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https://www.omaze.com/products/tesla-model-y-kimbal-musk

It basically is a lottery.

Instead of buying lottery tickets, you "donate" and have a chance to win Tesla.

Is it even legal in US?

Is it okay to organize something like this in US if you market it outside US?

  • Did you read omaze.com/pages/rules ? – BlueDogRanch Jun 26 at 4:13
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    I read that now. That's still a lottery. Basically they're saying you're donating money and as a way for us to say thanks we give you a chance to win Tesla. That is in essence, still a lottery. – user4951 Jun 26 at 5:25
  • You call it a "lottery"; so what is your point? It's legal where it's legal, and not where it's not. – BlueDogRanch Jun 26 at 5:40
5

No

First, gambling is not illegal - only illegal gambling is illegal.

Lotteries are legal in the United States when operated by or under licence from a state (44) or territory (3). That's legal gambling. It's illegal when operated by somebody else.

Clearly, Omaze isn't one of these; but they aren't running a lottery. They are running a sweepstakes. Not only is this legal, but it also isn't gambling because in a sweepstakes the players do not pay to play.

If you look closely, you can see a link that says "enter without contributing". Look even deeper and you can see "NO PURCHASE, PAYMENT, OR CONTRIBUTION NECESSARY TO ENTER OR WIN. Contributing will not improve chances of winning. Void where prohibited."

No stake means no gamble.

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  • So that means I can create lottery, and call it donation and it works. It's just legalese. If you read their front page, it's pretty clear that people buy tickets like in lottery to win – user4951 Jun 26 at 23:01
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    @user4951 but the important point is they don’t have to buy tickets and buying tickets gives them no more chance to win than not buying tickets – Dale M Jun 26 at 23:25
  • @user4951 How do you get “create a lottery and call it a donation” out of the distinct point that a sweepstakes requires no purchase. Put another way, every single person who sees that ad and wants that Tesla could enter without donating, Omaze and/or the intended recipient of the donation could receive $0.00, and yet some person is still going to receive a Tesla. – A.fm. Jun 27 at 0:08
  • You get more chance to win if you donate. Free sign up worth $100. It could be a key though – user4951 Jun 27 at 4:24
  • Say I want to create a lottery. Ups that's illegal. So? I call it donation. Also I allow people to sign up for free with very low probability of winning. Tada. Problem solved? – user4951 Jun 27 at 15:10
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It's not obviously illegal.

A lottery has all three of these elements:

  • chance

  • a prize

  • consideration - i.e. something of value the participant must give in exchange for the chance to win

Omaze doesn't require you to pay to participate. The rules say "You can always enter any campaign for free" and "You don’t have to make a donation to enter". The Tesla page has a link that says "enter without contributing". The link isn't as in-your-face as the Donate buttons but it is visible underneath them.

A sweepstake - which is what Omaze calls its promotions - has the first two elements of a lottery:

  • chance

  • a prize

To avoid being characterised as a lottery they should require participants to make only minimal efforts - e.g. completing an entry form or calling a freephone number. And not spending hours doing it.

In terms of the prize there must be no discrimination between a free ticket and a paid ticket - the odds of winning must be the same. This is called 'equal dignity'.

Omaze says "Equality matters to us at Omaze: we use a system so that entries are treated equally. Each free entry is automatically assigned 2,000 entries (equivalent to the donation entries you get when you donate $100). ..."

There are other requirements of sweepstake law. I imagine that Omaze paid for legal advice so that they would appear as a lawful sweepstake and not a lottery or illegal gambling game.

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