The plain-English rules for running a prize promotion that drives sales without tipping into an illegal lottery: free entry, equal odds, official rules, and where an administrator earns its keep.
A lottery combines three elements: chance, a prize, and consideration (payment or significant effort). Have all three and you're running an illegal lottery as a private company. Remove consideration by offering a genuine free way to enter, the "no purchase necessary" route, and you're a legal sweepstakes.
You're allowed to give an entry for each purchase, so a repeat buyer can stack entries. What you can't do is give buyers better odds than the free method. The free alternate method of entry (AMOE) must be able to yield the same number of entries at the same odds, typically a mail-in or online form, one entry per request, with no cap.
If a $200 order earns 20 entries but the free route only allows 1, that's paying for improved chances, which is an illegal lottery. Keep the odds equal and the same promotion is legal. This is the detail DIY tools skip and the reason brands get promotions pulled.
Publish official rules where every entrant sees them before entering. At a minimum they state:
If the total prize value is above the state threshold, register and post a surety bond in New York and Florida before the start date. Rhode Island requires registration for retail promotions over $500. Other states have disclosure requirements but no pre-registration.
The EU is stricter and country-specific. A pure buy-to-enter prize draw is prohibited or restricted in Germany and France because it ties a purchase to the chance to win. To run across the EU you generally need a real free entry route, plus country-by-country checks on rules disclosure and GDPR consent for the emails you collect. We've broken down Germany, France, Italy, Spain and the Netherlands in our European sweepstakes law guide.
A self-serve platform is fine for a small, single-country giveaway with a low-value prize. Bring in a sweepstakes administrator when the prize is high-value, entries cross states or borders, or your brand can't absorb the compliance risk. An administrator owns the rules, registration, bonding, winner verification, and fulfillment. That's the structure behind the 820,000 EUR AI Universa launch we ran in five days.
This guide covers general US and EU rules as of 2026 and is written for marketers, not as legal advice. Registration thresholds and country rules change. Confirm specifics with promotions counsel before you launch.
Only if you also offer a free alternate method of entry that gives the same odds. You can let purchases earn entries, but the free route must be able to earn the same number of entries at equal odds. Charging for better chances than the free method is an illegal lottery.
Not with better odds. Buyers can accumulate entries through purchases, but the free route (usually mail-in or online, one per request, no cap) must be able to earn the same number of entries at the same odds. The odds per entry have to be identical.
Yes. Any promotion awarding a prize by chance should publish official rules, regardless of size. They define who can enter and how winners are chosen, and they protect you if a result is challenged.
New York and Florida require registration and bonding above set prize-value thresholds, and Rhode Island requires registration for retail promotions over $500. Other states have disclosure rules but no pre-registration.
When the prize is high-value, entries span states or countries, you're risk-averse, or you don't want to own the filings. An administrator handles official rules, registration, bonding, and winner verification end to end.
We design the prize, write the official rules, handle registration and bonding, and run the whole campaign. See how we run it for brands.