California has passed a new law that will give alcohol manufacturers and suppliers the right to conduct consumer contests and sweepstakes in the state.

Prior to passage of the new law, SB 778, Californians were prohibited from entering sweepstakes or contests conducted by importers, manufacturers, and suppliers of wine, beer, or spirits. Starting January 1, 2013, residents of the state age 21 or older may now join in such promotions.

Of course, some conditions and restrictions remain. In addition to the age limit, contests may not involve the consumption of an alcoholic beverage and alcoholic beverages may not be awarded as prizes. Entry or extra chances to win cannot be premised upon the purchase of an alcoholic beverage, and an alternate method of entry must be made available that does not require a visit to licensed premises.

In addition, the law says that caps, corks, labels, cases, packaging, or other similar materials cannot be used as a means of entry or a means to determine the amount or size of the prize or the identity of the winner. Neck hangers on wine and spirits may be used as a method of entry, however, as long as proof of purchase is not required and an alternate means of entry is available. Contests where consumers scan or electronically enter codes for a chance to win are also allowed if the codes are permanently affixed to the label or packaging and are not required to be removed for entry.

Licensed beverage suppliers can now sponsor sweepstakes with third parties, such as nonprofits, businesses, and licensed retailers, as long as they are consistent with the limitations in the law.

The bill passed in the Legislature by overwhelming margins, with unanimous approval in the Senate and a 75 to 4 vote in the State Assembly.

To read the new law, click here.

Why it matters: California no longer stands alone in its contest and sweepstakes ban. Companies wishing to expand their promotions into the state should carefully review the new law.