The Complete Legal Guide For Running Sweepstakes, Contests, & More

What Are Digital Promotions and How Are They Used In Promotional Marketing?

Digital promotions are sweepstakes, contests, instant win games and giveaways run online or through apps to drive sign-ups, sales and engagement, and each type carries its own legal requirements.

Promotional marketing aims to raise visibility, interest and engagement for a brand, product or service. Promotions such as sweepstakes, contests, giveaways and instant win games ask consumers to take part for a chance at a prize, which makes them useful for collecting leads, supporting a product launch or rewarding purchases.

Because prizes are involved, promotions sit close to gambling law. The structure decides which rules apply: how winners are chosen, whether entrants must pay or buy, the prize value and the states where entrants live. Getting the structure right before launch is easier than fixing a live promotion.

02 - Sweepstakes, Contests, and More

Who Is In Charge Of Laws and Regulations for Promotions?

No single regulator covers promotions: the FTC polices deceptive advertising, the Postal Service covers mailed sweepstakes, the FCC covers marketing texts, and state laws set most rules.

Section 5 of the Federal Trade Commission Act declares "unfair or deceptive acts or practices in or affecting commerce" unlawful (15 U.S.C. 45), and the FTC enforces it against misleading promotions. Its consumer guidance states the core rule for chance promotions: "It's illegal to ask you to pay or buy something to enter or to increase your odds of winning."

Federal law also covers sweepstakes sent by mail: 39 U.S.C. 3001 requires the mailing, the rules and the entry form to state that no purchase is necessary to enter and that a purchase will not improve the chances of winning. For text-to-enter promotions, the FCC's consumer guidance says "Commercial texts require written consent," so a phone number submitted to enter is not, on its own, permission for later marketing texts.

Each state has its own lottery and gambling laws, and some add registration, bonding and disclosure rules for games of chance. Those state rules are covered in the bonding and registration section below.

Chance

Chance means winners are picked by luck, such as a random drawing or a seeded instant win piece, rather than by skill or merit. In a sweepstakes, each entrant's odds depend on how many eligible entries they hold, which is why free entries and purchase entries must be treated the same.

Consideration

Consideration is what an entrant must give to take part. The clearest form is money: a required purchase or payment. Examples of purchase-based consideration:

Buying a product to get an entry code printed on the packaging
Uploading a receipt for a qualifying purchase
A photo entry that must show the product, when entrants have to buy it

Whether non-monetary effort, such as attending a sales presentation to enter, can count as consideration depends on the state. Skill is not consideration: judging entries on skill removes chance, which is how contests work.

Prize

A prize is anything of value awarded to winners, such as cash, gift cards, merchandise, trips or event tickets. Prize value matters for state registration thresholds and for tax reporting, both covered below. Registration thresholds turn on the total announced value of all prizes offered, not each prize, so a promotion with many small prizes can still cross them.

Chance + Prize

A sweepstakes keeps chance and a prize, so it must remove consideration. It does this with a free alternate method of entry (AMOE) that gives non-buyers the same chance of winning as buyers. A sweepstakes can still offer purchase-based entries, as long as the free route is equal.

Prize + Skill

A contest keeps a prize but removes chance: judges choose winners against published criteria, such as the best photo or essay. The FTC notes that a skills contest "can ask you to pay to play," but whether a contest can charge an entry fee or require a purchase depends on state law, so check the states involved before charging to enter.

Types & Definitions Of Different Digital Promotions

Common promotion types are sweepstakes, contests, instant win games, collect-and-win games and first-come giveaways, which differ in how winners are chosen and whether a free entry route is needed.

Terms like "sweepstakes," "contest" and "lottery" are often used interchangeably, but they are different legal structures. The table compares them, and the descriptions that follow explain each type.

Type	How winners are chosen	Lottery element removed	Free entry route	Registration in NY, FL and RI
Sweepstakes	Random drawing	Consideration	Required if any entry route needs a purchase or payment	Yes, above each state's threshold
Contest	Judging against published criteria	Chance	Not needed when judging is genuinely skill-based	Generally not; the statutes cover games of chance
Instant win	Winning moments or pieces seeded in advance	Consideration	Same as a sweepstakes	Yes, above each state's threshold
Collect-and-win game	Collecting pieces, often distributed by chance	Consideration, when chance decides winners	Same as a sweepstakes when chance is involved	Yes, when chance-based and above the threshold
First-come giveaway	Order of eligible entry	Chance	Not needed; chance plays no part	Generally not

Sweepstakes

A sweepstakes picks winners by random drawing from all eligible entries. Entry is usually simple, such as completing a form or a social media action. Entrants may earn more than one entry through different methods, but every entry carries the same weight and a purchase cannot improve the odds. If any entry route requires a purchase, the sweepstakes needs a free alternate method of entry. For campaign planning, see how integrated sweepstakes support a marketing strategy.

Games or Advergames

Game promotions include collect-and-win games, bingo boards and scavenger hunts, where entrants gather pieces or complete activities to win. They tend to run longer and give people more reasons to come back.

If chance decides who wins, for example through randomly distributed game pieces, treat the game as a game of chance: offer a free way to play and check state registration.

Giveaways

A first-come giveaway, sometimes called a fire drill promotion, awards prizes to the first eligible entrants who complete an action, such as the first 500 to sign up or buy, until the prizes run out. Because order of entry, not chance, decides the winners, it is not a lottery.

Publish rules anyway, covering eligibility, the number of prizes, how entry order is recorded and what happens when prizes run out.

Social Media and Online Giveaway Rules

A social media giveaway is legally a sweepstakes, a contest or a first-come promotion, so it follows those rules plus the platform's promotion terms and FTC disclosure rules.

What is a giveaway in law?

"Giveaway" is a marketing word, not a legal category. A giveaway on Instagram, Facebook, TikTok, X or YouTube that picks winners at random from people who comment, follow or post is a sweepstakes: a free way to enter must be available to everyone, as commenting or following usually is, and if any entry route needs a purchase, a free alternate method of entry with the same chance of winning must be offered; the sponsor needs official rules, and state filing thresholds apply. A giveaway that judges entries, such as the best photo, is a contest. One that rewards the first people to act, such as the first 100 to sign up, is a first-come giveaway. The promotion types above explain each structure, and the official rules checklist below applies to all of them. Social posts also reach people outside the US, so state eligibility in the rules, for example US residents only. Keep a record of each entry with its timestamp and the total entry count at close, as evidence of how winners were selected.

Platform promotion rules

Each platform adds its own terms to the law. The table summarizes what each platform's promotion policy says, as checked on the platform's own pages.

Platform	What its promotion terms say	Checked
Facebook (Meta Pages, groups and events)	The sponsor must make sure the promotion complies with applicable law, including any required registration; participants must fully release Meta and acknowledge that the promotion is not sponsored, endorsed or administered by Meta; the promotion must not require or incentivize participants to share, repost, tag others or otherwise publicize it	October 2026
Instagram	The sponsor is responsible for the official rules, offer terms, eligibility and legal compliance; promotions must include a complete release of Instagram by each entrant and an acknowledgment that Instagram does not sponsor or administer the promotion; no encouraging people to tag content inaccurately	October 2026
X	Discourage multiple accounts and repeated identical posts, ask entrants to mention the sponsor's account, and keep hashtags relevant to the post; compliance with law is the sponsor's responsibility	October 2026
YouTube	Contests must be free to enter, must not be run through ad units and must not ask entrants to transfer ownership of their entries; official rules must link to the Community Guidelines and say that entries that break them are disqualified, state that YouTube is not a sponsor, release YouTube from liability and include a privacy notice	October 2026
TikTok Shop (US sellers and creators)	Giveaways must be free, giveaway items must be valued below $500, and giveaways must run through the LIVE Giveaway feature where available, state their terms in the content and require nothing beyond entering; cash and gift cards are not allowed as giveaway prizes, and game-like mechanics are not allowed	October 2026

Platforms change their promotion terms, so check each platform's current policy before launch. The TikTok row covers TikTok Shop giveaways only; giveaways run from a standard TikTok account follow TikTok's general terms, so check those too.

Can a giveaway require tagging or sharing to enter?

On Facebook, "tag a friend" or "share to enter" breaches Meta's terms, which bar requiring or incentivizing sharing, reposting or tagging. On X, a "most reposts wins" rule rewards extra accounts created to inflate the count, which X's guidelines tell sponsors to discourage, and a winner chosen by popularity is neither a random drawing nor skill-based judging, so define the structure in the rules. Instagram's guidelines bar encouraging people to tag content inaccurately, such as tagging themselves in photos they are not in. Instagram's guidelines do not contain Facebook's bar on requiring tagging, so check each platform separately rather than applying one Meta rule to both. On any platform, requiring a purchase or a paid subscription to enter adds consideration, so a chance-based giveaway then needs a free method of entry. YouTube's policy says a contest "must be free of charge to enter," so do not offer a purchase-based entry route on YouTube, even alongside a free method of entry.

Do giveaway entries need an FTC disclosure?

When people post to enter, the post is an endorsement made for a chance to win, so it needs a clear disclosure. The FTC's Endorsement Guides FAQ says that making "contest" or "sweepstakes" part of the hashtag, such as #XYZ_Sweepstakes, "should be enough," but that #sweepstakes alone is not, because followers "might not understand that the post was incentivized by a sweepstakes." The FAQ adds that "sweeps" probably is not enough either. Tell entrants where to place the disclosure, such as at the beginning of the post. When a creator hosts a giveaway for a brand, name the legally responsible sponsor in the rules, and the creator's posts must also disclose the creator's connection to the brand, such as payment or free product. The 2026 sweepstakes and promotions compliance guide covers social and UGC disclosure in more detail.

Cash prizes, filing thresholds and tax reporting

Cash and gift cards are common prizes, though some platforms bar them: TikTok Shop does not allow cash or gift cards as giveaway prizes. State filing thresholds count total prize value: over $5,000 in New York and Florida, and over $500 in Rhode Island, as the registration section explains. For tax years beginning after 2025, prizes of $2,000 or more to one winner in a year (a threshold the IRS may adjust for inflation from 2027) are reported in box 3 of Form 1099-MISC, which covers "amounts paid to a winner of a sweepstakes not involving a wager" (IRS). Collect a Form W-9 and the affidavit of eligibility before sending a reportable prize, and confirm the winner's identity and payment account before sending a prize through a payment app. State in the rules how and from which account winners will be contacted, and that the sponsor will never ask for a payment to claim a prize, so entrants can spot accounts impersonating the sponsor.

Paid ads for a giveaway

Ads that promote the giveaway are advertising for the promotion, so the state rules on publishing rules or material terms in advertising apply to them as well (see the "No Purchase Necessary" section below). Check the ad platform's own advertising policies before the campaign starts.

UGC contests

A photo, video or caption contest run on social media is a contest, so judge entries against criteria published in the rules and state what rights the sponsor receives in the entries. The contests description above and the 2026 sweepstakes and promotions compliance guide's UGC section cover rights in more detail.

Adhering To State & Federal Sweepstakes Laws

Federal and state rules overlap. The FTC Act prohibits deceptive advertising of a promotion, such as overstating prizes or odds, and federal mail law sets disclosure rules for mailed sweepstakes. State lottery laws decide whether a promotion is legal at all, and New York, Florida and Rhode Island add registration rules for games of chance.

These rules protect consumers from unfair or deceptive practices, such as prizes that are never awarded. Florida's statute, for example, makes it unlawful for an operator "To fail to award prizes offered" (Fla. Stat. 849.094).

Three requirements come up in most US chance promotions:

"No Purchase Necessary" Requirement

"No purchase necessary" means anyone can enter a sweepstakes or instant win for free, with the same chance of winning as a buyer, which removes consideration.

Florida's statute makes it unlawful "To require an entry fee, payment, or proof of purchase as a condition of entering a game promotion" (Fla. Stat. 849.094). For mailed sweepstakes, federal law requires the statement that no purchase is necessary in the mailing, the rules and the entry form (39 U.S.C. 3001).

States also regulate how the rules appear in advertising. New York requires the rules to be "published in all advertising copy used in connection therewith" (GBL 369-e). Florida allows advertising to carry only the material terms if it gives a website, toll-free number or mailing address where the full rules can be obtained. Short-form rules on packaging and in-store materials, with a link to the full official rules, follow Florida's allowance; check them against each state's own advertising requirement. Florida also requires the full rules to be conspicuously posted in each retail outlet where the game promotion can be played, and New York requires the rules and a statement of the minimum number and value of prizes to be posted in a conspicuous and prominent location in every retail establishment offering the promotion.

How To Legally Include A Purchase Requirement In Your Sweepstakes or Game

A sweepstakes can include a purchase-based entry, such as uploading a receipt or entering a code from product packaging, as long as it is not the only way to enter. The promotion must also offer a free alternate method of entry (AMOE) that gives entrants the same chance of winning.

Receipt-based entries need validation rules: which products, stores and dates qualify, and how duplicate or altered receipts are handled.

Alternate Method Of Entry (AMOE)

An alternate method of entry (AMOE) is a free way to enter a promotion that also offers purchase-based entries, and it must give free entrants the same chance of winning.

Common AMOEs are an online entry form, an email entry or a mail-in entry to the sponsor's address. Whatever the format, the free route must be a real alternative: requirements so burdensome that they discourage non-buyers from entering can undermine it.

Key Information To Know about amoes

The AMOE must be available to everyone eligible to enter, without a purchase or payment.

The AMOE should be disclosed alongside the other entry methods in the official rules and in advertising.

AMOE entries must be treated the same as purchase entries. Florida makes it unlawful "Arbitrarily to remove, disqualify, disallow, or reject any entry," and the FTC says it is illegal to ask entrants to pay or buy something "to increase your odds of winning" (FTC).

Bonding & Registering For Games of Chance

New York and Florida require registration plus a bond or trust account for consumer chance promotions with total prizes over $5,000; Rhode Island requires registration above $500.

These rules apply to games of chance, such as sweepstakes and instant wins, run in connection with the promotion, advertising or sale of consumer products or services and open to those states' residents. Florida's statute does not apply to nonprofit organizations, and its filing and bonding rules do not apply to FCC-licensed television or radio broadcasters. The bond or trust account must cover the total value of all prizes offered, and in Florida trust money can be paid out only after the winners are certified to the state. Florida may waive the trust account or bond for an operator that has run game promotions in the state for at least 5 consecutive years without any civil, criminal or administrative action by the state for violating the statute.

State	Trigger	Filing deadline	Bond or trust account	Winners list
New York (GBL 369-e)	Total announced prizes "in excess of five thousand dollars"	"at least thirty days prior to the commencement"; $100 fee	Trust account or bond equal to the total value of prizes	Filed within 90 days after the promotion ends, for each prize worth more than $25; records kept for six months
Florida (Stat. 849.094)	Total announced prizes "greater than $5,000"	At least 7 days before the start; $100 fee	Trust account or surety bond equal to the total value of prizes	Certified list of winners of prizes worth more than $25, from every state, "within 60 days after such winners have been finally determined"
Rhode Island (Form 660)	Prizes "in excess of five hundred dollars ($500)"; "Any game offered to Rhode Island Residents MUST register"	No lead time stated in the filing instructions; $150 fee	None listed in the filing instructions	Kept by the sponsor "for a minimum of one year"

Why Is Registering & Bonding Important?

Registration lets the state see a promotion's rules, prizes and odds before it runs, and the bond or trust account means winners are paid even if the sponsor defaults. Missing a filing has consequences: in New York, "Failure to file such statement shall be a class B misdemeanor"; in Rhode Island, "Failure to file a statement shall be a misdemeanor"; and in Florida, a violation is a second-degree misdemeanor and can also bring a civil penalty of up to $1,000 for each violation.

Build the filing deadlines into the launch plan. New York's 30-day lead time is the longest of the three states, and a copy of the bond or trust account certificate must be filed with the statement.

what states require registering & bonding

New York, Florida and Rhode Island require registration for chance promotions above set prize values, and New York and Florida also require a bond or trust account. Every state's lottery laws still apply to a promotion's structure.

New York: Games of chance with total announced prizes over $5,000 must be registered with the Secretary of State at least 30 days before the start, with a trust account or bond for the full prize value and a $100 filing fee.

Florida: Games of chance with total announced prizes over $5,000 must be filed with the Department of Agriculture and Consumer Services at least 7 days before the start, with a trust account or surety bond for the full prize value and a $100 filing fee. Filed rules "may not thereafter be changed, modified, or altered."

Rhode Island: Games of chance with prizes over $500 must be registered with the Secretary of State, with a $150 filing fee. The statute refers to retail businesses, but the Secretary of State's filing instructions say any game offered to Rhode Island residents must register.

Additional Information to Know About Registering & Bonding A Promotion

New York and Florida require a list of winners after the promotion. New York's is due within 90 days after the promotion ends. Florida's is due within 60 days after winners are finally determined and covers winners from every state, not only Florida; the same information can instead be published in a Florida newspaper of general circulation. Both cover prizes worth more than $25, and Florida also requires winning entries to be held for 90 days after the promotion closes. Rhode Island's filing instructions require the winners list to be kept for at least one year.

Registration rules cover games of chance, so a genuine skill contest generally falls outside them. Excluding a state's residents also keeps a promotion outside that state's filing rules, at the cost of that audience, but the exclusion must be real: Rhode Island's instructions cover any game "offered to Rhode Island Residents," and Florida's statute covers promotions conducted "within or throughout the state." Check each state's rules against the promotion's structure, including business-to-business promotions, before assuming an exemption.

Your Checklist For Creating Official Rules

Official rules, often called sweepstakes terms and conditions, are the published terms a sponsor must follow once a promotion starts, covering sponsor, eligibility, entry, winner selection, prizes, odds and privacy.

Rules should be easy to find and read from every place the promotion is advertised. In Florida, filed rules "may not thereafter be changed, modified, or altered," so settle them before launch. The checklist below covers the 12 elements most official rules include.

Rules Checklist

2. "No Purchase Necessary"

Chance promotions should state "No purchase necessary to enter or win" and "A purchase will not increase your chances of winning." For mailed sweepstakes, federal law requires both statements (39 U.S.C. 3001). A skill contest that charges an entry fee, where state law allows it, should state the fee instead. For mailed paid skill contests, federal law requires the rules to state the cost to enter each round, the maximum cost to enter all rounds and the method used in judging (39 U.S.C. 3001).

Rules Checklist

3. The Promotion Sponsor

Name the sponsor, the company legally responsible for the promotion, with its address, so entrants know who to contact with questions.

Administrator. Some sponsors use an administrator, such as an agency or promotion provider, to handle registration and bonding, entrant support, winner verification and prize fulfillment. If there is one, name it in the rules alongside the sponsor.

Residency

State where entrants must live, such as the 50 US states and the District of Columbia. State whether Puerto Rico and other US territories are eligible, and check their rules before including them. If the promotion runs only in some states, limit eligibility to residents of those states. Opening a promotion to other countries, including Canada, brings in their rules as well.

Age Requirements

State the minimum age, usually the age of majority in the entrant's state. If minors can enter, require a parent or guardian's permission. If the promotion runs on a website or online service directed to children under 13, or the operator has actual knowledge that it is collecting a child's personal information (16 CFR 312.3), the FTC's COPPA Rule requires the operator to "obtain verifiable parental consent before any collection, use, or disclosure of personal information from children" (16 CFR 312.5).

“In Good Standing”

For promotions run through social media, entrants may need an account in good standing. A sweepstakes run on a Facebook Page, for example, can exclude banned or suspended accounts.

The host platform’s own promotion terms also apply, such as Meta’s for Facebook, as the social media section above summarizes. (Meta)

Rules Checklist

6. How To Enter

Explain every way to enter, including any alternate method of entry (AMOE) and any limit on entries per person or per day.

For promotions with several entry routes, such as a combined sweepstakes and photo contest, explain each route and its requirements.
Clear, complete instructions reduce disputes; vague entry mechanics leave the rules open to challenge.
List the grounds for disqualification, such as entering with multiple email addresses or fake social media accounts.

Rules Checklist

7. How & When Winners Will Be Chosen

Explain how and when winners are chosen. For a sweepstakes, that is a random drawing from all eligible entries on a stated date. For a contest, list the judging criteria and how they are weighted; if public voting plays a part, state how votes are counted and weighted against the judging criteria. For an instant win, explain how winning moments or pieces are seeded.

Rules Checklist

8. Winner Verification Process

Describe how potential winners are verified before prizes are released. The usual step is an affidavit of eligibility with proof of identity, age and residency, plus a liability and publicity release where the sponsor needs one. Some sponsors also require notarization for higher-value prizes.

Collect tax information at the same time. The IRS instructions list prizes and awards in box 3 of Form 1099-MISC, including "amounts paid to a winner of a sweepstakes not involving a wager." For tax years beginning after 2025, the reporting threshold rose to $2,000 and "may be adjusted for inflation beginning in calendar year 2027," so collect a Form W-9 before releasing a prize that may be reportable. Prizes paid to the sponsor's employees are reported on Form W-2 instead, awards for services, such as a top-seller award to a nonemployee, go in box 1a of Form 1099-NEC, and winnings where a wager is made go on Form W-2G.

Rules Checklist

9. Prizing and Odds of Winning

List each prize, the number available, the approximate retail value (ARV) of each and the total ARV, and the odds of winning. Mailed sweepstakes rules must state "the estimated odds of winning each prize" and "the quantity, estimated retail value, and nature of each prize" (39 U.S.C. 3001), and New York's filing includes "the proportionate opportunity of winning prizes." Accurate prize descriptions also matter under the FTC Act's ban on deceptive practices.

Rules Checklist

12. Contact Information & Winners List

Tell entrants how to get a copy of the rules and the winners list. New York requires the winners list to be "furnished, without charge, to any person who requests the same," and allows the sponsor to require a stamped, self-addressed envelope if the rules say so (GBL 369-e). Florida requires the operator to "provide a copy of the list of winners, without charge, to any person who requests it" (Fla. Stat. 849.094).

11 - Conclusion

Create Legally Compliant Promotions With Ease

Legal promotions start with the lottery test, then add the right entry structure, published rules, state filings and tax reporting, all planned before launch.

Every promotion type in this guide follows the same logic. Remove one lottery element: free entry for sweepstakes and instant wins, skill-based judging for contests, order of entry for giveaways. Then publish complete official rules, register in New York, Florida and Rhode Island and bond in New York and Florida when the thresholds apply, meet each state's winners list rules and report prizes at the current IRS threshold.

For recent changes, including the 2026 prize reporting threshold, state privacy laws and disclosure for social media entries, and rules for Canadian entrants, see the 2026 sweepstakes and promotions compliance guide. Which of these steps would your next promotion miss if it launched tomorrow?

This guide is general information about US promotion law, not legal advice.

The Complete Legal Guide For Running Sweepstakes, Contests, & More

The US rules for sweepstakes, contests, instant wins and giveaways, from the lottery test to official rules

Understanding the Essentials of Promotional Laws & Guidelines

What Are Digital Promotions and How Are They Used In Promotional Marketing?

Who Is In Charge Of Laws and Regulations for Promotions?

What Separates A Lottery From A Sweepstakes?

How to Avoid Creating a Lottery

Chance + Prize

Prize + Skill

Types & Definitions Of Different Digital Promotions

Social Media and Online Giveaway Rules

What is a giveaway in law?

Platform promotion rules

Can a giveaway require tagging or sharing to enter?

Do giveaway entries need an FTC disclosure?

Cash prizes, filing thresholds and tax reporting

Paid ads for a giveaway

UGC contests

The Framework For Creating A Legal Digital Promotion

Adhering To State & Federal Sweepstakes Laws

"No Purchase Necessary" Requirement

Alternate Method Of Entry (AMOE)

Bonding & Registering For Games of Chance

Why Is Registering & Bonding Important?

Additional Information to Know About Registering & Bonding A Promotion

Your Checklist For Creating Official Rules

Before Getting Started

No matter the type of promotion, here are the core 12 elements that form the basic foundation of any Official Rules.

1. The Promotion Name

2. "No Purchase Necessary"

3. The Promotion Sponsor

4. Eligibility Requirements

5. The Entry Period

6. How To Enter

7. How & When Winners Will Be Chosen

8. Winner Verification Process

9. Prizing and Odds of Winning

10. Privacy Policies and Data Collection

11. Terms & Conditions, and Limitations of Liability

12. Contact Information & Winners List

Create Legally Compliant Promotions With Ease

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