September 20, 2011
Partner Gonzalo E. Mon was quoted in the Mobile Marketer article, "Fox, NBC Barred From Text-To-Win Sweepstakes As Part of Settlement." The article discusses how Fox, NBC and other media companies will be barred from offering certain types of text-to-win sweepstakes as part of the settlement for a class action lawsuit in California. The lawsuit stems from several years ago when the companies involved with text-to-win sweepstakes for American Idol, The Apprentice and other reality shows allegedly violated gambling and lottery laws.
"Text-to-win sweepstakes are becoming an increasingly popular marketing strategy with many companies, though companies may incorporate the mobile component in different ways," said Mr. Mon.
"The plaintiffs in the California case argued that the sweepstakes were unlawful, notwithstanding the free method of entry, because individuals didn't get anything of value for the money they paid to enter, other than the opportunity to win prizes," he continued. "The lawsuit and settlement highlights that there are still a number of risks associated with text-to-win sweepstakes . . . To reduce the risks of challenge, companies that offer text-to-win sweepstakes with premium fees should consult with their legal teams early in the planning process. At a minimum, each sweepstakes should include a free method of entry and consumers who pay premium fees should get something of value for those fees. Companies that offer those types of sweepstakes should work closely with their legal counsel to see if they can avoid the issues that led to this case."