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Structuring Sweepstakes and Contests
Whether operated by a franchisor or a franchisee, contests involving skill (“contests”) or games of chance (“sweepstakes”) aimed at consumers are often an integral part of a promotional and brand-building effort. These promotions can range in size and complexity ' from a restaurant's “business card fishbowl” drawing to a complex Internet and mobile promotion. Regardless of the details of your promotion, various federal and state laws and regulations may apply. This article sets forth some key legal and practical issues you should consider when operating a promotion.
Illegal Lotteries. Generally, federal and state laws prohibit any entity other than a state (or state licensees) from conducting a “lottery.” A contest or sweepstakes that contains each of the following three elements is considered an illegal lottery:
- An element of chance ' that is, randomness or luck plays a part in the determination of winners. State laws vary on the amount of chance required to constitute an illegal lottery;
- A prize ' anything of value awarded to one or more winners chosen; and
- Consideration ' this includes monetary and non-monetary consideration, and state laws vary on the amount of consideration required to constitute an illegal lottery.
Accordingly, one of these three elements should be removed before any promotion may proceed.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs
A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.
Coverage Issues Stemming from Dry Cleaner Contamination Suits
In recent years, there has been a growing number of dry cleaners claiming to be "organic," "green," or "eco-friendly." While that may be true with respect to some, many dry cleaners continue to use a cleaning method involving the use of a solvent called perchloroethylene, commonly known as perc. And, there seems to be an increasing number of lawsuits stemming from environmental problems associated with historic dry cleaning operations utilizing this chemical.