In a unanimous vote, the U.S. Senate last week approved a sweepstakes bill, and subsequently a House panel held a quick hearing on related legislation. There are strong indications a sweepstakes bill will fly through both houses after Congress returns in September.
The Senate bill would take effect just 120 days after signed, but requires the U.S. Postal Service to provide some specific regulations.
Publishers already are seeing subscriptions drop off due to the widespread publicity on sweepstakes. The drop may be even more apparent next week, when the Audit Bureau of Circulations releases its latest Fas-Fax report.
"Following the events of the past year, consumers have apparently lost confidence in this promotional tool, and our industry has suffered a significant reduction in orders," said Michael Pashby, exec VP of the Magazine Publishers of America, at the House hearing.
Probable limits would require such statements as "No purchase is necessary to enter" and "A purchase will not improve an individual's chance of winning" be repeated three times-in letters to consumers, again on order forms and again in printed rules for the contests.
The Senate bill also gives marketers just 35 days to remove from sweepstakes mailing lists anyone who asks to be removed, and it imposes a $10,000 penalty for failure to delete those names.
The exact shape of the sweepstakes bill language and its potential impact remained uncertain, however, since the House adjourned for its August break without any final committee action. The House Committee on Government Reform is considering the Senate bill sponsored by Sens. Susan Collins (R., Maine) and Carl Levin (D., Mich.), as well as bills by Reps. Frank LoBiondo (R., N.J.) and James Rogan (R., Calif.) seeking stronger disclosures.
The chairman of the House Government Reform Committee, Rep. Dan Burton (R., Ind.), said he was worried legislation would hurt magazine subscriptions too severely.
IT'S A POSITIVE
Christopher Irving, director of consumer affairs for Publishers Clearing House, suggested increased disclosure "is a positive thing.
"We think legislation will increase consumer confidence," he said. "We think it will allow some consumers to come back and be more confident."
Industry observers weren't so sure.
"There is going to be a continuing decline in response if you have the double whammy of turning down the promotions and a requirement for new disclosures," said Dan Capell, editor of Capell's Circulation Report.
Mr. Capell said about 25% of magazine subscriptions for the top 125 titles come from sweepstakes promotions, and some titles get as much as 50% of their