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Can I offer contests that involve merchandise prizes in North Dakota? What are the requirements?
Yes, you can offer contests that involve merchandise prizes in North Dakota. However, there are certain requirements that you need to follow.
Requirements for contests with merchandise prizes
According to NDAC Section 10-09-01-05, an amusement game or device may reward the player with only merchandise limited to prizes, toys, or novelties. The merchandise prize, toy, or novelty may not be repurchased for cash or for credits redeemable for cash. The merchandise prize, toy, or novelty may not have a wholesale value or cost exceeding sixteen times the cost of play, and if any prize consists of more than one item, unit, or part, the aggregate wholesale value or cost of all items, units, or parts may not exceed sixteen times the cost of play. Merchandise prizes may not consist of gift certificates, discount coupons or certificates, or other like items which may be equivalent to a cash prize or which may be redeemed or otherwise used to obtain merchandise, products, or services at either no cost or at a reduced cost. However, prizes or complimentary or promotional discount certificates may be given to a player when receipt of such items is not dependent upon the success of the player in the play of the game or device. Any merchandise prizes, toys, or novelties awarded to a player as a result of operation of the amusement game or device must be contained with the amusement game or device or located on the premises and within the immediate proximity of the amusement game or device and may be awarded only by the owner, operator, possessor, or lessee of the game or device [1.1].
Requirements for contests with cash prizes
If you are planning to offer contests that involve cash prizes, you need to follow the guidelines provided in NDAC Section 99-01.3-05.1-03. According to this section, prizes must only be cash and must be fifty percent or more of gross proceeds for each single event raffle. However, a single cash prize may not exceed twenty-five thousand dollars and the total cash prizes may not exceed twenty-five thousand dollars during a day. Prize payouts must be based on ticket sales and not on cash retained by sellers. The maximum cash prize limits of this section do not apply to a public-spirited organization that supports amateur collegiate athletics. The public-spirited organization’s primary purpose must include support of collegiate athletics [6.1].
In summary, you can offer contests that involve merchandise prizes in North Dakota, but you need to follow the guidelines provided in NDAC Section 10-09-01-05. If you are planning to offer contests that involve cash prizes, you need to follow the guidelines provided in NDAC Section 99-01.3-05.1-03.
Source(s):
Jurisdiction
North Dakota