Consideration may be monetary or non-monetary. If participants must pay money to play then you almost certainly have consideration. It is not clear what amount of time and effort may constitute non-monetary consideration under Texas law. There is some precedent in Texas that the time and effort involved in taking a test drive of an automobile is not onerous enough to constitute non-monetary consideration.
Does your give-away have Chance?
If you plan to award prizes based on a random drawing or based on the results of a card game such as poker then you almost certainly have the element of Chance. If you plan to award prizes based on the participants' skills -- such as in a judged essay contest -- then you probably do not have the element of Chance. If prizes will be awarded partly on skill but there is also randomness or luck involved then you will want to consult an attorney.
Does your give-away have a Prize?
Of course, by definition a give-away involves some type of prize. Beware that all prizes offered must be awarded. Certain states may require registration as well, if the total value of the prizes to be awarded exceeds a specified amount. For example, New York and Florida require registration if the total value of all prizes exceeds $5000. Rhode Island requires registration for retail establishments if the total value of all prizes exceeds $500.
Is your give-away for charity?
Texas allows certain exceptions for raffles and bingo that are held as fundraisers for a charity. However, strict rules apply to these exceptions so consult your attorney to ensure that you will be in compliance.
Other potential concerns?
Your official contest rules are essentially a contract between you and the participants. Be sure your official rules are well drafted and that you follow the official rules and keep records of your compliance. Otherwise, you may expose yourself to potential liability for deceptive trade practices under federal or state law.
Additional resources provided by the author
The legal opinions on the website of the Texas Attorney General should be consulted for more detailed information.
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