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 Q: How do sweepstakes work?

A: The rules for conducting a sweepstakes are quite consistent across the country. The promotion
must have a beginning and ending date, state the requirements for participation, detail restrictions
for who can enter, when and how the prizes will be awarded, etc., but the most important
requirements are identifying the prizes that will be awarded and providing free entry to all who
request it.

Q: What is gambling?

A: Gambling requires three elements: prize, chance and consideralionA Consideration is typically
defined as “something of value” which is wagered to win something of value.

Q: What is a free entry?

A: A free entry is a “no purchase required entry” into the sweepstakes. This means participants do
not have to purchase the advertised goods or services to be awarded an entry into the
sweepstakes. Customers simply have to request an entry according to the rules` A free entry
represents an opportunity to enter the sweepstakes and have the same odds of winning prizes as
those customers who purchase the advertised goods or services.

Q: How much money do l need to start a sweepstakes business?

A: A dedicated sweepstakes center or “Internet Cafe” requires the same start up capital as any
new business: more than you expect! Excluding hardware outfitting, an entrepreneur should
budget $10-15k in store build-out expenses and another $15-20k in startup costs, with advertising.

Q: lwant to expand my business into other states, what should l do?

A: Your homework! Call HEST for more information, but always, always do some research
yourself. Look at state oase law, court orders and attorney general opinions and learn as much as
you can prior to making any kind of investment,

Q: How do I know what the laws are in my area?

A: Visit the library (or hire an attorney) and look at Case law, Court orders and attorney general
opinions. Aiso don’t forget to research County and/or city ordinances, as well as zoning and
permitting requnements/restrictions.

Q: How do i advertise my business

A: With the same respect, integrity and honesty you would use on any other business venture. lf
you are professing to be a legal sweepstakes and NOT gambling, then DO NOT name your
business Land O’ Loot. Or High Rollers lnternet Café. Or Vegas Sweepstakes. Those names
send the Wrong message. Please keep in mind with a sweepstakes, you are promoting the sale of
goods or services. What are the goods or services in your store? Do you sell prepaid Internet
time? Do you sell beer? Soda? Do you solicit charitable donations? These are the items you
should be advertising along with the sweepstakes and cash prizes.

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