Our Top Tips for Running Prize Promotions in the US

1. Every state is different, don’t rest on your laurels in running a sweepstake across multiple different states.

It’s important to be aware that the rules change even when you move outside of your base state, and you don’t want to be caught out. Make sure to speak with our dedicated US team for advice on how to maneuver through the law.

2. Give yourself more time than you think – In some states registration is required to run sweepstakes and competitions compliantly (otherwise you may be subject to penalties!).

But penalties aren’t the only thing that would befall your brand/ agency – you also need to think about the negative press that comes with it. In the current financial climate, losing your consumers’ trust could be the deciding factor around whether to continue to purchase from your brand.

3. Take taxes into account!

Unlike a lot of other countries, in the US winners will have to pay tax on any winnings – We advise you take this into account when advertising the prize so as not to mislead your consumers.

There’s one thing finding out you’ve won $1,000… it’s another that you then have to pay a portion of it in tax. We recommend you cover this on behalf of your winners so that they actually win what they are expecting, without the slap that usually comes alongside it!

4. When thinking prizes – stay clear of alcohol! It is not allowed to be given away as a prize in any form or format (I.e. a wine tasting is off limits!).

Our alcohol brand friends need to get creative here but that’s where we can help. We found that money is always the winner when it comes to prizes, as people are able to spend it on whatever they want. But use this as an opportunity to really connect with your brand’s community – are there other prize options which they would appreciate or emotionally connect with (E.g. Pokémon gave their fans a vinyl with the old soundtrack on it)?

5. Get to know the jargon – It changes if you decide to branch out of the US!

Want to go multi-national and branch out of the USA? You need to make sure you know your prize promotion jargon in order to stay on the straight and narrow when it comes to the law.

Sweepstakes (USA) – Prize Draw (Europe)
Contests (USA) – Competitions (Europe)
Sponsor (USA) – Promoter (Europe)

If you’re looking to run a Sweepstake or Contest in the US or just need advice, please get in touch via our contact us page or email us directly.