Q: To help promote our agencys Web site, we want to conduct one or more sweepstakes or contests. Is it legal to conduct them online? Can we require that all contest entries be done online, or must we allow technophobes to mail entries to us? Can we require a purchase? Can we get free cruises from a cruise line and give them away? Why do sweepstakes rules always say, Void where prohibited by law?


A: No federal or state laws outlaw online sweepstakes by travel agencies. Further, you can require that all contest entries be done online.

Although Florida used to prohibit online-only sweepstakes, it recently changed its policy to allow them, just as all other states do.

You cannot require a purchase of any kind as a condition of being eligible to win, as purchasing a chance to win would violate most states laws prohibiting private lotteries and unlicensed gambling.

However, you can do what the cereal companies cleverly do: put contest entry forms on your product, such as your e-mailed invoice or itinerary, so that only a purchaser would ordinarily find out about the contest.

Then, in the fine print, you need to add no purchase necessary, and you need to explain how anyone can enter the contest without having bought anything.

You can give away a product or service, such as a cruise, as long as it has the value that you say it has.

The Federal Trade Commission has rules that prohibit advertising or publicizing a free product or service unless you clearly and conspicuously disclose at the outset all the terms, conditions and obligations of the offer.

So, if the cruise is subject to blackout periods or is capacity controlled, you have to say so up front.

Three states -- New York, Florida, and Rhode Island -- have laws requiring you to register the contest if you plan to allow their residents to participate, and Florida and New York require you to post a bond.

Since most smaller contest sponsors, such as travel agencies, cannot afford to register or get a bond, they simply exclude those states residents by saying that the contest is void where prohibited by law.

In addition, some states have laws that regulate contests in other ways.

For example, Tennessee prohibits sponsors from requiring a publicity release, and Illinois sets strict time limits on when winners must be notified and prizes given out.

However, I see no reason why you could not easily comply with all such laws. The most important thing to remember is that each contestant needs to have access to your contest rules, which need to be clear and thorough.

Legally, the rules form a contract with the consumer, and you must obey the rules.

For example, if you say, one free cruise will be awarded, you cannot refrain from giving the prize on the grounds that the cruise line decided not to give your agency a free cruise, unless your rules allowed you to do so.

If you plan to collect contest entrants e-mail addresses and the like for a customer list, you need to limit entries to people 18 years or older, as anti-child-pornography laws limit your right to collect information on children online.

You can find a checklist of contest rules for travel agency promotions at www.pestronk.com/contestrules.html.

Mark Pestronk is a Washington-based attorney specializing in travel law. He answers your questions in the TravelWeekly.com Legal Ease forum. To contact Pestronk directly, e-mail him at [email protected].

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