Baseball fans love clambering for soaring fly balls, and it’s generally a harmless endeavor. Except when the entire happiness of a Word-Series-bereft ball club depends on it. In the infamous Steve Bartman Incident, a spectator’s impulsive grab for the ball interfered with a possible out by Cubs left fielder Moisés Alou. Right idea, Steve; wrong time.
In sports, as in sweepstakes, the lesson holds true: Sometimes trying to do the right thing at the wrong time can lead to trouble.
That’s what happened recently when a client asked us to help create a relatively standard nationwide sweepstakes. The online sweepstakes offered an alternative mail-in entry method. The prize? A to-die-for winter vacation package to the Caribbean.
We told the client that awarding a travel vacation package for only one person was unusual. Typically a travel prize of this type included two people. However, the marketing budget apparently would only allow a prize for one person’s travel.
The prize, which included airfare, hotel, meals, and ground transportation, etc., was valued at $3,500. Because the prize’s Approximate Retail Value (ARV) was well below the $5,000 threshold for registration under New York and Florida’s statutes, the client didn’t need to register the sweepstakes in either of these states.
The nightmare began about three weeks into the five-week term of the sweepstakes. The client’s in-house lawyer reviewed the ads for the promotion and discovered that the prize had been increased from a trip for one to a vacation for two. And the ads listed an ARV of $5,200.
In a frantic telephone call to the marketing department, the in-house lawyer learned that, at the last minute, the company’s marketing department had decided to follow our advice, increased the prize package and revised the official rules accordingly.
But because the ARV of the prizes exceeded $5,000, they had unwittingly created a sweepstakes that should have been registered in both Florida and New York but wasn’t.
I explained to the perturbed in-house lawyer that the best way to deal with the failure to register this sweepstakes was to immediately contact the regulators in both New York and Florida and be completely upfront with them. We called both states and explained the situation. While the client did incur nominal fines, the effects of failing to register could have been much worse if the regulators had discovered this on their own.
What could have been done to prevent this nightmare from occurring?
Here are a few suggestions:
In most instances, changes can be made to a sweepstakes virtually up until the time it is launched. If the promotion must be registered, however, changes can only be made up until the registration is filed.
After a sponsor launches a sweepstakes, rules changes are generally not an option. If changes are absolutely necessary, consult an experienced sweepstakes lawyer.
Please note: We compiled this example from some of our actual cases. We modified the products and details to protect the parties’ privacy.
Dale Joerling is the chair of Thompson Coburn’s Advertising, Marketing and Promotion Law group. He is editorial director of the Sweepstakes Law Blog. You can reach Dale at (314) 552-6058 or firstname.lastname@example.org.