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Old 1st August 2012, 12:18 PM   #1
mrwannabe
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Default Question About Starting An Online Competition Site



I am not sure if this topic has been covered before. I'm new to the forum and have not found any such topics here yet.

My question is simple.

What are the related laws, if any, that i need to adhere to if i want to setup a website dedicated solely to carry out online competition . The competition would involve sponsorships of prize money and could be in thousands.

Are there any laws/guideline that cover this or is it as easy as just creating a site and start right away? And the competition does not involve any participating fees. FOC. Is a permit/license required?

I hope anyone who has experience or in the know can shed some light on this particular area and legal implications.

Thanks

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Old 2nd August 2012, 08:49 AM   #2
torka
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Where are you located? The laws are different depending on which country you're in.

Assuming you're in the USA, yes, there are laws that cover contests, competitions, sweepstakes, gaming, etc. Some are federal, some are state and some are local.

And, yes, the local laws may apply even for an online business. In fact, if you're going online, the issue is even bigger, because you may have to comply with the various laws in all the areas you target for service.

Your best bet is to sit down for a consultation with a lawyer who can walk you through the regulations. You need to make sure that the structure of your contests is OK, that the rules are ironclad (the more money involved, the more likely it gets that one or more of the losers will sue, claiming some impropriety), and that the wording you use to describe your contests is allowable. (Yes, you can get in legal trouble just for using the "wrong" words -- referring to something as a sweepstakes when it really isn't, for instance.)

However much prize value you're looking at, you're also talking about potential liability in even greater amounts, not just from disgruntled customers but government regulators. You seriously do not want to move ahead without consulting a lawyer.

--Torka

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