The Scoop on PromotionsProject Support Team Blog

July 14th, 2009

Old Laws vs. New Technology

As you might know, the laws that govern the promotion industry are often complex and unclear.  Throw into the mix the myriad of new technologies and you get a giant “legal question mark”.

In the old days, the formula was fairly straight forward:  a promotion became illegal if all three of the following elements were present in a concept:  1) Chance, 2) Consideration/purchase, and 3) Prizes.  Purchase was more easily defined back then and most often removed from the formula by allowing consumers to enter via U.S. Mail.  Today, we are not always sure how regulators view things. At one time, the state of Florida required an alternate means of entry for online promotions.  Since 1999, they reversed their position indicating that internet access has become as pervasive in society as the telephone.  Problem solved right, no!

What about text messaging?  As of now, marketers are hesitant to offer mobile sweepstakes campaigns that utilize text entry into the promotion despite the widespread availability and use of the technology. As of Q2 2008, a typical U.S. mobile subscriber sends or receives 357 text messages per month, compared to placing or receiving 204 phone calls.  Though the number of calls has remained relatively steady, the number of text messages is up 450% from just two years prior.  Q2 2008 was the second consecutive quarter in which the average number of text messages sent was significantly higher than the average number of phone calls placed (Nielsen Mobile, 2008).

So where does this leave us?  In time, the laws will catch up.  Imagine if the posted speed limit signs said 55MPH back in the days of horse and buggy.  Things do change, but in this case, not fast enough.