Promoting a product-is this a lottery, sweepstakes or contest

Answered by:

Question:

Would the following be considered a lottery or would it be ok? As a promotion of our Pop Money, we set up a wheel with variable dollar amounts that customers spin. To spin the wheel the customer must donate $1 that we donate to a charity. All the amounts on the wheel are more than $1 therefore all customers will get more than they donate. The amount won is then sent to the customer via Pop Money. We set a certain number of spins and it is done on a first come first serve basis.

Answer:

I don’t see it as a lottery as everyone wins although some will win more than others. If the winner gets $500 and then everyone else gets $1.50, that may be different as there is such a gap that a court may define “wins” as the big prize and the smaller ones as inconsequential. If we are talking $5 and $2 there is less of a gap. This may put this in the Contest category as a skill could be required to spin the wheel and win greater amounts. I say that because immediately people will talk about a technique and using the wrist as they spin. Part of my answer is also based on the fact that this is a low-risk issue, but depending on the rules and setup, that doesn’t mean it is no-risk. As described, there is skill and chance. The “pay to play” requirement removes it from being a sweepstakes in many states, as a payment is now required.