Kyle-Beth Hilfer Quoted in The New York Times On Sweepstakes Ambiguity

On October 9, 2024, Kyle-Beth Hilfer explained to The New York Times that businesses and political campaigns must follow federal and state laws when running prize promotions.

The Nuances of Awarding Prizes

Commenting on the nuances of awarding prizes, she said: “Sweepstakes rules should be crystal clear about whether a sponsor will award all prizes or whether a sponsor will choose alternate winners if the original potential winners are disqualified. Any ambiguity could lead to a legal challenge from an entrant or even a regulator.”

The entire article can be read here.

Background of Ambiguous Sweepstakes

The rules in a Trump campaign sweepstakes contained two provisions of note:

• In the event that a potential winner does not respond to Sponsor’s attempts to contact them or are otherwise disqualified such that Sponsor is unable to award the Prize, Sponsor may select additional potential winners by random drawing from remaining eligible entries.
• If the winner does not meet eligibility requirements, fails to respond to the notification within twenty-four (24) hours, or fails to return the signed documents within twenty-four (24) hours, he or she will be disqualified and an alternate winner will be selected from the remaining entries, in the same manner as outlined above.

In the first provision, the Sponsor had discretion to choose other winners in the event of a potential winner being disqualified. The permissive word “may” did not obligate the Sponsor to choose another winner. In the second provision, however, the language promised that an alternate winner will be selected on disqualification of the potential winner. Here the Sponsor was committing to choosing another winner. Thus, these rules contained an ambiguity as to whether the Sponsor of the sweepstakes, according to the terms of its own offer, must choose an alternate winner if the original potential winner either did not respond or were disqualified.

Sweepstakes ambiguity creates legal risk for the sponsor of a sweepstakes who does not choose an alternate winner. Such a sponsor could find itself facing legal challenge from a regulator or an entrant.

For more information about how to draft sweepstakes rules that avoid ambiguity, contact Kyle-Beth Hilfer.