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Is this a lottery or a sweepstakes?

Answered by: 
Randy Carey

Question: 
Our debit card vendor, TransFund, is doing a 50th Anniversary giveaway to its cardholders. In order for our cardholders to be eligible, we have to register our bank for the giveaway. If we do register our bank, every time our cardholders use their TransFund debit card for a qualifying purchase, they are automatically entered to win. TransFund will be awarding a $1,000 winner each month, qualifying them to win their choice of a new car, valued up to $50,000. In addition, TransFund will be giving away $500 per month to a qualifying cardholder who uses a TransFund ATM. TransFund is calling this a sweepstakes, but wouldn't this be considered a lottery? Can our bank register for this and then market it to our customers? I'm having a hard time understanding why a debit card vendor that does business with hundreds of banks in different states would put them at risk with the law by offering a lottery to its customers. I'm hoping my understanding of a lottery is just wrong. Any guidance you can give me, would be greatly appreciated.
Answer: 

I am sure it is like this one that they offer that has an alternative entry method available.

https://www.transfund.com/landing-pages/bts-sweepstakes

(ii) Alternative Method of Entry: To enter the Sweepstakes to win a Prize, anyone may enter by regular mail by printing the words “TransFund 2024 Back to School Sweepstakes Entry.” Along with his or her name, street address, city, state, zip, and phone number on a 3” by 5” white index card. Mail First Class in a #10 envelope via the U.S. Postal Service to TransFund 2024 Back to School Sweepstakes, c/o TransFund, P.O. Box 2300, Tulsa, OK 74192. Each individual entry must be handwritten and mailed in a separate envelope and must be postmarked on or after August 1, 2024, and received by TransFund between August 1, 2024, and September 25, 2024. A limit of one mail-in entry per day, per postmark date, will be electronically transcribed and entered into the Sweepstakes. Entries generated by a script, macro, bot, or any other automated means will be deemed void. Entries that are mechanically reproduced, copied, illegal, incomplete, or inaccurate are void.

First published on 01/05/2025

Filed under: 
Compliance
Filed under compliance as: 
Lottery
Marketing

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