The Goose Island field goal challenge took the “you can’t buy this kind of publicity” prize a few weeks back for a skill contest that went viral. The nuances of hosting such events get tricky when combined with state rules regarding alcoholic beverages. For instance, the original prize in that competition was free beer for a year, but given Illinois rules about giving away free alcohol, they had to change the purse to Super Bowl tickets and a few other runner-up offerings.
Apart from the particular state prohibitions on certain alcoholic prizes for events, at base, the event was a skill contest, and, along with sweepstakes, these methods of promotion are completely lawful when done correctly … and a source of lawsuits and headaches when mishandled.
So it’s good to understand the ground rules for games of skill and sweepstakes.
Regardless of whether you’ve got a game of skill or a game of chance, and irrespective of its size, a good set of rules is a necessity. That second link above takes you to the Goose Island rules for the field goal challenge, and they’re a good example. The rules are your contract with the participants. Having a defined set of rules that clearly give direction to the participants are the best way to accomplish a functioning set of criteria that will guide your conduct and that of the participants and keep your even running smoothly. Changing them once the game/sweepstakes begin is tantamount to a breach of contract (unless it’s found that something is illegal and you need to change them – ala G.I. changing the free beer situation – because you can’t contract for an illegal purpose). The rules are also where you’ll put any legally required disclosures and disclaimers that protect the host and sponsors. Rules are also where you can limit liability and disclaim certain things like what happens if a hurricane strikes while people are still pole-vaulting.
But what are these two great promotional offerings? Well read on.
Games of Skill
These are promotions that offer a reward based on some aspect of the participants’ abilities or an accomplishment and not on a random drawing or chance. Think baking contests, field goal challenges, spelling bees and trivia night. It is important that chance not be involved, such as having someone flip a coin at the end of a tied trivia night, as such a thing takes a game of skill and turns it into a game of chance. In fact, in drafting rules for your contest, you’ll want to specifically have a rule that deals with tie-breaking based on skill or have a set-up that awards the prizes to each person finishing first in the event of a tie.
Games of skill should be scored in some qualitative fashion and the criteria for awarding points or deciding the winner should be clearly defined. If the system of determining the skill is based on judging, then the point system and method for tabulating and awarding for merit should be delineated along with the experience and fitness of the judges. Think wine, beer, and spirits awards based on blind judging. These events are skill competitions at a company level, but function the same way – copious rules and criteria allow for a final tabulation and award based on objective criteria.
These, at base, are games of chance. Scratch off cards, drawings, raffles, these types of prize offerings are all methods of saying you’re holding a promotional event where the reward is doled out randomly. Sweepstakes differ from lotteries in that a lottery requires the participants to pay in order to win. Lotteries are strictly controlled by state law and involve three elements, 1) chance, 2) a reward, and 3) payment – the sweepstakes differs in that it doesn’t have part 3, consideration for entry.
“But I often see sweepstakes where you have to buy something to enter,” you say. Well, dear reader, that’s true, but in those instances there’s fine print that tells everyone they don’t have to pay to enter and can usually write or phone in for a free entry. Having the free option keeps it a sweepstakes and ensures the contest doesn’t run afoul of state lottery laws.
Sometimes “payment” can be a bit tricky to spot, as some courts have found that arduous surveys can amount to requiring something of value for participation – so best to vet your criteria for entry to ensure you’re not requiring something so burdensome to get into the contest that it might get considered payment. States can also have registration and bonding requirements if the cash value of your prizes exceeds certain dollar amounts – New York and Florida for instance.
The Takeaway: Taking the time to consider whether you’re hosting a game of skill or of chance and how to structure the event and drafting proper rules can help ensure your occasion becomes the traffic and buzz generating sensation you want it to be and will help save you on the potentially expensive a reputation ruining consequences of having something go wrong.