2005 Texas Business & Commerce Code CHAPTER 45. SWEEPSTAKES
BUSINESS & COMMERCE CODE CHAPTER 45. SWEEPSTAKES§ 45.001. DEFINITIONS. In this chapter: (1) "Catalogues" means promotional booklets listing merchandise for sale that are at least 24 pages long, have a circulation of at least 250,000, and either: (A) require customers to go to a physical location to purchase the advertised items; or (B) are published by a company that derives more than 50 percent of its total gross revenue from sales occurring at physical locations. (2) "Conducting" a sweepstakes means distributing any material that promotes a sweepstakes, describes the prize or prizes, states one or more of the sweepstakes rules, includes any current or future opportunity to enter the sweepstakes, or provides any method for the recipient of the material to obtain additional information about the sweepstakes. (3) "Credit card" means: (A) a card that, if covered by Texas law, would be a lender credit card, as defined by Section 301.002, Finance Code; or (B) a card that, if covered by Texas law, would be a lender credit card under Section 301.002, Finance Code, except that the obligations under the card are payable in full each month, not deferred, and no finance charge is assessed when the obligations are paid. (4) "Debit card" means a card offered by an institution whose deposits are insured by the Federal Deposit Insurance Corporation or by another agency, corporation, or instrumentality chartered by the United States government. (5) "Imply" means all methods and means by which an implication can be conveyed, including a statement, a question, a request, conduct, a graphic, a symbol, lettering, coloring, font size, font style, or formatting. (6) "Magazines" and "newspapers" mean publications: (A) in which more than 40 percent of the total column inches in each issue consist of advertising space purchased by companies other than the publisher, its affiliates, and the vendors for any of them; and (B) for which more than 50 percent of the total number of copies distributed of each issue go to customers who paid for the copy. (7) "Sweepstakes" means a contest that awards one or more prizes based on chance or the random selection of entries. Added by Acts 2001, 77th Leg., ch. 1119, § 1, eff. Nov. 1, 2001. Renumbered from V.T.C.A., Bus. & C. Code § 43.001 by Acts 2003, 78th Leg., ch. 1275, § 2(4), eff. Sept. 1, 2003. § 45.002. OFFENSES. A person conducting a sweepstakes through the mail may not: (1) require an individual to order or purchase a good or service, or promise to purchase a good or service in the future, to enter a sweepstakes; (2) automatically enter an individual in a sweepstakes because the individual ordered or purchased a good or service or because the individual promised to order or purchase a good or service; (3) solicit business using an order form or purchasing mechanism that has any role in the operation of a sweepstakes; (4) use a mechanism for entering a sweepstakes that: (A) has any connection to ordering or purchasing a good or service; (B) is not identical for all individuals entering the sweepstakes; and (C) does not have printed on the entry form in a font size at least as large as the largest font size used on the entry form the following language: "Buying Will Not Help You Win. Your chances of winning without making a purchase are the same as the chances of someone who purchases something. It is illegal to give any advantage to buyers in a sweepstakes."; (5) solicit an individual to enter a sweepstakes by invitation or other opportunity and allow the individual to choose or indicate the preferred characteristics of a prize to be awarded in the sweepstakes, unless those choices: (A) are made on the sweepstakes entry form; and (B) do not appear on and are not connected in any way to an order form or other purchasing mechanism; (6) offer through the mail any nonsweepstakes prize, gift, premium, giveaway, or skill contest during the 30-day period immediately following the last date on which the person conducted a sweepstakes through the mail; (7) offer through the mail any opportunity to enter a sweepstakes during the 30-day period immediately following the last date on which the person conducted a sweepstakes through the mail; (8) ask an individual for any information or any action by that individual that would be consistent with the individual winning a sweepstakes prize, unless the individual has won a sweepstakes prize; (9) provide an individual who has not yet won the sweepstakes with any document or other item that simulates any event, circumstance, or condition connected with being the winner of the sweepstakes; (10) send material accompanying or relating to a sweepstakes or an offer to enter a sweepstakes that states or implies that an individual must comply with a restriction or condition to enter the sweepstakes, unless all individuals entering the sweepstakes are required to comply with the identical restriction or condition; (11) use a scratch-off device or any other game piece that suggests an element of chance or luck to convey information about a sweepstakes or an offer to enter a sweepstakes; (12) send material accompanying or relating to a sweepstakes or an offer to enter a sweepstakes that: (A) states or implies that an individual's chances of winning a prize in the sweepstakes are raised, lowered, or different in any way because of a factor or circumstance that has no relation to the manner in which a winner of the sweepstakes is selected; (B) states or implies that a winner of a sweepstakes prize will be selected at a time or place or in a manner that is different from the actual time or place at which or manner in which a winner is selected; (C) states or implies falsely that the individual receiving the advertisement has received any special treatment or personal attention from the offeror of the sweepstakes or any officer, employee, or agent of the offeror of the sweepstakes; (D) states or implies that an individual who orders or purchases a good or service will receive a benefit in the sweepstakes or be treated differently in the sweepstakes compared with an individual who did not order or purchase a good or service; (E) states or implies that an individual who does not order or purchase a good or service will suffer a disadvantage in the sweepstakes or be treated differently in the sweepstakes compared with an individual who ordered or purchased a good or service; or (F) states that the recipient of the material: (i) is a winner if the recipient is not a winner; (ii) may be a winner; (iii) will be a winner if certain conditions are met or if certain events occur in the future; (iv) may be or will be among the group from which a winner will be selected; or (v) has in any way a better chance than another individual of being chosen as a winner; (13) publish or cause to be published different advertisements for the same sweepstakes that contain inconsistent descriptions of the grand prize awarded through the sweepstakes; (14) award multiple prizes in a sweepstakes unless all prizes are awarded on the same date and through the same selection process; (15) publish or cause to be published official rules of a sweepstakes that do not uniquely identify the prizes to be awarded and the date they will be awarded; or (16) provide for entry by mail in a sweepstakes and use: (A) more than one address to accept entries in the sweepstakes; or (B) the address for entry in the sweepstakes for any purpose other than entry in the sweepstakes. Added by Acts 2001, 77th Leg., ch. 1119, § 1, eff. Nov. 1, 2001. Renumbered from V.T.C.A., Bus. & C. Code § 43.002 by Acts 2003, 78th Leg., ch. 1275, § 2(4), eff. Sept. 1, 2003. § 45.003. APPLICATION OF CHAPTER; ACTS NOT PROHIBITED. (a) This chapter does not apply to any sweepstakes that is conducted through advertisements or inserts in magazines, newspapers, or catalogues sent through the mail. (b) This chapter does not apply to any charitable raffle regulated by Chapter 2002, Occupations Code. (c) This chapter does not apply to any sweepstakes regulated by the Alcoholic Beverage Code. (d) This chapter does not apply to any company regulated under the Public Utility Regulatory Act (Title 2, Utilities Code). (e) This chapter does not apply to any company that is an air carrier subject to Title 49 of the United States Code or to a nonprofit association of airmen who are subject to that title. (f) This chapter does not apply to a drawing for the opportunity to participate in a hunting, fishing, or other recreational event conducted by the Parks and Wildlife Department. (g) If the only use of the mail is for consumers to return their entry forms to the sponsor of the contest, then this chapter does not apply to that sweepstakes. (h) This chapter does not prohibit a sweepstakes sponsor from making a statement in the official rules of the sweepstakes describing the method to be used in choosing a winner, and this chapter does not prohibit a sweepstakes sponsor from notifying the winner after the winner has been selected. (i) This chapter does not prohibit a sweepstakes sponsor, after determining the winner, from obtaining an affidavit from the person selected to verify that the person is eligible to win the prize and has complied with the rules of the sweepstakes. (j) This chapter does not apply to a sweepstakes conducted through the mail if the most valuable prize to be awarded is less than $50,000. The value of a prize is measured by the highest number among its face value, its fair market value, and its financial present value. (k) Sections 45.002(3) and (4)(A) do not apply to a single sheet of paper that contains both a contest entry form and an order form if the order form is perforated or detachable and if the entry form must be separated from the order form and returned to an address different from the return address for the order form. (l) Sections 45.002(2), (3), and (4) do not apply to a contest that is offered to promote a credit card or a debit card if the official rules of the contest provide that consumers are entered in the contest based on the number of purchases made or the amount of money spent. A person who did not qualify as an issuer as of January 1, 2001, is not eligible for the exceptions under this subsection. (m) Sections 45.002(2), (3), and (4) do not apply to a company that is offering a sweepstakes in which the consumer must go to a physical location to obtain or use the goods or services that are being sold by the company offering the sweepstakes. (n) This chapter does not apply to any sweepstakes that is promoting one or more food products that are regulated by the federal Food and Drug Administration or the United States Department of Agriculture. (o) This chapter does not apply to any company whose primary business is the production, distribution, sale, and marketing of audiovisual entertainment works, products, or sound recordings. For purposes of this subsection, "primary business" means that 75 percent or more of a company's business is the production, distribution, sale, and marketing of audiovisual entertainment works, products, or sound recordings, and "production" means the systematic development, planning, and execution of creating the audiovisual works, products, or sound recordings. This chapter does not apply to a company that owns or operates a cable system, as that term is defined by 47 U.S.C. Section 522, as amended. Added by Acts 2001, 77th Leg., ch. 1119, § 1, eff. Nov. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 105, § 1, eff. May 20, 2003. Renumbered from V.T.C.A., Bus. & C. Code § 43.003 and amended by Acts 2003, 78th Leg., ch. 1275, § 2(4), 3(2), eff. Sept. 1, 2003. § 45.004. CIVIL PENALTY. (a) The attorney general may initiate an action under this chapter by filing suit in a district court in Travis County or in any county in which a violation occurred. (b) For each violation found, the court shall award the attorney general a civil penalty of not less than $5,000 or more than $50,000. (c) If the material accompanying or relating to a sweepstakes or an offer to enter a sweepstakes contains multiple statements, implications, representations, or offers that are prohibited by this chapter, each statement, implication, representation, or offer is a separate violation and shall result in a separate civil penalty. Each individual who receives the material constitutes an additional and separate group of violations of this chapter. (d) Any person who provides names or addresses of residents of this state that are used in conducting a sweepstakes that the person knows to be in violation of this chapter is liable for the cumulative civil penalties that result from the person's conduct. The liability of a person who provides names or addresses does not reduce the liability of the person who conducted the sweepstakes. (e) If the attorney general substantially prevails, the court shall award the attorney general reasonable expenses incurred in recovering a civil penalty under this section, including court costs, reasonable attorney's fees, reasonable investigative costs, witness fees, and deposition expenses. (f) A civil penalty recovered under this section shall be deposited in the state treasury. (g) A court may also award injunctive relief or other equitable or ancillary relief that is reasonably necessary to prevent future violations of this chapter. (h) This chapter does not create any private right of action for any person. Added by Acts 2001, 77th Leg., ch. 1119, § 1, eff. Nov. 1, 2001. Renumbered from V.T.C.A., Bus. & C. Code § 43.004 by Acts 2003, 78th Leg., ch. 1275, § 2(4), eff. Sept. 1, 2003.
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