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Online Promotions Outside the United States

Online promotions are potentially subject not only to the laws of all 50 states but also to the laws of every country in which the promoter’s website appears. Notably, certain countries (for example, Belgium, Malaysia, and Norway) prohibit sweepstakes altogether, whereas other countries (for example, France and Spain) require registration and payment of fees. Therefore, it is critical that sweepstakes and contest eligibility be carefully limited, such as, for example, limiting eligibility to U.S. residents.

Sweepstakes Versus Illegal Online Gambling

Internet sweepstakes must also avoid being classified as illegal online gambling; otherwise, the sponsors risk severe criminal and civil penalties under the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA).10 Since the enactment of UIGEA, it has been illegal for any person “engaged in the business of betting or wagering” to “knowingly accept” most forms of payment “in connection with the participation of another person in unlawful Internet gambling.”11 In other words, Internet sweepstakes sponsors must avoid promoting campaigns that could force the sponsor to be classified as a “business of betting or wagering,” such as conducting ongoing online sweepstakes advertising that participants will receive something of value based on an outcome predominantly subject to pure chance. In such circumstances, sponsors are also legally precluded from accepting credit card payments, checks, or electronic fund transfers as part of their offerings.

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