Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotion's Group and Co-Chair of the firm’s Brand Management & Protection Group, was quoted in a Bloomberg Law article (subscription required) on the legality of the recent sweepstakes launched by Elon Musk’s super political action committee America PAC, which is awarding a daily prize of $1 million to a swing state voter.
It has been de rigueur to void Québec when offering a sweepstakes to Canadian residents due to its historically onerous registration requirements. While Québec still has strong language requirements, and Canada prohibits pure chance promotions, the Province of Québec will no longer require registration of publicity contests with the Régie des alcools, des courses et des jeux (the “Régie”).
Andrew Lustigman, Chair of Olshan’s Advertising, Marketing & Promotions Group and Co-Chair of the firm’s Brand Management & Protection Group, and associate Morgan Spina will present a webinar on myLawCLE entitled “The Nuts and Bolts of Structuring and Promoting a Lawful Sweepstakes,” on September 27, 2023, from 3-4 p.m. (EST). In this CLE webinar, Andy and Morgan provide an introduction to sweepstakes law, covering the key legal areas of concern that arise in structuring a sweepstakes, including lottery law and gambling concerns and how to address them. Topics they will discuss include why bespoke rules are important and key provisions that should be incorporated when preparing a sweepstakes, as well as how to promote a sweepstakes on Instagram, Tik Tok and other social media platforms.
You can register for this CLE webinar here.
The Federal Trade Commission (“FTC”) has been interested in pursuing amendments to the Negative Option Rule for several years. In 2019, the FTC published an Advance Notice of Proposed Rulemaking (“ANPR”), soliciting public comment on certain issues related to negative options and automatic renewal contracts, including disclosures, consent, and cancellation. Following receipt of such comments, the FTC issued an Enforcement Policy Statement Regarding Negative Option Marketing in 2021. Now, in its latest and potentially most impactful effort, the FTC has issued a Notice of Proposed Rulemaking (“NPRM”), proposing several specific changes to the Negative Option Rule, as the existing rule was woefully out of date.
Sweepstakes entrants’ lack of knowledge of free method of entry insufficient to constitute violation of California Penal Code.
A Northern District of California case styled Suski v. Marden-Kane, Inc. (decided August 31, 2022) has resulted in a significant ruling in the field of sweepstakes law. A sweepstakes sponsored by Coinbase, a popular cryptocurrency exchange, and administered by Marden-Kane offered the chance to win valuable prizes to Coinbase users who bought or sold Dogecoin, a well-known “meme” token, on Coinbase for a total of $100 or more. The sweepstakes offered an alternative method of entry that did not require the trading of Dogecoin or incurrence by the entrants of any other expense. However, this free alternative method of entry was not well-publicized.
Defendants plagued by failure to include arbitration clause in sweepstakes rules
A class-action lawsuit against an online sweepstakes operator will go forward despite the plaintiffs’ admitted agreement to an arbitration clause. The sweepstakes offered the chance to win $1.2 million in Dogecoin, a type of cryptocurrency. The plaintiffs in the Northern District of California district court action, styled Suski v. Marden-Kane et al., initially agreed to arbitrate all disputes at the time they opened their online accounts with defendant Coinbase Global, Inc.
Andrew Lustigman, Chair of the firm's Advertising, Marketing and Promotion's Group and Co-Chair of Brand Management & Protection Group, and associate Morgan Spina will speak on a virtual panel entitled “Advertising, Sweepstakes, Promotions and Competitions Workshop” hosted by LAWorld.
An overwhelming number of US/Canada international sweepstakes promotions typically void the Canadian province of Quebec, resulting in Quebec residents being ineligible to participate. The province is typically voided because of a French translation requirement and a novel registration and tax regime based on prize value with the Regie des alcools, des courses et des jeux (the “Régie”). In an effort to expand sweepstakes offerings to this highly populated Canadian province, it has been reported that Quebec recently changed its promotion registration and tax requirements, making it easier to run international promotions open to Quebec residents.
In the context of the coronavirus pandemic, many companies have turned to online sweepstakes and promotions as a means of both promoting their brand and showing support to coronavirus relief efforts. Certainly, sweepstakes and promotions can be an effective way to achieve these dual purposes. As we previously reported, brands that have hastily run promotions without thinking through the consequences of various events have run into a firestorm of negative publicity as well as potential class actions. Making sure that the promotion incorporates the items below can help ensure that a promotion is legal, properly structured, and contains appropriate protections for the brand.
In 2017, California-based clothing company, Sunny Co. Clothing, posted a photo to its Instagram account displaying a model wearing Sunny Co. Clothing’s “Pamela” red, full-piece bathing suit. The caption stated that every person who reposts the image tagging Sunny Co. Clothing “will receive a FREE Pamela Sunny Suit.” Sunny Co. Clothing failed to set a maximum on the number of swimsuits available for the promotion. The post quickly went viral and Sunny Co. Clothing found itself in the undesirable position of not being able to fulfil its promotional obligations as it simply did not have enough swimsuits to meet the demand. Sunny Co. Clothing publicly learned the importance of having complete and conspicuously disclosed contest rules for social media giveaways. Reese Witherspoon’s fashion label, Draper James, is now learning the same lesson several years later.
Sponsors and promoters of sweepstakes are facing the decision as to whether to cancel or postpone planned promotions due to COVID-19. With respect to promotions that have already been registered and bonded in Florida, the Florida Department of Agriculture and Consumer Affairs (“FDACS”) has provided certain advice as to how these promotions will be treated. The FDACS has advised that there will be no refunds of filing fees in the event a promotion is cancelled due to COVID-19. However, if revisions to the Official Rules are required due to COVID-19, the FDACS has agreed to waive late penalties. In addition, the FDACS will permit substitution of trip or sports related prizes due to COVID-19.
An advertising agency that promoted sales events on behalf of numerous Indiana motor vehicle dealerships is the subject of an Indiana Attorney General lawsuit focusing on allegedly false sweepstakes promotions. The lawsuit highlights the governments’ continued focus on direct mail sweepstakes promotions.
One of the early guilty pleas in the government’s crack-down on allegedly fraudulent sweepstakes and astrology direct marketing campaigns has received a 36-month prison sentence. This sentence against a supplier reflects the serious nature of the government’s investigation into these matters.
Wright, et al v. Publishers Clearing House, Incorporated and Publishers Clearing House, LLC (EDNY April 23, 2018)
The American Conference Institute’s 5th Annual Summit on Digital Advertising Compliance: Social Media, Sweepstakes & Promotions took place on October 17-18, 2016 in New York, NY.
On October 27, 2016, the National Business Institute will present an audio webinar entitled “Social Media, Native Advertising and Sponsored Content Law.”
Olshan listed in The Legal 500, a London-based directory of leading lawyers for Media, Technology & Telecom work (Advertising, Marketing & Promotions) in Tier 3 in its 2016 edition.
The sufficiency of the advertisements should be evaluated by analyzing whether they pass the four P’s test.
Andrew Lustigman will Speak on City Bar CLE Panel on Sweepstakes, Promotions and Marketing on May 16, 2014.
Click below for more information on this event, sponsored by The New Jersey Institute for Continuing Legal Education.
The State of Florida has amended its laws regarding "game promotions" and "drawings by chance." The amendments as well as an April 11, 2013 press release issued by the Florida Division of Consumer Services has raised numerous questions regarding the impact on non-profit organizations. Not all is clear, but here's what we know so far.
The class actions regarding the premium SMS sweepstakes promotions for the play-at- home version of popular TV shows such as American Idol and Deal or No Deal alleging that the contests are illegal lotteries have reportedly been settled.
On May 11, 2011 Facebook announced that it was again revising its Promotions Guidelines.
Facebook announced on December 1, 2010, significant revisions to its Promotions Guidelines that may potentially expand the ability of advertisers to utilize this important marketing channel to conduct promotions.
Businesses, organizations, and even some creative individuals have hosted contests through their Twitter profile. Contests on Twitter may offer prizes for tweeting a particular update, for following a particular user, or for posting updates with a specific hashtag.
Publishers Clearinghouse has signed a new consent judgment with thirty-two states and the District of Columbia that beefs up the company's 2000/2001 thirty-three state agreement.
As Facebook continues to evolve into a widely-popular medium that consumes our lives, so too are the restrictions on using the channel for promotional activities.
Twitter, the social networking site and service, has become a very powerful tool for marketers. Twitter allows marketers to reach consumers directly, bypassing spam filters and enabling both one-to-many and one-to-one interactions.
The Federal Trade Commission announced that it had approved new rule provisions intended to clarify CAN-SPAM requirements.
The California State Assembly and Senate recently passed a bill that would amend existing state law by adding numerous disclosure requirements for sweepstakes materials. California Senate Bill 1400, which could have been construed to prevent alternate methods of entry from satisfying the requirement of no consideration, and which by its terms required opt-in consent before selling or sharing information about sweepstakes participants, was substantially modified before it was put into final form.
New York Attorney General has settled with the tax preparation company H&R Block regarding two sweepstakes promoted by the company to induce consumers to utilize its tax preparation services.
Andrew Lustigman's article "Legal Considerations For Promotions Involving User Generated Content" appears in the American Bar Association's The Practical Lawyer (June 2008) .
The Georgia Supreme Court recently ruled that the SMS game conducted during the NBC broadcast of Deal or No Deal does not violate Georgia's gambling law.
The Lustigman Firm's update on recent sweepstakes and promotion challenges is now online here.
As we have previously reported, a number of class actions have been filed against major network game shows that have incorporated a premium sms promotion component to the game show.
As we previously reported, contests incorporated into popular shows such as American Idol, Deal or No Deal, 1 vs. 100, and The Apprentice have generated lawsuits by people claiming the contests are illegal lotteries.
A bill greatly restricting sweepstakes promotions is shuffling through the New Jersey legislature. New Jersey Assembly Bill 2950 ("Regulates Operations of Sweepstakes In New Jersey) presents enormous problems for sweepstakes marketers. This legislation is not limited to just direct mail, but rather all channels.