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05.21.18   |   Insights

“No Purchase Necessary”

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“No purchase necessary”, you see it on the television, you hear it on the radio, it’s written in every promotional advertisement. There’s good reason why!

The underlying problem relates to gambling laws.  The “safe harbor” is to comply with the “no purchase necessary” rule because requiring no purchase essentially alleviates the gambling concern.  Retailers can run a contest (i.e., “no purchase necessary”) but not a raffle (i.e., with the requirement of a purchase).

Ohio law has rather stringent rules related to “gambling”, which is a nebulous concept that includes things like raffles, games of chance, contests, etc., in addition to what we traditionally think of as gambling. The rules are fairly complex and convoluted.

Retailers cannot require a purchase for people to enter a contest. Such a requirement would really create a raffle, and only certain types of organizations (i.e., nonprofits) can conduct raffles, and the money needs to go to charitable organizations. Allowing people to enter the drawing for “free” solves the gambling problem by running a contest, which does not run afoul of the gambling rules.  If “purchase” is required, the contest (OK) is converted into a raffle (NOT OK).

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