Marketers take note – Governor Arnold Schwarzenegger (R-Calif.) recently approved the amended version of the California Omnibus Sweepstakes Bill (Senate Bill 1400).  This bill amends California's existing sweepstakes law, Section 17539.15 of the California Business and Professions Code, and imposes new rules and disclosure requirements for sweepstakes and related solicitation materials.  The bill becomes effective January 1, 2009.

Requirements

Essentially the bill provides that marketers of sweepstakes must include certain disclosures in sweepstakes entry materials and related advertising, or in solicitation materials providing information about sweepstakes.  The aim of these new requirements appears to be to prevent deceptive advertising related to the promotion of sweepstakes within the state of California.  Specifically, the law requires the following:

• The language “NO PURCHASE OR PAYMENT NECESSARY” must be set out in a separate paragraph in the official rules.  The statement should be printed in all capital letters, in contrasting typeface, and it must not be smaller than the largest typeface used in the text of the rules. If the official rules do not appear on the marketing materials, the “NO PURCHASE OR PAYMENT NECESSARY” message must appear on the entry order device included therein. 

• The date of determination of the final winners must be disclosed in the official rules.

• It prohibits a sweepstakes sponsor from charging a fee as a condition to obtaining information about a prize or sweepstakes.

The bill also prohibits several different disclosures that are commonly associated with solicitations sent via the mail or email:

• It prohibits falsely representing that a person has been “specially selected” in connection with a sweepstakes.

• It prohibits falsely representing that the person receiving the offer has received any special treatment or personal attention from the sponsor or any agent of the sponsor.

• It prohibits falsely representing that a person is being notified a second or final time about his or her opportunity to receive or compete for a prize.

• It prohibits representing or implying that a prize notice is urgent unless there is a limited time period in which the recipient must take some action to claim, or be eligible to receive, a prize, and the date by which that action is required is clearly and conspicuously disclosed in the body of the solicitation materials.

• It prohibits representing that a solicitation has been authorized or approved by the government, or approved by any court, official or agency of the United States or any state, or by any lawyer, law firm or insurance or brokerage company; or creating a false impression as to the source, authorization, or approval of the solicitation.

Arent Fox will be monitoring the interpretation and enforcement of the amended law.  If you have questions regarding the California Omnibus Sweepstakes Bill, please contact:

Anthony V. Lupo
lupo.anthony@arentfox.com
202.857.6353

Sarah L. Bruno
bruno.sarah@arentfox.com
202.775.5760