SB 778 (Padilla) PowerPoint Presentation

SB 778 – Contests and
Mike Falasco
Wine Institute
Why Did WI Sponsor
 49 other states allow contests and sweepstakes
 Contests and sweepstakes were once informally
allowed in California (no statute or regulation)
 Overly aggressive brewer marketing led to a ban
 Current Rule 106 only allows suppliers a limited
right to SPONSOR contest, but not to conduct one
 SB 778 establishes the privilege in statute
Difference Between
Contest and Sweepstakes?
Generally, sweepstakes are games of chance. Contests
involve games with a degree of skill.
 A “contest” is defined as “a game, contest, puzzle, or
similar activity that holds out or offers to participants the
opportunity to receive or compete for gifts, prizes,
gratuities, or other things of value as determined by skill,
knowledge, or ability rather than upon random selection.
Skill, knowledge, or ability does not include the
consumption or use alcoholic beverages.”
 “Sweepstakes” is defined as “a procedure, activity, or
event for the distribution of anything of value by lot,
chance, or random selection where the odds for winning
a prize are equal for each entry.”
Who Can Offer a Contest
or Sweepstakes?
Only “Authorized Licensees” can conduct contests
and/or sweepstakes
 An authorized licensee is “a winegrower, beer and
wine importer general, beer manufacturer, out-ofstate beer manufacturer certificate holder, distilled
spirits manufacturer, distilled spirits manufacturer’s
agent, distilled spirits importer general, distilled
spirits general rectifier, rectifier, out-of-state
distilled spirits shipper’s certificate holder, brandy
manufacturer, and brandy importer.”
Common Provisions
 Only adults can enter a contest or sweepstakes. Authorized
licensees, wholesalers, retailers, their employees, or family
members are not eligible.
 No limitation on number of prizes
 No limit on dollar amount of prizes awarded (but no wine,
beer or spirits as prizes)
 No annual cap on the number of contests or sweepstakes, (but
note that an authorized licensee is required to maintain
records for all of their contests or sweepstakes for 3 years from
the completion of either type of game).
 No purchase requirement to enter
Some Limitations
 No sweepstakes entry fee
 No consumption of licensed beverages by a consumer to
participate in either a contest or sweepstakes
 No instant prize winners, but OK to provide instant
notification to the consumer that he/she is a winner
 Cannot conduct either game for the benefit of any
permanent retail licensee
 OK to conduct either game in the tasting room of a
winery’s or brewery’s principal license, but not at their
duplicate license
Means of Entry on
 Generally banned for both sweepstakes and contest
 Exceptions are made for neck hangers on wine and
spirits bottles and entry forms through electronic or
other media such as point-of-sale scan codes. An
authorized licensee is mandated to provide an
alternative means of entry other than a visit to
licensed premises.
Role of Retailer?
 Entry forms may be available at a retailer’s premises.
 A retailer is permitted to promote either game to the
extent already authorized by statute or ABC regulation.
 A retailer is expressly prohibited from collecting entries,
awarding prizes, or redeeming prizes.
 For sweepstakes alone, a retailer may provide the
matching of entries with numbers or pictures on pointof-sale materials and collection boxes for entry forms.
Placement of Signs
OK to put up signage as long as their placement is not
conditioned on the removal or repositioning of
another authorized licensee’s products or on the
purchase or sale of any product of the supplier.
“Unaffiliated Retailers”
 An authorized licensee is mandated to conduct a
contest or sweepstakes at a minimum of 3
“unaffiliated retail licenses” in California.
 An unaffiliated retailer means an independent retailer,
not one that is owned or controlled in whole or in part
by the same retailer.
 A retailer and a supplier are prohibited from
precluding a contest or sweepstakes being held at a
retail competitor.
Sweepstakes and
Rule 106
 Rule 106 has allowed for years supplier SPONSORSHPS of contests
with limitations: a) requires sponsorships only in the form of money
to bona fide amateur or professional organizations; b) no exclusive
sale of supplier’s products at event; c) no money to any organization
other than the one conducting the contest; and d) no purchase
requirement. The existing Rule 106 prohibits supplier-sponsored
 SB 778 supersedes Rule 106 and allows authorized licensees to
CONDUCT AND SPONSOR sweepstakes with no limits
 SB 778 allows authorized licensees to sponsor sweepstakes almost
anywhere, like sport stadiums and golf courses, and those being
held by entities other than licensed retailers, such as non-profits or
for-profit businesses. The limitations imposed on suppliersponsored contests in Rule 106 (i) do not apply.

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