Sweepstakes Compliance Glossary
A comprehensive reference for brands, marketers, and sweepstakes sponsors covering every key legal term used in U.S. sweepstakes compliance — from AMOE and bonding to official rules and tax reporting.
A promotional campaign where winners are chosen by chance (random selection) rather than skill. To remain legal and avoid being classified as an illegal lottery, a sweepstakes must remove the element of consideration — typically by offering a free entry method.
Not a legal term, but it implies a sweepstakes and must follow sweepstakes laws. If you call your promotion a "giveaway," the same legal requirements for sweepstakes apply.
A promotion where winners are selected based on skill, creativity, or merit-based criteria (e.g., an essay or photo contest). Unlike sweepstakes, contests may sometimes require consideration (an entry fee), though state laws vary.
A promotion containing all three elements: Prize, Chance, and Consideration. In the U.S., private lotteries are illegal; only state-run entities may operate them. Private businesses that run promotions with all three elements risk serious legal penalties.
Anything of value an entrant must give to participate. This includes money (purchasing a product), significant time, or substantial effort. Eliminating consideration is the primary goal of sweepstakes compliance.
A legally required, free way to enter a sweepstakes that originally involves a purchase or other consideration. Common forms include mail-in postcards or online web forms. The AMOE must be disclosed clearly in the official rules.
A legal principle requiring that AMOE entries be treated with the same weight as purchase-based entries. They must have the same odds of winning, the same entry limits, and access to the same prize pool.
A mandatory disclosure stating that a purchase is not required to enter or win and that a purchase will not improve an individual's chances of winning. This must appear prominently wherever the sweepstakes is advertised or entry is offered.
A financial guarantee (often a surety bond) required by certain states for sweepstakes where the total prize value exceeds $5,000. It ensures the sponsor has the funds to award the prizes. Required in New York and Florida before registration.
The process of filing sweepstakes details with state regulators before launch:
New York: Required 30 days before launch for prize pools >$5,000.
Florida: Required 7 days before launch for prize pools >$5,000.
Rhode Island: Required for in-store/retail promotions with prizes >$500.
The estimated market value of a prize at the time the rules are drafted. Sponsors must use ARV to determine if they meet state registration thresholds, and it must be clearly disclosed in the official rules for each prize.
The legally binding contract between the sponsor and the entrant. They must include eligibility, start/end dates, entry methods, prize descriptions, ARV, odds of winning, and winner selection procedures. Once published, they generally cannot be changed. Learn more about sweepstakes official rules and laws.
A shortened version of the rules required on all marketing materials (ads, social media posts, packaging). They must include "No Purchase Necessary," eligibility, end date, and where to find the full rules.
A legal document signed by winners (typically for prizes >$2,000.00) to confirm they meet the rules, release the sponsor from liability, and grant permission to use their likeness for promotion purposes.
An IRS tax form that sponsors must issue to any winner receiving a prize valued at $2,000.00 or more. Winners must provide their Social Security Number to the sweepstakes administrator for this reporting. This requirement must be disclosed in the official rules.
Federal law governing the collection of data from children under 13. Most sweepstakes limit eligibility to 18+ or 21+ to avoid these stringent requirements. Failure to comply can result in significant federal penalties.
A standard legal disclaimer used because sweepstakes laws vary by state and country. If a promotion violates a specific local law, it is "void" in that jurisdiction. This phrase must appear in the official rules and is typically included in abbreviated rules as well.
A legal standard used to determine if a promotion is a contest or a sweepstakes when it has elements of both. If chance "dominates" the outcome, it is treated as a sweepstakes and the no-purchase-necessary requirement applies.
Understanding these terms is only the first step. Running a legally compliant sweepstakes requires proper official rules, state filings, winner management, and tax reporting. Sweeppea handles all of it.