How to Ensure Your Sweepstakes Are Legally Compliant Worldwide

When running a sweepstake that spans multiple countries, your biggest focus should be ensuring compliance with the different promotion regulations.

In this article, we will show you how to run legally compliant sweepstakes in all the countries you’re targeting.

Understand the Local Laws and Regulations

Every country has unique rules that govern sweepstakes. Does your target country require a notary to oversee the drawing? What are the rules for advertising your sweepstakes? If your target audience is in the United States, you must consider federal and state laws. In the European Union, each country also has its own rules and regulations.

For instance, in Italy, a local public official should be present when drawing prizes. France mandates companies refund participants for the amount they spend on internet and postage to enter the sweepstakes. If you have thousands of entrants, this can be costly.

You should also check if the country mandates a no-purchase-necessary entry option or allows “prize promotion with purchase”. Additionally, check whether you must withhold taxes or if the responsibility falls on the winners.

Ensure Your T&Cs Are Clear and Comprehensive

Your sweepstakes terms and conditions (T&Cs) must include as many details as possible. While many companies provide precise details on the prizes, many fail to capture the prize fulfilment process correctly.

One example is Samsung, which didn’t explain the process clearly during its 2020 Buy and Win promotion. This led to participants complaining about delays in receiving their prizes, forcing the authorities to intervene in their favour. The company was fined and asked to compensate the affected.

To avoid lawsuits, you need to clarify when the winners can expect to receive their prizes. Your terms and conditions are prominently displayed on your sweepstake entry page to ensure transparency and set clear expectations for participants.

Pay Close Attention to the Privacy and Data Protection Laws

When running a global sweepstakes, you will unavoidably collect personal data from participants. This may include names, email addresses, and contact information. As a result, you should make sure your promotion doesn’t violate any privacy laws like the General Data Protection Regulation (GDPR) in the European Union.

One way to ensure that is to obtain explicit consent from participants before collecting their data. You should also clearly explain how the data will be stored, used, and protected.

Avoid Unintended Lotteries

While prize contests aren’t heavily regulated, the same cannot be said of lotteries. Many countries have tight restrictions on lotteries and don’t allow private companies to run them.

The problem is that sweepstakes can inadvertently be classified as a lottery if it combines prize, chance, and monetary payment to enter. If this happens, you can open yourself to legal trouble for running an illegal lottery.

But on the bright side, it is easy to avoid this, and all you have to do is avoid combining all three aspects of lotteries in your promotion. The best way to do so is to offer a free entry method. But you can also introduce a skills contest, such as answering trivia or submitting a short essay.

Use a Global Compliance Partner

If the legal requirements sound too much to handle, it’s because it is. But you don’t have to navigate the nitty-gritty yourself. If you’re running an international sweepstakes, you can partner with a global compliance partner. This will ensure your giveaways run smoothly without any unforeseen legal issues.

International promotions agencies like Promosfera can help you ensure your promotion aligns with regulations in every market. They can help you translate T&Cs, secure licenses, and manage the selection process to ensure fairness.