Sweepstakes, Contest & Promotion Laws
Every lawful prize promotion in the U.S. starts from the same federal baseline. A few states add bonding or registration when prizes cross a dollar threshold. Below: the baseline, the split between special and baseline states, and the Canada note.
The federal baseline (applies everywhere)
Under U.S. law a promotion is an illegal lottery only when it combines three elements: a Prize, Chance, and Consideration (a purchase or something of value to enter). A "sweepstakes" keeps the prize and chance but removes consideration — every entrant must be able to enter for free. A "contest" keeps the prize and consideration but removes chance (winners are judged on skill). Remove one of the three elements and the promotion is lawful for a private business.
Official rules you must publish
| # | Required disclosure in your Official Rules |
|---|---|
| 1 | A clear "No Purchase Necessary" statement, displayed prominently (39 U.S.C. § 3001 for mailed materials; FTC "Dot Com Disclosures" for digital). |
| 2 | An Alternate Method of Entry (AMOE) that gives free entries the same odds, same deadlines, and same number of entries as any paid path (the "equal dignity" rule). |
| 3 | Eligibility (age, residency) and exclusions (e.g., employees, void-where-prohibited). |
| 4 | Exact entry instructions for every method, including entry limits per person. |
| 5 | Start and end dates/times and time zone of the promotion. |
| 6 | A complete prize description with the Approximate Retail Value (ARV) of each prize and the number available. |
| 7 | The odds of winning (or the method used to calculate them). |
| 8 | Winner-selection method, notification procedure, and any deadline to claim. |
| 9 | Sponsor legal name and physical address. |
| 10 | A tax statement: winners are responsible for any taxes; sponsors generally file Form 1099-MISC for prizes of $600 or more. |
States with special bonding / registration
These states require advance registration and/or a bond when total prize value crosses a threshold (or, for Arizona, when a skill contest is tied to a purchase). National promotions must satisfy each state's rules or exclude that state's residents.
Arizona
No bond or registration for pure chance-based sweepstakes. Skill-based contests tied to a product purchase must be registered with the Arizona Attorney General before conduct.
View state law →Special ruleFlorida
Total announced prize value over $5,000 (cumulative across all prizes).
View state law →Special ruleNew York
Total announced prize value over $5,000 (cumulative across all prizes).
View state law →Special ruleRhode Island
Total prize value over $500, but ONLY for promotions conducted at retail establishments within the state.
View state law →Baseline-only states (47)
These states have no separate bonding or registration statute for sweepstakes. The federal baseline applies — but a few add narrow "consideration" or disclosure quirks (see each state page). The full list is on the states index.
Canada
Canada prohibits illegal lotteries that combine a prize, chance, and consideration (the Criminal Code). The standard fix is to remove consideration (free entry) and/or add a skill-testing question (STQ) so the winner is not chosen by pure chance. A mathematical or knowledge question the winner must answer correctly before claiming a prize. It must require genuine skill (not "what color is the sky?"). This introduces the skill element that takes the promotion out of pure-chance lottery territory. Read the Canada overview →