It appears that most laws can vary by state so it would be in your best interest to contact your legal department. The FTC Facts for Consumers page on prize offers might be a good place to do some research. The bottom of the page includes additional resources where you might find additional help. Good luck!

I'm wondering if there is any additional information on this topic as I am running into the same problem. I don't have a legal department to go to- I'm trying to launch a new online small business. I need to learn all I can about 'Skills Contests': rules, laws, state to state differences. (I amNOT doing a sweepstakes or lottery, it involves a sports skill, and it DOES cost money to enter). Does anyone have any additional info on where to go for help in this research? Thanks!

Hi wenand - I found the following information from FTC.gov: 'Sweepstakes-type promotions that require a purchase by participants areillegal in the United States. Other agencies, including the UnitedStates Postal Service (USPS) and the Federal Communications Commission(FCC), also enforce federal laws governing contests and prizepromotions. And each state has laws that may require promoters to makedisclosures, seek licensing, or post a bond. Since state laws vary,check with the Attorney General's Office in the state(s) in which youplan to advertise. If a contest or promotion involves telephone calls,the FTC's Telemarketing Sales Rulerequires specific disclosures, such as the odds of winning a prize, howto participate without buying anything, and that no purchase or paymentis required to win. If pay-per-call services are involved, the FTC's900 Number Rule requires certain disclosures. For more information, askthe FTC for the publications Complying with the Telemarketing Sales Rule and Complying with the 900 Number Rule.'

I saw the page this came from and actually the entire page is worth reading to understand how the FTC thinks in general about deceptive advertising. It may help the original poster better understand the intent behind specific guidelines and regulations. The page is here: http://www.ftc.gov/bcp/edu/pubs/business/adv/bus35.shtm in addition to the FTC's policy statement on deception here: http://www.ftc.gov/bcp/policystmt/ad-decept.htm

Thank you paulms for all your informative posts so far. Hope to see you more of you!

Thanks, Christine I was here early on, but time really passes fast. Amazing to see how active the community has become.

This is my first visit so I do not know if I am doing this right or not. I live in Colorado. A chain store at our mall had a contest, we are told the local store only had it, and we were told by store employees that contest ended at a certain time of a set date. On the date in question the store manager 'decided' to have the drawing for contest winners 'EARLY'. When we went to the store prior to the stated time we were told they had already picked the winners! Where do I go to find out if this is legal ? Just don't seem right!

You should have a state lottery or gaming commission that can answer your question.

Thanks for all the great links. Its so important to think carefully how you sweepstakes or contest is going to work to avoid discrimination + its just makes good business sense.

One of the key issues that can get you into trouble (depending on your state of course) is 'participation'. Most of the time, if you require any kind of contribution, purchase or any exchange of money in order to participate, you could end up in trouble. The best thing to do is consult an attorney in your area. You should be able to get a qualified opinion without too much expense.