Would This Be Considered a Lottery?

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Question:

We are wanting to run a promotion for the launch of a new employee website to encourage employees to bank at our bank. The promotion will consist of winning $50 gift certificates. Employees that currently have accounts and employees that open accounts during promotion would be eligible for drawing. Would this be considered a lottery?

Answer:

Yes. Having an account is "consideration."

The term “lottery” includes any arrangement whereby three or more persons (the “participants”) advance money or credit to another in exchange for the possibility or expectation that one or more but not all of the participants (the “winners”) will receive by reason of their advances more than the amounts they have advanced, the identity of the winners being determined by any means which includes—
(A) a random selection;
(B) a game, race, or contest; or
(C) any record or tabulation of the result of one or more events in which any participant has no interest except for its bearing upon the possibility that he may become a winner.

This is something John and I discussed at length in our recent webinar on "Freebies, Bonuses & Contests." You can find it in the Banker Store.

First published on BankersOnline.com 1/21/08