1

A content creator has paying subs. They want to induce the subs to continue their paid subscription so he wants to run a giveaway (only to his paying subscribers) as a reward for loyalty. They will pick 3 of their subs to get free days added to their subscription in a random drawing on a specific date.

I remember reading fine print on sales inducing give aways and they almost all had wording to the effect you could enter for free by sending a postcard or something to some address and that the "contest" was null and void if it was illegal, and no purchase was required to win.

Does anything like that apply here? Would this be legal across the US? What if you got more entries if you were on the higher paying tiers?

Business is online and the people wanting to offer this inducement are in many states, so it is really interstate commerce. Value of the inducement is under $50.

boatcoder
  • 231
  • 1
  • 6

1 Answers1

1

Most jurisdictions have gambling laws

What you are proposing is lottery trade promotion. Whether that’s legal depends on the law in the relevant jurisdictions. That’s definitely the jurisdiction where the business is based and may also include the jurisdictions where the subs are based.

For example, in , a trade promotion requires a permit if the value of the prizes exceeds $10,000.

A lottery where you do not have to pay or be a customer to enter is called a sweepstakes and has different rules.

Dale M
  • 237,717
  • 18
  • 273
  • 546