Does a Virginia retailer break the law if a cigarette manufacturer prints a sweepstakes notice on its packs and the only place a customer can learn of the sweepstakes in the store is on the pack itself?

Plain-English summary

Senator Howell asked whether a Virginia retailer would violate Code § 18.2-242 if a cigarette manufacturer offered an online sweepstakes and the only mention of the sweepstakes in the store was the notice printed on the back of the cigarette pack. The sweepstakes was open only to smokers 21 or older, and no purchase was required to enter.

The Attorney General said no. Section 18.2-242 is a criminal statute (Class 3 misdemeanor) that prohibits retail establishments from using games of chance to promote products subject to both federal and state excise taxes, which include cigarettes. By its plain language it applies only to retail establishments, not to manufacturers, and it requires the retailer to "use" the game to promote sales. A 2002 AG opinion had concluded the statute was violated where the sweepstakes appeared not just on the cigarette pack but also at a retail counter display. Here, with no counter display and the only notice on the back of the pack (often seen only after purchase), the retailer was not "using" the contest to promote sales. Federal regulations adopted after 2002 also require face-to-face sales of cigarettes, so the customer's first encounter with the back-of-pack notice is usually post-purchase, not at the point of sale.

Currency note

This opinion was issued in 2017. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

Virginia Code § 18.2-242 dates from a long tradition of separating excise-taxed products (cigarettes, alcohol) from games of chance used to drive sales. The statute reads, in relevant part:

No retail establishment in this Commonwealth shall use any game, contest, lottery or other scheme or device, whereby a person or persons may receive gifts, prizes or gratuities as determined by chance for the purpose of promoting, furthering or advertising the sale of any product or products having both a federal and state excise tax placed upon it, and the fact that no purchase is required in order to participate in such game, contest, lottery or scheme shall not exclude such game, contest, lottery or scheme from the provisions of this section.

A violation is a Class 3 misdemeanor. The statute applies to the retailer's conduct, not the manufacturer's. The AG framed the question as one of statutory construction: does selling a product whose own packaging contains a sweepstakes notice count as "using" the contest "for the purpose of promoting" sales? Two doctrines shaped the answer. First, the statute's plain language requires the retailer to "use" the contest, suggesting affirmative conduct beyond mere sale. Second, criminal statutes must be strictly construed against the state, with any genuine ambiguity resolved in favor of the defendant.

A 2002 AG opinion had read § 18.2-242 to be violated when the sweepstakes appeared at a retail counter display in addition to the pack itself. Two factual distinctions move this case the other way: there is no in-store display, and a federal rule (21 C.F.R. § 1140.14) adopted after 2002 prohibits self-service displays of cigarettes, meaning customers must ask a clerk for a pack. As a result, customers typically encounter the back-of-pack notice only after purchase, when it is no longer functioning as a sales pitch.

Common questions

Does this statute apply to cigarette manufacturers?
No. By its plain terms, § 18.2-242 applies only to "retail establishment[s] in this Commonwealth." If a manufacturer also operates a retail establishment, that retail establishment is covered, but a manufacturer-only operation is outside the statute.

What is the difference between this scenario and the 2002 opinion?
In 2002, the sweepstakes information appeared both on the pack and at a retail counter display. The counter display was the retailer's own promotional choice, which the AG concluded amounted to "using" the manufacturer's promotion to push sales. Here, with only the pack itself carrying the notice, the retailer is not doing anything additional to promote the contest.

Does "no purchase necessary" mean the statute does not apply?
No. The statute explicitly says that "the fact that no purchase is required ... shall not exclude such game ... from the provisions of this section." The no-purchase-necessary feature does not pull the contest out of the statute; what matters is whether the retailer is using the contest to promote sales.

Why is the federal self-service rule relevant?
After the 2002 opinion, the FDA adopted regulations prohibiting retailers from selling cigarettes through self-service displays. That means customers must hand the pack to a clerk to pay, and they typically do not see the back of the pack until after they have already bought it. The AG used this to support its conclusion that the back-of-pack notice functions as post-purchase information, not in-store promotion.

What would push a retailer into violation territory?
The AG's reasoning suggests that affirmative steps by the retailer such as putting up signs, counter displays, or other in-store materials about the sweepstakes would risk a violation. Selling the product as-is, with only the manufacturer's pack mentioning the contest, would not.

Citations

• Va. Code § 18.2-242
• Alger v. Commonwealth, 267 Va. 255 (2004) (legislature chose its words with care)
• Armstrong v. Commonwealth, 263 Va. 573 (2002) (criminal statutes strictly construed)
• 2002 Op. Va. Att'y Gen. 138 (in-store display violation)
• 21 C.F.R. §§ 1140.14, 1140.16 (federal restrictions on self-service cigarette sales)

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2017/17-014-Howell-cigarette-sweepstakes.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Mark R. Herring
Attorney General

June 8, 2017

The Honorable Janet D. Howell
Member, Senate of Virginia
Post Office Box 2608
Reston, Virginia 20195

Dear Senator Howell:
I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of
the Code of Virginia.

Issue Presented
You inquire whether it would be a violation of § 18.2-242 of the Code of Virginia for a cigarette
manufacturer to offer a sweepstakes contest, when the sweepstakes material would be available only on
the back of the cigarette package.

Background
You relate that a cigarette manufacturer proposes to provide notice on the back of its cigarette
packages of a sweepstakes contest offered on the company's website. The sweepstakes would be open
only to smokers who are at least twenty-one years old, and no consumer purchase would be necessary to
participate. You further relate that communication regarding the sweepstakes in a Virginia retail
establishment would be only on the cigarette package itself, not anywhere else in the retail establishment.

Applicable Law and Discussion
Section 18.2-242 of the Code of Virginia is a criminal statute that prohibits retail establishments
from using various games of chance to promote the sale of retail products subject to a federal and state
excise tax:

(a) No retail establishment in this Commonwealth shall use any game, contest, lottery or
other scheme or device, whereby a person or persons may receive gifts, prizes or
gratuities as determined by chance for the purpose of promoting, furthering or advertising
the sale of any product or products having both a federal and state excise tax placed upon
it, and the fact that no purchase is required in order to participate in such game, contest,
lottery or scheme shall not exclude such game, contest, lottery or scheme from the
provisions of this section.

(b) Any person violating the provision of this section shall be guilty of a Class 3
misdemeanor.[1]

A 2002 opinion of this Office concluded that the statute would be violated where a cigarette
manufacturer conducted a sweepstakes, and the sweepstakes material was available not only on the
cigarette package, but also at the retail establishment counter.[2] Under those facts, this Office concluded
that "the retailer [would be] availing itself or using the manufacturer's promotion in order to further the
sale of cigarettes"[3] and, thereby, would violate § 18.2-242.[4]

Applying the law to the question you pose and the facts you present, I first observe that
§ 18.2-242 applies only to retail establishments.[5] It does not apply to cigarette manufacturers. Thus,
unless a cigarette manufacturer owns and operates a retail establishment, it is not subject to the statute.

The statute targets the conduct of retailers, and requires some affirmative action by a retail
establishment to use a game of chance to sell products subject to state and federal excise taxes, which
include cigarettes.[6] By the plain language of § 18.2-242, the establishment must "use" the game of
chance "for the purpose of promoting, furthering or advertising" the sale of the product.[7] We must
"assume that the [General Assembly] chose with care the words it used when it enacted [this] statute"[8]
and, as a criminal law, it must be strictly construed against the state.[9]

On the facts you provide, there is no "use" of the game by the retailer for promotion or
advertising of the cigarettes. The notice of the availability of the sweepstakes appears only on the
cigarette packages, and not anywhere else in the retail establishment. Thus, the facts here are readily
distinguishable from those underlying the 2002 opinion where, in addition to information on the package,
there was also a retail counter display. Also, as federal regulations adopted after the 2002 opinion
prohibit retailers from selling cigarettes through self-service displays,[10] the sweepstakes notice on the
cigarette package is more likely post-purchase notice, and the retailer would not, therefore, be "availing
itself or using the manufacturer's promotion" to stimulate cigarette sales as in the circumstances
underlying the earlier opinion.

Conclusion
For these reasons, I conclude that where a retailer does nothing to promote or otherwise make
customers aware of a cigarette manufacturer's sweepstakes opportunity, and where the only way a
customer likely learns of the sweepstakes in the retail store is by seeing it on the back of a pack of
cigarettes after purchase, the retailer has not used the sweepstakes "for the purpose of promoting,
furthering or advertising"[11] the sale of the cigarettes. The retailer has merely sold the cigarettes and does
not violate § 18.2-242.
With kindest regards, I am
Very truly yours,

Mark R. Herring
Attorney General

[1] VA. CODE ANN. § 18.2-242 (2014).

[2] 2002 Op. Va. Att'y Gen. 138 (March 7, 2002).

[3] Id. at 139.

[4] See id.

[5] "No retail establishment in this Commonwealth shall ...." VA. CODE ANN. § 18.2-242.

[6] I.R.C. § 5701(B); VA. CODE ANN. §§ 58.1-1000 to -1017.3 (2013 & Supp. 2016).

[7] See VA. CODE ANN. § 18.2-242.

[8] Alger v. Commonwealth, 267 Va. 255, 261 (2004) (internal punctuation omitted) (quoting Barr v. Town & Country Props., Inc., 240 Va. 292, 295 (1990)).

[9] Armstrong v. Commonwealth, 263 Va. 573, 581 (2002) (quoting Commonwealth of Va. Dep't of Motor Vehicles v. Athey, 261 Va. 385, 388 (2001)).

[10] 21 C.F.R. §§ 1140.16 (2010) and 1140.14 (2016) (Note-there are limited exceptions to the requirement for direct face-to-face sales, including in facilities where a retailer ensures that no person under 18 years old is present, or permitted to enter, at any time-often referred to as adult-only facilities, see 21 C.F.R. §§ 1140.16(C)(2) (2010)).

[11] VA. CODE ANN. § 18.2-242.