As of April 26, 2013, sponsors of skill-based contests in Vermont may require ... Up until this point, Vermont was one o
JUNE 2013
ADVERTISING, MARKETING & PROMOTIONS
>> ALERT ENTRY FEES NOW PERMITTED FOR SKILL-BASED CONTESTS IN VERMONT As of April 26, 2013, sponsors of skill-based contests in Vermont may require an entry fee or other consideration for entry into skill games. BACKGROUND Up until this point, Vermont was one of the few states that prohibited sponsors from requiring an entrant to pay an entry fee or similar consideration for entry into skill games. In the majority of states, in order to avoid an illegal lottery, one of the following three elements must be eliminated: 1) Prize (anything with some tangible value); 2) Chance (selection of winners on some random basis); and 3) Consideration (some monetary payment or substantial effort required for participation).
and sweepstakes statute in order to make this change. Vermont’s Senate Bill 3 (click here to view) amends Vermont’s consumer protection statute to expressly provide that: “Nothing in this chapter shall be construed to prohibit a person from requiring or paying any kind of entry fee, service charge, purchase, or similar consideration in order to enter, or continue to remain eligible for, a game of skill or other promotion that is not based on chance.” Additionally, the bill amends Vermont’s contests and sweepstakes statute by adding the underlined sentence:
AMENDMENTS
Notwithstanding the provisions of this chapter, a person may organize, execute, or participate in a contest or game of chance, including a sweepstakes, provided that persons who enter the contest or game of chance are not required to venture money or other valuable things. The cost of mailing an entry shall not be considered a venture of money or other valuable things. This section shall not be construed to prohibit a person from organizing, executing, or participating in a contest that is not a contest of chance.
Vermont amended both its consumer protection statute and its contests
There are still a handful of states, albeit dwindling in number and no longer
For skill-based promotions, the element of chance is generally absent, so requiring consideration in those contests is permitted in most jurisdictions. (Although, note that the line between chance and skill is not always clear; various legal tests exist to discern whether a skill contest has effectively eliminated the element of chance.)
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counting Vermont among them, continuing to prohibit consideration in skill-based contests.
THE BOTTOM LINE As of April 26, 2013, Vermont joined the majority of states in permitting sponsors of skill-based contests to require an entry fee or other consideration for entry into skill games. Accordingly, businesses that are structuring a contest that requires a fee or purchase will no longer be required to void Vermont.
FOR MORE INFORMATION Joseph J. Lewczak Partner 212.468.4909
[email protected] Allison Fitzpatrick Partner 212.468.4866
[email protected] or the D&G attorney with whom you have regular contact.
Davis & Gilbert LLP T: 212.468.4800 1740 Broadway, New York, NY 10019 www.dglaw.com © 2013 Davis & Gilbert LLP
