Giveaway laws in the US: sweepstakes official rules explained

This page explains the basics in plain English and links to the official sources. It's general information, not legal advice. Laws change and depend on your situation, so if you're a business, giving away valuable prizes or taking entries from several states or countries, talk to a lawyer who handles promotions. We last checked these sources in October 2026.

US law sorts prize promotions by how winners are chosen and what people give to enter:

• Lottery: a prize, chance and consideration, meaning something of value people must give to enter, usually a purchase or a fee. Private lotteries are generally illegal.
• Sweepstakes: a prize given by chance, with nothing to pay or buy. Federal mail law defines a sweepstakes as "a game of chance for which no consideration is required to enter" (39 U.S.C. § 3001(k)).
• Contest: winners chosen by skill, such as the best photo judged against published criteria.

A random draw from Instagram comments is usually a sweepstakes, as long as nobody has to pay or buy anything to enter.

Consideration is what turns a sweepstakes into a lottery, so US sweepstakes rules say "No purchase necessary" and mean it. If any way of entering involves buying something ("every order gets an entry"), you also need an alternative method of entry, or AMOE: a free way to enter, such as a mail-in or online form, with the same chance of winning.

Some laws spell this out. Florida makes it unlawful to require an entry fee, payment or proof of purchase to enter a game promotion (Fla. Stat. § 849.094). For sweepstakes sent by mail, federal law requires a clear statement that no purchase is necessary and that a purchase won't improve the chances of winning (39 U.S.C. § 3001(k)).

A typical Instagram giveaway ("follow, like and comment to enter") doesn't ask for a purchase. Watch for rules that quietly add one: "customers only", "extra entries for every order" or "enter with your receipt".

"Void where prohibited" tells entrants the giveaway doesn't apply anywhere it would be illegal. It's a useful line, but it doesn't make your giveaway legal where you do accept entries, and it doesn't replace a registration a state requires.

Be specific instead. Say exactly who can enter, for example "Open to legal residents of the 50 United States and D.C., aged 18 or older." Instagram is global, so without an eligibility line anyone anywhere can comment. Some sponsors also leave out states with extra requirements rather than register there.

Three states add paperwork when the total value of all prizes in a promotion passes a set amount. The amounts below count every prize combined, not each prize. These laws are aimed at promotions run to sell products or services, so ask a lawyer whether yours is covered.

• New York, more than $5,000 in prizes: register with the New York Department of State at least 30 days before the start, file your rules, pay a $100 fee, and either hold the full prize value in a trust account or post a surety bond. Within 90 days after the end, file a list of winners of prizes worth more than $25. Sources: N.Y. General Business Law § 369-e and the Department of State registration form.
• Florida, more than $5,000 in prizes: file your rules and a list of all prizes with the Florida Department of Agriculture and Consumer Services at least 7 days before the start, with a $100 fee. Once filed, the rules can't be changed. Set up a trust account or surety bond for the total prize value, and file a certified list of winners of prizes over $25 within 60 days after they're determined. Source: Fla. Stat. § 849.094.
• Rhode Island, more than $500 in prizes: when a retail business runs a game of chance to promote itself, it must file a statement and its rules with the Rhode Island Secretary of State and pay a $150 fee. The Secretary of State's instructions say games offered to Rhode Island residents must register even if they're run from another state, and that the host must keep a winners list for at least a year. The form doesn't ask for a bond. Source: Form 660, Statement with Reference to Games of Chance.

If people have to post about your brand to enter, for example a photo with your hashtag, the FTC sees those posts as incentivized and expects them to say so. Its Endorsement Guides FAQ says a hashtag that includes the word "contest" or "sweepstakes", like #BrandName_Sweepstakes, should be enough, while "sweeps" probably isn't.

If a brand gave you the prize or paid you to run the giveaway, that's a material connection your followers should know about. The FTC's Disclosures 101 for Social Media Influencers recommends clear labels such as #ad or #sponsored, placed where people will see them.

Prizes count as income for the winner. For 2026, the IRS instructions for Form 1099-MISC say to report other income of $2,000 or more in box 3 (the threshold was $600 before 2026), including prizes and awards that aren't for services. If you give away a valuable prize, you may need the winner's tax details before you deliver it. Either way, say in your rules that winners are responsible for taxes on their prize.

Other countries have their own rules. A few starting points:

• Canada: the Competition Act requires fair disclosure of the number and approximate value of prizes, how they're split by region and anything that affects the chances of winning. Prizes must be handed out without undue delay, and winners chosen by skill or at random (section 74.06). The Criminal Code's lottery rules (section 206) are why Canadian contests usually ask winners to answer a skill-testing question.
• United Kingdom: the advertising code for promotions lists the terms you must state and requires prize-draw winners to be chosen by chance, either by a verifiably random computer process or with an independent person supervising (CAP Code section 8).
• Brazil: commercial giveaways need prior authorization from the federal government (Law 5,768/1971), and Instagram's promotion guidelines remind organizers in Brazil to follow the Secretariat of Prizes and Bets.