Thanks for your comments.

Even slight differences in the way that sweepstakes and contests are set up and administered can mean the difference between a legal and successful program on the one hand, and one that runs afoul of state laws regarding lotteries or the use of illegal gaming machines on the other. That is why it is always important that each sweepstakes and contest be reviewed by experienced counsel.

You mention the sale of telephone cards with attached sweepstakes entries, which has been one of the most hotly litigated areas in sweepstakes law over the past several years. Based on particular promotion details, often including the use of vending machines that resemble slot machines, the provision of telephone cards that were unusable or rarely used, and/or phone cards that were deemed to be merely ancillary to the sale of the chance, several courts and Attorneys General have opined that particular promotions were illegal lotteries, or that particular vending machines were illegal gaming instruments. See generally, e.g., Sun Light Prepaid Phone Card Co. v. State, 360 S.C. 49, 600 S.E.2d 61 (S.C. 2004), cert. denied sub nom Phonecards R Us, Inc. v. South Carolina, 543 U.S. 1120, 125 S.Ct. 1069, 160 L.Ed.2d 1068, (2005); Jester v. State, 64 S.W.3d 553 (Tex. App. 2001); Midwestern Enterprises, Inc. v. Stenehjem, 2001 N.D. 67, 625 N.W.2d 234 (N.D. 2001); Pre-Paid Solutions, Inc. v. City of Little Rock, 343 Ark. 317, 34 S.W.3d 360 (Ark. 2001); People Ex. Rel. Lockyer v. Pacific Gaming Technologies, 82 Cal.App.4^th 699, 98 Cal. Rptr.2d 400 (Cal. App. 2 Dist. 2000); Opinion of the Office of the Attorney General of the State of Alaska re Promoting the Sale of Pre-Paid Phone Cards through a Cash Prize Sweepstakes Without a Gaming Permit, A.G. File No. 663-00-0212 (October 17, 2000); Florida Advisory Opinion AGO 98-07 (February 5, 1998). At the same time, other courts, considering other promotions connected with telephone cards, have found that the telephone card is a genuine product, and that the associated sweepstakes is a valid promotional tool designed to increase the sale of the product. See, e.g., American Treasures, Inc. v. State, 173 N.C.App.170, 617 S.E.2d 346 (N.C.App., 2005). Indeed, in 2004, the Superior Court of the State of California found that the promotion that you conducted in conjunction with the sale of telephone vending cards was wholly legitimate. Again, this underscores the importance of considering the specific facts of each proposed sweepstakes or contest.

Here at the Online Publishing Law blog, we’ll continue to keep a close eye on developments in sweepstakes and contest law, including the Georgia case that we’ve discussed and the related California cases (Bentley v. NBC Universal, Inc., 2:07-CV-03647, C.D.Ca.; Herbert v. Endemol USA, Inc., 2:07-CV-03537; Couch v. Telescope, Inc., 2:07-CV-3916; and Cunningham v. Endemol USA, Inc., 2:07-CV-3643).