Hosting a sweepstake is an easy way to create brand awareness, collect customer data, and increase product and service sales.
These promotions are proven to be effective for marketing your business, with some companies using sweepstakes to go viral and generate sales.
Companies that are interested in reaching new customers — including international customers — should consider adding a sweepstake to their marketing strategy.
However, running a giveaway can be complicated; there are specific laws governing games of chance to prevent a sweepstake from operating like a lottery.
In the US and many other countries, there are restrictions around gambling and lotteries to protect consumers.
The laws vary from country to country, too – making it even more complicated to run an international sweepstakes.
For instance, in Ireland, it is illegal to operate a giveaway in which someone has to pay to enter to win. In Canada, Quebec has its own set of rules for online contests, which leads many to void the contest in that region altogether.
Knowing the ins and outs of those rules can make or break your giveaway. In this guide, we’ll highlight four key considerations and best practices for running an international promotion.
We’ll provide an overview of the laws and regulations, legal requirements, marketing considerations, and logistics of running an international promotion.
Plus, we’ll offer some templates and examples that you can use as inspiration for your next giveaway.
1. Laws and Regulations
First and foremost, it’s important to understand the laws and regulations related to international sweepstakes.
In the US alone, rules vary widely from state to state. Some states have a prize value threshold making that the value of your sweepstakes prize can’t exceed a certain amount.
For instance, in New York, when the total value of prizes is over $5,000, the company must register and bond the sweepstakes.
In other states, there are rules dictating when a winner must claim their prize, around the promotion of alcohol and tobacco, and even around the types of sweepstake prizes you can offer.
The rules vary from country to country, too. Most countries have rules in place to try to prevent scams masquerading as sweepstakes.
As you approach designing and setting up your sweepstakes, it’s best to recognize that it’s simply not feasible to run a promotion that’s open to everyone.
The wide variety of sweepstakes laws will make it too complicated. Instead, adhere to some of the more common laws and regulations or to specific countries’ rules.
The Difference in Laws by Country
Sweepstakes rules by country differ pretty widely depending on gambling and lottery rules and consumer and privacy protections.
For instance, in Australia, the structure of your promotion must align with the definition of a “trade promotion lottery” under Australian law, as well as comply with privacy/data collection laws. In Italy, a local government official must be the one to hand-select a sweepstakes winner.
Here are a few other differences in sweepstakes law to know:
- Some countries will require you to register the promotion to obtain a license or provide a bond/deposit (including Australia, Brazil, Italy, certain US states, Hong Kong, and the Philippines)
- Some countries require you to maintain a separate pool of national entrants (Italy)
- In some places, your company is required to pay gambling taxes on the average total value of all prizes offered (Austria)
- There may be restrictions on the maximum single prize value and the maximum total value of all prizes (Japan and Brazil)
There are some commonalities to watch for, the most common of which is that your official rules must be translated into the country’s official language.
This includes all entry forms, official rules, disclaimers, and any other communications about your sweepstakes.
It’s also a good idea to offer prizes of smaller value since many countries will charge customs, duties, and taxes that could discourage people from entering.
Plus, offering many smaller prizes means you can award more winners, helping your promotion attract more attention.
Ultimately, the best option is to choose the law of one jurisdiction to govern the entire campaign and exclude consumers from problematic jurisdictions from entering.
Legal Consequences of Non-Compliance
What happens if your sweepstakes violates official rules in a specific country?
The penalties can range from fines to a criminal investigation — not to mention the negative publicity and possible reputational damage resulting from failure to comply with local rules.
In Canada, fines for non-compliance with sweepstakes laws can range from CAD 1,000 to CAD 10,000 per violation.
If the violation is serious, such as running an illegal lottery or failing to offer a free method of entry, the penalties can be much higher, including imprisonment and fines of up to CAD 1 million.
In the UK, the Gambling Commission can issue fines for non-compliance with sweepstakes laws, ranging from GBP 250 to GBP 50,000 per violation.
Companies can also be disqualified from holding future sweepstakes if they are found to have breached the law.
Ultimately, it’s best to understand the legal requirements and official rules to avoid these consequences altogether.
2. Legal Requirements
There are industry-specific and platform-specific rules that businesses must meet when running international sweepstakes, in addition to country-specific laws.
The legal requirements that define sweepstakes depend on the countries in which the sweepstakes will be conducted.
Work with an expert or do your research to understand how to properly set up your next sweepstake. Keep in mind some of the common legal requirements regarding licensing, registration, bonding, eligibility requirements, winner notification, and prize restrictions.
Permits and Licenses
Some countries will require you to obtain a license before conducting sweepstakes. You may also be required to register with a tax or other regulatory authority.
In Spain, for example, a Spanish Tax ID for non-residents must be obtained before you can host a promotion. Promotions in Turkey must be cleared by the General Directorate of the National Lottery Administration.
Some countries, including the US, require businesses to offer a free method of entry known as an Alternative Method of Entry (AMOE).
AMOE refers to ways in which players can participate in your promotion by purchasing your product or taking a separate action that requires no purchase.
If you worry that your sweepstakes might be illegal due to the presence of consideration, you can offer an AMOE such as:
- Filling out an online entry form
- Entering via phone or email
- Entering the sweepstakes through social media
- Signing up in person
Read more about no-purchase-necessary rules in our Sweepstakes Legal Checklist For Your Next Promotion.
Age and Residency Restrictions
Businesses must comply with the eligibility requirements of the countries in which the sweepstakes will be conducted.
For example, some countries prohibit certain individuals or groups from participating in sweepstakes, such as minors or employees of the sponsoring company. You may also have to navigate privacy rules, such as GDPR.
Ideally, you’ll use a tool to run the sweepstakes to limit entrants from specific geographic locations — e.g., through geotargeting. ViralSweep is also able to ensure your promotion complies with the law.
We require affidavits from anyone who wins a prize over $600 in value, which they must complete to confirm their eligibility and for them to receive the prize.
Some countries require businesses to post a bond or provide proof of financial security before conducting a sweepstakes.
The purpose of the bond is to ensure that the business can fulfill its obligations to the winners of the sweepstakes.
To comply with prize restrictions, ViralSweep can help by issuing 1099 IRS tax forms to any U.S. winners who receive a prize over $600 in value. We also offer a service to help register and obtain bonds for specific states.
Ultimately, you should look for a partner that makes it simple to run legal and compliant sweepstakes.
3. Marketing Considerations
As you get closer to launching your promotion, you will need to activate a marketing strategy that gets the word out about your sweepstake.
Marketing your sweepstakes to an international audience requires extra attention to detail. Cultural differences and social media rules can impact where and how you promote your event.
Before you reach out to potential entrants, make sure you’re aware of social media sweepstakes rules and design a marketing campaign that resonates with your target audience.
Define your target audience for your sweepstakes, keeping in mind what you hope to achieve with this campaign.
Decide if your goal is to attract an audience of people who are potential customers or if you want to cast a wide net and collect as many entries as possible.
It can be very tempting to cast a wide net and promote your sweepstakes everywhere, but remember, you’ll end up building a list that isn’t targeted and will be hard to market to.
In the long run, no matter how many leads you collect, it all comes down to how you build the relationship and sell to the final customer.
[Read more: The Advanced Guide To Sweepstakes]
As you define your target audience, note what language they speak, social and cultural norms, and think about what prize would resonate most with potential entrants.
You can find information about different target audiences in your Google Trends dashboard.
How will your sweepstake reach its intended audience?
Strategize the various marketing channels that can be used to promote international sweepstakes, including social media, email marketing, and online advertising.
We recommend hosting your sweepstakes on your website instead of on Facebook or another platform.
Using social media sites is a great way to connect with your customers, but social platforms should be used as tools—they should augment the marketing efforts based on your website.
Regardless, ViralSweep is equipped to help you run a sweepstake from your website, store, or blog with a small snippet of code, as well as via mobile devices and on social media.
We can also help you translate into any language and display multiple languages at one time — great if you’re planning to reach audiences in multiple locations.
Finally, you’ll need to know whether your sweepstakes was effective. This can be done by measuring analytics such as website traffic, click-through rate, and conversion rate.
Ideally, you’ll partner with a tool like ViralSweep to get much deeper data insights than these simple KPIs.
ViralSweep offers automatic source tracking to show you which traffic sources are driving entries to your sweepstakes.
Likewise, you can generate your own links and track entries from specific sources. This helps you understand which influencers or paid campaigns are having the greatest impact.
ViralSweep also provides real-time analytics: See the growth of your email list and social channels, and track entries, social growth, and more for every sweepstakes.
4. Logistics Considerations
Logistics is the final piece of the puzzle to put together for your international sweepstakes. How will you make sure the prize winner gets their prize?
This can be difficult when you expand your geographic reach to new countries since you may need shipping partners who can help you deliver on your promised outcome.
Prize Selection and Delivery
As previously mentioned, there are local laws that may dictate how soon you need to deliver the incentive to your sweepstakes winners.
Provide the winners with a date that they must respond by in order to claim their prize; in some places, this is mandatory. 7 to 14 days is usually a good timeframe.
Make it clear that if a response is not received within the allotted timeframe, they will forfeit their prize, and a new winner will be drawn.
This guide has a template for notifying your winners how and by when, they will need to claim their prizes.
Administration and Management
When your followers enter a sweepstake, they want the best experience possible. The administration and management of your sweepstakes must be seamless. In practice, this means:
- Posting clear and concise rules that can be easily understood by all entrants. Include information on eligibility requirements, the entry process, prize details, and any other important information.
- Choosing a reputable and secure platform to collect entries that is compliant with all rules and local laws.
- Verifying that entrants meet all eligibility requirements, including age, residency, and any other criteria specified in the rules — before awarding any winners.
- Keeping detailed records of all entries, including the date and time of entry, as well as any other relevant information, to prevent disputes and ensure fairness in the selection of winners.
- Providing regular updates on the progress of the sweepstakes, and promptly responding to any questions or concerns.
- Using a random selection process to choose winners and ensuring that prizes are distributed fairly and promptly.
- Following up with winners once prizes have been distributed to ensure that they have received their prizes and are satisfied with the outcome.
By following these best practices, you can help ensure successful and compliant international sweepstakes that are fair, transparent, and rewarding for all involved.
Budgeting and Cost
Finally, budgeting for your international sweepstakes can be tricky.
There may be additional costs to starting and running your promotion, such as licensing and registration fees.
You may also need to work with a local partner to promote your giveaway, adding to your budget.
However, in many countries, a small prize can go a long way. Prizes can be generous when converted to local currencies.
Remember that not every winner can afford to pay high taxes on their winnings. Not all participants have bank accounts, either.
You may decide to award gift cards for keeping it simple. Research the cost of living where you intend to host your contest to keep everything as fair as possible.
Ready to Run Your First International Sweepstakes?
This guide provides a good overview of how to run your first international sweepstakes. Among other things, consider the local regulations and laws related to conducting your sweepstakes legally.
Ensure your rules (and all other communication surrounding your promotion) are translated into the local language.
Likewise, you may have to get licenses, permits, or bonds to run your sweepstakes in different parts of the world.
Consider using smaller prizes that are easy to deliver digitally or coupons that can be redeemed locally to avoid the logistics of shipping goods to winners overseas.
ViralSweep can help you manage all the moving parts of running your first international sweepstake.
With data and analytics to help improve your promotion, plus training, integrations, and support to help you navigate sweepstakes regulations, ViralSweep is your partner in running effective giveaways.
Learn more with this platform demo, or sign up to get started.