Ten Things You Need To Know Before Doing A Scratch Off Promotion
A promotional scratch-off game is often likened to state lottery scratch offs because of their similarity, but promotional scratch offs really are a totally different animal. When a scratch-off element is added to a promotional piece- it is considered a “gaming device” by definition. This means you need to make sure that the promotion you are attempting is set up in a way so that it is not considered and illegal lottery. Below are 10 Q & A pieces of info key to creating a scratch-off promotion that is in compliance with state and federal rules.
What You Need To Know:
1. What’s the difference between a Lottery Scratch Off Card and Promotional Scratch Off Game Card?
Our Scratch-off game cards are not lottery tickets! Cards must exclude the consideration element in order to be classified as sweepstakes and not an illegal lottery. Consideration is asking for money or the purchase of a product in exchange for the scratch-off game card. Simply, you can not require a purchase to receive a scratch-off card; our cards cannot be sold as the lottery does.
There are three elements that define a lottery scratch-off card: PRIZE, CHANCE and CONSIDERATION. Lottery scratch cards are different in that the third element “consideration” is required to participate and win. You purchase the ticket with a chance of winning. Consideration can be described as an effort on the part of the consumer that must be given in order to be entered into the sweepstakes (ie. Purchase). Promotions in which prizes are awarded on the basis of chance do not constitute illegal lotteries if entrants do not have to pay any money to enter or to win.
2. What are some of the common requirements when running a Scratch off Promotion?
Some states require formal registrations for scratch-off promotions. There are accompanying fees that must be paid, as well as surety bonds or escrow accounts that must be established before the promotion begins. Those fees depend upon the total prize pool. Also, there should always be a No Purchase requirement for all scratch-off game cards. In other words, the element of consideration (payment) must be removed before the sponsor can lawfully proceed.
3. Does Every Scratch off Promotion have to be registered?
Not always! Outside of New York, Florida, and Rhode Island, the answer is no, and in these states only when the total prize pool (the retail value of all prizes being offered) is more than $5,000 (for NY and FL), or $500 or more (for RI). New York and Florida are the only states that currently require formal registration of a scratch-off game and filing of surety bonds. Florida is currently the most active in the enforcement of compliance with its registration policies. This registration is required when the total prize value is greater than $5,000. If the prize value is less, you will not need to register the promotion. If you are only distributing a small portion of the entire promotion in these states, there may be a way around registering even if the prize value exceeds $5,000.
Call Bill Gillespie toll free 1-813-831-9902 for a Free consultation and to learn move about this process. Note: Rhode Island requires only registration. Alcoholic beverage and some other industry promotions are a separate consideration.
4. Do all the prizes have to be given away?
If you have a grand prize with a random drawing, or a second chance entry, all prizes must be awarded. However, in many “instant win” games, prizes may not be awarded if the winning game pieces are not found or claimed. Provided your official rules clearly state that fact, as well as what the conditions for the awarding of prizes, there is no issue here. When planning and budgeting for a scratch-off game promotion, you should always plan that all of the prizes will be awarded. You must have the prizes available to be awarded.
5. Are Official Rules required for every scratch-off promotion?
You definitely want to cover yourself! Official Rules are, legally, the sponsor’s “contract with the public”. They constitute an enforceable contract between the sponsor and participants and can’t be changed once published. If your promotion is marketed toward the general public, they are required and should be clearly spelled out for the promotion. An abbreviated set of rules and regulations can be printed on the back of the card. Additionally, copies of the official full rules and regulations are made available at all participating locations, on a website or by written request. If this is an internal sales, safety or employee incentive promotion, the official rules and regulations to the public are not required. However, I would strongly suggest that you have some type of contest structure in place to avoid any confusion.
With every order, we can release “Generic” rules and regulations for that can be used for any promotion. This is a $2,000 Value and is yours FREE with any promotion you do with our company. These rules can be easily customized for your promotion. Call Bill Gillespie Toll Free 813-831-9902 for a Free Rules Consultation!
6. McDonald’s and Burger King glue their game pieces to their cups and require you to buy a menu item to get a game piece. How do they do this?
Guess what? There is NO purchase required to play their games. However, if you ask for a game piece without making a purchase, they will give you a form that tells you were to write to receive a game piece for free. This is called an Alternative Method of Entry. For example: “You may also obtain a game piece without purchase and a full set of rules by sending a self-addressed business size envelope postmarked no later than 00/00/00 to Game Card Request, 123 Any Street, Any town USA.” This alternative method of entry allows manufacturers and retailer to do in-package, on- package promotions or to only give out a game piece when a purchase is made.
7. How do I protect myself from mistakes, misprints or forgery?
Many years ago, KRAFT foods ran into the problem where there were too many prizes printed for their promotion. After this fiasco, legalese in the Promotions marketing filed came up with what has been deemed as “The KRAFT Clause. This one clause can protect you 100% if the unlikely event that any problems occur. It reads as follows: “If due to a printing, production or other error, more prizes are claimed than are intended to be awarded for any prize level per the above, the intended prizes will be awarded in a random drawing from among all verified and validated prize claims received for that prize level. In no event will more than the stated number of prizes be awarded.” This should be included in all official rules and regulations. If you don’t work with us, you should always work with a reputable printer who specializes in scratch-off games. Do not run with a local printer that thinks they can do this type of job for you.
8. Contest Disclosures?
In addition to lottery laws, various state laws require contest promoters to disclose certain information. Companies typically make these disclosures in their contest rules, although some states require that the disclosures be made elsewhere as well. When writing rules for sweepstakes or contest, think of them as a contract (courts usually do). Try to anticipate problems that may arise. Some issues that commonly arise include: What if there is more than one winner? When will the sweepstakes open and close? What will you do with damaged or illegible entries? Who is eligible? Who will pay the taxes? Thinking through the mechanics of the sweepstakes from beginning to end, and drafting rules covering likely issues, will save you time and money (and perhaps bad press or worse) down the road. We are here to help. With every order, we give you a Generic Set of Rules and Regulations with a value at over $2000. Please contact Bill@promoprintinggroup.com for more information on this Free Service.
9. Do scratch off games really work?
For years now, “experts” have been predicting the complete and total demise of sweepstakes, contests, and scratch-off games. Yet, according to industry reports, sweepstakes activity has steadily increased over the last 10 years. This increase is measured at more than 25 to 30 percent—on top of an already solid base or benchmark of activity. Their continued popularity may be partly due to the somewhat limited number of promotional options available to marketers. Perhaps even an increase in the nationwide phenomenon of “Lotto Fever” (and greater acceptance of casino gambling among mainstream America). Or it may simply be the fact that sweeps, contests, and games offer certain advantages such as fixed-budget liability (as opposed to open-ended liability situations such as refunds and/or premium programs that, when more successful than anticipated, have the potential of “breaking the bank”). Whether you want to promote your business, thank your customers, hold a fundraiser, or implement an employee incentive program, a scratch-off game is guaranteed to create unmatchable excitement and multiply your ROI!
Here are a few reasons why:
– Average Rate of Return is between 5-20% (we often see 30% – 50%)
– Redemption rates are high! Because no one throws away a winning lottery ticket, right?
– It is proven that consumers interact 10 times longer with a scratch and win than with any other promotion.
– It creates a competitive edge. You have control over your prizes and offers.
– Increases foot traffic, impulse purchases, and brand recognition.
10. How Do We Get Started?
So, now that you’re in the know, where do you go from here? Find a scratch card printer that can provide you with your needs. A printer with a variety of styles and sizes, fully customized cards and complete control over prize distribution. This is imperative to the overall success of your promotion. At Promo Printing Group, we work one on one with each of our customers from start to finish. We make sure all elements of the printing process are fully understood. Some internet printers allow you to upload files and pay online without fully understanding the ramifications and legality of running a scratch-off game. Not us! You can guarantee all your questions will be answered. We are committed to helping you have a successful promotion.
Ready to get started? We are ready to help! Call Toll Free Today for a Free Consultation and to receive a free idea sample package. Challenge us today!