Are Lotteries Legal for Private Businesses?

Q: Are Lotteries Legal for Private Businesses?

Generally, no. Lotteries are highly regulated and typically restricted to government agencies or licensed charitable organizations. Click to see what types of giveaways your business can legally run instead. Lotteries are regulated because they combine three components: a prize, chance, and consideration (e.g., a purchase). When all three are present, the promotion is usually classified as a lottery. Private businesses in most jurisdictions cannot run lotteries unless authorized by local gaming authorities. Instead, consider running a skill-based contest or sweepstakes with a free method of entry .

Published on June 5, 2025; Updated on August 19, 2025

Lotteries are regulated because they combine three components: a prize, chance, and consideration (e.g., a purchase). When all three are present, the promotion is usually classified as a lottery.

Private businesses in most jurisdictions cannot run lotteries unless authorized by local gaming authorities. Instead, consider running a skill-based contest or sweepstakes with a free method of entry.

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How Can I Run a Legal Sweepstakes in the United States?

You must allow free entry, disclose odds, follow FTC guidelines, and comply with state-level sweepstakes laws. Click to see the legal requirements and documentation you need.