A Guide to U.S. Promotion Law for Employee and Partner Reward Programs

B2B sales incentives are a popular way to motivate internal teams, resellers, agents, and other business partners. But if your reward program includes a chance to win a prize, does that mean it’s a sweepstakes? And if so, are you legally required to offer a free entry route?

These are questions we hear frequently, especially from marketers launching promotions across multiple U.S. states. The good news is that most business-to-business (B2B) and internal incentives don’t fall under the same rules that govern consumer sweepstakes.

This guide explains why and what you still need to consider when running chance-based B2B rewards.

1. How U.S. Law Defines a Sweepstakes (And Why It Matters)

Under U.S. law, a promotion is generally considered a sweepstakes, or even an illegal lottery, if it includes all three of the following elements:

• Prize: Something of value is awarded (e.g. gift cards, merchandise, cash)
  
• Chance: The winner is chosen at random
  
• Consideration: The participant gives something of value to enter (typically a purchase or payment)
  

To be legal, a sweepstakes must eliminate one of these elements. Most public promotions do this by removing “consideration” and offering a free Alternative Method of Entry (AMOE).

But if your promotion is not open to the public, if it’s invite-only and limited to employees or contracted business partners, it’s not treated as a consumer sweepstakes. That means the AMOE requirement doesn’t apply.

2. Why B2B and Internal Promotions Are Treated Differently

They’re Not Consumer-Facing

If your incentive program is only accessible to staff, sales agents, distributors, or other contractual partners, and is not publicly advertised or available to the general public, it’s considered an internal or B2B incentive, not a sweepstakes.

Participation Is Tied to the Job

Whether someone qualifies by closing a sale, completing a training module, or submitting a lead, these actions are all part of their job. U.S. law does not view them as “consideration” in the legal sense. Instead, these rewards are treated as performance-based bonuses or non-cash compensation.

There’s No Payment or Purchase Involved

Because participants are not paying to enter or making a purchase as a condition of entry, there is no need for a free entry alternative.

3. Examples of Internal Promotions That Don’t Trigger Sweepstakes Rules

4. Compliance Tips for Running Legal B2B Promotions

To ensure your program stays outside sweepstakes law, follow these best practices:

Include basic terms – Even internal programs should have simple terms to prevent confusion or disputes
Keep it closed – Limit participation to known individuals with a business or employment relationship
Avoid paid entry – Don’t tie rewards to purchases or fees
Be clear about eligibility – Document who can participate and how they qualify
Don’t advertise it to the public – Keep it off social channels, websites, and public-facing ads

5. Frequently Asked Questions

Do we have to say “No Purchase Necessary”?
No. That phrase is only required in public sweepstakes where a purchase is one of the ways to enter.

What if our resellers operate in multiple states?
That’s fine, U.S. state sweepstakes laws apply to consumer promotions, not internal incentives or B2B programs.

What if we want to open the promotion to customers later?
Once a promotion becomes customer-facing, it must comply with sweepstakes laws, including offering an AMOE, disclosing odds, and possibly registering in certain states.

6. How BeeLiked Helps You Run Rewarding and Compliant Promotions

At BeeLiked, we help businesses design and deliver engaging gamified promotions across a wide range of use cases, from internal sales incentives to global consumer sweepstakes. For B2B and employee-focused campaigns, our platform offers the flexibility to keep promotions invite-only, securely manage access, and automate prize delivery, while keeping the experience exciting and brand-aligned.

For clients running consumer-facing campaigns, we go a step further by helping ensure full compliance with U.S. federal and state laws. From AMOE options to customizable terms and secure invite mechanisms, BeeLiked gives you the tools to reward customers without taking legal risks.

Whether you’re motivating employees or launching a nationwide game, we’ll help you keep things fun, fair, and fully compliant.

Need help building your next reward program? Get in touch with the team at BeeLiked to learn more.