Advertising FAQs
Political advertising, alcohol advertising, gambling advertising, tobacco advertising. Be careful or be sorry!
Under our “Advertising FAQ’s” menu, you’ll find topics related to some of the more frequently asked questions about advertising issues
From ice storms and hurricanes to terrorist attacks, broadcasters keep the public informed with the latest news and information. During times of crisis, many broadcasters devote massive resources to live coverage. Since advertising is a broadcaster’s only source of revenue, there needs to be a balance between the news of the moment and the economics of self-preservation. Three sales consultants offer their views on how to walk that tightrope. While these pieces were written in the wake of the Sept. 11, 2001, terrorist attacks, they are equally applicable to today’s emergency situations.
Here is the political rate calculator from Mark Levy of Revenue Development Resources.
Here are answers to your questions about political ads.
Here is a summary of the key political races in Maine and the U.S. and how often they are conducted.
Here is a summary of Maine law concerning the required disclaimers and sponsor IDs on political ads.
Thanks to the 2004 passage of the Bipartisan Campaign Reform Act and the US Supreme Court’s decision in McConnell v. FEC, there are some new rules broadcasters must follow. And there are the perennial thorny issues of lowest unit rate calculations and the like.
Here is an advisory on political advertising from noted FCC law firm Pillsbury Winthrop Shaw Pittman, along with a Q&A file addressing some of the questions on political advertising that MAB has received in recent years.
Visit the FCC’s political programming site, which includes a link to relevant federal law and regulations.
A .pdf of NAB’s PB-18 Political Agreement Forms is now free to NAB members. The PB-18 on CD is discounted for NAB members. Visit nabstore.com for details. Non-NAB members can also purchase the PB-18 from the NAB Store at a slightly higher rate. Sorry, but MAB cannot supply these forms; they must be purchased directly from NAB.
Can a retailer advertise an offer to pay the sales tax on a consumer’s purchase? No. Not only can the retailer not advertise it, he/she can’t do it in the first place. Under Maine law, payment of sales tax is the responsibility of the ultimate end purchaser. That responsibility cannot be assigned to or assumed by another. Here is an excerpt from Maine Revenue Services’ General Informational Bulletin on sales taxes:
TAX AS SHOWN IN ADVERTISEMENTS AND BILLS.
A seller cannot advertise that no sales tax will be charged on otherwise taxable items or that no sales tax will be charged on certain days or period of time (otherwise known as a tax holiday). It is illegal for any seller to advertise or hold out or state to the public or to any consumer that the sales tax or any portion of it will not be collected, or will be absorbed by the retailer, or that if collected it will be refunded. If the retailer does not state the amount of the tax separately from the sale price of tangible personal property or taxable services, the retailer shall include a statement on the sales slip or invoice presented to the purchaser that the stated price includes Maine sales tax.
Who pays the sales tax on contest prizes, the station or the prize winner? As noted above, sales tax is paid by the end consumer. However, much depends on how the contest is structured. This is a complex area. Stations should consult their legal counsel for advice based on the specific facts and circumstances of the contest.
Does a broadcast station have to charge sales tax on a video or audio tape that contains a spot it produced for a client? Possibly. Advertising agencies and graphic designers that make sales of tangible personal property and/or fabrication services are required to register as sellers with the State Tax Assessor and to collect, report and remit the Maine sales tax on taxable sales to their clients. Sales tax applies to the entire amount charged to clients for items of tangible personal property such as drawings, paintings, designs, photographs, layouts, audio and video tapes, lettering, assemblies and printed materials such as catalogs, brochures, pamphlets and fliers. Costs incurred by the agency in the production of these items and services performed by the agency which are a part of the production of these items are a part of the taxable sale price of the item, whether or not they are separately stated in the billing to the customer. View the complete Maine Revenue Services instructional bulletin on Advertising Agencies and Graphic Designers.
There are some restrictions and limitations that impact what broadcasters can and cannot advertise. If you have specific questions, contact MAB.
Can a bar in Maine advertise a “half price happy hour”? Yes.
Can stations advertise hard liquor? Yes. Except for a Bureau of Alcohol, Tobacco and Firearms regulation against giving the alcohol content of beer in a radio or TV commercial, there are no FCC or other federal regulations that prohibit or govern the advertising of alcoholic beverages by radio or TV stations. In the mid-1990s, the liquor industry trade council abandoned its long-standing voluntary ban on liquor ads. The US Supreme Court’s decision in 44 Liquormart (1996) struck down a Rhode Island law prohibiting the advertising of liquor prices. However, stations may want to carefully review their own or their owners’ policies and the moral and ethical issues involved before accepting hard-liquor advertising.
Can a bar or restaurant advertise “free” liquor, for example: “free champagne at midnight when you join us for New Year’s Eve”? No. Under Maine law, it is illegal for the holder of a liquor license to offer or deliver any free drinks. Likewise, it is illegal to offer to sell or deliver an unlimited number of drinks for a set price, except at private functions not open to the public. However, it is permissible to advertise liquor as part of an all-inclusive, fixed-price package.
Where can I get an answer to a specific question about advertising alcohol? Specific questions concerning alcohol advertising may be directed to the Maine Bureau of Alcoholic Beverages and Lottery Operations, (207) 287-3721. You can also view Maine’s liquor laws and liquor-licensee rules and regulations online.
Federal law permits commercial enterprises to conduct lotteries and games of chance (characterized by the 3 attributes of prize, chance, and consideration) as long as the lottery is “occasional and ancillary” to the enterprise’s main purpose. However, Maine law prohibits the conduct of lotteries by commercial enterprises. Maine law does allow lotteries, beano/bingo and games of chance to be conducted by non-profit organizations. In most cases, such games and lotteries must be licensed by the Maine State Police, and stations should retain a copy of the license for their files. Maine law also sets limits on the dollar value of prizes. Stations are encouraged to read the Beano/Bingo and Games of Chance statutes at Title 17, chapter 62, of the Maine Statutes. Also visit this page for more details on rules, guidelines and FAQs concerning nonprofit gaming in Maine.
Can my station air ads for Hollywood Slots or Oxford Casino? Yes. Federal law permits the airing of ads for casinos as long as they are legal in the place where they are conducted (see below). The Maine Gambling Control Board does have rules governing the content of such ads; read the rules here (scroll down to chapter 14).
Can stations in Maine advertise other casino gambling, for example Atlantic City casinos? Yes. As long as the activity is legal where it is conducted, and as long as the actual gambling activity does not occur in violation of Maine statute, stations may advertise casino gambling. The US Supreme Court, in the Greater New Orleans Broadcasters Association case (1999), struck down the federal ban on casino advertising, as long as no state laws would be violated as a result. In a private letter opinion issued to MAB in March 2001, the Maine Attorney General’s Office indicated that the Maine criminal prohibition against “advancing gambling activity” would not be enforced against Maine radio and television stations advertising lawful casino gambling activities. (Indian casinos, such as Foxwoods, are governed by the federal Indian Gaming Regulatory Act, and it has always been legal to advertise them.)
A local snowmobile club wants to hold a “poker run,” in which snowmobilers collect cards at various checkpoints and then win prizes based on the best poker hand. Is this legal? Yes, as long as (1) the snowmobile club is organized as a non-profit organization, and (2) the club has a license from the State Police to conduct the game.
Can I put my advertisers’ names in a hat and conduct a drawing for a prize, such as a trip? Probably not. If buying an advertising package is the “cost” of entering the contest, this would constitute consideration. Thus, the three elements of a lottery are present — prize (the trip), chance (the random drawing), and consideration (buying the ads).
Should I accept advertising for online sites that purport to “teach” people how to gamble, e.g. how to play Texas Hold’em or how to bet on sports? It depends. Congress passed the Unlawful Internet Gambling Enforcement Act on Sept. 30, 2006, and President Bush signed the bill into law on Oct. 13. The measure makes it illegal for U.S. banks and credit card companies to settle transactions for patrons of Internet gambling sites. This effectively wipes out Americans’ access to true online gambling. However, there are numerous sites that purport to be “educational” in nature and are aggressively advertising on American media because they often make contact with users outside of the website, urging them to visit another site where the users can place actual bets. It remains to be seen whether advertising for these “educational” sites will dry up in view of the new federal law. Stations should be very careful to check the content for any ads placed by “educational” gaming sites and, when in doubt, contact legal counsel.
Whom do I call to get an answer to a specific question about advertising games of chance? Specific questions about beano/bingo or games of chance may be directed to the Maine Dept. of Public Safety, (207) 624-7210.
What are you smoking??? Laws and rules on tobacco, marijuana and e-cigarette ads
Can my station run an ad for a store named “The Cigaret Shopper”? This is probably a violation of federal law. The very name of this store promotes cigarettes, and the name cannot be left out of ads because of the FCC’s rule on sponsorship identification. Governing federal statutes concerning tobacco advertising are the Cigarette Labeling and Advertising Act of 1970 (amended 1973) and the Comprehensive Smokeless Tobacco Health Education Act of 1986. See this BroadcastLawBlog advisory for more details. Trying to wiggle around the ban on cigarette advertising by leaving out the name of the store is a violation of the FCC’s sponsor identification rule.
So what can and can’t be advertised? It is permissible to advertise cigars, pipe tobacco, and smoking accessories such as lighters and rolling papers. The advertising of cigarettes, little cigars, and smokeless tobacco, such as chewing tobacco and snuff, is prohibited.
United States Code Title 15, Chapter 36, § 1335: Unlawful advertisements on medium of electronic communication. After January 1, 1971, it shall be unlawful to advertise cigarettes and little cigars on any medium of electronic communication subject to the jurisdiction of the Federal Communications Commission.
The Comprehensive Smokeless Tobacco Health Education Act of 1986 extended the broadcast advertising ban to smokeless tobacco products.
What about advertising “e-cigarettes,” electronic or vapor cigarettes? A qualified yes, for now, according to this legal advisory from Pillsbury (scroll to the bottom). The federal government is under pressure to regulate e-cigarettes out of concern that they are becoming a “gateway” drug for children and teenagers. This area of law could change rapidly.
The Food and Drug Administration has issued the following requirements for e-cigarette packages and advertising:
Must comply by Aug. 10, 2018
Format and Display Requirements for Required Warning Statements on Advertisements
Advertisements include print advertisements and other advertisements with a visual component (including, for example, advertisements on signs, shelf-talkers, Web pages, and email). The required warning statement on advertisements must:
- Appear on the upper portion of the advertisement within the trim area;
- Occupy at least 20 percent of the area of the advertisement (warning area);
- Be printed in at least 12-point font size and ensure that the required warning statement occupies the greatest possible proportion of the warning area set aside for the required warning statement;
- Be printed in conspicuous and legible Helvetica bold or Arial bold type or other similar sans serif fonts and in black text on a white background or white text on a black background in a manner that contrasts by typography, layout, or color, with all other printed material on the advertisement;
- Be capitalized and punctuated;
- Be centered in the warning area in which the text is required to be printed and positioned such that the text of the required warning statement and the other textual information in the advertisement have the same orientation; and
- Be surrounded by a rectangular border that is the same color as the text of the required warning statement and that is not less than 3 millimeters (mm) or more than 4 mm.
“WARNING: This product contains nicotine. Nicotine is an addictive chemical.“
What about advertising marijuana? While it has been legalized in some states for medicinal or recreational use, marijuana is still an illegal substance in the eyes of the federal government. And, since broadcasters are federal licensees, it’s probably not a wise idea to become the “test case” for resolving the conflict between federal and state law. See this law blog entry for more details. The same advice applies to CBD oil.
Disclaimer: This website is intended to provide general guidance only. Stations should consult with their own legal counsel regarding the facts and circumstances of a particular advertising question or issue.