Sweepstakes, which are legal, are distinguished from lotteries in one, and only one, respect: They cannot require the giving of something of benefit (known as "consideration"), for example the payment of money or the expenditure of substantial time or effort by the consumer that results in a direct benefit to the sponsor, as a prerequisite of entry. Sponsors can remove the element of consideration for sweepstakes (typically entered by purchasing a product), by offering an alternate free means of entry (such as an 800 number to call or a 3x5 card to mail), as long as those using the free alternative are treated on an equal basis with those who pay to enter. The alternate means of entry must be clearly and conspicuously disclosed in all advertising for the sweepstakes.

These basic rules on keeping sweepstakes legal, are only the starting point in determining whether sweepstakes advertising directed to children meet the more stringent requirements of CARU's Self-Regulatory Guidelines for Children's Advertising (the Guidelines). The basic premise of the Guidelines is that children, because of their age and inexperience, are more credulous and therefore need more protections than adults. Sweepstakes promoters must therefore use common sense in dealing with a child audience. For example, while it might be sufficient for a sweepstakes advertised to adults to disclose the alternate means of entry in mice type in a magazine or other printed advertisement (and CARU takes no position on the issue of sweepstakes advertising to adults), such a disclosure would clearly not suffice in a sweepstakes advertised to children. The necessity of having clear disclosure that no purchase is necessary cannot be overstated. While adults might look for a free method of entry, children are more likely to think that the only way to enter is to purchase the sponsor's product, especially when the product is candy or other low cost items. It is important to remember that if the fact that no purchase is necessary to enter is not clearly and conspicuously disclosed so that a child will understand the message, the sweepstakes is an illegal lottery.

The Guidelines, which take into consideration the developing ability of children to distinguish fact from fantasy and truth from hype, wisely recommend clear disclosure to the child of what prizes are offered and the likelihood that a child has of winning a touted prize. Thus, if a sweepstakes advertisement depicts prizes of $5, $100 or $500 and a grand prize of a million dollars, but the large majority of the prizes actually awarded are worth one dollar or less, it may not be sufficient disclosure to state that "Many will enter, hundreds will win." Similarly if the overwhelming majority of prizes are a subscription to an unknown magazine advertising the sponsor's product, it is not sufficient to state, "Many will enter, few will win" if there is only one grand prize of a trip to Los Angeles. Another problem CARU has encountered in this area is the omission of clear disclosure of the number of prizes offered. While some sweepstakes offer only one grand prize, others offer four or five. CARU thinks it is best to indicate the number of grand prizes.

Correspondingly, while CARU does not believe that a sponsor must depict every prize offered, it does recommend that if the overwhelming majority of prizes are of much lesser value than the advertised prizes, the advertisements should both picture and disclose in writing (or in the case of broadcast advertisements, in oral disclosures) the lesser-valued prizes and the general number of those prizes to be awarded. For example, an advertisement could state, "You could win the grand prize of a trip for two to Japan, or one of thousands of yo-yos."

There can be situations in which the type and number of prizes need not be as fully disclosed in the advertising as suggested above. In several cases over the past few months CARU has come across sweepstakes for which print and television advertising direct kids to Websites, both to obtain information about entering and to enter, with no purchase involved in the promotion. In those instances where a visit to the Website is a necessary prerequisite to entering, CARU has considered it sufficient if the prize disclosures are clear and unavoidable before the child enters.

The above-mentioned examples are not meant to be proscriptive, and are offered as a resource, not a directive. In dealing with children, one must always try to put one self in the child's place and remember that a child is even more likely to believe that he or she will win the grand prize(s), or that all prizes are big ones, than even the most gullible adult. The best guidance is probably to use common sense and make sure, as the Guidelines specifically require that,

"In advertising sweepstakes to children, care should be taken not to produce unrealistic expectations of the chances of winning, or inflated expectations of the prizes to be won."

CARU notes that it has recently been aware of an increase in the number of sweepstakes offered to children. Children enjoy sweepstakes, and there is no reason not to welcome their increased presence. There is every reason, however, to be careful in their execution, so that they do not run afoul of the law or CARU's Guidelines