Comparison of Sweepstakes to Amusement Games (8-Liners)

Item Sweepstakes Amusement Games (8-Liners)

Amusement games are authorized by the Penal Code Ch.

The TABC authorizes sweepstakes to advertise
47.01. In 2003, during the 78th Session of Legislature, the
and promote the sale of alcoholic beverages.
Legislature declined to amend the Penal Code to include
Sweepstakes are also regulated by Ch 45 Bus.&
video sweepstakes in the definition of a gambling device.
Authority Com. Code which is also referred to as The
As a result, video sweepstakes are not prohibited in Texas
Sweepstake Act. Sweepstakes are also regulated
and are regulated by Ch. 45 of the Bus. & Commerce Code
at the federal level by U.S. Code Title 39, Part IV,
– not the Penal Code. See the analysis and history of HB
Chapter 30 §3001
977 and HB 1478

No. Amusement games winnings must be redeemed

Can Cash Prizes Yes. Sweepstakes winnings may be paid as cash exclusively with noncash merchandise prizes, toys, or
be Paid? prizes. novelties, or a representation of value redeemable for
those items.

Sweepstakes are subject to additional regulation if a single

prize is offered with a value greater than $50,000.
Amusement games must be 10X compliant. The player is
Sweepstakes are subject to additional regulation exclusively rewarded “with noncash merchandise prizes,
Restrictions on
if a single prize is offered with a value greater toys, or novelties, or a representation of value redeemable
Winnings than $50,000. for those items, that have a wholesale value available from
a single play of the game or device of not more than 10
times the amount charged to play the game or device once
or $5, whichever is less.”

Yes. The user must stake something of value to obtain an

No. All sweepstakes entries are free and
Is There a Cost outcome from the game. This meets the definition of
alternative methods exist to receive entries
gambling from the Penal Code Ch. 47.01(1) which states
to Play? without a purchase or donation as required by
"Bet" means an agreement to win or lose something of
Texas and Federal Statute.
value solely or partially by chance."

No - 8-liners cannot create a finite number of game pieces.

Is There a Finite Yes. The Sweepstakes is created with a single
They use a random number generator to determine
Pool of Entries? pool of finite entries.
winning plays.

Are There a Yes. The number and type of prizes to be

No - The prizes varies based on number of prizes
Specific Number awarded is determined at the time the
previously awarded
of Prizes? sweepstakes is created.

Are the Prizes Yes. Each prize is associated with an entry at the No - Again, the prizes varies based on number of prizes
Pre-Determined? time the Sweepstakes is created. previously awarded

No - Odds change with each play. The operator can

Are the Odds Yes. The odds are determined at the time the
change the percentage ratio of money bet to the prizes to
Predetermined? Sweepstakes is created.
be paid.
Are Civil
Yes. Penalties are no less than $5,000 or more
Penalties than $50,000 for each violation found
No. Amusement games are governed by the Penal Code.
Available?
Are Winnings
No. The IRS has ruled in Technical Advice
Considered Yes. Amusement games are gambling. The user has won
Memorandum No. 200417004 that Sweepstakes
'Gambling' for or lost something of value solely or partially by chance.
winnings are not gambling winnings.
Tax Purposes?