Can I offer contests that involve entry fees in Texas? What are the requirements?

Based on the documents provided, contests that involve entry fees are not explicitly prohibited in Texas. However, there are specific requirements that must be met in order to conduct a legal contest in Texas.

Requirements for Contests Other Than Drawings

Tex. Bus. & Com. Section 621.202 outlines the required records for contests other than drawings. The offeror must maintain records of the identity and address of each person responsible for developing, creating, sponsoring, or implementing any part of the advertising plan or program. Additionally, records must be kept 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). The offeror must also keep a copy of each contest solicitation and records adequate to determine the name and address of each contestant, the approximate date each contestant was sent the solicitation used in the contest, the number of major prizes awarded, the date each major prize was awarded, the name, brand, type, model number, and manufacturer of each prize offered, the method of computing the retail value of each prize, the method of selecting major prize winners, the name and address of each major prize winner, and 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.

Requirements for Matched Contests

Tex. Bus. & Com. Section 621.103 outlines the requirements for matched contests. 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.

Required Disclosures Relating to Matched Contest

Tex. Bus. & Com. Section 621.104 outlines the required disclosures relating to matched contests. A person who uses a matched contest shall clearly and conspicuously disclose in writing in the offer that attendance at a sales presentation is required, the name and street address of the person who is soliciting attendance at a sales presentation, a description of the product or service being sold, each requirement, restriction, qualification, and other condition that must be satisfied for a person to enter the contest, including any deadline by which the person must visit the location or attend the sales presentation to qualify to receive a prize and the approximate duration of the sales presentation, a statement of the odds of winning each prize offered, expressed as a ratio in Arabic numerals, the geographical area or states in which the contest will be conducted, the beginning and ending dates of the contest period, the identity and address of each person responsible for awarding prizes, that all unclaimed prizes will be awarded by a drawing and the date of the drawing, and all other rules and terms of the contest.

Prohibited Acts Relating to Matched Contest

Tex. Bus. & Com. Section 621.105 outlines the prohibited acts relating to matched contests. A person engaged in the preparation, promotion, sale, distribution, or use of a matched contest may not use the term “prize” or a similar term in a false, misleading, or deceptive manner, represent in soliciting a person to enter or participate in the contest that the person is a “finalist,” “major award winner,” “grand prize recipient,” or “winner” or that a person has “won,” “will win,” or “will be awarded” or use words or phrases of similar meaning unless the representation is true, represent that a prize has a sponsor, approval, characteristic, ingredient, use, benefit, quantity, status, affiliation, connection, or identity that the prize does not have, represent that a prize is of a particular standard, quality, grade, style, or model if the prize is of another, misrepresent the odds of winning a prize, misrepresent the rules or terms of participation in the contest, represent that a number, ticket, coupon, symbol, or entry form confers or will confer an advantage on a person that another person does not have or has a value that other entries do not have, or represent that a person is more likely to win a prize than another person.

Conditioning Prize on Payment of Consideration, Charge, or Expense Prohibited; Exceptions

Tex. Bus. & Com. Section 621.108 prohibits an offeror from notifying a person that the person has won a prize, will receive a prize, or has a chance to win or receive a prize if the receipt of the prize is conditioned on the person paying consideration of any kind, paying a charge, or incurring an expense. However, an offeror may notify a person that the person has won a prize, will receive a prize, or has a chance to receive a prize that is conditioned on the person paying expenses incurred for travel to and from the sales location or a refundable deposit authorized under Section 621.006.

Based on the above information, it is possible to offer contests that involve entry fees in Texas, but the offeror must comply with the specific requirements outlined in the relevant statutes.

Jurisdiction

Texas

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