In the 1960s, lottery-like contests designed to publicize products through sweepstakes competitions spread rapidly. In the 19th century, every state banned lotteries—defined as competitions in which chances to win prizes were sold—to protect citizens. In 1868, Congress prohibited the distribution of lottery materials through the mail. The mid-20th century sweepstakes, however, did not require contestants to purchase tickets or products to win prizes and were thus considered legal. In 1966, the number of national sweepstakes exceeded 600 and consumer groups accused them of deceptive practices. An FTC investigation in 1968 into sweepstakes from oil companies and supermarket chains found evidence of deception. In the following excerpts from letters to a 1969 Congressional investigation, citizens urged Congress to take action to regulate sweepstakes. Their efforts failed to produce a bill that passed through Congress, however, and by 1998, the FTC estimated that more than 400 million sweepstakes flooded the mail annually and that consumers lost more than $40 billion each year through sweepstakes and telemarketing scams. In 1999, Congress passed the Deceptive Mail Prevention and Enforcement Act. Among other consumer protections, this Act required sweepstakes materials to clearly state odds of winning, value of prizes, and rules.
HOUSE SMALL BUSINESS COMMITTEE—SUBCOMMITTEE HEARINGS ON INVESTIGATION OF SWEEPSTAKES PROMOTIONS
Reproduced below are pertinent excerpts from 83 letters that Rep. John D. Dingell (D-Mich.), chairman of the subcommittee investigating “sweepstakes” promotions, has received from citizens in many sections of the country. The originals of these letters, as well as hundreds of other letters received by Rep. Dingell, are on file in the office of the Subcommittee counsel, where they may be inspected upon request.
(1) Hon. Slade Gorton, Attorney General for the State of Washington, Seattle, Washington: “* * * The Supreme Court of the State of Washington has recently held that one such game constitutes a lottery, and is therefore prohibited by our state Constitution and a penal statute * * *. We take the general position that if a game does not involve substantial skill and is therefore a lottery it constitutes an unfair method of competition and as such is detrimental to the best interests of consumers. We believe that it is impossible for independent local firms to engage in high priced promotions which the large national companies can afford. The result is that businesses do not compete on the basis of price and quality of goods, but rather on the basis of unequal economic power. * * *” . . .
(3) Mr. Stephen D. Saboff, President, Leonard Refineries, Inc., Alma, Michigan: “* * * Leonard Refineries, Inc., has not operated any sweepstakes games or contests * * * because we could not begin to offer the prizes given by our competitors. The larger scope of operations (and advertising) of the major oil companies makes it impossible for smaller companies to compete effectively in the ”games“ area; hence it amounts to unfair competition. * * *”
(4) American Oil Company, Chicago, Illinois: “* * * The American Oil Company will not use promotional games this fall. We think the public is tired of games, and so are our dealers and distributors. Someone needs to take the lead in terminating the games merry-go-round, and we plan to do just that. * * * Most gasoline marketers have participated in games reluctantly, seeking primarily to protect their dealers‘ volumes from the impact of competitors’ games, * * * but the time has come for someone to take a stand. * * * We continue to believe that the motoring public primarily seeks quality products and good service. Promotional techniques should be aimed at offering customers those basics of our business.”
(5) Mrs. Ruth A. Skiff, Elnora, New York: “* * * I would like to see them outlawed, as a protection of the average citizen and also as a general raising of standards of our culture, which is certainly not enhanced by such wide use of cheap gimmicks.”
(6) Mr. J. K. Hochgertle, Woodbridge, Virginia: “ * * * Finally someone is doing something about it. * * * Reader’s Digest and Longines Symphony send unsolicited merchandise to your home. Now I have two albums from a company (Longines) that were mailed to me unsolicited with the giant giveaway programs, and billed accordingly. * * * I mailed the album back, and the very day I mailed it back, I received a duplicate, the same album. * * * It is sitting in my closet and it can stay there, I refuse to mail them back. Paying for them—they can drop dead—I am not using them. * * * All I get is more sweepstakes, and bills. There is no way to adequately communicate with these companies. * * * I get a bad rating because I won’t pay for items I don’t want, and didn’t ask for. I’m mad. * * *” . . .
(8) Mr. Warren F. Buston, Miami, Florida: "* * * Just a note about my continuing count in the so-called Coca-Cola Bottle Cap Contest. This past week I opened the cork section on top of 260 more bottle caps and guess what? Not a single winner. That makes a total of 2,403 caps examined, and with only ONE winner, and that one for a dollar. * * *"
(9) Mrs. Werdesheimer, North Hollywood, California: "* * * Can you help us poor suckers who enter contests and never hear what happened to our entries? I have spent so much money on products I didn’t need (not to mention the time) that I am ashamed of myself. Some contest forms say they will send a list of winners if one is requested. So far I have yet to receive one. In the 10 years that I have been entering contests, I have never won so much as an honorable mention. . . .
(13) Mrs. J. C. Gerlach, Pittsburgh, Pennsylvania: “* * * Here is another one to add to your collection. How can one check the winning numbers? A check list is available by mail, but it costs 12¢, including a self-addressed, stamped envelope . . . to find out you have not won. Go get 'em, Mr. Dingell.”
(14) C. V. May, Washington, D.C.: “* * * The Publishers Clearing House sends me (winning) numbers and renewal cards consistently. I remind them that I already have 10 subscriptions, and cannot renew or subscribe for any more, . . . but I get more in the mail. * * * Well, Sir, as a sure winner, I would hate to hold my breath that long. Needless to say, I have received nothing. * * * sure winners should not get a runaround.” . . .
(16) Mrs. Robert Dowell, Overland Park, Kansas: “* * * I am not in favor of sweepstakes, particularly the ”pre-drawn winner“ kind, where a number is assigned to individuals contacted for magazine subscriptions, etc. This kind of promotion, while barely legal, is quite unfair in that practically none of the prize money or merchandise offered need be given away, because the people with the ”lucky number“ usually throw them away, and all the unlucky people go running down to the stores to check something that was never meant for them in the first place. . . .” . . .
(18) Hon. Christopher T. Bayley, Deputy Attorney General, State of Washington, Seattle, Washington: “* * * The adoption of regulations is a step forward, but only because such guidelines would serve to prevent some of the worst abuses occasionally associated with promotional sweepstakes. But in a larger sense, even honest sweepstakes promotions harm the interests of the consuming public, by diverting attention from open competition on the basis of cost and quality of goods and services. Instead, consumers are lured by the hope, however remote, of getting ”something for nothing."
“Promotional sweepstakes further tend to restrain competition because the cost of such schemes virtually precludes their use by small or independent business firms. The result is that such firms continue to compete on the basis of goods and services, while larger companies with national or regional operations hold out the lure of ”something for nothing.“ * * * But, even that is not ”for nothing," since costs of sweepstakes are passed right back to consumers in the form of advertising and promotional costs * * *.
“I respectfully suggest that the consumer interest would best be served if steps were taken to prohibit promotional sweepstakes as a form of competition (which they are not) in interstate commerce.”
(19) Donald E. Humphries, San Antonio, Texas: “* * * Having spent several thousand dollars and a year’s time investigating the so-called ”give-aways“ on my own, I support you and Congressman Silvio (Conte) that they should be banned altogether. Many women are spending many ill-afforded dollars each week trying to win something for nothing. * * * Please check up on Longines Symphonette from Symphonette Square, New York, who have been running a sweeps for years, and I’ve never been able to obtain a list of major winners, only those who have won record albums, or some such. * * * Also recently I’ve tried to obtain the winners names in a sweeps sponsored by General Foods Kitchens. They tell me they cannot release the major winners, as it would be an ”invasion of privacy“ * * * I intend to make this my sole work till the truth outs. * * *”
(20) Mrs. C. S. Matthews, Pittsburgh, Pennsylvania: “* * * Since the article of your investigation appeared in the newspaper, at least one company has changed its rules. Previously, Sunset House never mentioned what they did with the unclaimed prizes. Now, as you can see with the enclosed rules, they will have a drawing of all unclaimed prizes. You have made at least one company toe the line. Let’s hope that fear of your investigation will make others become more honest and give out all the prizes that they advertise. Thank you for protecting the public. * * *” . . .
(25) Mrs. Betty M. Noel, Spokane, Washington: “* * * Happy to hear that you are investigating sweepstakes, . . . and hope you will put a speedy end to them. But Please take note that Contests—I mean real Skill contests, are not the same as ”pre-drawn“, ”you-may-already-have-won" lotteries and sweeps.
“A sweepstakes, where the winners are drawn in advance is no contest. There is no competition. Only chance. In a ”pre-drawn winners" sweeps, I’m surprised if as many as 10% of the prizes are ever claimed. But the skill contests (statements, last lines, limericks, slogans, photography, design, etc.) are fairly judged, and prizes are awarded, and people really can win.
(26) Frank R. Mueller, Silver Spring, Maryland: “* * * I did send Reader’s Digest a self-addressed, stamped envelope for the presumed list of winners, but . . . I have never received any such list. Thank you for starting an investigation of these things which clutter our mail. This seemed to us to be rather a cruel hoax to pull on anybody, and especially old people such as we are.”
(27) Mr. and Mrs. Troy Harris, Mentor, Ohio: "We personally have entered five contests over the last year, sponsored by magazines, where the big prize was a house or a car or a wonderful trip—or cash if you preferred. We received a small pamphlet from one place. That was our prize. . . . The magazines we have subscribed to, hoping to win a prize, are: Reader’s Digest, McCall’s, Life, Modern Screen, and Time.
“We are on Social Security, and the thought of winning a nice prize of money sounded very good. I wish you could see what they offer and how nice they make it sound. . . .” . . .
(33) National Federation of Independent Business, Inc. (Home Office), San Mateo, California—Washington, D.C.: “* * * The National Federation of Independent Business asked businessmen across the nation whether Congress should pass legislation to prohibit all ”sweepstakes“ games and contests. Sixty-seven percent responded ”yes“, 26 percent said ”no“, and 7 percent expressed no view.” . . .
(35) Thelma Coles, South Charleston, West Virginia: “. . . I am sending you a book I received from Sunset House in California. . . . I won this contest of 10,000, and they sent me a 39 cent pin. . . . I would like you to investigate this. I don’t think it should continue.” . . .
(38) Mrs. Leslie Lippman, Birmingham, Alabama: “. . . Friends of mine run an Esso Station, and because the company made them buy a bicycle and have a contest, they made sure one of their closest friends won for his child. I’m not surmising—they actually told that they did it. . . . We are short on honesty in this country nowadays—or maybe it’s BRAINS!” . . .
(41) Clifton Barbee, Chicago, Illinois: “* * * I sure hope you get onto the britches of these hanky-panky promoters, and flog them all the way back to Madison Avenue, New York, from whence they came. * * *” . . . (48) Joseph A. Prachar, Lombard, Illinois: “* * * A good, hard look into these contests is long, long overdue; and a strong legislation should be recommended by your Subcommittee to bring this fraudulent, extravagant mess under control. The thing that makes us so damn angry is the established fact that we are paying for it right out of our pockets! We’re actually paying for fraud upon us, the consumers!! * * *” . . .
(52) Mrs. Margaret K. Kane, Chesterfield, Missouri: “* * * Last Fall I received in the Listerine ”Stop, Win or Save Sweepstakes“ the winning number and was to receive a G.E. radio, value only $3.95. To date, I have not received the radio or any communication despite three letters I have written to Listerine and D. L. Blair Company, asking them what happened to the prize. * * * The only way I can rebel is to stop buying Listerine products and to advise my friends not to buy them. * * *”
(53) Mrs. Retha Gray, Atlanta, Georgia: “* * * Barnum was right * * * ”Never give a sucker an even break“ The Sunset House sweepstakes game is certainly following this advice. * * *” . . .
(57) Mrs. Donna M. Shaad, Bonner Springs, Kansas: “* * * I do not feel that a big company like Coca-Cola should be allowed to sponsor such a deceitful contest. * * *”
(58) Mrs. Annetta Snyder, St. Clair Shores, Michigan: “* * * Concerning the ”Come-On Contests,“ I certainly would like to see something done about it. I’m sick, sick, sick about all the ads on TV. Oil and gasoline companies, every magazine publisher and mail order house, and the Reader’s Digest is the worst. * * * All I get is a mailbox filled with all this tripe, and a waste basket full of papers. And the damn fool gullible Americans (including myself) fall for it. Why, why can’t they put a stop to it? But of course they won’t—it’s too simple for Washington to put a ban on it. * * *” . . .
(60) Rev. Jack M. Tuell, Methodist Pastor, Vancouver, Washington: “* * * But what concerns me are some of the elderly widows on meager incomes who have come to me very upset; the tone and tenor of these mailings leads them to believe that they are actually going to receive thousands of dollars. When they don’t, they are terribly hurt and disillusioned. This points to a crucial need for legislation which would bring about ”truth in contests“. * * *”
(61) Jose M. Requena, Sr., Tucson, Arizona: “* * * All I got was a booklet on How to Cook with Herbs. I hope that your investigation will stop this kind of solicitation just to make people buy their magazines. * * *” . . .
(64) Dr. Irvin T. Beck, Dentist, Louisville, Kentucky: “. . . The junk that I won. Pins—a big joke. One had a piece of fur about one inch square with a glass bead . . . broken on arrival. Another had ”pearl“ earrings—broken on arrival due to the thin box and cheap construction. Those with gold color have a coating so thin you don’t dare touch the gold, and remember that I as a dentist work with the stuff. . . .”
(65) Mrs. Bernadine Hadaad, Miami, Florida: “. . . And you should just gaze on the fabulous prize the postman brought. Mother of pearl they call it, and the circulars say they are giving out ten thousand of them. Well, mother of god, they are a far cry from pearls. No decent Woolworth’s ten cents store would sell them over the counter. Can’t you stop them from being so mean and tricky. . . . ”
(66) Jacques Israel, Pittsburgh, Pennsylvania: “. . . I consider to be unethical by what is considered to be the largest publishing concern in the world, The Reader’s Digest. . . . Mrs. Pansy E. Sloss, age 84, a shut-in living in the City project on the third floor without air condition. . . . They have been putting her under the impression she is among the winners of their $150,000 Sweepstakes. They were constantly pushing books on her. As she did not have the money, I paid for some of them until I realized it must be a fraud. . . . I spent over $10.00 for books sent by them not asked for. They are billing her for two that was returned some weeks ago. I am not counting the money I spent for the subscription. . . .” . . .
(74) From “an interested postmaster,” USA. (name and address withheld upon request): "* * * I wish to call your attention to the large volume of mail that we are receiving through the Post Office, promoting the sweepstakes games and contests * * *. Under the conditions, I feel the Post Office Department is doing an excellent job.
"There is one thing for sure: that the tremendous increase in volume of mail pertaining to sweepstakes is adding to our deficit, and is slowing down preferential mail in general. The reasons for this is due to the following factors that I would like to bring to your attention.
"(1) Much of the mail has incomplete names, such as one initial and the last name, or two initials and the last name, instead of the more helpful given name.
"(2) The mail is in all shapes and sizes, making the distribution of same about twice as time-consuming as preferential first class mail.
"(3) The average weight of this mail is about twice that of ordinary mail, yet, at the same time going at about one-half the rate, which adds to the Postal deficit, for which it appears we are blamed, but not responsible.
"(4) The outside of the envelopes of the sweepstakes mail has considerable writing, advertising, lucky winner numbers, arrows * * * making it more difficult to sort and distribute by our Postal clerks.
"* * * It is apparent but unintentional that the Post Office Department is permitting this ever-increasing volume of mail to appear. By allowing this mail, the Post Office Department is actually subsidizing and helping to promote this type of sweepstakes games and contests. This is a hidden subsidy that most people do not stop to think of or realize that it actually exists.
“Without the ability to mail pieces of mail weighing twice as much and yet at the same time one-half the rate as preferential first-class mail, it might not be possible that these companies would continue in this type promotion. It would be our desire that this matter be investigated.”
(75) Nelson R. Thornton, Leesburg, Florida: “* * * Don”t forget the contest sponsors pay “third class, bulk rate” postage; the small merchants trying to make an honest living pay * * * first class postage rates * * * It’s the same old story—big business won’t let the little man make a decent living * * *. Good luck." . . .
(79) Mrs. Harriet D. Dyson, Atlanta, Georgia: “* * * I am so happy you are investigating these rigged ”give-away" games, and, believe me, that is just what they are. I have received twenty or more. * * * Never have I won anything. How they get my name is also very important to me, because I believe it to be unconstitutional for people to sell my name to others.
“If the Postal authorities would slap a heavy postage on this sort of thing, it would stop. What actually happens is that the regular user of the mail for correspondence is subsidizing these rackets. These ”sweepstakes“ promotions ”stink“—and that is the only word that is effective here. * * *”
(80) E.J. Lamarre, Belen, New Mexico: “* * * The sweepstakes affairs really should be stopped. It is aggravating and clogging the mails with a trash that is beyond comprehension. The Reader’s Digest along with the Publishers Clearing House and several others are very bad, and we know that they just cannot pay out what they advertise. I do hope your investigation will put an end to the whole bad business. I believe in advertising, but not crooked work. * * *”
Source: Congress, House, Select Committee on Small Business, Investigation of “Preselected Winners” Sweepstakes Promotions: Hearings before the Subcommittee on Activities of Regulatory Agencies Relating to Small Business of the Select Committee on Small Business, House of Representatives, 91st Cong., 1st sess., Washington, D.C., November 12, 13, and 14, 1969 (Washington: Government Printing Office, 1970).