We would strongly recommend consulting with legal counsel before going ahead with this promotion. Although we cannot offer any legal advice, we would have concerns with this kind of promotion under the federal lottery prohibition and the Illinois Criminal Code’s prohibitions on gambling.

As to federal law, the Federal Deposit Insurance Act states that a bank may not (among other things) “announce, advertise, or publicize the existence of any lottery.” It defines “lottery” as an arrangement in which participants “advance money or credit to another in exchange for the possibility or expectation that one or more but not all of the participants (the ‘winners’) will receive by reason of their advances more than the amounts they have advanced.” 12 USC 1829a(c)(2). Because the BaZing promotion requires that customers qualify for and open a rewards checking account in order to participate in the tournament competition, and provides a $1,000 prize to the winner, we believe that it could fall under the “lottery” definition.

The tournament competition may also raise issues under the Illinois Criminal Code’s gambling prohibitions. The Criminal Code defines lotteries as “any scheme or procedure whereby one or more prizes are distributed by chance among persons who have paid or promised consideration for a chance to win such prizes . . . .” 720 ILCS 5/28-1(a)(9)720 ILCS 5/28-2(b). There is an exemption for drawings in which “money or other things of value can be won but no payment or purchase is required to participate,” but in this case, the participants would be required to open the BaZing rewards checking account in order to participate, and therefore we do not believe that the exemption would apply here. 720 ILCS 5/28-1(b)(13).

Note that other Illinois laws apply to promotional giveaways. Even if the promotion was restructured so as not to violate the lottery and gambling prohibitions under federal and Illinois law, these notice requirements would still apply:

• The Prizes and Gifts Act prohibits any requirement of payment as a condition to winning, competing for, or obtaining information about a prize. 815 ILCS 525/20(a). It specifies nine disclosures which must be made in a written promotional prize offer. 815 ILCS 525/25.

• The Consumer Fraud and Deceptive Practices Act prohibits advertising any business by offering free prizes to a consumer unless all material terms and conditions relating to the offer are clearly and conspicuously disclosed at the outset of the offer. 815 ILCS 505/2P.