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 Minnesota, 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 by allowing free entry. Minnesota law requires clear disclosure of the rules, terms, and conditions of the promotion. The state does not have a registration requirement for sweepstakes based on the total amount of prizes, unlike states such as Florida, New York, and Rhode Island. However, businesses must ensure that their sweepstakes or contests do not violate consumer protection laws, which prohibit deceptive practices and require that the odds of winning are clearly disclosed. Additionally, if a sweepstakes or contest involves a charitable donation or is open to minors, there may be additional regulations to consider. It is advisable for businesses to consult with an attorney to ensure full compliance with all relevant laws when structuring a sweepstakes or contest.