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

Yes, you can offer contests that involve entry fees in Vermont, but there are certain requirements that must be met.

Requirements for Contests with Entry Fees in Vermont

According to VTCR 06-031-003 § 109.01, it is 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:

  • is deceptive or misleading as to chances of winning, the number of winners, the value of the prizes, or the availability of the prize;
  • requires any kind of entry fee, service charge, purchase or similar consideration in order to enter or to continue to remain eligible; or,
  • uses publications, literature, written or verbal promotion that is false, deceptive or misleading.

Therefore, if you want to offer contests with entry fees in Vermont, you must ensure that your contest is not deceptive or misleading, does not require any kind of entry fee, service charge, purchase or similar consideration in order to enter or to continue to remain eligible, and does not use publications, literature, written or verbal promotion that is false, deceptive or misleading.

Registration and Fees

In addition to the above requirements, if you are a fantasy sports operator offering a fantasy sports contest to consumers in Vermont, you must register with the Secretary of State on or before October 15 of each year and pay an annual registration fee of $5,000.00 [2.1].

The Vermont Lottery may also charge a nonrefundable application fee to be submitted upon application for a License in an amount determined by the Commission, subject to 32 V.S.A. § 603. This fee is intended to cover the costs of processing an application including but not limited to criminal background checks and credit checks [3.1].

Consumer Protection

As a fantasy sports operator, you must adopt commercially reasonable policies and procedures to protect consumers, including preventing participation in a fantasy sports contest with a cash prize of $5.00 or more by the fantasy sports operator, an employee of the fantasy sports operator or a relative of the employee who lives in the same household, or a professional athlete or official who participates in one or more real world sporting events in the same sport as the fantasy sports contest [2.2].

Exemption

The provisions of 13 V.S.A. chapter 51, relating to gambling and lotteries, do not apply to a fantasy sports contest [2.3].

License Eligibility and Application

If you are interested in obtaining a License to engage in business as a Sales Agent, you must complete an application in a form prescribed by the Commission and file it with the Commission. Before issuing a License, the Commission, through its Director, shall consider factors including the financial responsibility and security of the person and their business or activity, the accessibility of their place of business or activity to the public, the sufficiency of existing Licensees to serve the public convenience, the volume of expected sales, the honesty and integrity of the applicant, the credibility of the information supplied in the application, and the business experience and business practices of the applicant to include any prior history with the Vermont Lottery [3.2].

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 [4.1].

Therefore, to offer contests with entry fees in Vermont, you must ensure that your contest meets the requirements outlined in VTCR 06-031-003 § 109.01, register with the Secretary of State, adopt commercially reasonable policies and procedures to protect consumers, and obtain a License if necessary.

Source(s):
Jurisdiction

Vermont