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Can I offer contests that involve charity donations in Texas? What are the requirements?

Here is the response to your query:

Offering Contests Involving Charity Donations in Texas

Charitable raffles are regulated by Chapter 2002 of the Texas Occupations Code [1.2]. However, if you are not conducting a raffle, but rather a contest that involves charity donations, you must comply with the requirements set forth in Tex. Bus. & Com. Section 621.202 [1.1].

Requirements for Contests Involving Charity Donations

According to Tex. Bus. & Com. Section 621.202, for each contest other than a drawing, the offeror shall maintain until the second anniversary of the date the last prize was awarded:

  1. Records of the identity and address of each person who is responsible for developing, creating, sponsoring, or implementing any part of the advertising plan or program;
  2. Records that show that the winning numbers have been deposited in the mail or otherwise made available to recipients in accordance with the odds statement provided under Section 621.104(a);
  3. A copy of each contest solicitation;
  4. Records adequate to determine:
  5. The name and address of each contestant;
  6. The approximate date each contestant was sent the solicitation used in the contest;
  7. The number of major prizes awarded;
  8. The date each major prize was awarded;
  9. The name, brand, type, model number, and manufacturer of each prize offered;
  10. The method of computing the retail value of each prize;
  11. The method of selecting major prize winners;
  12. The name and address of each major prize winner; and
  13. The facts on which each representation or disclosure made in connection with the contest was based and from which the validity of the representation or disclosure can be determined.

Postal receipt records, affidavits of mailing, and a list of winners or recipients of the major prizes satisfy the requirements of Subsection (a)(2) [1.1].

Matched Contests

If you are conducting a matched contest, you must comply with the requirements set forth in Tex. Bus. & Com. Section 621.103 [2.1] and Section 621.104 [2.2]. The identity and number of the major prizes to be awarded in a matched contest must be determined before the contest begins and disclosed on each entry form distributed. Each major prize identified on an entry form for a matched contest shall be awarded. The contest period for a matched contest may not exceed 12 calendar months. If, during the contest period for a matched contest, a winning number is not presented or matched for a major prize, the offeror shall conduct a drawing from the names of those individuals who attended a sales presentation during the contest period. The offeror shall conduct the drawing not later than the 60th day after the date the contest period ends. Each major prize identified on the entry forms distributed during the contest period that was not previously awarded shall be awarded at the time of the drawing.

Prohibited Acts Relating to Gifts

Tex. Bus. & Com. Section 621.053 prohibits the use of the term “gift” or a similar term in a false, misleading, or deceptive manner. It also prohibits directly representing or implying that a gift promotion is a contest. In a gift promotion, the term “finalist,” “major award winner,” “grand prize recipient,” “winner,” “won,” “will win,” or “will be awarded” or words or phrases of similar meaning that imply that a person is being solicited to enter or participate in a contest cannot be used. It also prohibits representing that a gift has a sponsor, approval, characteristic, ingredient, use, benefit, quantity, status, affiliation, connection, or identity that the gift does not have. Additionally, it prohibits using a word or phrase that simulates or causes confusion with a document issued by an officer of a court or with the seal or name of a real or fictitious governmental entity or implies that the offeror is sending a court document or legal document or that the offeror is a governmental entity [1.3].

Conclusion

If you are offering a contest that involves charity donations in Texas, you must comply with the requirements set forth in Tex. Bus. & Com. Section 621.202 [1.1]. If you are conducting a matched contest, you must also comply with the requirements set forth in Tex. Bus. & Com. Section 621.103 [2.1] and Section 621.104 [2.2]. Tex. Bus. & Com. Section 621.053 [1.3] prohibits certain acts relating to gifts.

Source(s):
Jurisdiction

Texas