What is a Sweepstakes Parlour?

A sweepstakes parlour refers to a business model that offers consumers a chance at winning prizes, based on their willingness to spend money on a specific product. One system involved offering customers one hundred chances to win a prize, for every dollar they added to a phone card. Once the purchase had been made, the buyer was allowed to access an electronic terminal, which redeemed the chances of winning and informed the buyer if they had been granted a prize. The terminal is generally housed in a small room or parlour, hence the term sweepstakes parlour.

The norm is for the parlour to strongly resemble a casino environment, and the electronic terminal to come in the form of a wheel of fortune styled device. What the odds are of consumer winning is not fully known, since these parlours are said to not fit the definition of gambling, and so remain unregulated under traditional gambling laws. For this reason, and for many other reasons, these parlours have come under tremendous scrutiny, and have been banned in many parts of the world.

Business Model And History

This business model has come under much scrutiny over the years, with many ongoing cases that have yet to reach a conclusion, with many other cases resulting in a ban of the business model altogether. Detractors insist that the business model is nothing short of luring customers in a highly unscrupulous way, tricking them into buying products they would otherwise not be interested in. Others insist that since the consumer is not directly placing down money as a bet, that the system is not what is referred to as gambling.

Whatever the truth of the situation may be, the parlours first appeared in parts of the south of the United States, and were met with such overwhelming success that the rest of the country was quick to jump on board. Sweepstakes parlours frequently appeared beside strip malls, which were already considered to be questionable in their nature by many, and the addition of the new highly apposed system did not improved the reputation for these areas. As long as the systems remain legal, they are sure to keep appearing where they are allowed. For the most part, however, the systems are not allowed and have been banned.

Gambling Versus Sweepstakes Parlours

Any game of chance in a casino is clear about its intentions. A gambler is, essentially, placing a bet on a prediction of an outcome. The money is put down, the event occurs, and if the bet maker was correct, they receive a payout. That is to say, games of chance and gambling have clear cut rules. A sweepstakes parlour is a different set of rules altogether. A gambler purchases a product, which they may or may not want, and is rewarded for this purchase by being given an unregulated chance at winning prizes. In one court case the federal government requested access to the financial records of a parlour operator, which would help make an informed decision about the legality of the process. Rather then allow access, the operators opted to rather close down the parlours altogether. This instance should give some idea as to how fair and legal the systems were.