Sweepstakes Mania Grips Lawmakers
WITH MONICAGATE ALMOST almost out of the way at deadline, senators had time to turn to another critical national issue: sweepstakes.
Two sweeps measures were proposed in February-the Deceptive Mail Prevention and Enforcement Act, by Sen. Susan M. Collins (R-ME), and the Deceptive Sweepstakes Mailings Elimination Act, by Sen. Carl Levin (D-MI). And they weren’t the first this year.
Collins, chair of the Senate’s Permanent Subcommittee on Investigations, plans hearings to examine the sweepstakes business and “document the nature and extent of the problem and how these deceptive mailings affect Americans, particularly senior citizens.” Her bill is designed to “stem the tide of deceptive mailings flooding the mailboxes of the people of Maine and throughout the country,” she says.
Collins’ bill would strengthen the law prohibiting mailings from resembling official government documents or creating the impression that the mailing is connected with or endorsed by the federal government. It would also give the U.S. Postal Inspection Service subpoena powers to probe fraudulent sweeps operations. Violators would be subject to graduated civil penalties of between $50,000 and $2 million, depending on the size of the mailing. Her measure would not pre-empt any existing state or local laws controlling sweepstakes mailings.
Levin’s bill-endorsed by Collins-complements her legislation, as it would “stiffen the penalties for deceptive mailings; give the U.S. Postal Service administrative subpoena power; restrict use of misleading language and symbols and require better disclosure about the chances of winning and statements that no purchase is necessary to win,” Levin said in a statement.
Errant sweepstakes mailers would face a civil penalty of $10,000 “for each piece of mail” that violates the law and any regulations imposed by the USPS under Levin’s proposal.
The first Senate bill, the Honesty in Sweepstakes Act, was introduced by Sen. Ben Nighthorse Campbell (R-CO) in late January, shortly after two nearly identical measures were proposed in the House by Rep. Frank LoBiondo (R-NJ) and Rep. James E. Rogan (R-CA). All three have been referred to committee for review.
Campbell’s bill-a slightly different version of one he put forward last year that died in committee-would require sweepstakes mailers to clearly state in their promotional materials, and in any contest entry documents, that the mailing is an offer to participate in a sweepstakes or game of chance and that no purchase is required to win or enhance a chance of winning.
He, like Levin, proposed a graduated scale of civil penalties ranging from $50,000 to $2 million.
The LoBiondo and Rogan bills basically mirror Campbell’s proposal. Both would require the same notices on the envelope and its contents andwould not pre-empt tougher state regulations or laws.
Rogan’s legislation would subject violators to civil penalties of up to $10,000 a day for each offense and possible criminal prosecution for fraud; LoBiondo’s doesn’t address the subject.
The DMA is reviewing the proposals and hasn’t taken a position on any of them yet, says Jerry Cerasale, senior vice president for government affairs.
