Unveiling the Legalities of Running Competitions in Your Business

If you’d rather listen to these insights, see episode 115 of The Powerful Content Podcast.

Have you ever considered running competitions in your business to boost engagement, promote your products or services, and attract new customers? Competitions can be a fantastic way to create buzz around your brand and increase brand awareness. However, before diving into the world of competitions, it’s crucial to understand the legal requirements and obligations that come with it.

Emma Heuston, a former lawyer turned entrepreneur, knows a thing or two about competitions and has the following insights to share.

Understanding the purpose of running competitions

Emma believes that the very first step to running a competition – before you dive into the logistics – is defining the purpose of the competition. Competitions can serve as powerful PR and promotional tools, helping to increase brand visibility and awareness and can be a great tool to build your email list. Whether you are looking to attract new clients, promote a product, or simply engage with your audience, competitions can be a valuable strategy.

The legalities of a Game of chance vs. Game of Skill

When it comes to running competitions, Emma says that it’s important to highlight the distinction between a game of chance and a game of skill. In a game of chance, participants have an equal opportunity to win, while a game of skill involves a specific skill requirement for entry. Understanding the legal implications of each type of competition, including the need for permits in certain states, is crucial to staying compliant with the law.

Check out the table in this blog post of Emma’s to understand the differences.

Navigating legal requirements and obligations

To ensure your competition is legally compliant, there are several key considerations to keep in mind:
Entry must be free or tied to the purchase of a product within a certain value range.
The competition must be conducted for the benefit of promoting your business or a specific product
The winner must be determined by chance.

Additionally, clear terms and conditions outlining entry details, prize information, and winner selection process should be provided to participants.

Transparency and privacy considerations

Maintaining transparency and safeguarding participant data are essential aspects of running competitions. Emma suggests that businesses have clear disclaimers and privacy policies in place, outlining how participant data will be used and protected. Both of these should live on your website. This will ensure that data collection is necessary and secure can help prevent breaches and protect both the business and participants.

Tools and resources for legal compliance

For businesses looking to streamline their competition processes and ensure legal compliance, accessing resources such as templates for terms and conditions can be highly beneficial. You can check out Emma’s resources here.

Understanding the legal landscape of competitions and staying informed about specific state requirements can help businesses navigate the complexities of running competitions successfully.

Focus on Your Own Race

Emma suggests that focusing on your own race when it comes to running competitions is key to avoiding comparison. Just because someone else in your industry is doing it, doesn’t mean that you have to as well.

Tailoring your competition strategies to align with your values, resources, and goals can lead to better outcomes for you and your contestants.

Running competitions in your business can be a powerful way to connect with your audience, increase brand visibility, and drive different aspects of growth. By understanding the legal requirements and obligations associated with competitions, businesses can ensure that they avoid costly legal mistakes..

Next time you consider running a competition in your business, remember to define your purpose, understand the legal nuances, prioritise transparency and privacy, and focus on your unique path to success. Whether it’s a game of chance or skill, competitions can be a valuable tool in your marketing toolkit when implemented thoughtfully and responsibly.

Where to find Emma Heuston