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Can I offer contests that involve chance-based games in Vermont? What are the requirements?
Based on the documents provided, contests that involve chance-based games can be offered in Vermont, but there are certain requirements that must be met.
Requirements for Contests
According to VTCR 06-031-003 § 109.01, it is considered an unfair and deceptive trade act and practice in commerce for any person to solicit any other person to engage in any kind of a game of skill, contest, sweepstakes, giveaway or other promotion which:
a) is deceptive or misleading as to chances of winning, the number of winners, the value of the prizes, or the availability of the prize;
b) requires any kind of entry fee, service charge, purchase or similar consideration in order to enter or to continue to remain eligible; or,
c) uses publications, literature, written or verbal promotion that is false, deceptive or misleading.
However, 13 VTST 2143b states that a person may organize, execute, or participate in a contest or game of chance, including a sweepstakes, provided that persons who enter the contest or game of chance are not required to venture money or other valuable things. The cost of mailing an entry shall not be considered a venture of money or other valuable things. This section shall not be construed to prohibit a person from organizing, executing, or participating in a contest that is not a contest of chance.
License Requirements
If the contest involves break-open tickets, then a license is required. According to 31 VTST 1202, break-open tickets sold in Vermont shall be manufactured only by a person licensed by the Commissioner. A licensed manufacturer shall sell break-open tickets only to distributors licensed under this chapter. A distributor licensed under this chapter shall purchase break-open tickets only from a manufacturer licensed under this chapter.
Fees
According to 31 VTST 1204, the Commissioner may issue the following licenses to qualified applicants:
- Manufacturer annual license: $3,000.00.
- Distributor annual license: $2,000.00.
Allocation of Profits
The profits received by the State of Vermont through the sale of the Tri-State Lotto tickets shall be deposited in the Education Fund established by 16 V.S.A. § 4025 and used solely for the purposes of State and local funding of public education (31 VTST 677).
Therefore, if the contest does not involve break-open tickets, then no license is required. However, if it does, then a license is required, and the manufacturer and distributor must pay the respective fees. Additionally, the profits received from the contest must be used solely for the purposes of State and local funding of public education.
Jurisdiction
Vermont