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Many companies offer promotional games which include 'win codes' if you buy a certain product. These 'win codes' allow to win prizes by chance which are much larger than the value of the bought product. An example would be the sales promotion "Mc Donalds Lottery" (see wikipedia), which offered prizes up to $1,000,000 if you are really lucky. I even participated in similar lottery-like promotions by non-licensed retailers as a child, when I would have never been able to participate in real lotteries, which are only offered by state-controlled companies to adults in my jurisdiction. Similar regulations, both concerning age limits and licensing needed exist in most countries. Such it appears to me that such promotional games are not considered as lottery, otherwise such promotional games were not possible. Why is this?

My first thought was "As long as a product is sold and the 'win codes' are only a bonus, it is not illegal lottery'. But if this is the rule, what prevents a company from selling very cheap products (worth a few cents) for a few dollars and giving 'win codes' with significantly high chances of winning as a bonus?

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  • "...but apparently this does not apply to such lottery-like promotions" Why do you think laws don't apply? Have you read the specific state and federal laws which apply to the specific marketing and promotional games? Feb 24 '20 at 14:12
  • Which country and jurisdiction?
    – Trish
    Feb 24 '20 at 15:21
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Answer is for the USA.

Look at the fine print. No purchase necessary.

Typically you need to mail in a request for a game piece (win code, whatever), or something like that, but there is a way that someone can get the game piece without paying the company.

EDIT:

Here is an example- a grocery chain (/multinational company) with a Monopoly game. They make it not simple to find this, (though it does say "No Purchase Necessary" on the front page), but here you go :

Rules

NO PURCHASE NECESSARY TO PARTICIPATE OR TO PLAY TO GET GAME TICKETS BY MAIL: RECEIVE ONE (1) GAME TICKET AND ONE (1) BONUS GAME TICKET FOR A TOTAL OF TWO (2) GAME TICKETS BY SENDING A SELF-ADDRESSED, STAMPED ENVELOPE (“SASE”) TO SHOP, PLAY, WIN! COLLECT AND WIN GAME TICKET REQUEST, ATTN: PROMOTIONS COORDINATOR, P.O. BOX 3058, KENNESAW, GA 30156. MAIL-IN REQUESTS, INCLUDING BOTH OUTER ENVELOPE AND SASE, MUST BE HANDWRITTEN AND MUST BE POSTMARKED NO SOONER THAN FEBRUARY 5, 2020, NO LATER THAN APRIL 28, 2020 AND MUST BE RECEIVED NO LATER THAN MAY 5, 2020. THERE IS NO LIMIT TO THE NUMBER OF MAIL-IN REQUESTS BUT THERE IS A LIMIT OF ONE REQUEST PER ENVELOPE. VERMONT RESIDENTS MAY OMIT RETURN POSTAGE TO VERMONT ADDRESS OR (WITH PROOF OF VERMONT RESIDENCY) TO OTHER ADDRESSES.

So in Vermont, even having to pay the return postage is not allowed. Note that they can insist that you handwrite the request and mail it separately, so you have to spend on a stamp to send it, and in most states a stamp for them to send the game piece. See the link for whole rule list, but it must be handwritten ,including the envelope, so no labels, printers, etc. At that point , go an buy a can of house brand soda and get your darn piece, but.. no purchase necessary.

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Because it’s a sweepstakes, not a lottery

A lottery requires you to buy (or otherwise give something of value) in order for you to enter; a sweepstakes doesn’t, entry is free and open to all.

Usually, different regulations apply. For example, in anyone can conduct a sweepstakes but businesses have to register them with the government, charitable not-for-profits don’t. Lotteries are restricted to licensed gaming businesses and charitable not-for-profits.

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