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Oct 7, 2005, 17:50 #1
Help needed involving legal issue! *long post*
I need your help with this issue concerning my new website, and contests that we are going to have. I'm starting a new website/business and I need some legal advice to make sure what I'm going to do is legal.
The Website: The website is going to be based around cars. There will be a message board, user-profiles, and contests or competitions--which will be the main feature of the site. I was able to get sponsored by an auto parts company that will provide expensive items to give away in these contests.
Contest Format: The format of the contests will work like this: There are 4 tiers, Tier 1, Tier 2, Tier 3, and Tier 4. Each Tier will have a category and each tier will be giving away a prize. Also, Tier 1-3 will require an entry fee, while Tier 4 will remain free to enter. So the setup will be something like this:
Tier 1-"Best Rims"-$5 Entry Fee
Tier 2- "Cleanest Interior"-$3 Entry Fee
Tier 3- "Best Audio/Video Mod"-$1 Entry Fee
Tier 4-"Best paint job"-Free Entry
We will be charging entry fees because it is a contest, and the prizes are large prizes, such as rims, body kits, car seats, and more.
Anyone who wants to enter the contest, will then have to go out and take pictures of their car that relate to what the category is. At the end of the month, a panel of judges will review each submission and choose a winner in each contest.
Is it legal? I was reading around the Internet and read some things about illegal lotteries. Illegal lotteries deal with chance, however, and our contests aren't based upon chance where we are drawing a random winner--the judges will actually be selecting a winner based on a list of criteria.
To Summarize:We need to know how to write our rules so that we can legally charge participants of our contests to enter. They will be paying money to enter the competition, where our judges will then choose the winner, depending on the topic of the contest, which changes every time (weekly/monthly). What would we have to put in our "Terms of Service" or our "Contest Rules" that would help us get around the situation so that we can hold these contests?
I contacted a lawyer friend of mine and they got back to me with this:
"We have found out all that it is possible for us to find out at our end, and, unfortunately, we have not been able to come up with a clear answer -- something that happens more often, in legal affairs, than most non-lawyers realize. But at least we now have, and can give you, a better idea of what needs to be done.
We have found the criminal statutes that define illegal gambling. According to these statutes, gambling is illegal when it is based in whole or in part on lot or chance rather than speed, strength, skill or endurance. Since we are not familiar with the court cases that have interpreted the statutes, neither Beth nor I can give you reliable advice as to how this would apply to the sort of activity you have in mind. It would be irresponsible of us even to try. If you like, we would gladly mail you copies of the statutes (we'd need you to give us your address), but we doubt that you would find them any more enlightening than we have.
Beth spoke with someone she knows in the Attorney General's Office. He said that you can't do what we thought you could, namely, go to the state agency that regulates this sort of thing and seek its advice, because there is no state agency that regulates that type of website contest. Instead, people who run such contests must act at their peril: if the contest is illegal, they risk prosecution by the State's Attorney's Office, which is separate from the Attorney General's Office, and which would handle the case as it does any other criminal matter.
The other thing you might do is contact your local State's Attorney's Office -- the number would be in your phone book, under Connecticut government listings -- and see if someone there would be willing to review your Tier Structure and give you guidance. If you do that, be sure to keep a record of whom you spoke to and when. Ideally, you should seek the advice in writing. If you only get it orally, and the advice is to the effect that your plan is legal, write immediately afterward to the person you spoke to, summarize in your letter your understanding of the conversation, and ask him to contact you if you got anything wrong. If the State's Attorney's Office is willing to advise you at all, it would do so without charge.
There is one other thing I must tell you: if you do rely on the advice of a private attorney who tells you that what you propose is legal, and he turns out to be wrong, your reliance on his advice would not protect you against prosecution. On the other hand, an official opinion from the State's Attorney's Office would protect you -- if you can get one.
I wish we could tell you something more definite. Perhaps one of the private attorneys, or the State's Attorney's Office, will be able to do so. I would leave you with one final caution, however -- if in doubt, don't!"
Sorry for the extremely long thread guys, but this is a serious issue.
carlo2343 is online now Edit/Delete Message
Oct 7, 2005, 18:10 #2
You will need to comply with each state's laws regarding contests. I would suggest consulting with a lawyer familiar with the laws applying to contests and giveaways.
It sounds as if your lawyer friend may deal with a different branch of law as they were not able to advise you adequately.
Oct 7, 2005, 18:18 #3
Oct 7, 2005, 20:48 #4
The other 49 U.S. states don't require special filing procedures, but they may have particular rules about what sort of contests are legal. This is where the "void where prohibited" clause comes in. The statement gives the company blanket protection against running an illegal contest, without having to research the law in each particular state, and tailor the contest accordingly.