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#2281720 - 03/01/23 04:18 PM lottey? $0 to enter, but pay to enter event
needHELP! Offline
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Joined: Jan 2013
Posts: 47
We are a state non-member FDIC bank, so I know we are to follow these rules:
https://www.fdic.gov/regulations/laws/rules/1000-2200.html

Would the following be considered a lottery, and prohibited for the bank to participate in or advertise?
The Chamber of Commerce holds a local event, open to anyone, but admission to the event is $5 per person. The bank is going to have a drawing where people can register at the event for a chance to win a $500 gift card. Registration for the $500 gift card is open for anyone (over the age of 18) attending the event. The entrant does not have to pay to enter, and they do not have to be a bank customer.

Because the entrant has to pay $5 to enter the gate to be able to enter the drawing, and then there is a chance to win, and a prize valued at more than the amount advanced ($5), would this be considered a lottery that we should not take part in or advertise?

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#2281792 - 03/02/23 04:58 PM Re: lottey? $0 to enter, but pay to enter event needHELP!
Dan Persfull Offline
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Bloomington, IN
So persons not attending the event cannot register for the give-away at any of the bank's branches. IMO that makes it a lottery.
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#2281906 - 03/07/23 01:45 PM Re: lottey? $0 to enter, but pay to enter event needHELP!
SteveDave Offline
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Joined: Aug 2021
Posts: 124
I agree with Dan. Seems like a lottery to me.

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#2281909 - 03/07/23 02:41 PM Re: lottey? $0 to enter, but pay to enter event needHELP!
needHELP! Offline
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Joined: Jan 2013
Posts: 47
Thank you both for responding. Have a great day!

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#2282115 - 03/10/23 06:00 PM Re: lottey? $0 to enter, but pay to enter event needHELP!
Luv2run Offline
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Joined: Jan 2015
Posts: 610
Is this a lottery?: Customers who deposit $60 (12- $5 deposits) into a savings account is entered into a quarterly drawing for $100.00 gift card. This is only open to customers.
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#2282116 - 03/10/23 06:04 PM Re: lottey? $0 to enter, but pay to enter event needHELP!
raitchjay Online
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Joined: Oct 2009
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OK
Sounds like a lottery to me.
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#2282118 - 03/10/23 06:13 PM Re: lottey? $0 to enter, but pay to enter event needHELP!
BrianC Online
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BrianC
Joined: Nov 2004
Posts: 6,694
Illinois
The American Savings Promotion Act passed in December 2014 legalized "prize-based savings accounts" where you can offer this type of promotion provided that the only consideration given is depositing funds into a savings account.

I encourage you to have legal counsel review the text of the law and compare it to your proposed promotion to ensure that it does not have any prohibited conditions.

https://www.congress.gov/113/plaws/publ251/PLAW-113publ251.pdf
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#2282193 - 03/13/23 08:03 PM Re: lottey? $0 to enter, but pay to enter event needHELP!
Andy_Z Offline
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The ASP would still require rules and the bank should have predefined guidance, training and specific rules to follow. It sounds like the bank may be close to meeting the intent of the ASP, but is this a lucky coincidence or planned? I haven't seen any banks that used this but there were some, that's why the law was created - some banks were doing it according to state laws.
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#2282582 - 03/23/23 06:37 PM Re: lottey? $0 to enter, but pay to enter event needHELP!
Luv2run Offline
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Joined: Jan 2015
Posts: 610
Thank you all for your response! I was thinking pretty much as you all were. Unless its a Savings Promotion Incentive with a deposit of funds, it would look like a lottery.

I haven't had any luck in determining if the Savings Promotion Incentive is legal in my state. I know the FDIC allows it, but still trying to figure out the state standing.

Thanks
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