In the United States, a sweepstake is a type of contest where a prize or prizes may be awarded to a winner or winners. Sweepstakes began as a form of lottery that were tied to products sold. In response, the FCC and FTC refined U.S. broadcasting laws (creating the anti-lottery laws). Under these laws sweepstakes became strictly "No purchase necessary to enter or win" and "A purchase will not increase your chances of winning", especially since many sweepstakes companies skirted the law by stating only "no purchase necessary to enter", removing the consideration (one of the three legally required elements of gambling ) to stop abuse of sweepstakes. Today, sweepstakes in the United States are used as marketing promotions to reward existing consumers and to draw attention to a product. By definition, the winner is determined by pure random chance rather than skill.
55-694: Sweepstakes with large grand prizes tend to attract more entries regardless of the odds of winning. Therefore, the value of smaller prizes usually totals much less than that of the top prize. Firms that rely on sweepstakes for attracting customers, such as Publishers Clearing House and Reader's Digest , have also found that the more involved the entry process, the more entrants. Businesses often obtain marketing information about their customers from sweepstakes entries. Because of their potential for abuse, sweepstakes are heavily regulated in many countries. The US, Canada, and individual US states all have laws covering sweepstakes, so there are special rules depending on where
110-464: A "$ 5,000 every week for life" sweepstakes in TV ads and the front page of AOL.com. The following year the company acquired a mobile marketing company, Liquid Wireless. The company utilized, then stopped then started again utilizing coregistration (through other websites) to expand its customer base. In 2008, a PCH spokesperson said the digital properties were intended to attract younger consumers. By 2013,
165-415: A $ 30 million national settlement in 1999. In 2000, another $ 18 million settlement was reached with 24 states, after the company sent mass mailings which said "You are a winner!" and used mock personalized checks. PCH agreed to avoid similar mailings in the future, and add a "sweepstakes fact box" to mailings. However, concerns about deceptive practices by PCH continued after this national settlement and
220-537: A business. Unlike in the U.S., entrants may be required to purchase a product in order to enter a trade promotion in Australia. Companies or promoters may require a trade promotion lottery permit if the winner(s) are to be chosen via an element of chance, i.e. a competition draw. No permits are required for competitions that do not involve an element of chance in determining the winner or winners. Common examples include competitions where entrants are required to submit
275-706: A commercial product — is likely to be labelled as a "prize draw" or "competition" in the UK. In the UK, prize competitions and prize draws are free of statutory control under the Gambling Act 2005 , but should follow the CAP Code . In the United States, sweepstake sponsors are very careful to disassociate themselves from any suggestion that players must pay to enter, or pay to win, since this would constitute gambling. Sweepstakes typically involve enticements to enter
330-525: A consumer promotion with prizes that range from substantial wins such as cars or large sums of money to smaller prizes that are currently popular with consumers. There should be no monetary cost to the entrant (although some sweepstakes require entrants to subscribe to a promotional mailing list, potentially exposing the entrant to an increase in junk mail , spam email , or telemarketing calls) and sweepstakes winners should also not be required to pay any kind of fee to receive their prizes. As an example of
385-480: A contest of skill in order to overcome requirements that would classify sweepstakes as a form of gambling under their country's legal definition. There are similar laws in Brazil. In Australia, a sweepstake is known as a competition , however the technical name for a consumer competition is a trade promotion lottery. A trade promotion lottery is a free entry lottery conducted to promote goods or services supplied by
440-415: A diet cookbook sold more than other products, the company began expanding into jewelry, media, collectibles, household products, and others. PCH is a direct-marketing company that sells merchandise and magazine subscriptions and operates several prize-based websites. While best known for the sweepstakes and Prize Patrol it uses to promote its magazine subscriptions, the majority of the company's revenue
495-467: A few years the company moved out of Mertz's basement into an office building and started hiring staff. When PCH moved its headquarters in 1969, its prior location was donated to the city and renamed the Harold E. Mertz Community Center. The company revenue had grown to US$ 50 million by 1981, and $ 100 million by 1988. In 1967 PCH ran its first sweepstakes as a way to increase subscription sales, based on
550-467: A lawsuit involving the attorneys general of 14 US states. Later that year, PCH denied wrongdoing, but agreed to pay a settlement of $ 490,000 and to change their practices. Under the agreement, PCH said it would define terms like "finalist" and disclose the chances of winning. In 1997, a contestant of competitor AFP flew to Tampa, Florida thinking he had won, though he had not. The resulting publicity caused more lawsuits for both companies. PCH reached
605-467: A magazine subscription was purchased or not. Originally based in Newark , New Jersey, then Jersey City , New Jersey, the company's tactics attracted controversy, since the mailings that accompanied the sweepstakes promotions, which invariably included a form via which the recipient could purchase magazine subscriptions, frequently included language that seemed to indicate that the recipient had already won
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#1732772101200660-440: A person may have already won a major prize, or claiming that they need to pay a fee to collect the prize, are always scams . The Prize Patrol has made in-person appearances or delivered prizes on TV programs including The Oprah Winfrey Show , The Price Is Right , and Let's Make a Deal . Their surprise winning moments have been spoofed by Jay Leno , Conan O'Brien , and the cast of Saturday Night Live ; woven into
715-467: A photo or an answer to a question in 25 words or less. Many compers (those who enjoy entering competitions) attend annual national conventions. In 2012 over 100 people from the online competitions website lottos.com.au met on the Gold Coast, Queensland to discuss competitions. Sweepstakes with an entry fee are considered in the UK to be lotteries under the Gambling Act 2005 . Most sweepstakes in
770-413: A prize, or was a finalist who had improved chances of winning a prize, when this was not the case. In a related phenomenon connected to the company's promotion tactics, news stories reported cases of elderly Americans traveling to Florida (the company, at least for some time, routed their mail through St. Petersburg, Florida ) in an effort to collect the money that they believed they had won, because of
825-430: A promotion for a product, usually either a telephone card or Internet access. Sweepstakes casinos use a similar model, offering promotional real money winning opportunities by playing casino-style games online. Sweepstakes must be carefully planned to comply with local laws and curtail forms of entrant fraud and abuse. Before home computers were popular, a common method of entry was a mailed, plain 3" × 5" index card with
880-401: A random drawing; however, AFP claimed that this came from a misunderstanding of how AFP processed entries at that time. Most of AFP's entry envelopes had windows on the back revealing an OCR code to identify the customer and sweepstakes, as well as any magazine subscription stamps on the entry form. If a stamp appeared in the proper window, the envelope was opened for further processing; if not,
935-436: A spokesperson for PCH. Publishers Clearing House claims that "Through charitable trusts created by [their] founders, more than 40% of the company profits benefit community organizations." American Family Publishing American Family Publishers was an American company that sold magazine subscriptions. Founded in 1977, American Family Publishers (AFP) was one of America's leading marketers of magazine subscriptions. AFP
990-761: A state policy on sweepstakes promotions, Tennessee residents are prohibited by a policy of the Tennessee Alcoholic Beverage Commission (and not a state law) from entering sweepstakes online sponsored by manufacturers of wines and liquors; however, Tennessee residents may enter many of these same sweepstakes promotions by entries delivered by the US Postal Service. Another example is that Tennessee state law prohibits sweepstakes agencies and sponsors from requiring sweepstakes prize winners to submit to "in perpetuity" publicity releases. Most corporate-sponsored sweepstakes promoted in
1045-403: A week for life, or $ 10 million. Prizes can also range from $ 1 Amazon gift cards to $ 2,500, $ 1 million or $ 3 million. The larger cash prizes are paid in installments, typically with a balloon payment at 30 years, reducing the present value of prizes to much less than their nominal values. In August 2024, "early look" prizes were eliminated. According to the official rules, as of June 2020,
1100-540: Is about outdoors lifestyle , the Editorial Director of the publication is Rachael Schultz, formerly of Insider and Hearst Communications . Wide Open Country focuses on country music , and is based in Nashville . Finally, their sports publication FanBuzz previously belonged to Cox Media Group . PCH began selling merchandise in 1985 with two products. After a Hershey's Chocolate Cookbook and
1155-418: Is from merchandise. The company has been selling books, media, jewelry, and other consumer items since the 1980s. PCH operates eight websites, including PCH Search and Win, PCH Lotto, PCH Games, PCH Save and Win, and Candystand. The company also sells magazine subscriptions at a discount and advertises subscriptions along with its sweepstakes. It's estimated that companies like PCH keep 75 to 90 percent of
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#17327721012001210-500: The litter caused by the improper disposal of non-winning lottery tickets. Since lottery tickets are considered to be bearer instruments under the Uniform Commercial Code , these lottery scratch card promotions can be entered with non-winning tickets that are picked up as litter. Publishers Clearing House Publishers Clearing House ( PCH ) is an American company founded in 1953 by Harold Mertz. It
1265-868: The 1990s PCH and its primary competitor, AFP, have experienced a series of lawsuits due in part to concerns that their mailings misled consumers about their odds of winning and implied that magazine purchases increased their chances. This led to the Deceptive Mail Prevention and Enforcement Act of 2000, which regulates direct mail businesses. At the Senate hearings regarding this Act, PCH claimed most consumers were not confused about their chances of winning or that purchases did not increase their chances. The company said that fewer than five percent of participants spend more than $ 300. However, government officials from California claimed 5,000 local consumers paid more than $ 2,500 each in magazine purchases under
1320-402: The 1990s, the company shifted its focus online. It began selling magazine subscriptions and merchandise on PCH.com in 1996. They acquired the assets of search company Blingo in 2006, online gaming company Funtank in 2010, mobile marketing company Liquid Wireless in 2012, and internet news aggregator Topix in 2019. In 2006, it acquired Blingo Inc., an ad-supported metasearch engine that
1375-468: The Prize Patrol, a publicized event where winners are surprised with a check at their home. The idea was inspired by the 1950s television series The Millionaire . The two companies were often mistaken for each other, with Star Search host Ed McMahon and The $ 25,000 Pyramid host Dick Clark , the spokespeople for AFP, mistaken for representatives of the better-known PCH. Beginning in
1430-520: The U.S.), which are usually based on major sporting events such as the Grand National and the World Cup . Entrants pay an equal stake for each horse/team they draw out of the hat before the event. The winner then takes the pot. For horse racing events, the pot may be split between the horses that win, place, and show. What an American would call a "sweepstakes" — a random prize draw promoting
1485-487: The UK are small-scale. They are classed as work lotteries , residents' lotteries , or private society lotteries, and do not require a licence, provided that all the money staked is paid out as prize money. The popularity of the term "sweepstakes" may derive from the Irish Sweepstakes , which were very popular from the 1930s to the 1980s. There is a tradition of office sweepstakes (known as office pools in
1540-822: The United States limit entry to US citizens, although some allow entry by legal residents of both the United States and Canada. Among the most popularly known sweepstakes in the United States were the American Family Publishers Sweepstakes (now defunct), Publishers Clearing House sweepstakes, and Reader's Digest Sweepstakes , each of which strongly persuaded entrants to purchase magazine subscriptions by placing stickers on contest entry cardstock while promising multimillion-dollar (annuity) winners who will be "announced on TV". The American Family Publishers sweepstakes used paid advertisements during NBC's The Tonight Show to announce its grand prize winners (for many years, its celebrity spokesman
1595-447: The attorney general of several states against the company, resulting in court orders requiring changes in the way the company promoted the sweepstakes. The company complied, but increased lawsuits resulted in the company, which was 50% owned by Time, Inc. , changing its name to American Family Enterprises . At that time, Time Inc. took a more hands-on role in the business, filing for bankruptcy in 1998. Publishers Clearing House (PCH)
1650-546: The company mailed 220 million envelopes. Frequent buyers can receive 30 to 40 mailings a year. By 2024, direct mail and product sales were discontinued. Although PCH advertises its sweepstakes along with magazine subscriptions, no purchase is necessary to enter or win. In 1995, PCH began the tradition of announcing winners of its $ 10 million prize just after the Super Bowl . As of 2012, $ 225 million in prizes have been distributed. Some of its larger prizes are for $ 5,000
1705-571: The company paid $ 3.5 million to the attorneys general of 32 states and the District of Columbia to settle possible contempt charges that it had violated the terms of the 2001 agreement. The company denied wrongdoing, but agreed to work with both an ombudsman and a compliance counsel who would review its mailings quarterly. In April 2014, an investigation by the Senate Special Committee on Aging concluded that PCH had "pushed
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1760-509: The company refused repeated requests by Time for a larger share of sales revenue from magazine subscriptions. AFP and PCH competed for exclusive rights to magazines and for the better promotion and prize ideas. When AFP increased their jackpot to $ 1 million, and then to $ 10 million in 1985, PCH raised its prizes to match. $ 7 million in prizes were distributed by 1979, $ 40 million by 1991, and $ 137 million by 2000. In 1989, two members of its advertising team, Dave Sayer and Todd Sloane, started
1815-453: The company's online acquisition efforts, websites and social media communications. In 2013, a $ 5 million television campaign modified the traditional prize patrol commercial by digitally altering video from classic sitcoms like The Brady Bunch and Gilligan's Island to show the prize patrol visiting characters in the show. Major winners are never contacted in advance; any letters, telephone calls, and social media messages claiming that
1870-403: The company's trash, reinforcing beliefs that the company favored those who made purchases in selecting a sweepstakes winner. PCH said this was done by a disgruntled employee at their mail processing vendor. A class action lawsuit ensued, which PCH settled by giving discarded entrants a second chance to win. In 1994 PCH sent mailings telling recipients they were all "finalists", which led to
1925-481: The entrant lives. The U.S. Federal Trade Commission exercises some authority over sweepstakes promotion and sweepstakes scams in the United States. Notably, sweepstakes in Canada, Australia, and several European countries require entrants to answer a skill testing question such as solving an elementary-school-level mathematical puzzle, or answering a simple general knowledge question, making it (in theory, at least)
1980-511: The entrant's name and address. Massive computer-printed entries resulted in a new requirement that entries must be "hand-printed". Laser printers that can mimic ink pen writing are also a problem for sponsors. In most sweepstakes, entrants and their relatives must not be related to the sponsor or promoter. Many state lotteries also run second-chance sweepstakes in conjunction with the retail sale of state lottery scratch cards in an effort to increase consumer demand for scratch cards and help control
2035-518: The envelope was scanned for entry in the sweepstakes, then thrown away unopened. A separate checkbox below the return address also allowed AFP to process address corrections without opening the envelope. Star Search host Ed McMahon was the original spokesperson for American Family Publishers from its start and starting in 1993, Dick Clark (who co-hosted TV's Bloopers & Practical Jokes on NBC with McMahon) later became co-spokesperson with McMahon. These claims eventually led to litigation by
2090-447: The false belief that they were increasing their odds of winning the sweepstakes. Industry sources estimated PCH's response rates decreased by 7 to 12 percent and its sales volume by 22 to 30 percent in response to the bad publicity from these lawsuits. In 2000, PCH laid off a quarter of its 800-person work force. In 1992 thousands of discarded sweepstakes entries from contestants who had not bought magazine subscriptions were found in
2145-510: The fees from the original subscription, while publishers use the increased distribution to improve circulation numbers and revenue from renewals. PCH popularized the idea of using sweepstakes to sell magazine subscriptions in the direct-marketing market and became known by detractors as a producer of junk mail for advertising through mass-mailings. Documents filed with the New York State Department in 1993 said that year
2200-495: The internet had become PCH's primary channel of interaction with consumers. The New York Times described the digital transition as "part of an overall effort to collect information on Web users, show them advertisements and use the registration information for PCH’s mailing lists." In 2020, PCH acquired digital publisher Wide Open Media Group, publisher of websites Wide Open Spaces, Wide Open Country, and FanBuzz. These publications focus on particular topics. Wide Open Spaces
2255-432: The limits" of federal law and legal settlements and that additional legislation might be needed, especially since the 2000 law did not cover email and other online communications. Beginning in late 2021, PCH has been hit with multiple new class action lawsuits, alleging that "Publishers Clearing House sells and rents mailing lists containing subscribers’ personal information to a variety of third parties...with each claiming
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2310-725: The most popular has been the McDonald's Monopoly "instant-win" game-piece promotion (To satisfy the "no purchase necessary" requirement, free game pieces are made available on request through the US mail). Soft drink companies also sponsor many sweepstakes, such as the Pepsi Billion Dollar Sweepstakes game and the Pepsi Stuff loyalty rewards program that allowed Pepsi drinkers to accumulate points from packages and cups and redeem them for merchandise. Pepsi Stuff
2365-512: The odds of winning "$ 5,000 a Week for Life" in Giveaway 16000 are 1 in 6.2 billion. The Prize Patrol surprises sweepstakes winners at their homes, work, or other locations with cash prizes capturing the event on video. Since their introduction in 1989, these reality TV-style videos of prize-winners surprised at their doorstep with checks for $ 1,000 to $ 10 million have been used in widely broadcast television commercials, and, more recently, in
2420-863: The odds of winning, and whether purchases increased their chances. By 2010, the company had reached settlements with all 50 states, and in 2023 the Federal Trade Commission ordered PCH to overhaul its sweepstakes processes. Publishers Clearing House was founded in 1953 in Port Washington, New York by Harold Mertz, a former manager of a door-to-door sales team for magazine subscriptions. The company started in Mertz's basement with help from his first wife LuEsther and daughter Joyce. Its first mailings were of 10,000 envelopes from Mertz's home on Long Island, New York, and offered 20 magazine subscriptions. A hundred orders were received. Within
2475-543: The passing of the Deceptive Mail Prevention and Enforcement Act in 2000. State attorneys spoke out against the national settlement and additional lawsuits were filed by individual states. Another $ 34 million settlement was reached in 2001 in a lawsuit involving 25 states, bringing the total settlements since 1999 to $ 82 million. As part of the settlement, PCH was required to avoid terms including "Guaranteed Winner," add disclaimers to mailings saying that
2530-405: The plots of movies such as Let's Go to Prison , The Sentinel , and Knight and Day ; and Early Edition. They have been the subject of cartoons . In the summer of 2020 Marie Osmond became a spokesperson for Publishers Clearing House with television and online advertisements as well as direct-to-home mailings. In January 2021, Steve Harvey made his debut in television commercials as
2585-485: The promotional language contained in the sweepstakes entry forms (for instance, their frequently used phrase You may have already won $ 10,000,000! , although mitigated by an introductory line that stated "If you have the winning number...," led people to believe that they had already won the major prize). Television exposé have also aired that claim to reveal, through garbology , that the entries of people who did not order magazines were thrown away rather than entered into
2640-482: The publishing company monetizes its subscribers’ private information—including their names and addresses—without consent. In June 2023, the Federal Trade Commission ordered PCH "to overhaul its sweepstakes entry and sales processes, stop surprise fees, and pay $ 18.5 million to consumers." At that time, the FTC also issued a consumer alert describing the deceptive practices in which PCH was found to engage. Beginning in
2695-405: The recipient had not yet won and that purchasing merchandise would not increase their chances of being a winner. PCH reached settlements with all fifty states and agreed to work with a "compliance counsel." PCH apologized in the settlement and said it would contact customers who had spent more than $ 1,000 on merchandise the prior year. PCH also reached an agreement with Iowa in 2007. In 2010
2750-496: The sweepstakes held by Reader's Digest . The first prizes ranged from $ 1 to $ 10 and entrants had a 1 in 10 chance of winning. After the sweepstakes increased response rates to mailings, prizes of $ 5,000 and eventually $ 250,000 were offered. PCH began advertising the sweepstakes on TV in 1974. It was the only major multi-magazine subscription business until 1977. Former client Time Inc. and several other publishers formed American Family Publishers (AFP) to compete with PCH after
2805-493: Was Ed McMahon ). All three companies eventually paid fines and penalties to a variety of states who initiated legal actions against them. Of those three companies, only Publishers Clearing House continues to use sweepstakes as a promotional device and as recently as 2010 paid $ 3.5 million to settle charges that it had violated the terms of a 2001 multi-state agreement for which it was fined $ 34 million. Sweepstakes are frequently used by fast-food restaurants to boost business. One of
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#17327721012002860-430: Was Pepsi 's largest and most successful long-term promotion ever and it ran for many years in the US and in many countries around the world. Other sponsors may require the submission of a UPC of a company product (with provision for receiving a "free" UPC) for entry into the sweepstakes drawing. Sweepstakes parlors , which began to appear in the US around 2005, are establishments that offer chances to win cash prizes as
2915-421: Was jointly owned by TAF Holdings, Inc. (a subsidiary of Time Inc.) and a group of private investors. It is best known for running sweepstakes in which a large amount of money was offered as the grand prize (in a range of several hundred thousand to one or more million dollars). The winner was chosen at random, by a professional auditing company, from among all who responded to the sweepstakes, regardless of whether
2970-407: Was later re-branded as PCH Search and Win. PCH ran contests on Twitter , Facebook , and Myspace . iPhone apps for slot games and trivia were developed. The company created online play-and-win sites like PCH Games (formerly Candystand) and PCHQuiz4Cash, with air-hockey and video poker games. In December 2010, PCH acquired Funtank and its online gaming site Candystand.com. In 2011, PCH promoted
3025-643: Was originally founded as an alternative to door-to-door magazine subscription sales by offering bulk mail direct marketing of merchandise and periodicals . They are most widely known for their sweepstakes and prize -based games which were introduced in 1967. From August 2020 to March 2024, they owned the Wide Open Media publications Wide Open Spaces (about outdoors lifestyle ), Wide Open Country (about country music ), and FanBuzz (about sports ). Their sweepstakes has been subject of legal actions regarding whether consumers were misled about
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