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 Illinois, 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. An illegal 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 by allowing free entry. Illinois does not have registration requirements for sweepstakes based on the total amount of prizes, unlike states such as Florida, New York, and Rhode Island. However, businesses must still adhere to the Illinois Consumer Fraud and Deceptive Business Practices Act, which prohibits deceptive practices in promotions. Additionally, the official rules of the sweepstakes or contest should address eligibility, entry procedures, prize descriptions, odds of winning, and how winners will be selected and notified. It's also important to include details on the sponsor's identity, any restrictions on receiving the prize, and a liability release. Federal laws, including the Federal Trade Commission (FTC) regulations, also require clear and conspicuous disclosure of the terms and conditions of the promotion.