Understanding compliance for SMS sweepstakes and contests

You will learn

Learn about the requirements to run an SMS sweepstakes program in the US and Canada, as well as free draws and prize competitions in the UK.

Sweepstakes, contests, and free draws can be a great tool to grow your list quickly. However, they are subject to state and federal laws as well as mobile carrier requirements. Klaviyo only supports sweepstakes and contests run via approved short codes in the United States and Canada. Free draws and prize competitions that meet governmental standards are allowed in the UK without Klaviyo or carrier review.

Before you begin

While Klaviyo performs a general review of program terms and opt-in workflows as part of the short code application process, upstream providers and mobile carriers ultimately approve or reject terms and disclosures at their discretion.

Please note:

• Carriers limit sweepstakes to short codes in the US and Canada.
  • You cannot run an SMS sweepstakes program with a toll-free number, long code, or branded sender ID in the US and Canada.
• Paid-entry-only games of chance (lotteries) are not permitted through Klaviyo in the UK. Free draws and qualifying prize competitions are allowed.
• It’s recommended to submit sweepstakes requests at least 2 months in advance.
  
  • It takes around 4 to 8 weeks for the review process.
  • Once your brand is approved for sweepstakes you do not need to re-apply each time you launch a new sweepstakes or contest.

Types of contests

Sweepstakes

Sweepstakes are a form of contest characterized by an element of chance and the awarding of a prize. Winners are drawn at random. No consideration, such as a purchase or payment, may be required to enter.

Sweepstakes are subject to state and federal laws, as well as mobile carrier requirements. Mobile carriers review sweepstakes programs individually, and reserve the right to approve or reject them at their discretion.

An example of a sweepstakes is an SMS sign-up form or sign-up page that collects contest entries and awards a gift at random to 1 or more subscribers. The entry must be free, with the sweepstakes rules page and mobile terms clearly displayed on the sign-up form and website.

Free draws

A free draw is a type of contest where participants are entered into a drawing for a chance to win a prize. Free draws are a UK designation similar to sweepstakes in the US and Canada. Free draws are supported on all UK sending numbers. Klaviyo does not support lotteries in the UK.

Notable examples of free draws include text-to-win campaigns with no element of skill to enter.

Prize competitions and games of skill

A prize competition is where the outcome is determined by the participant’s skill, judgment, or knowledge. An example of this type of contest includes a pay-to-enter quiz competition with multiple rounds of questions, where entrants are eliminated for wrong answers and the sole winner takes the prize for answering all questions correctly.

SMS compliance for US and Canadian sweepstakes

Before submitting a US or Canadian sweepstakes or contest for approval, meet the following criteria:

• Have an active short code or be applying for one.
• Make your sweepstakes or contest rules available online.
• Get explicit consent to send SMS about your sweepstakes or contest. Entering a contest or providing an email address does not by itself give consent to SMS marketing.
• For US sweepstakes, use double opt-in when collecting SMS consent and include sweepstakes disclosures in your mobile terms and privacy policy. See the US short-code program requirements.
• Ensure that your mobile terms include program information about sweepstakes.
  • You should confirm that your mobile terms meet the necessary requirements with your legal team.
• Ensure calls to action (CTAs) like sign-up forms, emails, and website banners include information about sweepstakes where applicable.
  • Location of the rules must be listed near the CTA (e.g., a link to the sweepstakes/contest rules page).
  • Mobile terms must mention sweepstakes or contests (e.g., promotional messages, cart reminders, sweepstakes and/or contest promotions).

Note that meeting these minimum requirements does not guarantee carrier approval.

If you are applying for a new short code, include your sweepstakes program in your application. Follow the short code application process. If you already have a short code approved for other message types, adding sweepstakes requires a program amendment and carrier approval before you start sending.

Regional contest requirements

United States

The details of the official rules can vary depending on the nature of the promotion, but most states generally require that both contest and sweepstakes rules are available via the company website and clearly state:

• Free method of entry
• Effective dates of the sweepstakes
• Eligibility requirements (e.g., age) and exclusions (e.g., family members of sponsor employees).
• The start and end dates (and times and time zone if applicable) of the entry period
• A list of all states where participation in the sweepstakes is available
• A complete description of the nature and number of prizes to be awarded and their approximate retail value (ARV)
• The details regarding prizing offered to contest winners, draw dates, defined contest period, number of prizes, any regional allocation of prizes and chances of winning must be included in the application form for all programs with a contest element.

For other contests, most states also require:

• The criteria by which the winner is to be selected.
• The method for determining prize winners if a tie occurs. Otherwise, some states require that both winners receive the same value of prize.

Canada

Sweepstakes are referred to as contests in Canada, and requirements for approval by Canadian carriers slightly vary.

The minimum requirements are:

• All contests must offer a “no purchase necessary” method for participating.
• Contest rules and regulations must abide by all applicable local, provincial, territorial, and federal laws, and they must be available on request to any wireless carrier before the program launch.
• The application form for all programs with a contest element must include the following:
  • Details on prizes being offered, including their number, approximate value, and any regional allocation.
  • Chances of winning.
  • Defined contest period.
  • Draw dates.
• No prizes specific to an individual wireless carrier may be offered (e.g., “win an Acme TV bundle for a year”).
• Contest winners are to be selected and prizes distributed on the basis of skill or on a random basis.

Organizations running contests are also encouraged to refer to the following Canadian government resources:

• Competition Bureau enforcement guidelines for promotional contests
• Québec Régie des alcools, des courses et des jeux

United Kingdom

The United Kingdom also has legislation around the types of contests that can be run and their requirements.

In England, Wales, and Scotland, free draws and prize competitions do not need a Gambling Commission license if they meet the requirements of the Gambling Act 2005. If they do not, they may be illegal lotteries. Klaviyo does not support lotteries in the UK.

The following requirements apply to free draws and prize competitions.

Free draws

Free draw campaigns can make all entries free or offer both a paid and a free route of entry. “Free” means the normal cost of the communication method, with no additional entry charge; for example, first- or second-class post can qualify, but special delivery does not. The Gambling Commission does not approve free draws, but it may raise concerns and request contest rules and additional information.

If you run a free draw with a paid entry route, you should treat free and paid entrants equally. Make sure that:

• People can choose to take part without paying.
• The free entry route must be no more expensive and no less convenient than the paid route, and must be available at the normal communication rate.
• Free entry routes must be promoted and displayed at the same level as a paid route.
• The system that determines prizes should not recognise the paid and free entry routes as different.
• Sufficient terms of service covering eligibility must be publicly accessible.

Prize competitions and games of skill

The organizers of a prize competition must be able to show that the skill, knowledge, or judgment required will:

• Discourage people wishing to enter from doing so because it is too difficult.
• Prevent a portion of those who enter from winning a prize.

For example, multiple choice questions, or questions that allow a second chance if your first answer is wrong, rarely meet these criteria.

The rules on what constitutes a sufficient level of skill for a service to be determined as a prize competition are not clearly defined, so prize competitions are much less common.

Additional resources

Short code application reference

Basics: SMS compliance

How to target contest entrants with flows