# Title 53 — Sports and Amusements

## Chapter 53-11 — Contest Prize Notices

### § 53-11-01. Definitions.

As used in this chapter, unless the context otherwise requires:
1. "Prize" means an item or service of value that is offered or awarded to a participant in
a real or purported contest, competition, sweepstakes, puzzle, drawing, scheme, plan,
or other selection process.
2. "Retail value" of a prize means:
a. A price at which the sponsor can substantiate that a substantial number of the
prizes have been sold to the public in this state during the preceding year; or
b. If the sponsor is unable to satisfy the requirement in subdivision a, then no more
than one and one-half times the amount the sponsor paid or would pay for the
prize in a bona fide purchase from an unaffiliated seller.
3. "Sponsor" means a person that requires another person in this state to pay money as
a condition of awarding the person a prize, or as a condition of allowing the person to
receive, use, compete for, or obtain information about a prize, or that creates the
reasonable impression that such a payment is required.
### § 53-11-02. Disclosures required.

1. A sponsor may not require a person to pay the sponsor money as a condition of
awarding the person a prize, or as a condition of allowing the person to receive, use,
compete for, or obtain information about a prize. A sponsor may not use a solicitation
that creates the reasonable impression that a payment is required, unless the sponsor
first has delivered to the person written prize notice containing the following
information:
a. The true name or names of the sponsor and the address of the sponsor's actual
principal place of business;
b. The retail value of each prize the person receiving the notice has been selected
to receive or may be eligible to receive;
c. A statement of the person's odds of receiving each prize identified in the notice;
d. Any requirement that the person pay shipping or handling fees or any other
charges to obtain or use a prize, including the nature and amount of the charges;
e. If receipt of the prize is subject to a restriction, a statement that a restriction
applies, and a description of the restriction;
f. Any limitation on eligibility; and
g. If a sponsor represents that the person is a "winner", is a "finalist", has been
"specially selected", is in "first place", or is otherwise among a limited group of
persons with an enhanced likelihood of receiving a prize, the written prize notice
must contain a statement of the maximum number of persons in the group or
purported group with this enhanced likelihood of receiving a prize.
2. The information required by subsection 1 must be presented in the following form:
a. The retail value and the statement of odds required must be stated in immediate
proximity to each identification of a prize on the written notice and must be in the
same size and boldness of type as the reference to the prize. The statement of
odds must include, for each prize, the total number of prizes to be given away
and the total number of written prize notices to be distributed. The number of
prizes and written prize notices must be stated in Arabic numerals. The statement
of odds must be in the following form:
___________ (number of prizes) out of__________ notices distributed.
b. If a person is required to pay a shipping or handling fee or any other charge to
obtain a prize, to be eligible to obtain a prize, or participate in a contest, the
following statement must appear in immediate proximity to each listing of the
prize in the written prize notice, in not less than ten-point boldface type: YOU
MUST PAY $______ TO RECEIVE THIS ITEM or YOU MUST PAY $______ TO
COMPETE FOR THIS ITEM, whichever is applicable.

c. The statement required under subdivision g of subsection 1 must appear in
immediate proximity to each representation that the person is among a group of
persons with an enhanced likelihood of receiving a prize and must be in the same
size and boldness of type as the representation.
### § 53-11-03. Prize award required.

No later than thirty days after making the representation, a sponsor who represents to a
person that the person has been awarded a prize shall provide the person with the prize, or with
a voucher, certificate, or other document giving the person the unconditional right to receive the
prize, or provide the person with either of the following items selected by the person:
1. Any other prize listed in the written prize notice that is available and that is of equal or
greater value; or
2. The retail value of the prize, as stated in the written notice, in the form of cash, a
money order, or a certified check.
### § 53-11-04. Exemptions.

1. This chapter does not create liability for acts by the publisher, owner, agent, or
employee of an advertising agency, a newspaper, periodical, radio station, television
station, cable television system, or other advertising medium arising out of the
publication or dissemination of a solicitation, notice, or promotion governed by this
chapter, unless the publisher, owner, agent, or employee had knowledge that the
solicitation, notice, or promotion violated the requirements of this chapter, or had a
financial interest in the solicitation, notice, or promotion.
2. This chapter does not apply to solicitations or representations, in connection with:
a. The sale or purchase of books, recordings, videocassettes, periodicals, and
similar goods through a membership group or club that is regulated by the federal
trade commission under title 16, Code of Federal Regulations, part 425.1,
concerning use of negative option plans by sellers in commerce.
b. The sale or purchase of goods ordered through a contractual plan or
arrangement such as a continuity plan, subscription arrangement, or a single sale
or purchase series arrangement under which the seller ships goods to a
consumer who has consented in advance to receive the goods and after the
receipt of the goods is given the opportunity to examine the goods and to receive
a full refund of charges for the goods upon return of the goods undamaged.
c. A sale by a catalog seller that derives at least fifty percent of its annual revenues
from the sale of products sold in connection with the distribution of catalogs of at
least twenty-four pages that contain written descriptions or illustrations and sale
prices for each item of merchandise, if the catalogs are distributed in more than
one state with a total annual distribution of at least two hundred fifty thousand.
### § 53-11-05. Penalty - Remedies.

1. A violation of this chapter is an unlawful practice in violation of section 51-15-02 and is
subject to applicable provisions of chapter 51-15.
2. A person who intentionally violates this chapter is guilty of a class C felony. It is
evidence of intent if the violation occurs after the attorney general has notified a
person by certified mail that the person is in violation of this section.
3. A person suffering pecuniary loss because of an intentional violation of this chapter
may bring an action in district court to recover costs, reasonable attorney's fees, and
the greater of five hundred dollars or twice the amount of the pecuniary loss.
4. This chapter provides relief in addition to the remedies or penalties provided under
other law.
