I wish I had the time to do this research today but I'm in a bit of a
crunch. I am the Host of a television talkshow on a public access
channel and I need to get some really good background information
together pertaining to the following situation (Preferrably a few
links to web sites that have specific information regarding this
topic).

I am building sponsorships for our live technical support show and I
need to find out what the limitations are concerning give-aways that
our brought by sponsors when they come on the show. A specific example
would be last week when we had an MP3 player to give away.

We only had one MP3 player and I could not think of a more fair way to
give it away than to have the producer take down the name and number
of everyone that called, and then to draw names out of a hat to see
who won the MP3 player.

This turned out to not be a popular idea with the Facilitators that
night. Terms like "violation of LOAF laws" and "Lottery" were thrown
out, and I still see them both as being a bit of a stretch.

Getting a case that set precidence in court regarding this would also
be very helpful. The more recent the example and the closer it is to
Georgia the better.

Thank you very much.


Timothy L. Gott

Resource_purist-ga: 

    First off, I wasn't able to find out what a 'LOAF' law was, but I
did some good research on Georgia laws pertaining to this subject
(Looking at other states really isn't helpful here -- Georgia has some
pretty strict statutory provisions on lotteries, promotions and
gambling -- better to stick with the source.)  Here's what I've found:


    There is some difference depending on whether or not you and the
sponsors are acting under non-profit or for-profit status.  Mostly it
has to do with how many rules you absolutely have to follow to keep
this legit.  Let me reiterate:  Georgia is _extremely_ picky about
what they consider legal.  They tend to tar everything that isn't
following the statutory framework as a 'lottery' and lotteries are
generally illegal (outside of VERY narrow circumstances).  [1]

    If you're operating as a non-profit, you're free to operate a
raffle under Georgia law.  GA ST § 16-12-22.1.   The law is pretty
specific:  "[O]nly nonprofit, tax- exempt churches, schools, civic
organizations, or related support groups; nonprofit organizations
qualified under Section 501(c) of the Internal Revenue Code, as
amended; or bona fide nonprofit organizations approved by the sheriff,
which are properly licensed pursuant to this Code section shall be
allowed to operate raffles."  [2]

    Otherwise, if you're operating as a plain-old for-profit you have
some hefty rules to follow.   Georgia State Law § 16-12-36, defines
'Promotional Contests'


     (a) A promotional or giveaway contest which conforms with the    
        qualifications of a lawful promotion specified in paragraph
(16) of subsection                                               (b)
of Code Section 10-1-393 shall not be a lottery.

     (b) Except as provided in subsection (a) of this Code section,
all promotions or promotional contests involving an element of chance
in the distribution of prizes, gifts, awards, or other items which
otherwise meet the definition of a "lottery" in this article shall be
included within the definition of the term "lottery" for purposes of
this article, unless specifically exempted by some other statute or
law. [3]

      Now you're asking, what are the magical rules one must follow to
be a promotion?  Well GA ST § 10-1-393 (the referenced statute) goes
into a whole litany of things you can't do, or what you _can_ do to
avoid doing something illegal.  Its rather daunting. I record first
the full statute, so you can read the full letter of the law without
searching.  I've then broken it down and summarized a bit.  I'm not a
lawyer, this is cursory, and I don't profess to be an expert on
Georgia law.   This is mostly just a service to make more sense of
this.

GA ST § 10-1-393  -- Unlawful Acts and Practices.  

 (16) Failure to comply with the following provisions concerning
promotions:
[DEFINITIONS SECTION -BITMAVEN]
(A) For purposes of this paragraph, the term:
(i) "Conspicuously," when referring to type size, means either a
larger or bolder type than the adjacent and surrounding material.
(ii) "In conjunction with and in immediate proximity to," when
referring to a listing of verifiable retail value and odds for each
prize, means that such value and odds must be adjacent to that
particular prize with no other printed or pictorial matter between the
value and odds and that listed prize.
(iii) "Notice" means a communication of the disclosures required by
this paragraph to be given to a consumer that has been selected, or
has purportedly been selected, to participate in a promotion. If the
original notice is in writing, it shall include all of the disclosures
required by this paragraph. If the original notice is oral, it shall
include all of the disclosures required by this paragraph and shall be
followed by a written notice to the consumer of the same disclosures.
In all cases, written notice shall be received by the consumer before
any agreement or other arrangement is entered into which obligates the
consumer in any manner.
(iv) "Participant" means a person who is offered an opportunity to
participate in a promotion.
(v) "Promoter" means the person conducting the promotion.
(vi) "Sponsor" means the person on whose behalf the promotion is
conducted in order to promote or advertise the goods, services, or
property of that person.
(vii) "Verifiable retail value," when referring to a prize, means:
(I) The price at which the promoter or sponsor can substantiate that a
substantial number of those prizes have been sold at retail by someone
other than the promoter or sponsor; or
(II) In the event that substantiation as described in subdivision (I)
of this division is not readily available to the promoter or sponsor,
no more than three times the amount which the promoter or sponsor has
actually paid for the prize.


[REQUIREMENTS SECTION -- BITMAVEN]
(A.1) Persons who are offered an opportunity to participate in a
promotion must be given a notice as required by this paragraph. The
written notice must be given to the participant either prior to the
person's traveling to the place of business or, if no travel by the
participant is necessary, prior to any seminar, sales presentation, or
other presentation, by whatever name denominated. Written notices may
be delivered by hand, by mail, by newspaper, or by periodical. Any
offer to participate made through any other medium must be preceded by
or followed by the required notice at the required time. It is the
intent of this paragraph that full, clear, and meaningful disclosure
shall be made to the participant in a manner such that the participant
can fully study and understand the disclosure prior to deciding
whether to travel to the place of participation or whether to allow a
presentation to be made in the participant's home; and that this
paragraph be liberally construed to effect this purpose. The notice
requirements of this paragraph shall be applicable to any promotion
offer made by any person in the State of Georgia or any promotion
offer made to any person in the State of Georgia;
(B) The promotion must be an advertising and promotional undertaking,
in good faith, solely for the purpose of advertising the goods,
services, or property, real or personal, of the sponsor. The notice
shall contain the name and address of the promoter and of the sponsor,
as applicable. The promoter and the sponsor may be held liable for any
failure to comply with the provisions of this paragraph;
(C) A promotion shall be a violation of this paragraph if a person is
required to pay any money including, but not limited to, payments for
service fees, mailing fees, or handling fees payable to the sponsor or
seller or furnish any consideration for the prize, other than the
consideration of traveling to the place of business or to the
presentation or of allowing the presentation to be made in the
participant's home, in order to receive any prize; provided, however,
that the payment of any deposit made in connection with an activity
described in subparagraph (B) of paragraph (22) of this subsection
shall not constitute a requirement to pay any money under this
subparagraph;
(D) Each notice must state the verifiable retail value of each prize
which the participant has a chance of receiving. Each notice must
state the odds of the participant's receiving each prize if there is
an element of chance involved. The odds must be clearly identified as
"odds." Odds must be stated as the total number of that particular
prize which will be given and of the total number of notices. The
total number of notices shall include all notices in which that prize
may be given, regardless of whether it includes notices for other
sponsors. If the odds of winning a particular prize would not be
accurately stated on the basis of the number of notices, then the odds
may be stated in another manner, but must be clearly stated in a
manner which will not deceive or mislead the participant regarding the
participant's chance of receiving the prize. The verifiable retail
value and odds for each prize must be stated in conjunction and in
immediate proximity with each listing of the prize in each place where
it appears on the written notice and must be listed in the same size
type and same boldness as the prize. Odds and verifiable retail values
may not be listed in any manner which requires the participant to
refer from one place in the written notice to another place in the
written notice to determine the odds and verifiable retail value of
the particular prize. Verifiable retail values shall be stated in
Arabic numerals;
(E) Upon arriving at the place of business or upon allowing the
sponsor to enter the participant's home, the participant must be
immediately informed which, if any, prize the participant will receive
prior to any seminar, sales presentation, or other presentation; and
the prize, or any voucher, certificate, or other evidence of
obligation in lieu of the prize, must be given to the participant at
the time the participant is so informed;
(F) No participant shall be required or invited to view, hear, or
attend any sales presentation, by whatever name denominated, unless
such requirement or invitation has been conspicuously disclosed to the
participant in the written notice in at least ten-point boldface type;
(G) Except in relation to an activity described in subparagraph (B) of
paragraph (22) of this subsection, in no event shall any prize be
offered or given which will require the participant to purchase
additional goods or services, including shipping fees, handling fees,
or any other charge by whatever name denominated, from any person in
order to make the prize conform to what it reasonably appears to be in
the mailing or delivery, unless such requirement and the additional
cost to the participant is clearly disclosed in each place where the
prize is listed in the written notice using a statement in the same
size type and boldness as the prize listed;
(H) Any limitation on eligibility of participants must be clearly
disclosed in the notice;
(I) Substitutes of prizes shall not be made. In the event the
represented prize is unavailable, the participant shall be presented
with a certificate which the sponsor shall honor within 30 days by
shipping the prize, as represented in the notice, to the participant
at no cost to the participant. In the event a certificate cannot be
honored within 30 days, the sponsor shall mail to the participant a
valid check or money order for the verifiable retail value which was
represented in the notice;
(J) In the event the participant is presented with a voucher,
certificate, or other evidence of obligation as the participant's
prize, or in lieu of the participant's prize, it shall be the
responsibility of the sponsor to honor the voucher, certificate, or
other evidence of obligation, as represented in the notice, if the
person who is named as being responsible for honoring the voucher,
certificate, or other evidence of obligation fails to honor it as
represented in the notice;
(K) The geographic area covered by the notice must be clearly stated.
If any of the prizes may be awarded to persons outside of the listed
geographical area or to participants in promotions for other sponsors,
these facts must be clearly stated, with a corresponding explanation
that every prize may not be given away by that particular sponsor. If
prizes will not be awarded or given if the winning ticket, token,
number, lot, or other device used to determine winners in that
particular promotion is not presented to the promoter or sponsor, this
fact must be clearly disclosed;
(L) Upon request of the administrator, the sponsor or promoter must
within ten days furnish to the administrator the names, addresses, and
telephone numbers of persons who have received any prize;
(M) A list of all winning tickets, tokens, numbers, lots, or other
devices used to determine winners in promotions involving an element
of chance must be prominently posted at the place of business or
distributed to all participants if the seminar, sales presentation, or
other presentation is made at a place other than the place of
business. A copy of such list shall be furnished to each participant
who so requests;
(N) Any promotion involving an element of chance which does not
conform with the provisions of this paragraph shall be considered an
unlawful lottery as defined in Code Section 16-12-20. The
administrator may seek and shall receive the assistance of the
prosecuting attorneys of this state in the commencement and
prosecution of persons who promote and sponsor promotions which
constitute an unlawful lottery;
(O) Any person who participates in a promotion and does not receive an
item which conforms with what that person, exercising ordinary
diligence, reasonably believed that person should have received based
upon the representations made to that person may bring the private
action provided for in Code Section 10-1-399 and, if that person
prevails, shall be awarded, in addition to any other recovery provided
under this part, a sum which will allow that person to purchase an
item at retail which reasonably conforms to the prize which that
person, exercising ordinary diligence, reasonably believed that person
would receive; and
(P) In addition to any other remedy provided under this part, where a
contract is entered into while participating in a promotion which does
not conform with this paragraph, the contract shall be voidable by the
participant for ten business days following the date of the
participant's receipt of the prize. In order to void the contract, the
participant must notify the sponsor in writing within ten business
days following the participant's receipt of the prize;

     Alright, now that thats out in the open, lets break this down a
little.  Definitions are pretty self-explanatory.   I will instead lay
out a roadmap of the steps, so you can show this to whomever doesn't
feel like reading the statute :-)

    [1]  Anyone given an opportunity to participate in winning the
prize MUST be given a notice (written, by statute) prior to them
travelling to pick up the prize, or attend any seminar, sales pitch or
whatnot.   The state wants to keep you from using this as an
ensarement (by the language, this is what it appears to reiterate over
and over again.  The disclosure (to the winner, or whomever) must be
clear and meaningful.  It must be conspicuous, must be understandable.

    [2]  This has to be a good-faith advertisement by the sponsor of
the product.  If you're lying, the sponsor, or those involved (the
promoter) may be held liable.  You must provide the name and
addressess of both the promoter and sponsor, if applicable.

    [3]  Its majorly illegal if you require the winner to pay
anything, short of having to come pick up the prize.

    [4]  Notice must state the Retail value of the prize, the odds of
winning the prize.  The odds must clearly be identified as 'Odds'. 
Both must be conspicuous, and must not require the participant to hunt
around to find them.

    [5]  When the participant (winner) comes to claim the prize, or
the promoter gives the prize to the winner, they must be informed if
they must endure a sales pitch or seminar.

    [6]   If there is a sales pitch, the participant isn't required to
stay in order to claim the prize.

    [7]   There is no requirement of further purchase to claim/win the
prize.

    [8]   Limitations on eligibility must be clearly stated (like when
you're having people call in, you need to say 'this prize is only open
to folks over the age of 18, etc.,).

    [9]   Substitutions are not allowed.  If you run out of a prize,
you must give a certificate and honor it within 30 days.  Otherwise,
the valid retail value must be paid.

    [10]  Sponsor must honor the voucher or certificate if prize is
not given.
    
    [11]  Geographic scope must be defined  (e.g., 'This only applies
in Georgia' or 'This only applies within 50 miles of this television
broadcast, etc' )
  
    [12]  Sponsor or promoter must furnish the names of the winners if
requested.

    [13]  Same as above, but this applies to supplying it to any
participant who asks.

    [14]  *** If you violate ANY of these provisions, you'll be
considered an unlawful lottery ****

    [15]  If a participant does not receive the item they expected to
recieve, they can complain to the proper authorities and file a civil
claim.

    [16]  If a contract is entered into by a participant, and the
promotion does not conform to this section, the contract can be
voidable by the participant within 10 days of the contest.  (Oddly
enough, it says nothing about return of the prize by a winning
participant ...)

    So my guess, is that the folks who were antsy didn't want to put
up with all the steps required to make this legitimate.  I would urge
you to contact your local sherrif and verify that there may not be a
local rule within your town or city, and find out if there is a permit
needed to be fully compliant.   (I couldn't find that information). 
Otherwise, provided you show and provide adequate amounts of
information, and remain on the up and up, the statutes seem to say
such promotions (regardless of medium) are alright.

I hope this helps.  I'm not a lawyer, and this isn't legal advice,
(hopefully) just a step in the right direction for you.   I would urge
you to contact the sherriff, or anyone else to verify local laws.


----------------
[1]  Like you, I don't really believe this is a lottery.   But for the
sake of thoroughness I've included the statute that covers lotteries: 
O.C.G.A. § 16-12-22(a)(2, 6).   Generally speaking, Georgia says any
system _not otherwise classified under law_ that involves (1) prize
(2) chance and (3) consideration is considered a lottery.   The courts
are very flexible on what is considered 'consideration.'   Some
Georgia caselaw has considered the inducement to buy (but not a
requirement to do so ) to be consideration.  Boyd v. Piggly Wiggly
Southern, Inc., 155 S.E.2d 630 (Ga.App., 1967).  The latest case to
uphold the general lottery prohibition law is Sparkman v. State, 434
S.E.2d 564 (Ga.App.,1993.)

[2]  This is about your only 'out' if you were in any way requiring
people to _pay_ to get their names in the drawing, and that includes
making people dial 900 numbers, or any kind of toll-charging service. 
"'A lottery is any scheme or **915 procedure whereby one or more
prizes are distributed by chance among persons who have paid or
promised consideration for a chance to win such prize, whether such
scheme or procedure is called a pool, lottery, raffle, gift, gift
enterprise, sale, or policy game, or by some other name.' Code s 26-
2701(d)."  This came directly from Tierce v. State, 178 S.E.2d 913,
(Ga.App. 1970).   Basically, consideration is slippery, but for the
most part it involves payment, or inducement to payment (like buying a
ticket, etc.)

[3] GA ST § 16-12-36. Promotional contests

Good luck!  

Bitmaven-GA

Search Strategy:  Very little googling today.  I used a few law
databases, such as findlaw.com (for state cases) and
http://www.legis.state.ga.us/cgi-bin/gl_codes_detail.pl?code=1-1-1
(The Georgia General Assembly Page).   I also used a few proprietary
databases, but I've included all the statutory citations and case
citations, so this should make your searching _tons_ easier.   Most of
the juicy statutory bits in georgia clump around the 16-12-20*'s
section.

---

Request for Answer Clarification by resource_purist-ga on 16 Jun 2003 11:27 PDT

Your answer would have been a very good answer if I needed information
'just' regarding what is and what is not considered a "Lottery".
Thanks for the detail. The answer you gave me was very informative and
I can tell you spent some good time in it but it was simply headed off
in a slightly wrong direction.

LOAF in the context of "Public Television" or "Public Access" stands
for Lottery Obsenity Advertising Fundraising. And it might have that
definition in regard to any kind of media in general. I say 'might'
because I'm not an expert in this area. The LOAF law foundation of
expertise was needed, I believe, to head down the appropriate path of
research. You quoted me a few things regarding Lottery Laws, but so
far nothing specific to the context of Public Television and the LOAF
laws.

The comment that was made on this question is a step in the right
direction. "You just held a drawing, right?  Heck, that's done by
radio stations every day" Now if I could get that comment tied into
the point that "Commercial Radio" law is no different than "Public
Access (nonprofit) law" then I will be set. Solid references are a
must if I'm going to build confidence to my audience.

I believe that I was pretty clear that the goal of getting this
question answered, was started with the premise that; I felt pretty
confident that this could be done when I communicated that I see the
reasoning that the facilitators used as "being a bit of a stretch" I
just simply need to know "what the limitations are concerning
give-aways (if any) that our brought by sponsors when they come on the
show." Keep in mind that this muse be in the context of Public
Television and the LOAF laws.

Once again I feel pretty confident that this can be done. I just need
to ease the facilitators minds so they aren't bouncing off the walls
thinking that the station is going to be shut down because we are in
violation of LOAF laws :-) ... Ah, show business people, so many are
so high strung.

---

Clarification of Answer by bitmaven-ga on 17 Jun 2003 20:23 PDT

resource_purist-ga: 

      I've done a bit more digging.  I think overall, I did cover most
of your question.  The problem is, you're paying $10 for what really
is a legal opinion.  This _particular_ area of law is sparse,
especially in Georgia.   That's not to say that the area can't be
figured out by a competent person in the field, but the folks at
GoogleAnswers, while competent, aren't legal professionals.    The
cases I've provided you are the cases in the field that had _anything_
to do with your subject matter.   As my first answer stated, its hard
to 'generalize' something that is very much within the State's realm,
and the state determines what is good or bad regarding gambling and
the various grey areas surrounding.

     Here's what I have found.   I warn you, it's applicable only in
the sense that a) it hasn't been overruled and b) the language of the
statute (in this case, 18 U.S.C.A. § 1304) is similar in its
definition of 'lottery' (see above).   I _know_ you're not looking for
lotteries, per se.   But the courts are fickle creatures, and they
analogize everything.  So the comparison to lotteries cannot be
avoided.   Here's the bits of the relevant statute:

§ 1304. Broadcasting lottery information

Whoever broadcasts by means of any radio or television station for
which a license is required by any law of the United States, or
whoever, operating any such station, knowingly permits the
broadcasting of, any advertisement of or information concerning any
lottery, gift enterprise, or similar scheme, offering prizes dependent
in whole or in part upon lot or chance, or any list of the prizes
drawn or awarded by means of any such lottery, gift enterprise, or
scheme, whether said list contains any part or all of such prizes,
shall be fined under this title or imprisoned not more than one year,
or both.
Each day's broadcasting shall constitute a separate offense.

[Notice, my three elements I've listed above (Prize, chance and
consideration) rear their ugly little heads again.]

      This is a Federal statute, but the similarities are at least
ones that a logical person could draw useful analogies from.


      The specific case that I found on point (and really, the only
case with similar features) is Federal Communications Com'n v.
American Broadcasting Co.  74 S.Ct. 593 (1954), a Supreme Court case,
that originated out of NY.  In FCC v. ABC, the court analyized whether
or not three 'give-away' games -- 'Stop the Music' 'What's my Name?'
and 'Sing It Again' possessed the requisite amount of consideration to
be considered a lottery.   Short answer:  The Court found that it
wasn't enough that a home viewer merely _watched_ the program.  
Consideration had to be something more (they compared it to cases
similar to the Boyd case I mentioned below -- cases where an
individual is induced to participate by entering a store and could
have the possibility to recieve a free ticket, but more likely than
not would have to pay).     To quote:


"But such cases [the actual -lottery- cases -BM] differ substantially
from the cases before us. To be eligible for a prize on the
'give-away' programs involved here, not a single home contestant is
required to purchase anything or pay an admission price or leave his
home to visit the promoter's place of business; the only effort
required for participation is listening"

     The Court said thereafter that the FCC has no real authority to
go after those give-away contests that don't meet that requisite for
consideration outlined in the statute, and that these shows were
legit, as far as they were concerned.    The Court was unimpressed
that the FCC was pursuing this like a lottery case and urged that if
Congress had a problem with it, they could amend the statute.  
"Likewise, without success, it urged Congress to amend the law to
specifically prohibit them."   Doing a perusal of the statute in
question, Utah has found it unconstitutional, but there has been no
change or removal of the law.  IT still seems valid, for all intents
and purposes.  Thus, Congress didn't care that much.

     These cases were relevant but less so than the Supreme Court
case.
  
     Clef, Inc. v. Peoria Broadcasting Co., Equity No. 21368, Circuit
Court of Peoria County, Illinois (1939).   This will be a hard to find
kinda case.  It's a case out of equity court (looks like the district
level)  from 1939.   I didn't have much information to go on, but the
Case was referenced.  If you were -really- interested, I figured
including it wouldn't hurt.


     In the Matter of Revocation of license of CS WIGO, Inc. (WIGO-AM)
Atlanta, Georgia 85 F.C.C.2d 196, BC Docket No. 78-53.   Less on
point, but relevant only in the sense that even if you violate the
laws, you won't be removed off-air.   This was a "True lottery case"
where a radio station was broadcasting illegal numbers accross the
airwaves.  Original revocation was reduced to a $10k sanction.

     There is no information on "public access" television relating to
give-away programs that I was able to find in any degree of law
review, caselaw or treatise.   That isn't to say it doesn't exist.   I
just don't have access to it.   This area of law is fairly slim.   I
think the statutory breakdown I provided listing what you need to do
to be in compliance is a good start.   Contacting a sherriff or
lawyer, or someone entrenched in Georgia law would _also_ be a good
thing.   This should be a good jumping-off point for you.    I hope
this revised information helps, along with my clarifications.


Bitmaven-ga

I left this alone for a long time because I didn't want to address it
while I was unhappy with the results and the "You only paid $10"
comment. At this point it's been three years and I am no longer in
need of the answer :-) "journalist-ga"'s comment did get me in the
right direction at the time where I was able to at least mildly
address the issue myself.

I gave an extra star because of the effort, I appreciate all of the
time and that was put into this and am willing to let you keep the
money just because of the work. However I think it would have been a
better idea to pass the question along to someone else (like
"journalist-ga") who was willing to at least begin a basic easy to
understand explanation that I'm sure would have headed in the right
direction if journalist-ga had more time.

And I'm not going to overlook the possibility that my lack of
understanding of Georgia law might be to blame here. However the just
of the answer that I seem to get from bitmaven was ""There isn't a
good answer so here are several things that get "close enough" so I
can justify taking the ten dollars"". It's ok, keep the ten. I'm not
trying to upset you but rather have you take a loving reflective look
at what your motivation was for answering the question.

I would rather pay someone who isn't working "for the money" than pay
someone who is largely motivated by the money. This seems evident by
the work that is produced. Though, once again I am not side-stepping
the very real possibility that I could be wrong.

Greetings Timothy:

MY UNEDUCATED GUESS: The primary definition for lottery from the
online Miriam Webster dictionary is "a drawing of lots in which prizes
are distributed to the winners among persons buying a chance."  The
operative phrase I see for lotteries and law is "buying a chance." 
IMHO, only if you charged all callers a fee to enter their names in
the drawing for the player could your giveaway be termed suspect of
breaking a lottery law.  You just held a drawing, right?  Heck, that's
done by radio stations every day.

I don't have the opportunity to answer your question at present due to
my schedule but I wanted to leave this quick comment/opinion.  I'm
hoping one of our legal Researchers can provide you with specific
examples you seek.

Best regards,
journalist-ga