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Can I offer contests that involve referral bonuses in South Dakota? What are the requirements?
Referral Bonuses in South Dakota
South Dakota law does not have specific provisions regarding referral bonuses. However, contests that involve referral bonuses may fall under the definition of a lottery, which is illegal in South Dakota [2.1].
To avoid violating the law, any contest involving referral bonuses must not require participants to pay any money or purchase anything to enter or win [2.1]. Additionally, the contest must not be based solely on chance, but rather on skill or knowledge [2.1].
If the contest meets these requirements, it may be legal in South Dakota. However, it is recommended to consult with a legal professional to ensure compliance with all applicable laws and regulations.
Requirements for Contests in South Dakota
Contests in South Dakota must comply with the state’s consumer protection laws, which prohibit false advertising and deceptive trade practices [2.1]. Additionally, contests must comply with federal laws, such as the Federal Trade Commission Act and the Children’s Online Privacy Protection Act (COPPA) [2.1].
Contests must clearly disclose all material terms and conditions, including the rules, eligibility requirements, and any limitations or restrictions on the prize [2.1]. The contest must also provide a fair and equal opportunity for all participants to win [2.1].
If the contest involves the collection of personal information from participants, such as names and email addresses, the contest must comply with applicable privacy laws, such as COPPA and the General Data Protection Regulation (GDPR) [2.1].
Conclusion
Contests that involve referral bonuses may be legal in South Dakota if they comply with all applicable laws and regulations. It is recommended to consult with a legal professional to ensure compliance. Additionally, all contests must comply with South Dakota’s consumer protection laws and federal laws, and must clearly disclose all material terms and conditions.
Source(s):
Jurisdiction
South Dakota