Earlier this month, Stephen Barth and Hospitalitylawyer.com hosted the most recent installment of their successful hospitality law conference held each February in Houston. This year’s conference saw attendance return to pre-recession levels with representation from many of the in-house legal departments of the largest national and international hotel operators. The conference dedicated the first day to three all-day pre-conference boot camps on real estate, privacy / PCI compliance and the unique issues faced by the restaurant and lodging in-house lawyer. I sat through the real estate presentations, which although a little slow at times (you can only define REVPAR so many times), did a reasonable job of summarizing the variety of issues associated with the development, purchase, sale and management of hospitality properties in one coherent presentation. Ruth sat through the privacy / PCI discussion and found it very informative. The second day was filled with a wide variety of topics – from alcohol compliance, to sweepstakes, to franchise negotiations, to receiverships to tips – in one of four breakouts dedicated to food & beverage, lodging, human resources and loss prevention. The highlight of the third and final day was the annual hospitality case update.
Greetings from an unusually cold Houston, location of the 2011 Hospitality Law Conference, sponsored by Hospitalitylawyer.com. I attended a number of interesting sessions over the course of two and a half days including the one that is the topic of this post: legal concerns that arise with holding contests and sweepstakes that result in the award of prizes.
No doubt you’ve seen advertising for these kinds of promotions: “Submit your favorite photo of a stay at our hotel and win a free night!” “Leave your business card for our monthly drawing and win a chef’s menu dinner with wine pairings for 2!” “After your cucumber eye treatment, enter your name for a chance to win a shiatsu massage with reflexology finisher!” Contests and sweepstakes are immensely popular marketing tools throughout all retail markets, including hospitality. I myself have shed business cards all over Seattle, chasing dreams of chic meals taken at funky, retro hotels (with free wi-fi). Contests and sweepstakes can be as simple as dropping a card in a fishbowl or as complicated as shooting, editing and submitting a polished six-minute animation short to be judged in a “contest of skill.”
A word on terminology: the speakers defined a sweepstakes as a promotion in which prizes are awarded by chance versus a contest (or contest of skill) in which entrants must perform an action—answer a trivia question, write an essay, paint a picture—in order to be judged for a prize. Prizes in contests are based on skill and not luck.
The primary focus of the session yesterday was the importance of making sure all sweepstakes and contests stay on the right side of the line that separates a fun and useful marketing tool from an un-fun, illegal gambling operation (lottery). Every state regulates gambling, games of chance, lotteries—in short, if you aren’t the government, or aren’t licensed by the government, don’t run a lottery.
Greg Duff founded and chairs Foster Garvey’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.