Or at least you should be. On February 2, 2007, Cheryl Bentley sued Donald Trump and the creators of the NBC television series The Apprentice for allegedly creating an illegal lottery in the state of Georgia.

The “Get Rich With Trump” sweepstakes is a watch-and-win promotion where entrants watch the television show and, at the prompting of the announcer, text in which Apprentice contestant should be sent to “Tent City.” The rules state that in addition to any mobile phone text charges that may apply, Sponsor will charge entrant a $.99 “premium” charge per text entry. The rules also allow for a free method of entry online.

Perhaps the sweepstakes attorney who vetted this promotion should be sent to Tent City instead. Many states carry laws on their books that clearly state that a free method of entry does not cure an otherwise illegal lottery. If the pay-to-play method of entry does not provide the entrant with something equal in value to what was paid, the lottery is still illegal. In this case, an entrant gets no more for its money that does an entrant who chooses to use the Internet entry method.

R.J. Reynolds has agreed to pay $5 million to finally settle a lawsuit brought by the California Attorney general over the company’s practice of giving cigarette’s away at public events. Reduced from the $14.8 million dollar judgment originally awarded, the settlement means the parties avoid a costly appeal.

Federal law prohibits free distribution of cigarettes when it is done in federal buildings, but does not place bans on cigarette distribution in other locations. California health and safety law prohibits the giving of cigarettes on public property and private property open to the general public. Reynold’s lawyers argued that the six instances in which it gave away cigarettes (on pulic property) were not violative of Federal law, which has the exclusive right to regulate tobacco promotions, and that the California law was over-reaching. The California Supreme Court disagreed.

While acknowledging that Federal law regulated tobacco “promotions”, the Court found that Reynolds’ distribution of cigarettes in public places where minor were present, constituted a a health hazard and was therefore subject to state regulation based upon its health and safety laws.

Both state and Federal law contain exceptions to the tobacco give-away provision that do allow distribution of cigarettes in places where minors are not present (such as bars and nightclubs). In the Reynolds case, the company was handing out cigarettes and street fairs and auto shows, at which minors were allowed. Reynolds argued that the cigarettes were being handed out from a tent, that the tent was open only to people 21 years of age or older, and each recipient of the free cigarettes was required to prove (s)he was an existing smoker by producing a pack of cigarettes. Attorney General Bill Locker argued that such precautions were not sufficient to keep cigarettes out of the hands of minors and that, under California law, the entire event had to be off-limits to anyone under 21.

State Attorneys General throughout the country are seeing an increase in the number of consumers getting bamboozled out of thousands from a new scheme that is a remake on an old sweepstakes scam: the wire transfer.

The old scam works like this: you receive an email from a “National Sweepstakes” representative, typically in Canada, who informs you that you’ve won a million dollar lottery. All that’s needed to transfer the money to your account is a wire transfer of a few hundred dollars for “handling.” The wire transfer is a favorite of con artists because once the cash leaves the mark’s account, it’s often impossible to trace.

The new scam still involves a wire transfer, but instead of an email from a representative of a country showering you with sweepstakes winnings, an exiled royal family member begs for your help in reuniting her with her money. In exchange for accepting her funds into your U.S. account, she will split it with you. She assures you that a small fee will be charged from your account, but only if you provide a confirmation code. The code is bogus, and so is the royal family member. But the get-rich-quick scheme is enticing enough that many consumers are forking over their cash without asking questions (like why it is that the princess is writing to you).

The same rules apply to sweepstakes and money schemes that always have: don’t accept candy from strangers.

Recently, the Arkansas Atorney General has seen a rise in the number of complaints from consumers claiming that they are being contacted by telemarketers despite having signed up for the do-not-call registry. Upon investigating the claim, the state has found that in fact, the consumer has signed away his or her right not to be called by signing up for a sweepstakes or other trade promotion.

Increasingly, marketers and companies are adding language to their sweepstakes rules that state that those entering are specifically granting permission to receive a home phone call from the sponsoring organization, despite the fact that they are not on the do-not-call list. While a change in promotions law may be imminent (especially in Michigan, where similar cases have been brought), currently, it is not a violation of promotions law to require a person to be contacted by the sponsor in order to enter. Moreover, the do-not-call list only affects home numbers. Thus, at trade shows, where consumers are asked to drop their business card in order to be eligible to win a prize, there is generally no proscription against companies using that information to market their services.

Practice Pointer: It is certainly legitimate for companies to ask for contact information in order to reach potentially new customers and doing so through a promotion is a time-tested way to drive numbers. The fallout, however, for burying such requirements in the fine print can be worse than never having asked for the information in the first place. Companies should be clear about their desire to use the information they collect for marketing purposes, even if it reduces slightly the number of entries they receive.

Effective July 1, 2005, Florida will relax its requirement that sweepstakes rules be printed in their entirety on every advertisement showcasing the promotion.

Prior to the enactment of this modification, under Florida Statute 849.094, advertisers were required to print the full entry rules in each an every advertisement that promoted a sweepstakes, even when the ad was quite small, such as in a magazine. Under the modification, Florida will now allow advertisers to print just the “material” elements of the contest, so long as there is a mailing address, website, or toll-free number listed for consumers to get a complete copy of the sweepstakes rules.

Both the old and newly modified statute were applicable to sweepstakes (games of chance) where the aggregate prize value was $5000.00 or more, so promotions that award smaller prizes will not be affected by this. Defining what is a material will be subject to administrative hearings, but in all likelihood, material disclosures will include the dates of the sweepstakes, to which residents the promotion is open, the prizes (and odds, if known), and the age of entrants.

Reader’s Digest has agreed to pay $196,000 to settle a dispute with the state of Connecticut over deceptive marketing of its sweepstakes. The popular magazine, found in supermarket aisles and dental offices everywhere, promoted its sweepstakes by claiming that purchasing more company products increased an entrant’s chances of winning. The actual odds of winning the sweepstakes were not affected by such purchases (unless one considers the “winner” to be Reader’s Digest, which derives about 75% of its revenue not from magazine sales, but from these ancilliary products).

Connecticut’s Attorney General sued Reader’s Digest on behalf of consumers, and focused on seeking restitution for “high activity” consumers - those who spent more than $2,500 a year on Reader’s Digest products between 1997 and 2000. The settlement money is intended to go right back into the hands of the consumers that were deceived, through a claims administration process.

In addition to the settlement, the Attorney General secured an injunction preventing Reader’s Digest from engaging in deceptive marketing practices for its sweepstakes in the future. From now on, Reader’s Digest agrees to disclose the odds of winning, set forth clear entry deadlines, inform consumers that purchases do not increase the likelihood of winning, and clearly state in all solicitations that consumers have not yet won a prize.

Reader’s Digest resolved similar claims with 33 other states in 2001 in a multi-state settlement.

Consumers who receive a prize notification and a check as winnings from the North American Prize Pool are the latest victims in a new sweepstakes scam: cash the check and say goodbye to your savings.

According to the Seattle Police Department, the “mark” is sent a letter and a check (drawn on a real bank). She is told that she has won $300,000.00 and in order to verify that the mark is really the winner, she is asked to deposit the check in her account and then send back a check for the same amount to cover the taxes. The victim’s check is real; the sweepstakes check is counterfeit. When the sweepstakes check bounces, the victim’s bank charges the victim for the $4,000.00.

Sweepstakes Pointer: No legitimate sweepstakes will ever charge an entrant to collect winnings. In addition, a verification process usually involves a written declaration. Finally, consumers should be suspect of any sweepstakes in which they do not remember entering.

This Fall, the New York Attorney General announced a settlement between it and McNeil-PPC, the makers of Tylenol, for advertising a sweepstakes promotion that appeared to require consumers to purchase a product in order to enter. Under the laws of all 50 states, consumers must be allowed to enter and win a sweepstakes without making a purchase.

The advertising for the promotion, which appeared on television and in print, implied that consumers must purchase Tylenol for a chance to win. Although the ad did note that there was no purchase necessary, it was written in tiny “mice-type” printing, while the words BUY TYLENOL were prominently displayed in the ad. The fact that 84% of the people who entered the sweepstakes had actually purchased a Tylenol product suggested that the alternative free entry provision was not significantly prominent to be effective. To insure that McNeil used a bigger font, it was required to amend their current and future advertising and to pay $52,000.00 in damages.

practice pointer: Advertisers should consider the type size and placement of the “no purchase necessary” provision, especially when promoting in New York.