Spinning Wheel Games: How to Keep Them Legal

Spinning wheel games are cropping up all over websites offering instant win prizes. Some brands also offer anyone who spins to win the additional chance enter into a grand prize sweepstakes drawing. The catch: the customer has to sign up for a newsletter or other marketing material. Several legal issues, revolve (sorry, pun intended!) around these spinning wheel games. To avoid violating sweepstakes and contest laws, brands should adopt some best practices.

Where are these spinning wheels coming from? Typically, they come from a third party app developer who may not even be in the United States. The developer offers a template that is easy to install on a website and promises to drive traffic. In exchange, the app developer may receive payment based on the number of spins the wheel gets. The developer appears to offer a turnkey solution to generating traffic. On closer examination, however, these apps often use templates that are barely customizable and often are not vetted with American sweepstakes law.

Many marketers fail to recognize these spin to win games for what they are: games of chance sweepstakes. To protect the brand, the game should be accompanied by a set of rules. Even if the prizes are low-end, there should be abbreviated rules that cover at least eligibility, the entry period, odds of winning, full prize descriptions, and methodology for claiming a prize. The rules should also protect the brand in the event the spinning wheel malfunctions. The rules and the on-screen experience should also connect entrants to the brand’s privacy policy. Consider also whether the prizes would hit the threshold for required registration and bonding in Florida and New York.

The odds of winning are often a trouble spot when setting up a spinning wheel game. An algorithm on the back end usually determines how often a winning space might come up. That algorithm determines the odds of winning a given prize. The problem is that many marketers are not understanding how the algorithm works and do not know how to state the odds of winning, as required by law. Even more confusingly, marketers often want to limit the number of prizes. Why? if the game goes viral, the brand does not want to be on the hook financially for too many prizes. Restricting the number of prizes, however, likely would render the odds of winning incorrect and compromise the legality of the game. All of these problems need to be sorted through and handled appropriately on both the backend and in the rules to ensure legality.

Another issue is requiring entrants to subscribe to email marketing lists. Per 50 states’ sweepstakes laws, you cannot ask someone to give money or something of value or consideration (substantial time or effort) in order to have a chance to win a prize. Does requiring a person to receive your newsletter before she can spin to win constitute illegal consideration? What if you require the person to stay subscribed to your emails for a period of time? The latter is particularly troubling. Can the right disclosures obviate the legal risk? Again, it depends on the particular program’s execution and how the consumer experiences the disclosures. In addition, marketers need to ensure that their e-newsletters and other marketing materials are CAN-SPAM compliant before linking a contest to them.

A final problem with these spinning wheel apps is that the templates are often rigid. They may not allow for sufficient customization. Many of the apps do not show the entire wheel to the consumer, leading to the potentially false impression of higher chances of winning something of value. The templates also may not have enough room to disclose clearly and conspicuously the details of the game and prizes or to publicize the rules properly.

BEST PRACTICES:

Steps to take to protect your brand:

• Consider your goals for using a spin the wheel game. If it is merely to gather email addresses, realize that many people will unsubscribe right after your first newsletter comes. Work with your sweepstakes attorney to determine what legal exposure you have and then decide if the game is worth the risk.
• Draft rules for your spin to win game that protect your interests. Make sure to use disclosures to communicate the most important disclaimers and the existence of the rules. Experienced sweepstakes and advertising counsel can help you with these risk mitigation steps and ensure you meet the legal standard of “clear and conspicuous.”
• Do not copy another brand’s rules. You do not know what kind of vetting that brand has done and what kind of risk it is willing to take. Also clear the name of your spin to win game so that it does not infringe on another brand’s trademark.
• Consider limiting the length of your spinning wheel game and the value of your prizes to mitigate against the game going viral. A viral promotion can run way over budget and also implicate Florida and New York’s registration and bonding requirements.
• Look carefully at your contract with the spinning wheel app developer. What warranties and indemnities are there to protect you if the wheel goes haywire? How much customization does the contract allow?
• Check your insurance policy to make sure you have coverage for violations of sweepstakes and advertising laws. Many policies have exclusions in these areas.

If you are considering running a spinning wheel sweepstakes or contest for your brand and want to understand the legal issues, click here to request more information.