Legal Concerns When Running a Giveaway on Stream

Giveaways and contests are regulated by law. Because Twitch is an American company, its users should obey the federal and state laws and know the pitfalls of organizing a legal giveaway on stream. First of all, it’s crucial to understand the difference between giveaways and contests. 

The Difference Between a Giveaway and a Contest

When organizing an event on stream use the right name. The contest usually requires some skills from the participants: a person with the best talent receives an award. A giveaway is a synonym of sweepstakes. No special talents required in order to receive a prize in a giveaway on stream. A winner is chosen randomly. That is why, when describing the rules to your giveaway, it’s better to use the word “contest” or “sweepstakes”, because there is no such notion as “giveaway” in legal terminology. 

Rules To Follow When Organizing a Giveaway on Stream

  • Be sure that no purchase is required from the participants in the form of money, time or other value.
  • Remember that such items as alcohol, tobacco, and gasoline cannot be used as prizes in your giveaway.
  • The official rules of a giveaway should be widely accessible and simply put. If you organize a contest, write in detail description of the skills required for a winner. 
  • A sponsor of a giveaway bears responsibility for prizes. Even if your vendors, suppliers or other people fail to deliver the prize, you, as a sponsor, should make everything possible to keep your promise and reward the winner. 
  • It’s important to comply with the rules of a giveaway: be right on time (except your giveaway is a surprise), pick the winner fairly, be transparent and give prizes timely.

N.B. If you break the rules, there is a risk of penalties (in cases of severe violations, the penalty may reach $2,000,000). In some states the regulations are stricter: for example, in Vermont, even the payment for postage (if you make the winner pay for the delivery of the prize) is considered to be a violation. If you organize sweepstakes, they have to be absolutely free.

Sub-only Giveaways: Are They Legal?

In spite of explicit legal prohibitions, not everything is so easy in practice. For instance, how should we treat so widespread sub-only giveaways? Are they technically illegal or not? The main rule of any giveaway is zero-cost for entry. If the user should pay for something, it automatically becomes an illegal lottery (lotteries are only allowed to be organized by the governmental structures). Giving subscribers of the channel a greater chance to win is not legally accepted, even despite the fact the users pay Twitch, not you. Sub-only giveaways demonstrate your preferential attitude to people that have paid for Twitch special services, and it’s not fair.

If It’s Illegal, Why Do Streamers Continue to Organize Sub-only Giveaways?

A lot of streamers run technically illegal giveaways every day. Moreover, almost all third-party extensions and streaming apps, including a popular StreamElements or Rafflecopter, provide a “Sub-only” or “Subscriber luck” functions that give subscribers bigger chances to win. However, this shouldn't be a justification for you. Just because third-party developers make these features available for you, doesn’t make it legal. They won’t protect you when you get sued. Your giveaway is your problem. The only reason why Twitch turns a blind eye to the problem of illegal giveaways is that it has so many other problems. But, nothing lasts forever, so it’s better to stay fair in the eyes of the law and your audience.

Illegal Giveaways May Include:

  • Sub-only entry
  • The requirement of bits donation 
  • Any other cost for entry or part payment for the prize, including postage expenses

Filtering Out the Giveaway Participants Without An Entry Fee

It’s normal that you don’t want all people to take part in your giveaway. Along with engagement and fun, giveaways usually bring a lot of unwanted audiences interested only in nabbing free goods - people that stop by your channel for the giveaway and don’t really appreciate what you do. There are some ways to filter out the audience of your future giveaway, omitting the requirement of cost for entry:

  • The requirement to be in a chat and follow the channel. Not everyone is ready to hit “follow” - “unfollow” button to participate in a giveaway.
  • Making your giveaway random. Sweepstake rules encourage to announce a giveaway beforehand, but it’s not a must. By not making announcements you can also lose your loyal viewers, but at the same time attract fewer tyre kickers.
  • Filter the users based on the amount of time spent on your channel. It’s an effective method. However, there are people that see no problem in opening up a tab in the browser and don’t close it ever, even if they're not watching your gameplay.
  • It’s also possible to set "a paying attention" widget on your channel that will depict users that actively participate in the community live. Only they will be allowed to participate in your giveaway on stream.

Instead of Takeaways

A giveaway on stream is a good chance to mix up your broadcast, entertain your viewers, make closer connections and reward your loyal audience. Making your giveaway in accordance with the law will only add your channel more value and respectful attitude from the viewers. If this is your first giveaway on stream, weigh all pros and cons. Along with the boost in viewer numbers, you may receive a massive drop in chat quality as a side effect of your giveaway. Moreover, there are a lot of legal difficulties you may face, for instance, when the winners are people under-16s or people that are not satisfied with the prize. They can bring a suit against you. If you’re still willing to run a giveaway on your stream, be sure that:

  • You have to set clear and visible to all rules for entry in your giveaway.
  • You inform people that you’re not responsible for the actions of delivery companies in case the prize is delivered wrong way or has been damaged on the way.
  • You notify all participants about your right to reroll the results of the giveaway at any time in case the troll wins.
  • You don’t allow participating fake or double accounts.
  • Set yourself a grace period, so that you have some days in hand to deliver the prize to the winner.
  • After announcing the winner, ask him/her if they want the prize and can accept it in the coming days. If the answer is negative, reroll.

To get more detailed information about proven steps to successful giveaways on Twitch as well as the fullest list of third-party giveaways, review our previous posts.