A2402 2R

An Act concerning the regulation of sweepstakes, supplementing P.L.1960, c.39 (C.56:8-1 et seq.) and repealing section 2 of P.L.1969, c.131.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. The Legislature finds and declares that:

(1) A vast number of sweepstakes are being directed to New Jersey consumers and New Jersey consumers may have paid millions of dollars to purchase goods or services to enter sweepstakes based on representations by the sponsors of those sweepstakes.

(2) Sweepstakes may be targeted to certain vulnerable New Jersey consumers.

(3) There is a compelling need to curtail and prevent the most deceptive practices in connection with the promotion of sweepstakes.

(4) There is a compelling need for more complete disclosure of rules and operation of sweepstakes in which money or other valuable consideration may be solicited.

(5) Preventing the deceptive promotion of sweepstakes is a matter affecting the public interest.

b. It is the intent of the Legislature in enacting this act:

(1) To require that New Jersey consumers are provided with all relevant information necessary to make informed decisions concerning sweepstakes.

(2) To prohibit misleading and deceptive prize promotions.

2. As used in this act:

“Clear and conspicuous” or “clearly and conspicuously” shall mean a statement that, regardless of the medium in which it is made, is presented in such size, color, contrast, duration, location ¹,¹ and audibility, compared to the other information with which it is presented, that it is readily apparent and understandable and in language and terms used in accordance with their common or ordinary usage and meaning. If such statement modifies, explains¹,¹ or clarifies other information with which it is presented, it ¹[must] shall¹be presented in close proximity to the information it modifies ¹, explains,¹ or clarifies and in a manner that is readily apparent and understandable. Such statement ¹[may] shall¹ not
contradict or be inconsistent with any other information with which it is presented.

“Consideration” means money or any other thing of value including, but not limited to: making a donation; purchasing goods or services; submitting to a sales presentation; ¹and¹ waiving or granting a right merely by entry into the sweepstakes or purported sweepstakes, including granting any person authorization to call a consumer who is on the national do-not-call registry as maintained by the Federal Trade Commission. By way of example, but not limitation, consideration does not include completing and submitting an entry blank obtainable locally, by mail ¹,¹ or from the Internet, or to call in an entry by a telephone call in the participant’s local calling area or to a toll-free number. Completing publicity or liability releases, eligibility affidavits ¹,¹ or assuming liability for federal, state ¹,¹ or local taxes also does not constitute consideration.

“Conducting a sweepstakes” means distributing any material in this State that promotes a real or purported sweepstakes, describes the prize or prizes, offers a prize by means of a prize notice, states one or more of the ¹[sweepstakes] sweepstakes’¹ rules, includes any current or future opportunity to enter the sweepstakes, or provides any method for the recipient of the material to obtain additional information about the sweepstakes. It does not include placing a sweepstakes announcement.

“Contest” means a ¹[sweepstakes] game, puzzle, or competition¹ in which winning a prize depends on a combination of chance and the skill of the contestant where the element of chance is predominant.

“No purchase necessary message” means a statement, clearly and conspicuously displayed, that no purchase or payment or any other consideration is required to enter or win the sweepstakes and a payment or purchase or any other consideration will not improve an individual’s chances of winning the sweepstakes.

“Official rules” means the formal printed statement of the rules for the sweepstakes.

“Prize” means cash or an item or service of monetary value that is offered or awarded to a person in a real or purported sweepstakes.

“Prize notice” means notification ²[, including, but not limited to,] intended for a specific recipient or recipients that: the recipient or recipients will receive a prize; or invites the recipient or recipients to make contact by telephone, Internet, or in person to learn how to receive the prize or to obtain other information related to the notice. A prize notice shall not include communications such as² an advertisement appearing in a magazine or newspaper of general circulation, periodical, circular, in-store or out-of-store sign, or other advertisement placed before the consuming public or in any radio broadcast, television broadcast, or electronic medium ²[, that is delivered by the United States Postal Service or by a private carrier, telephone, electronic mail, or other means of communication, intended for a specific recipient or recipients and is or contains a representation that the recipient will receive a prize. A prize notice also includes a notification which requires or invites the individual to make a contact by telephone, Internet ¹,¹ or in-person to learn how to receive the prize or to obtain other information related to the notice]². Nothing in this section shall be construed to include in the definition of “prize notice” a notice informing the individual that he or she has been awarded a prize solely as a result of his or her entry in a sweepstakes, if the individual is awarded the prize stated in the notice.

“Represent” and “representation” means express statements and the implications and inferences that reasonably would be drawn from those statements, taking into account the context in which the representation is made, including, but not limited to, emphasis, font, size, color, location ¹,¹ and presentation of the representation and any qualifying language. If the representation is made on or visible through a mailing envelope, the context in which the representation is to be considered, including any qualifying language, shall be limited to that which is visible without opening the mailing envelope.

“Retail value” means a price at which the sponsor can demonstrate that a substantial number of the prizes or substantially similar items have been sold to the public in this State by someone other than the sponsor during the preceding year.

“Specially selected” means a representation that a person is a winner, a finalist, in first place or tied for first place, or otherwise among a limited group of persons with an enhanced likelihood of receiving a prize.

“Sponsor” means a person who conducts a real or purported sweepstakes or anyone acting on behalf of that person.

“Sweepstakes” means any contest, giveaway, drawing, plan, or other selection process or other enterprise or promotion in which anything of value is awarded to participants by chance or random selection that conforms to the requirements of this act and that is not otherwise regulated or unlawful under other provisions of law. By way of example and not limitation, sweepstakes does not include a contest, giveaway, drawing, plan, or other selection process or other enterprise or promotion authorized by the New Jersey State Lottery Commission, New Jersey Casino Control Commission, New Jersey Racing Commission, or New Jersey Legalized Games of Chance Control Commission.

“Sweepstakes announcement” means a notice of the fact that a sweepstakes is being or will be conducted, appearing in any newspaper, magazine, periodical, circular, in-store or out-of-store sign ¹,¹ or other written matter placed before the consuming public, or in any radio broadcast, television broadcast, electronic medium ¹,¹ or delivered to or through any computer, which does not contain a device or mechanism for entry into the sweepstakes but directs the consumer to a location, website, address, telephone number ¹,¹ or other venue for information about and entry into the sweepstakes. If the announcement is for a sweepstakes involving automatic entry upon the purchase of goods or services, the announcement shall clearly and conspicuously disclose the availability of an alternate means of entry not involving a purchase.

3. a. No sponsor shall conduct a sweepstakes or offer a prize in connection with a real or purported sweepstakes to another person in this State if the: official rules ¹[;],¹ prize notice ¹[;],¹ advertising ¹[;],¹ or offering or soliciting material for the sweepstakes or purported sweepstakes fails to comply with the requirements of this act.

b. No sponsor shall conduct a sweepstakes in which an entrant is required to give any consideration ¹in order to enter¹.

c. No sponsor shall conduct a sweepstakes in which a consumer is automatically entered because the consumer purchased goods or services unless the sponsor provides an alternative means of entry not involving a purchase and the announcement and advertising for the sweepstakes clearly and conspicuously discloses the availability of the alternate means of entry and location where details of the alternate method of entry can be found.

d. Any materials used to conduct a sweepstakes shall ¹specifically¹ disclose that to receive a prize offered in the sweepstakes, an entrant shall not be required to furnish any ¹type of ¹ consideration ¹[, identifying any type of consideration that anything in the solicitation material suggests, implies or insinuates is required]¹.

¹e. The owner or publisher of a newspaper, magazine, publication, or other printed matter in which a sponsor’s solicitation materials appear, or the owner or operator of a radio or television station that disseminates a sponsor’s solicitation materials shall not be deemed to be acting on behalf of the sponsor when the owner, publisher, or operator has no knowledge of the intent, design, or purpose of the sponsor, nor any financial interest in the sweepstakes.¹

4. a. The official rules for a sweepstakes shall contain simple, clear, understandable ¹,¹ and easily readable language and shall disclose in writing to each offeree:

(1) ¹[The] the¹ manufacturer’s suggested retail price or comparable retail price of each prize offered and, when a prize is a coupon, rebate, or similar instrument redeemable in connection with the purchase of goods or services, a statement that the prize is of no value unless the related goods or services are purchased;

(2) ¹[The] the¹ conditions to be met to receive a prize;

(3) ¹[That] that¹ to enter the sweepstakes and receive a prize, the offeree shall not be required to¹[:]¹ make a purchase or payment or give any other consideration, and that doing so will not improve the offeree’s chances of winning¹[.] ;¹

(4) ¹[The] the¹ exact number of prizes in each category;

(5) ¹[Instructions] instructions¹ regarding how to receive a list of winners, if a prize with a retail price or monetary value of more than $100 is offered; ¹provided, however, that the sponsor shall only be required to provide a list of those who won prizes with a retail price or monetary value of more than $100;¹

(6) ¹[Whether] whether¹ each prize will be awarded;

(7) ¹[The] the¹ date when winners will be determined;

(8) ¹[The] the¹ odds of winning each prize, if they can be determined in advance, or that the odds of winning will be determined by the number of entries;

(9) ¹[The] the¹ fact that the person has not yet won;

(10) ¹[The] the¹ true name or names of the sponsor, the address of the sponsor's actual principal place of business, or an address from which the sponsor’s business is actually conducted, and the address at which the sponsor may be contacted;

(11) ¹[If] if¹ receipt of a prize is subject to a restriction, a statement that a restriction applies and a description of the restriction;

(12) ¹[Any] any¹ limitations on eligibility;

(13) ¹[The] the¹ deadline for submission of an entry to be eligible to win each prize; and

(14)¹[If] if¹ a person has been specially selected, a statement of the odds of winning a prize or a statement of the maximum number of persons in the group of persons with this enhanced likelihood of receiving a prize.

b. Any solicitation material other than the official rules shall contain:

(1) the disclosures required pursuant to paragraphs (3), (10), (12), (13), and (14) of subsection a. of this section;

(2) the disclosures required pursuant to paragraph (2) of subsection a. of this section, except that a description of the particular conditions shall not be required;

(3) the disclosures required pursuant to paragraph (11) of subsection a. of this section, except that a description of any restriction shall not be required;

(4) the statement concerning coupons, rebates ¹,¹ or similar instruments redeemable in connection with the purchase of goods and services required pursuant to paragraph (1) of subsection a. of this section, if applicable; and

(5) the official rules or information detailing how the official rules can be obtained.

For the purposes of this subsection, solicitation material shall not include a sweepstakes announcement.

5. a. No sponsor shall require a person to pay money or give any other consideration as a condition of ¹entering a sweepstakes,¹awarding that person a prize, or as a condition of allowing that person to receive, use, compete for, or obtain a prize or information about a prize.

b. Nothing shall be deemed to prohibit a sponsor from requiring as a condition of entry that a person agree to the use of his name and state of residence or, in the case of a contest, the entry submission, in the event that the person wins a prize in the sweepstakes.

6. a. No sponsor shall represent that a person has won or unconditionally will be the winner of a prize or use language that may lead a person to believe he has won a prize, unless the following conditions are met:

(1) ¹[The] the¹ person shall be given the prize without obligation to provide consideration; and

(2) ¹[The] the¹ sponsor shall notify the person at no expense to that person within 15 days of winning the prize.

b. If a sponsor offers one or more items of the same or substantially the same value to all or substantially all of the recipients of a prize notice, the sponsor shall not represent that those items are prizes or that the process by which those items are to be distributed is a sweepstakes, or otherwise represent that the purported sweepstakes process involves a distribution by chance.

7. No sponsor shall:

a. Make any representation that is false, deceptive¹,¹ or misleading;

b. Use in any solicitation material any type, size, location, lighting, illustration, graphic depiction ¹,¹ or color resulting in the obscuring of any material fact;

c. Deliver, or cause to be delivered, ²by any means of delivery or communication,² a prize notice which:

(1) ¹[Simulates] simulates¹ or falsely represents that it is a document authorized, issued, or approved by any court, official, or agency of the United States or any state or by any lawyer, law firm, financial institution,or insurance or brokerage company;

(2) ¹[Creates] creates¹ a false impression as to its source, authorization, or approval;

(3) ¹[Creates] creates¹ a false impression as to the method or means of delivery; or

(4) ¹[Creates] creates¹ a false impression that it is a check or other negotiable instrument representing a prize or award that may be cashed, deposited ¹,¹or negotiated¹[.] ;¹

d. Give an advantage to an entry accompanied by an order for goods or services; ¹[and] or¹

e. Charge any amount for shipping and handling to receive a prize.

8. It shall be an unlawful practice and a violation of P.L.1960, c.39 (C.56:8-1 et seq.) to violate the provisions of this act.

9. The Director of the Division of Consumer Affairs in the Department of Law and Public Safety shall promulgate regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), necessary to effectuate the provisions of this act.

10. Section 2 of P.L.1969, c.131 (C.56:8-2.3) is repealed.

11. This act shall take effect on the 180th day following enactment.