New business idea?

Discussion in 'Ideas' started by Vision18, Dec 15, 2008.

  1. Vision18

    Vision18 New Member

    I was reading something in the New York Times just recently and thought it was a good idea.

    I would have these contests (on a website that I'll create) where I would propose a Scenario and the contestants would answer. The one that I deemed most creative would win the prize. There would be an entrance fee, and the amount of the entrance fee would depend on what the prize is.

    So an example:
    Scenario: You just found out you won $1,000,000 in the lottery. But you know your Aunt is very ill and needs a lot of medical treatment. You also have found out that your immediate family is struggling to makes ends meet. No one in your family knows you won the money. What do you do?

    Prize: MP3 Player (by a prominent company)
    Entrance Fee: $5
    Duration of Contest: 30 days (just say 30 days)

    Okay, there also must be a certain amount of people that enter into each contest otherwise it will be void.

    I have to at least make enough to cover the cost of the prize.

    Now, in the article I read it says "...the contest isn't a game of chance, state approval is not required, and teaming with a nonprofit group isn't necessary."

    My question is this, is there anything I am missing about this that would make it a bad decision to begin pursuing?

    Any legal issues involved?

    I would have disclaimers and so forth but that's a whole other thread.

    Please let me know.
    Thank you so much for your help; I really appreciate it.
  2. pip87

    pip87 New Member

    It sounds like quite a fun idea.
    You would have to have some kind of system going where if you didn't have enough people enter to cover cost of prize that they would get there money back.

    Your best idea is probably to contact some kind of business/legal advisor about the legal side of things to make sure you go along the right track. I know some people offer free consultations so it may be you do not have to pay for this. It's just to cover your back really but its up to you.

    Hope this helps!
  3. Vision18

    Vision18 New Member

    yes...a minimum amount of tickets would have to sell for EACH contest..if they didn't..the members would get either 99%-100% of their money back..most likely 100%'s NOT a game of "chance" there are no gamblin fees/restrictions/etc.

    thank you so much for your input
    i will have to contact someone about the legal matters of it
    i appreciate all your help!


    Sounds good, but you are going to be in legal hotwater for it would appear to be a lottery system in the eyes of the law, and that is not allowed unless you are located outside U.S.

    Good luck,
  5. Vision18

    Vision18 New Member

    I thought about that too.
    But, I looked up defintions of a lottery and contest.
    There is a clear difference.

    There is also a NY Times Article I read stating a woman in Hawaii is having a "contest" where the prize is her house...Entry fee is $100...Contestants have to write an essay...Winner gets the house...Essays judged by "members of community" who were yet to be decided.

    The article says that because it's not a raffle (which is very similar to lottery) - the woman does not need state approval and she does not need to be involved with a charity.

    There are no "odds" of winning in my business. The most creative person wins. We do NOT pick a number out of a hat, like the way a lottery works.

    There is a clear difference but at the same time I completely understand where you are coming from. I appreciate all your help. Thank you so much!


    Yes, there is a fine line between lottery and contest, and even if you didn't break one states regulations, you have to check with all of them if you are going to offer it to everyone. I understand you are not drawing from a hat, which is good, but regulators have a very unique ability to call it like they want to see it if you have any complaints, so that is the real issue, operating without one single complaint. Most states require registration for contests and drawings, so it will be interesting if you will be in compliance with every state. I was refused approval on a similar contest drawing, but it was drawing, so different.

    Good luck,
  7. irishguru

    irishguru New Member

    I beleive that is a fnatastic Idea and you should at least give it a go, even if only on a smaller scale [​IMG]
  8. newpage

    newpage New Member

    Sounds like a good primetime show. Go for it.
  9. molyda

    molyda New Member

    Many companies use contest as a way of increasing their sales. Think of cereals, cookies, chips, beers... they all offer a contest "no purchase required" but it's a major publicity and their sales hit the roof!

    So contests are more of a marketing strategy.

    You'll need to consider the criteria for the winning participation, contact info, customer service, staff that will be reviewing the texts, how to send or claim the prize, and all that stuff. Legally, you should ALWAYS have proper advices from professionals (and we are not professionals! lol Unless some of us are lawyers!).

    I live in Quebec, the only province of Canada where contests, draws, casinos, lottery, betting, etc. are controlled by provincial law. So a lot of those contests (even some marketing hit from major companies) are open to all Canadian residents, EXCEPT for Quebec residents. It sucks, but that's how it is!

    So even though New York Times states that no approval is necessary, do your own due diligence! [​IMG]
  10. Haris

    Haris New Member

    sounds good
  11. rayj00

    rayj00 New Member

    Better be careful with this.

    Charging a fee for a prize may be illegal in some states. It's almost
    like gambling....
  12. BruceMiles

    BruceMiles New Member

    Business ideas are all in the order of you. They are lurking in your garage, in your basement, in your kitchen, and in your children's room. You'll get them in magazine ads, at your neighbor's house, and at work. They are correct there in the vegetables you brought in from the yard . . . in the stack of identification next to your laser copier . . . in the back of your truck . . . and at the back of your mind.
  13. JanePhilis

    JanePhilis New Member

    This sounds like a really good idea. However, I believe it's important to read the clauses that come with it. It's just better to be very careful about this kind of things.
  14. carterstory

    carterstory New Member

    I"d talk to a lawyer first.. laws for this varies from state to state. This woman held it as a contest (The essay), not a raffle (Selling tickets) which may be more legal than a raffle.
    Most contests have entry fees (Races, Pageants, Spelling bees, sports tournaments). So if I had to guess.. this is the route she went, what you are discussing seems more like a raffle to me.
  15. forstine

    forstine New Member

    this is a very good idea, did you ever get this up and running.. Also how did you set it up, what kind of script or application was used
  16. stellaandreapar

    stellaandreapar New Member

    This is such a great idea! Goodluck [​IMG]

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