So you want to do a giveaway, should be easy right? Well, in Colorado, there are some rules and regulations that make it more complicated than you would think. If you are unsure if your giveaway fits your local laws and regulations, you can reach out to a giveaway/sweepstakes administration company to help.
To make this as basic as possible, you cannot require money or remuneration of any form to be included in the chance of winning a giveaway. This includes purchasing your product, buying a “ticket”, etc. You also cannot require them to put forth too much effort (sitting for too long of a presentation, etc.). And always include all rules, dates, etc. in any posts/etc. promoting your giveaway.
In the state of Colorado, the definition of gambling is as follows: payment, luck, and the receipt of prizes, and as a result such activities are illegal in the state. So requiring any of the above would be considered gambling and you need a special license to do so in Colorado.
Now let’s talk about the 2 forms of giveaways, Sweepstakes, and Contests.
Sweepstakes are a game of chance/luck. Winners are randomly selected, there is no remuneration involved, and they usually garner a larger more varied group of entries. This type of giveaway normally gets the most traction on social media.
Some examples of Sweepstakes:
- Like our FB post and Page to enter.
- Follow us on instagram and like our post.
- Follow us, @anotherperson, and like this post to enter.
Contests are skill based. A winner is determined based on their performance or by meeting a certain criteria and being judged. With a contest, you have eliminated the giveaway property of “chance” making it legal under state and federal law.
Other things to note:
- All entrants must have an equal opportunity to win.
- All platforms (Instagram, Facebook, Twitter, etc.) have their own rules on how you may run your giveaway.
- The US federal government has laws against who you may advertise to, so be sure you are aware of those if you want to allow minors (anyone under age 18) to participate.
- Something else to note is if you are a part of the financial, alcohol, and tobacco industries – you have additional requirements to follow.