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 Alaska, 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: prize, chance, and consideration (entry fee or purchase). To avoid being classified as a lottery, most sweepstakes remove the consideration element, allowing free entry. Contests, which are based on skill or ability rather than chance, can require an entry fee as long as the winner is chosen based on skill. Unlike some states, Alaska does not have specific registration requirements for sweepstakes or contests based on the total amount of prizes. However, businesses must still adhere to general consumer protection laws and ensure transparency by publishing official rules. These rules should address eligibility, entry procedures, prize descriptions, odds of winning, and how winners will be selected and notified. Additionally, businesses must be cautious about privacy issues and the use of personal information collected during the promotion.