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 Alabama, businesses that wish to run sweepstakes or contests must comply with both state and federal regulations to ensure their promotions are not classified as illegal lotteries. An illegal lottery includes three elements: prize, chance, and consideration (entry fee or purchase requirement). To avoid being classified as a lottery, most sweepstakes remove the consideration element, allowing free entry. Alabama law specifically prohibits the promotion of a lottery and requires that any sweepstakes or contest must provide clear terms and conditions. This includes defining eligibility, prize details, entry procedures, and how winners will be selected. While Alabama does not have the same registration requirements as states like Florida, New York, and Rhode Island, businesses must still ensure that their promotions do not violate any gambling laws. It is advisable for businesses to consult with an attorney to ensure that their sweepstakes or contest rules are compliant with all applicable laws and to address any legal issues that may arise.