Puerto Rico Revises Sweepstakes Regulations

On October 27, 2010, Puerto Rico's Department of Consumer Affairs released new regulations governing the promotion of sweepstakes in Puerto Rico. While many brand owners and promotional agencies routinely ran promotions in Puerto Rico prior to the change, the new regulations clear up a number of ambiguities in the old regulations, place fewer restrictions and obligations on promoters, and generally bring promotion of sweepstakes in Puerto Rico more in line with the 50 states. The regulations apply to "any person who advertises, makes, promotes, holds, organizes or otherwise entrusts the holding of sweepstakes to promote companies, institutions, products, goods, services or any other purpose of commercial gain." The regulations do not apply to intellectual or sports competitions or other games where skill, talent, or some special attribute is predominant, nor to games run by non-profit entities or political parties. Significant changes from the old regulations include the following:

• Elimination of Spanish language requirement -- rules can be English-only if advertisement of the game is English-only;
• Certification of drawing and presence of Notary Public at drawing no longer required;
• Clarifies that abbreviated rules are allowed in advertising and defines what constitutes "abbreviated rules";
• Makes the required "publication" of winners easier; and
• Definition of "consideration" limited to "a monetary payment that financially benefits the promoter" -- SASE, visiting a commercial establishment, payment of standard text messaging, or Internet access charges not financially benefiting the promoter are specifically excluded.

Tip: Under the new less restrictive regulations, companies planning to run sweepstakes in the 50 states and D.C. can now likely extend the sweepstakes to Puerto Rico without significant additional obligations.