It’s fun to give stuff away. It’s not fun to get in trouble with the FCC for running an illegal lottery. Before setting up a sweepstakes, contest, or giveaway, there are some things every brewery will want to consider.
According to the FCC, if a contest does these three things, it’s by definition an illegal lottery:
1. Giving away something that has value. (Prize)
2. The winner is selected by chance. (Chance)
3. The winner has to pay something (or do something) of value to enter. (Consideration)
To avoid being considered a lottery, legal contests take away one of the three elements. Of course, if you take away #1, it’s no fun for anyone!
When a contest organizer wants to select by chance, the consideration element has to go away. It has to at least be possible to enter for free. This is why you see prominent “No Purchase Necessary” language on a lot of contests, with an email or snail mail address to enter. Lottery laws are at the state level, too, and what counts as consideration varies by state. In some states, it’s okay to make your “free” entry method an in-person visit to the taproom.
If it’s a pay-to-play contest, then a winner can’t be selected by chance. It’d have to be something else, like skill. A brewery could think about running a pay-to-enter shuffleboard tournament, for example, where the rules of the game dictate the winner. Or, “skill” could be a little more intangible than that…like writing a poem that best captures the vibe of a beer.
Of course, depending on the state the contest is running in, there can be much more to it than this. Still, with these guidelines as a starting point, you’d be on your way to avoiding an awkward chat with the FCC!