements if the total amount of prizes exceeds a certain amount. And there are a number of issues you should address in the official rules you publish with the sweepstakes or contest.

In Pennsylvania, businesses that want to run a sweepstakes or contest must comply with both state and federal regulations to ensure their promotion is not considered an illegal lottery. A lottery typically includes three elements: consideration (entry fee or purchase), chance, and a prize. To avoid being classified as a lottery, at least one of these elements must be eliminated. Most sweepstakes remove the consideration element by allowing free entry. It's important to clearly define the official rules for the promotion, including eligibility, entry procedures, prize descriptions, and how winners will be selected and notified. While Pennsylvania does not have the same registration requirements for sweepstakes as states like Florida, New York, and Rhode Island, businesses must still adhere to the state's Unfair Trade Practices and Consumer Protection Law to prevent deceptive practices. Additionally, federal laws, such as the Federal Trade Commission (FTC) regulations, require transparency in advertising and prohibit unfair or deceptive acts in contests and sweepstakes.