Are companies legally obligated to award prizes when running sweepstakes?

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I was thinking that all of the sweepstakes and giveaways I saw as a kid (i.e. ‘Tune in on Monday for the secret word!’) were probably great ways to get people to watch shows. Is there a law that states/stated they actually have to give the prizes they promoted away? Otherwise it seems like a pretty inexpensive way to draw ratings…

In: Other

Yes otherwise it’s fraud. They have to publish the conditions somewhere and then abide them.

Thing is, the giveaways are usually super cheap compared to the advertising it generated.

Yes. But if there is a “grand prize”, it can be a very low chance of winning similar to the lottery

Yes. as if they dont then it’s Fraud and they would be open to legal action to be taken against them by everyone that participated.

in some locations even you are forced to disclose the actual chances ie: if you require a buy in to participate. but the ultimate point is that you cannot setup a legal contest if you cannot provide the prizes.

there isn’t a specific law, but essentially they are offering a verbal contract to anyone who completes the terms. if they failed to meet the terms, they could be sued in civil court. those kind of things were almost always followed by super fast statements about how terms and limitations apply and the whole thing was void in some states. that is because they are mostly following contract law and some states didn’t allow that kind of contract or put additional restrictions on it.