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Does lottery kind of contest (without any input of money from contestants) considered as gambling?

Mobile, AL |
Filed under: Gaming law Internet law

I want to put a new feature on my website where members can participate in lottery kind of contest. There won't be any input of money from members, only they have to participate if they want. Upon the completion of this contest, some random number of winners will be selected out of all participants, who will be awarded with gift-coupons. So, will this be considered as gambling in state like Alabama where gambling is not legal?

Attorney Answers 3


A "lottery" is illegal in Alabama. (Charity bingo is an exception to this rule.) A lottery (a) has a prize, (b) winner of which is determined by chance, (c) for consideration (i.e., buying a ticket).

If you are not selling tickets or requiring consideration for this drawing, you're likely not running a lottery.

If participants would have to buy something or otherwise pay you for the chance to win, you're likely running a lottery.

You should talk to an attorney about your idea. You don't want to run afoul of this administration and it's anti-gambling stances.

Disclaimer: No attorney client privilege is established by receiving an answer to your question on Avvo. This answer is provided for informational purposes only. If you have further questions, please do not hesitate to visit my Avvo profile or website -- -- to set up an appointment to talk more about your issue. As required by Rule 7.2(e), Alabama Rules of Professional Conduct, no representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.

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2 lawyers agree


Gambling requires three elements: 1) consideration 2) chance and 3) a prize.

What you are describing would eliminate the consideration element (where someone has to offer something of value in exchange for the chance of winning the prize).

Assuming we eliminate this element, you will not be considered illegal gambling but you are still operating a contest.

Online contests are regulated under state law. This is why you often see in the rules a disclaimer such as: NOT AVAILABLE TO RESIDENTS OF THE FOLLOWING STATES: FL, VT, NY, CA...

This is because some states will require a proper registration and in some cases even a the placement of a bond. Remember, state Attorneys General seek to protect their citizens from SCAM operators.

Many webmasters will never bother to comply with any of this and will never face a problem. Others end up having to hire criminal lawyers in a multitude of states. What is typically done is to walk through the various state requirements for each state you care to extend the contest in and see what if anything will be required.

I suggest you discuss with a lawyer that has experience in this area.

Most of us here, including myself, offer a free phone consult.

Best regards,
Natoli-Lapin, LLC
(see Disclaimer)

The law firm of Natoli-Lapin, LLC (Home of Lantern Legal Services) offers our flat-rate legal services in the areas of business law and intellectual property to entrepreneurs, small-to-medium size businesses, independent inventors and artists across the nation and abroad. Feel free to call for a free phone consultation; your inquiries are always welcome: CONTACT: 866-871-8655 DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting.

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I'd caution my colleagues that in Alabama, while the state's definition of a lottery appears to require money payment, what the asker is describing may still be gambling, if they require participants to provide something of value to play. A brief search shows that "something of value" is defined in Alabama Criminal Code as "Any money or property, any token, object or article exchangeable for money or property or any form of credit or promise directly or indirectly contemplating transfer of money or property or of any interest therein, or involving extension of a service entertainment or a privilege of playing at a game or scheme without charge." If the players have to give something that qualifies as "something of value", then you could still be running afoul of Alabama's gaming laws.

The author is a Maryland attorney; however no answer given on Avvo is intended as legal advice or intended to create an attorney-client relationship. Dan's expertise lies in the electronic entertainment (video game) industry, as well as complex internet law issues, electronic free speech, entertainment law, copyright and trademark law, and computer fraud. He primarily represents game developers and founders of emergent internet technologies.

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Frank A. Natoli

Frank A. Natoli


You will "caution" us? This is not a competition between lawyers, that is what law school was for. So you should focus on addressing the Askers question and not trying to look more right than the other lawyers that respond. If you read my answer I clearly define consideration as anything of value. Is an email consideration? How about a promise to perform a service? Different courts come out in different ways. In this case AL is only the jurisdiction where the Asker is located not necessarily where the matter will be adjudicated.

Daniel Gary Rosenthal

Daniel Gary Rosenthal


And this is not a law school answer. This is a person asking on Avvo who is not going to know what consideration is, nor necessarily going to understand the technical definition of a thing of value. Instead of trying to understand my motivations, maybe you should focus on actually providing a valuable service, and not a 50-state common-law based answer that doesn't reflect the language used by the state in question? Not to mention you're incomplete in your comment too -- yes, AL is not necessarily where the case will be adjudicated. But AL Criminal Code Section 13A-12-29 expressly indicates that does not remove criminal liability for promotion of gambling even if the lottery is conducted outside of AL and the lottery is legal in the outside jurisdiction. Do you think that the asker might want to know that? I do. So yes, that's the sort of reason why I would "caution" you, and I'd expect to be cautioned as well when I get something wrong on Avvo.

Daniel Gary Rosenthal

Daniel Gary Rosenthal


Says the guy licensed only a couple of years more than me, right. Please do tell me about how my years of experience in the gaming industry developing systems involving these same legal issues, or the book that the ABA is publishing on multijurisdictional gaming issues that I co-wrote are invalid. You want to talk about respect, show some yourself. It's earned, not given, and ain't earned nothin' from me.

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