Incentive Promotions (Raffles, Prizes, or Sweepstakes)
Purpose
The purpose of this guidance document (“Guide”) is to provide information, best practice tips, and recommendations for Liberty University, Inc. (“Liberty”) student researchers (“Researchers”) considering or currently operating incentives, giveaways, or similar promotions to encourage individuals to participate in research projects.
Disclaimer
The information provided in this Guide and Appendix A is not legal advice and should not be relied upon as such. Instead, this Guide offers information and resources to help you prepare for and manage incentive-based promotions as part of your research projects. If you have any questions about this Guide or the Appendix, you may contact the IRB.
Research Payments Generally
Researchers routinely offer direct payments or other forms of consideration to encourage individuals to participate in research. Payments generally take one of three forms: (1) compensation, (2) reimbursement, or (3) promotional incentives/prizes. In each case, amounts must be fair and reasonable to minimize the possibility of coercion or undue influence and comply with all applicable federal and state laws.
This Guide focuses on promotion incentives/prizes. Unlike reimbursement or compensation, which seek to restore subjects to a pre-research financial baseline, promotion incentives are intended to influence subjects to enroll in research, remain enrolled, and complete specific milestones for a chance to win a particular prize or thing of value.
Avoid Operating an Illegal Lottery
Researchers are generally free to offer promotional prizes to encourage research participation. However, Researchers may be surprised to learn that in addition to rules applicable to research compensation generally, they must also comply with state and federal lottery laws.
With limited exceptions (e.g., certain charitable raffles and official state lotteries), the operation of lotteries is prohibited under the gambling laws of every state and the District of Columbia. Lotteries are also proscribed under federal laws that prohibit mailing lottery materials and broadcasting information about illegal lotteries by television and radio station licensees. Violations of state anti-lottery laws can also serve as predicate violations of federal anti-gambling statutes and give rise to public enforcement and private rights of action under state consumer protection laws.
Most states define a lottery as a scheme in which all three elements of prize, chance, and consideration are present. “Prize” means property, money, or anything of value. “Chance” is present if either the selection of winners or the prizes they win is influenced by factors outside the control of the participants. “Consideration” varies by state but can include required payments to participate, required purchases of a product or service, or the expenditure of substantial time or effort to enter the drawing. “Raffles,” by definition, are lotteries that generally involve random drawings of names or prearranged numbers of individuals after purchasing chances or participating in a random contest. In most states, only charitable organizations are authorized to operate raffles.
The above analysis is equally applicable in the context of research-related promotions. Researchers who solicit participation in research projects by offering random chances to win gift cards, cash, electronics, etc., in exchange for completing a survey or other activity are, in effect conducting illegal lotteries. Lottery laws typically carry criminal penalties. Depending on the state law at issue, lottery violations can trigger sanctions ranging from misdemeanor sentences and fines to serious prison time and significant financial penalties.
Sweepstakes Drawings
To avoid penalties for operating an illegal lottery, Researchers who intend to offer prize incentives should consider structuring their promotions to meet the definition of a “sweepstakes” rather than a raffle/lottery.
In sweepstakes, the “consideration” element is eliminated from the promotion by allowing invited participants to enter and win the drawing for free using what is commonly referred to as an alternative method of entry (“AMOE”). A typical example of an AMOE is mailing a postcard or sending an email with the individual’s name and contact information before a deadline. For the AMOE to be “free,” all individuals invited to participate in the program must be able to submit the AMOE and enter the drawing regardless of whether they participate in the research project. For example, if you invite 100 individuals to complete a survey, all 100 must be allowed to submit an AMOE for a chance to win, regardless of whether they answer the survey. In addition, the AMOE submissions must be given “equal dignity” in all respects to the other participants, which means that all deadlines, prizes, and odds of winning must be precisely the same for AMOE submissions as they are for all other research participants.
While Sweepstakes are permitted in every state and the District of Columbia, certain jurisdictions limit their operation. For example, Florida and New York require registration and posting a surety bond for certain sweepstakes. Most states include information on their websites about lottery laws. You should confirm that your promotion is compliant in your state and all jurisdictions where you intend to solicit participants.
Advertising Drawings
If you decide to operate a “sweepstakes,” it is recommended to refer to the promotion in your marketing materials as a “drawing” and avoid terms like “raffle,” “sweepstakes,” or “lottery.” Note that many social media platforms, including Facebook and Twitter, have rules for running promotions. In all cases, you must follow the advertising rules outlined in Compensating Research Participants and all applicable state and federal laws.
Promotion Rules Template with Instructions
All promotions should include official rules addressing eligibility, deadlines, odds, sponsor information, and AMOE. Attached below is a model template to guide you in preparing official rules. This template is not necessarily compliant in all jurisdictions. Consult an attorney if you need specific advice or assistance preparing your official rules. Additionally, a model affidavit of eligibility, which can be given to the winner of an incentive drawing is provided.
Model Affidavit of Eligibility docx
IRB Research Incentive Guidance Document (Legal Affairs) 9/27/22