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.