This is general information, not legal advice. Rules differ by state, platform and prize value, so confirm the details for your situation, particularly for large prizes.
The three elements
In the US, legal treatment of prize promotions often turns on three elements: a prize, chance, and consideration (something of value given by the entrant, such as payment). A promotion with all three can be an illegal lottery unless it is specifically permitted. Removing one element, usually consideration, is how many free giveaways avoid that problem.
Free-entry giveaways
A giveaway with no purchase or payment required is generally treated more simply than one with paid entry. Be careful with anything that looks like required payment, such as a mandatory purchase or paid membership, and consider offering a free alternate method of entry.
Raffles
Raffles, where tickets are sold, are regulated at state level, and charities often need registration or permission. Rules vary a lot between states. Check with your state authority before you sell tickets.
Official rules
Larger promotions publish official rules covering eligibility, entry period, prize value, odds, how winners are selected and notified, and who runs the promotion. Even for small giveaways, a clear rules post is good practice.
Social platform policies
Instagram, Facebook, TikTok, YouTube and X each have promotion rules. Common requirements include stating that the platform is not a sponsor and not asking people to misuse features such as tagging. Review the current rules for your platform before you launch.
Disclosure and endorsements
If you are an influencer or a brand working with others, FTC endorsement guidelines may require clear disclosure of material connections. Review the current guidance from the Federal Trade Commission.
Practical checklist
- Make entry free or consult a lawyer
- Publish clear rules
- Choose winners randomly and show how
- Keep records of entries and winners
- Comply with platform rules and disclosure guidance
- Check state rules for raffles and large prizes
When to talk to a lawyer
Consider legal advice if the prize is valuable, if entry requires a purchase or payment, if you plan to run a raffle with ticket sales, if entrants include children, or if you operate across several states or countries. Laws on promotions differ and change, and this overview cannot replace advice on your situation.
Records to keep
Keep your official rules, the entry list, the method used to select the winner, the winner notification, proof of prize delivery and any tax paperwork your jurisdiction requires. Keep them for as long as your local rules or your accountant recommend.
