Can I offer contests that involve merchandise prizes in Alabama? What are the requirements?

Here is an updated response to your query:

Requirements for Offering Contests with Merchandise Prizes in Alabama

Alabama law allows for contests with merchandise prizes, but there are certain requirements that must be met.

1. The contest must not be considered gambling or a lottery ^[2.1][3.2].
2. The prize or award must not exceed $12,500 ^[2.1].
3. The contest operator must disclose all prizes and awards offered to winning participants in advance of the game or contest ^[3.1](5)].
4. The contest operator must segregate fantasy contest player funds from operational funds or maintain a reserve that equals or exceeds the amount of player funds on deposit, which reserve may not be used for operational activities ^[3.1](10)].
5. The contest operator must contract with a third party to annually perform an independent audit, consistent with the standards established by the American Institute of Certified Public Accountants, to ensure compliance with this chapter and shall submit the results of the audit to the regulator within 270 days of the end of the operator’s fiscal year ^[3.1](11)].

In addition to the above requirements, there are also specific regulations related to contests held at the Alabama State Fair Authority. The Alabama State Fair Authority is authorized to expend funds for the purpose of awarding prizes and premiums at livestock shows ^[1.5]. The Board of Directors of the Alabama State Fair Authority must adopt a plan for the distribution of premiums or prizes, which must be approved by the commission ^[1.3]. Associations that desire to share in state aid available for the purposes of this article must file a statement of prizes and premiums to be paid during the current fair season ^[1.6].

Therefore, if you want to offer contests with merchandise prizes in Alabama, you must comply with the above requirements and any additional regulations related to contests held at the Alabama State Fair Authority.

Source(s):

• [2.1] (Effective January 1, 2018) Construction; limitation on prizes or awards.
• [1.3] Grants to Alabama State Fair Authority - Plan for distribution of prize money at fair; premiums or prizes in excess of annual appropriation.
• [3.1] Fantasy constest procedure requirements.
• [1.5] Expenditures for prizes and premiums authorized.
• [1.6] Filing of statement of prizes to be awarded.
• [3.2] Exclusion from lottery or gift enterprise provisions.

Jurisdiction

Alabama

• Gaming