No purchase necessary and AMOE — when chance promotions need a free entry path (and how skill contests differ)

Chance promotions: purchase-required is the illegal shape

The FTC’s small-business advertising FAQ states the rule in one sentence: “Sweepstakes-type promotions that require a purchase by participants are illegal in the United States.” The same page notes that the U.S. Postal Service and the FCC also enforce federal contest and prize-promotion rules, and that states may add disclosures, licensing, or a bond. [1]

FTC consumer guidance is the plain-language version: real sweepstakes are free and by chance; it is illegal to ask someone to pay or buy something to enter or to increase the odds of winning. Sweepstakes mailings must say you do not have to pay to participate. The same page treats “pay a fee for taxes, shipping, processing, or customs to get your prize” as a prize-scam sign — real prizes are free. [2]

The Postal Inspection Service’s consumer guide is equally blunt — “No Purchase Necessary — It’s the Law!” — and describes a sweepstakes as prizes awarded by chance with no purchase or entry fee required to win. Equal chance whether or not the person orders is the point of the disclosure. [7]

Florida writes the same prohibition from the operator side. Fla. Stat. § 849.094(2)(e) makes it unlawful to require an entry fee, payment, or proof of purchase as a condition of entering a game promotion. FDACS’s operator FAQ repeats that list and notes that FDACS will not certify that a particular game promotion is legal — accepting a filing is not an endorsement. [6] [10]

New York’s chance-promotion filing statute is built on the same premise. GBL § 369-e applies to prizes “as determined by chance, without any consideration therefor.” The Department of State’s registration page lists “require no consideration for entering” as one of the four facts that make a game of chance registerable. If you required a purchase, you are not looking at a missed $5,000 filing. You are looking at the illegal lottery pattern. [9]

What equal-dignity AMOE actually means

Practitioner writing treats AMOE as the conservative way to remove consideration from a chance promotion. Holland & Knight’s 2022 alert: add a free method of entry so people who skip the purchase — or the social tasks that may count as consideration — can still enter. A common example is a mailed 3-by-5 card; another is an online form that requires nothing more than contact information. Courts have treated a mailed card as a token effort, not consideration. That is a generalization, not a holding about your facts. [3]

Equal dignity is the part brands skip. AMOE entrants’ odds must match paid or effortful entrants. Procedures that restrict or deter free entry — hidden URLs, slower processing, fewer entries, a mail-in that arrives after the draw — reintroduce the consideration problem and can look like an unfair or deceptive practice. [3]

RIT’s guidance makes the same point on “do something to enter” promotions that are not a checkout. Filling out a survey can be consideration because of the time invested. The official-rules fix they describe is an alternate free method so a person can enter the drawing without doing the survey at all. [5]

AMOE belongs in the official rules, not only in a footer. Method of entry, the free path, limits per person, and “a purchase will not improve the chances of winning” are sweepstakes-rules items on RIT’s list. [5] See Official rules checklist for a skill contest for the skill-contest counterpart.

Bad AMOE, why it fails, safer mechanic

General patterns. None of these are case studies.

Purchase-required random giveaways

The risky Shopify pattern is: buy to be entered, winner drawn at random, no free path that a person can actually use. That is prize + chance + consideration. Jones Day and Holland & Knight both use that three-part test. [4] [3]

Variants that fail the same way: “spend $50 to unlock a raffle ticket”; “order today for a bonus entry”; a product-page widget that only loads after checkout; a comment giveaway limited to people who post a receipt. Adding “no purchase necessary” in six-point type without a working AMOE does not fix the structure.

Instagram “follow and tag to win” is usually a chance promotion with social-action consideration, not a purchase — and it has its own platform-policy problems. That is Instagram giveaway rules.

If you call people about a prize promotion

The FTC’s Telemarketing Sales Rule adds disclosures that do not appear in a product-page caption. If a seller or telemarketer offers a prize promotion, it must tell the person, clearly and conspicuously, before they pay: [8]

• The odds of winning — or, if odds cannot be calculated in advance, that fact plus the factors used.
• That they can participate or win without buying anything or making any payment, and that a purchase or payment will not increase the chances of winning.
• How to enter without paying — instructions, or an address or local or toll-free number for the no-purchase path.

The same FTC guidance is explicit: if a purchase or payment is required for eligibility, it is not a prize promotion; it is a lottery, which is generally unlawful under federal and state lottery laws. [8] The small-business FAQ also notes TSR disclosures when a contest or promotion involves telephone calls. [1]

How skill contests differ — and how they do not

A skill contest tries to remove chance instead of removing consideration. Winners are ranked by disclosed performance. If that is true end to end — including ties — the promotion is not a sweepstakes, and the AMOE analysis for chance promotions is the wrong template. [3]

It is still the wrong move to treat “no AMOE needed” as “purchase-required skill play is fine everywhere.” The first article in this series is explicit: a skill contest does not get a free pass on consideration just because scoring is involved. Some states are stricter about paid or effortful entry into contests than others. Skill contest vs sweepstakes walks through prize, chance, and consideration. [3] [4]

FTC consumer guidance notes that some skill contests can ask people to pay to play — and immediately warns that those promotions can be structured so contestants pay repeatedly and never win. That is a consumer warning, not a recommendation that brands charge for entry. [2]

Hybrid designs put chance back. Draw among the top ten scores, raffle among everyone who “qualified,” or add a bonus random prize for all players, and you are running a chance promotion again. If entry also required a purchase or substantial effort, the lottery elements can all be present. [4]

Not a free pass

Removing chance does not automatically remove Florida, New York, or Rhode Island filing analysis, platform rules, tax reporting, or advertising-law duties. Those statutes are written around chance; regulators can still read “contest” broadly, and a leaked draw puts you back inside them. [6]

If your promotion is a sweepstakes, build a real AMOE and write official rules that match it. If it is a skill contest, finish with skill and publish criteria that match the live mechanic. Do not mix the two and hope the disclaimer covers the gap.

Contest.Zone is a B2B example of the skill path: first-party email, accuracy plus server-measured speed, no random draw, no purchase to play. Use it only as an illustration. Counsel who knows your facts still has to say whether the promotion you actually run is lawful where you accept entries.