1. Key Legal Developments Affecting
Sweepstakes, Contests, Disclosures &
Digital/Social Media
Presented by Donna DeClemente

2. DDC Marketing Group
American Sweepstakes & Promotion Co
Alliance Sweepstakes Services
www.ddcmarketing.com
www.american-sweeps.com
www.alliancesweeps.com
Blog: Donna’s Promo Talk
Email: ddeclemente@ddcmarketing.com
Twitter: @ddeclemente
Facebook: Donna.DeClemente
LinkedIn: donnadeclemente
Shadow
Izzie

3. This session will address an array of legal
regulations and guidelines
• sweepstakes, giveaways and contests
• social media, digital media
• disclosers and intellectual property
Echo Jack

4. My Daughter, Alex, and her island pets.
Student at Ross University of Veterinary
Medicine
Frankie
Roti

5. The Basics:
Sweepstakes, Contest, or Lottery
• Prize + Chance = Sweepstakes
• Prize + Skill = Contest
• Prize + Chance + Consideration = Lottery

6. What is Consideration?
• A Purchase or Payment of any kind
• Time: No more than 30 minutes max
• The Supreme Court did rule that watching a
30 minute show to find the code or answers in
order to enter isn’t too much time

7. What is Consideration?
• Alternate Method of Entry (AMOE) - If there is
consideration (purchase, payment or time), the
sponsor must offer a way to enter without
purchase/consideration
• Not Consideration:
– Postage
– Visiting retail establishment (but not multiple visits)
– Internet access
– Filling out entry form

8. What is Consideration?
• Social media entry requirements do not usually have
consideration, however…
• Writing about the product or taking a photo or video of
the product may be consideration:
– Take a photo of yourself with the shoes
could be done in a store
– Take a photo of yourself with the shoes
“out & about the town” is consideration
– Dunkin Donuts take a photo of yourself
taking a bite of a donut – can’t return the donut
• Can the participant effectively compete without
actually purchasing the product

9. What is Consideration?
• Degree of Effort Required is a big trend in
social media sweepstakes
• Earn extra entries from different challenges
- Does it requires too much time?
• Bonus entries for sharing/referring – not likely
to be deemed consideration
– But may raise Can/Spam or endorsement issues

10. What is Consideration?
• Do text and data charges constitute Consideration?
- Still no definitive answer
- No regulatory action or challenges
- Class action lawsuits pending
regarding premium text challenges
• Some lawyers still recommend AMOE
– No legal basis since Wi-Fi is regularly available
• Still should always state that data charges may
apply and to consult their providers

11. What is a Contest?
• Judged based on a degree of skill or uniqueness
• Must clearly define
objective judging criteria
• Needs to follow lottery laws
• Purchase may be required only if needed to create a
submission
• You may receive fewer entries for a contest, but
entrants normally are more engaged with the contest
itself—and with your brand

12. User-Generated Contests
Most popular forms
of user-generated
Contests:
– Photo
– Video
– Essay
– Recipe
– Design

13. User-Generated Contests
• Include specific submission
guidelines defining what you
will and won’t accept
• Clearly communicate that entrant must have the
rights to use any of the submitted content and
that it does not infringe on copyrights.
• Don’t encourage people to submit a video that
will require music without providing royalty-free
music – i.e. a dance contest

14. User-Generated Contests
Voting Contests
Beware of Contests solely
based on public voting
- Lack objective criteria
- Mostly a popularity contest
- Considered a game of chance if no judging
- Vulnerability to voting fraud and bots
- Brands have been moving away from this

15. User-Generated Contests
Voting Contests
• Instead make public voting a part of the total
judging criteria
Example: Judging Criteria:
- 45% public appeal (number of votes)
- 30% creativity and originality
- 25% composition and quality
• Or, use phased judging
- Chose Finalists then open Voting

16. Contest Tips
• Don’t be involved in the contest creation
• Providing samples or templates (balancing act)
• Avoid claiming ownership
- Take a license only for rights you need
• Screen/monitor/filter
• Be specific/avoid ambiguities
• Prohibit all 3rd party content or only infringing
content
• Prohibit all trademarks
• Remember everything is transparent

17. Contest Tips
• Don’t ask people to write an essay about your
product
- Expect low entry rate if you do
• Don’t ask your entrants to get too outlandish
with their submissions - Keep it simple and
real
• Don’t ask entrants to post items that they may
not want to share with the public
- Is it too private or embarrassing?

18. Facebook Updates
• Facebook no longer allows Like Gating
• Can still ask fans to like your page,
but do not make it mandatory
- “Don’t forget to Like our page”
• You can now run a promo on your
FB page vs. a FB app
- difficult to collect data on participants
- difficult to contact winners

19. Facebook Updates
• Still can’t give participant extra entries for
sharing on their timeline
• Can allow a refer-a-friend feature for
an extra entry
- App creates a personalized URL to share
- Friend enters promotion from this URL
- Original participant gains an extra entry

20. • Don’t suggest that Pinterest sponsors
or endorses you or your promotion
• Don’t require people to Pin from a
selection - let them pin what they like
• Don’t make people pin or repin your contest rules
– This is a biggie
• Don’t run a sweepstakes where each pin, repin,
board, like or follow represents an entry

21. • Don’t encourage spammy behavior
– such as asking participants to comment
• Don’t ask people to vote with pins, repins,
boards, or likes
• Don’t overdo it: contests can get old fast.
• Don’t require a minimum number of pins -
One is plenty

22. Twitter Guidelines
• Discourage posting the same Tweet
repeatedly
• Don’t create a sweeps where the most
retweets win
• Ask Users to include an @ reply to ensure all
entries are viewed

23. Google +
Google+ still does not allow you to run any
promotions on their platform
- Only use it as a way to promote

24. FTC Endorsement Guidelines
FTC updated their Endorsement & Testimonial
Guidelines
• Sparked by an investigation into a Pinterest-based
contest conducted by Cole Haan which instructed
participants as follows:
Create a Pinterest board titled “Wandering Sole”
Pin 5 images of shoes from Cole Haan’s Pinterest board
Pin 5 images of participants “favorite places to wander”
Tag all with #WanderingSole
Cole Haan would then judge all entries
Award winner a $1,000 shopping spree

25. FTC Endorsement Guidelines
FTC Concluded the following:
• The act of pinning the images of the advertiser’s product
constituted endorsements
• So the act of pinning as well as tweets, videos, photos, etc. may
constitute endorsements
• Any incentive no matter how minimal may be an endorsement
• Must require disclosure
FTC now recommends:
• Use of sweepstakes title along is not adequate,
• Must also include #Contest or #Sweepstakes or #Entry or similar
designation in hashtag - #WanderingSoleContest

26. FTC Disclosure Guidelines
• FTC also focused on disclosures in traditional
media – 60 warning letters were issued
- Small type size
- Placement at the bottom of the page
- Light type font
- Insufficient contrast
- Placement in large/dense photos
- Insufficient duration on the screen

27. Social Media Content
• Think before you reuse any 3rd party content
– No clear legal guidance
• If you retweet it, post it, like it, you own it and is
that a risk? - Depends on risk tolerance levels
• Who has initiated the conversation?
• Does the profile picture include other people,
minors?
• What is the content?
– Does it include a photo, who’s in it, does it make a
claim you can’t support

28. Social Media Content
• Duane Reade
tweeted a photo of
Katherine Heigl
taken by a
paparazzi with their
bags and were sued
• They made it look
like an
endorsement

29. Social Media Content
On the other
hand, Arby’s
posted a Tweet
with @Pharrell
during the
Grammy’s that
worked

30. Social Media Content
Use of Celebrities
• Any use of celebrity tweets/posts presents a
high risk of a right of publicity violation
• Courts taking an increasingly narrow view of
“commercial use”
• Celebrities are earning big money to tweet

31. Social Media Content
Bud Light Recently apologized for this tweet:
“The perfect beer for removing ‘no’ from your
vocabulary for the night,” followed by the
requisite “#UpForWhatever” hashtag.

32. Official Rules
• All promotions - Giveaways, Sweepstakes,
Contests ….
• Should have official rules that are readily
available to all eligible participants that
clearly set forth the terms and details
• Official Rules are your contract with the public

33. Official Rules
1. No purchase necessary (for games of chance) – clearly
and conspicuously disclosed
2. Void where prohibited, void in (list states that must be
voided/sponsor wishes to void)
3. Sponsor’s official name and address
4. Start and end dates
5. Eligibility – national vs. local, age, also who is not
eligible – Sponsor’s employees, immediate family,
partners, agencies, etc.
6. How to enter – web/blog url, Facebook, Twitter,
hashtag, submission, etc.

34. Official Rules
7. Prize(s) description–ARV of each
- $600 or over must send 1099
8. Drawing date – Winner announcements
9. Info on how to obtain winner’s list
10. If utilizing Facebook as a method of entry:
“This promotion is in no way sponsored endorsed,
administered by, or associated with, Facebook.”

35. Notifying Winners
• Contact Winners first before you announce
their names and get their permission

36. Bonding & Registration
• Only applies to Sweepstakes (Games of Chance)
• Consumer promotions only when total prize
value exceeds $5000
• A surety bond to cover prize redemption and
sweeps registration required for NY & FL
• Rhode Island registration only for retail
sweepstakes that prize value exceeds $500
• Quebec requires bonding and registration plus all
communications to be produced in both English
and French-Canadian

37. Global Promotions
• No such thing as an International promo
• Each country has it’s own laws, regulations, tax issues,
registration fees, privacy policies…
• Contests are not as restricted as sweepstakes
• US & Canada can be included together (except
Quebec)
- minor addition to the rules
- winner must answer a mathematical question

38. Applications
Facebook - Create Facebook apps with built-in voting restrictions and
fraud prevention
Twitter - Increase engagement with sharing incentives
Instagram - Use the link in your bio to direct traffic to your Campaigns
Pinterest - Drive traffic to your eCommerce sites. Display custom content
to users in different countries
Website and Blog - Embed Campaigns on your website or blog, or
publish them to the web where they function as landing pages
Shortstack.com

39. Applications
Rafflecopter makes it easy to run a giveaway online
Create & launch a giveaway in minutes
They provide a template for “Terms and Conditions”
- Available for a paid account

40. “The currency today is not money
It is user engagement and their content
But it is full of risks, and we all must be cautious”*
Thank-you
*Quote from Linda Goldstein, Partner, Manatt, Phelps & Phillips, LLP, from the BAA 2014
Annual Marketing Law Conference.