IMGL Magazine April 2022

Consumer protection

for businesses, such as ’McDonald’s, to sell retail items, such as hamburgers, through promotions that give away lottery entries provided that non-paying customers have an alternative method of entry (AMOE). At first, most courts that considered this exception insisted that the promoter’s goal must be to increase sales of the primary product rather than simply make money selling entries to a lottery. This is still the prevailing case law in many states. Assuming that all states now allow AMOE even where the only purpose of the promotion is to make money from raffling valuable items, AMOE rules generally require substantially equal opportunity for non-paying participants to (1) enter, (2) win the same prizes as paying customers, and (3) claim prizes. These rules are generally established by court precedent, so a state would be better served by codifying them. A model state act, however, should provide: “Every game promotion offered to a person located in this state must provide for non-paying persons to enter, claim, and win all offered prizes on equal terms as paying persons.” I will not dwell on the second and third elements because they tend to have less relevance to these online raffles. The second concept of equal dignity is that non-paying participants should have equal chances to win all prizes offered. Separate prize pools may invalidate the flexible entry sweepstakes because the non-paying participants do not have the opportunity to win the same prizes as paying participants. As an aside, in the “everyone wins” car raffle, only paying participants can win the cheapest 1/64 model car. Non-paying entrants are excluded from “everyone ” and unlikely to win anything. You are merely given a chance to win a full-sized car. Despite its misleading title, the smaller print of the raffle written rules says if you buy a 1/64 car, you have the opportunity to win the real expensive vehicles. The third requirement of equal dignity is that non-paying participants must be able to claim their prizes just as easily as paying participants. The most relevant AMOE requirement to social media raffles is equal opportunity to enter. This provision requires the promoter to allow non-paying participants to enter the raffle similarly to paying participants. Central to the notion of equal opportunity to enter is that the public knows (1) that they do not need to pay to enter, (2) how to enter the sweepstakes, and (3) that no purchase is necessary. Many states have disclosure requirements set by statute or court decisions requiring “clear and conspicuous” communication of the free entry method to adequately inform consumers. If they do not, States should consider adopting statutes that spell out these requirements. Colorado law, as an example, requires the“no purchase necessary

message” to be clearly and conspicuously disclosed in a manner integral to representation. This message must be in the same type size, typeface, color, style, and font as the representation and cannot be separated from it using intervening words, graphics, colors, or excessive blank space. In several Facebook promotions, the availability of free entry is revealed only after multiple clicks. For example, the car giveaway referenced above starts with an ad on the main Facebook page without mentioning free entry. Click on that, and it brings you to the second page of advertising, where you can buy up to a ten pack for a mere $289.95 with no mention of a free entry. Next, there is a link “[f ]or Official Rules, prize descriptions[,] and odds disclosure,” where finally the third-page states, “NO PURCHASE NECESSARY TO ENTER OR WIN. A PURCHASE DOES NOT INCREASE YOUR CHANCES OF WINNING.” Best practice suggests that state law require this language be conspicuously displayed on every page of a promotion. Another principle of equal opportunity to enter a sweepstakes is that the method of entry for non-paying persons must be substantially the same as paying customers. In non-internet sales, offering an alternative way to enter at the store is often impractical. For example, a particular brand of trading cards may provide the purchaser with a chance to win game-used sports equipment via an entry mechanism on the cards themselves. However, the trading card company may allow thousands of retail locations like convenience stores to sell these cards and cannot practically have an alternative method for persons to enter for free at the store. So, the trading card companies typically offer non-paying customers the opportunity to enter by mail. States can end abuses by mandating that paying and non-paying persons can enter using the same method where feasible. Where this mandate is unfeasible, promoters should provide a similar and not burdensome alternative to non-paying persons. Promoters should not use the“mail-in” method without a legitimate reason to discourage free entry. Unlike store sales, requiring mail-in entries for internet promotions is far less justifiable given that online free entry should be available in virtually all cases. Unfortunately, many Facebook promoters use the “mail-in” method to stifle free entries. Here is an example from a Facebook promotion: To enter without making a purchase, on a plain piece of 3”x5” paper, hand print your complete first and last name, street address, city, state/province/territory, zip/postal code, date of birth (mm/dd/yyyy), e-mail address plus daytime telephone number including area code. Then, on the opposite side of your entry, in at least 25 words complete the sentence “I want to win <this raffle> because…”. … Mail-in

36 • IMGL Magazine • April 2022

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