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 Indiana, businesses that want to run a sweepstakes or contest must comply with both state and federal regulations to ensure that their promotion is not considered an illegal lottery. An illegal lottery typically 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 by allowing free entry. It is crucial for businesses to clearly outline the official rules of the promotion, which should include eligibility criteria, entry methods, prize descriptions, odds of winning, and how winners will be selected and notified. While Indiana does not have the same registration requirements for sweepstakes as states like Florida, New York, and Rhode Island, businesses must still adhere to the Deceptive Consumer Sales Act, which prohibits deceptive and unconscionable sales practices. Additionally, the Indiana Attorney General's office can take action against businesses that conduct fraudulent or deceptive contests or sweepstakes. Federal laws, such as the Federal Trade Commission (FTC) regulations, also apply and require clear disclosure of the terms and conditions of the promotion to protect consumers from unfair or deceptive advertising practices.