Puerto Rico Liberalizes Sweepstakes Law

The Sweepstakes Regulations issued by the Department of Consumer Affairs on October 27, 2009 remove many of the hurdles to offering a chance promotion in Puerto Rico. With these changes, the Department of Consumer Affairs is seeking to encourage sponsors of chance promotions offered throughout United States to also include Puerto Rico in their promotions. The new Regulations replace the existing regulations which were effective February 22, 2004.  Among other things, the new Regulations

  • eliminate the requirement that the official rules and game pieces (for instant win games) be certified by a Notary Public in the Commonwealth;
  • recognize posting of the official rules on an Internet website as satisfying the publication requirement (formerly newspaper, radio or television publication was required);
  • eliminate the Spanish-language requirement;
  • allow sponsors to make all taxes (including excise taxes) the winner’s sole responsibility;
  • allow for contacting potential winners by means other than certified mail, if specified in the official rules;
  • allow for less than (30) days from notification for potential winners to claim their prize, if specified in the official rules;
  • allow sponsors to use “commercially reasonable” methods to select an alternate prize winner, taking into account the nature of the prize (e.g., event tickets);
  • recognize the ability of sponsors to offer trade promotions to their employees which are not open to the general public;
  • define “consideration” specifically in terms of money (not store visits or other forms of “effort” consideration).

In considering the above, several cautions should still be borne in mind. First, the Regulations retain the requirement that a sponsor petition the Department before modifying, suspending or cancelling a chance promotion offered to Puerto Rico residents. A sponsor still cannot take such actions unilaterally. Secondly, as in the past, should a sponsor decide to exclude Puerto Rico residents from its chance promotion but then fail to clearly inform Puerto Rico residents of this exclusion, the sponsor must honor prize claims from Puerto Rico residents. Lastly, while the Regulations do not require the official rules or advertising to be in Spanish, this is still strongly recommended as Spanish is the principal language of the Island.