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 Montana, 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. A lottery typically includes three elements: consideration (entry fee or purchase), chance, and a prize. To avoid being deemed a lottery, most sweepstakes remove the consideration element by allowing free entry. It's important to clearly distinguish between sweepstakes (which are games of chance) and contests (which are based on skill), as contests may require some form of entry fee or purchase. Unlike Florida, New York, and Rhode Island, Montana does not have specific registration requirements for sweepstakes based on the total amount of prizes. However, businesses must still provide official rules for their promotions, which should address eligibility, entry procedures, prize descriptions, odds of winning, and how winners will be selected and notified. Additionally, businesses should be aware of the federal Deceptive Mail Prevention and Enforcement Act, which governs sweepstakes through the mail, and the Federal Trade Commission's guidelines on advertising and online promotions.