Puerto Rico has approved new Sweepstakes Regulations, effective November 27, 2009, that remove restrictions that routinely caused U.S. sweepstakes promoters to void their offerings in the U.S. commonwealth.
Prior regulations had required translations of materials, the presence of a notary at the winner drawing, and local bonding and registration requirements that could be accomplished only by a lawyer or agent in Puerto Rico.
The avowed purpose of the new regulations is to make them consistent with normal practices in the 50 states, so that promoters of nationwide sweepstakes in the United States can add Puerto Rico without further ado. With one possible exception, this goal appears to have been achieved.
Key provisions of Puerto Rico’s new Sweepstakes Regulations include:
- The new rules apply only to sweepstakes. They do not apply to skill contests, which remain problematic in Puerto Rico.
- Full rules must be available on the Internet (or via other, more cumbersome methods such as posting in a store).
- Abbreviated rules must include “eligibility requirements for entry.” While this normally is addressed at least in part in abbreviated rules, it is not specifically required by other jurisdictions.
- Abbreviated rules must appear on any ads or packaging related to a sweepstakes. This should already be standard practice.
- No consideration — and therefore no bar to sweepstakes legality — is found in a requirement that entrants must provide a self-addressed, stamped envelope, make a store visit, pay standard text message charges, or incur normal Internet or telephone charges in submitting an entry.
- Rules must be published in the same language as used in any ads for the sweepstakes. Thus, a sweepstakes advertised only in English need have only English rules available. A sweepstakes advertised in both English and Spanish needs rules in both languages.
- Puerto Rico still includes a somewhat complicated bureaucratic approval process if a sweepstakes is modified or suspended after it is announced. A written petition must be submitted explaining the reasons and asking permission to terminate or suspend the sweepstakes. This requirement for explicit permission differs from normal practice where a sponsor reserves the right to modify, suspend, or terminate a sweepstakes if its intended play is thwarted for any reason, and faces at most only general misrepresentation enforcement rather than the specific penalties provided in the Puerto Rico rules.
- This is the one provision in the new regulations that appears more restrictive than standard practice throughout the 50 states and the District of Columbia. Promoters who expect more than a trivial risk that a sweepstakes might need to be modified would probably be prudent to exclude Puerto Rico.
- Warranty documents offered by the manufacturer of a prize premium must be delivered with the prize.
- Unclaimed prizes must be awarded, for example, through a second-chance drawing. This requirement is applied to the “extent practicable in light of the nature of the prize,” allowing for non-award of time-sensitive prizes such as concert tickets if time does not allow.
Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and our colleagues. If you have any questions about this update or would like to discuss this topic further, please contact your Foley attorney or:
Paul Bargren
Milwaukee, Wisconsin
414.297.5537
[email protected]
