I'm starting a new site that will have some element of sweepstakes to it (monthly prizes where users can earn entries by doing various things on the site, as well as random contests for specific things). I know we'll definitely need a lawyer to help finalize any terms of service for the site (we don't want minors using the site) as well as sweepstakes rules. Any ideas/suggestions as to where to look for good lawyers who specialize in online sweepstakes? And are there other legal aspects of such a site I should consider? Like should we have users be 13 and over, but they need to be 18 and over to be eligible? This is primiarly a U.S. site too, but we can add Canada to the mix. I know there's certain legal issues there as well. I'm just starting out and am completely legal clueless, so any help would be greatly appreciated. Thanks so much!
I don't know if there would be a problem as long as users do not have to place money in order to win. It would just be the same as entering competitions etc. If you do have to bet money then you would need a legally binding TOS.
Sweepstakes rules vary from state to state, even if no money is required to enter a contest (that's why some promotions aren't good in Florida and Arizona, for example).
No, there's no money at all involved. You just need to do certain actions on the site to earn "points." The more points you have, the more "entries" you have in each monthly sweepstakes. But you don't have to spend a dime at all. Even with that I'd need to be careful from state to state? And is there a minimum award I should shoot for in terms of all sorts of tax implications? I know there's some threshold that if a prize is over, you're required to file certain forms with the IRS, etc., which is why a lot of sweeps prize values fall just below that number. I'm just curious about things like that. Thanks!
This site seems to have a lot of useful information compiled about US gambling laws: http://www.gambling-law-us.com/ I don't know if it's up to date, but it seems like a place to start. Note that some states require you to start a trust account or file special paperwork if the prizes are worth over a certain amount. As for the IRS, you have to file a form for every person to whom you pay $600 or more. More info from the IRS: http://www.irs.gov/instructions/iw2g/ar02.html#d0e338