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ARTICLE · 13 MAY 2025

What Constitutes A Legal Sweepstakes?

Klein Moynihan Turco LLP
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Legal sweepstakes are an effective means for brands to attract consumer attention and interaction through the allure of possible prize winnings.

United StatesTechnology
David O. Klein
David O. Klein
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Legal sweepstakes are an effective means for brands to attract consumer attention and interaction through the allure of possible prize winnings. Some sweepstakes operators, however, have attempted to create business models based primarily on offering stand-alone forms of serial sweepstakes called "social casinos" or "sweepstakes casinos." These newer models may run afoul of anti-gambling laws, and have come under increasing scrutiny from state lawmakers. In fact, some states have already passed laws to ban certain variations of the social casino/sweepstakes casino model.

How Does A Sweepstakes Casino Differ from A Legal Sweepstakes?

In order to operate legal sweepstakes games, sponsors must eliminate one of the following three elements: prize, chance or consideration. Sweepstakes casinos, as a rule, involve chance and charge entry fees to purchase "basic coins" that enable entrants to play the associated promotional games. Given that, the salient issue is whether

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