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I recently received on my web browser an internet ad saying:

"Congratulations!! You have won todays contest in your area!!
Click below to claim your prize of a $1000 Walmart Gift Card

*participation required"

If you click through on the ad, you find (surprise!) that you haven't
really won anything.  Instead, you find that in order to get your
$1000 gift card from Prize-Rewards.net, you must complete 13 "Sponsor
Offers".  According to the instructions, "Sponsor offers may require
you to purchase products and take other actions such as obtaining a
loan, transferring a balance, or similar steps."

My state (Virginia) has laws prohibiting this kind of deceptive
advertising.  For example:

Virginia Code 59.1-416 says:

__BEGIN_QUOTE__
A. No person shall, in connection with the sale or lease or
solicitation for the sale or lease of goods, property, or service,
represent that another person has won anything of value or is the
winner of a contest, unless all of the following conditions are met:

1. The recipient of the prize, gift or item of value shall be given
the prize, gift or item of value without obligation; and

2. The prize, gift or item of value shall be delivered to the
recipient at no expense to him, within ten days of the representation.

B. The use of language that may lead a reasonable person to believe he
has won a contest or anything of value, including, but not limited to,
"Congratulations," or "You have won," or "You are the winner of,"
shall be considered a representation of the type governed by this
section.
__END_QUOTE__

VA Code 59.1-421 says that anyone who sues over this code section and
wins shall recover reasonable attorney's fees.

VA Code 59.1-204 defines statutory damages of $1000 or actual damages,
whichever is *greater*, for any person who suffers loss as a result of
an intentional violation of the statute.

My questions are:
1) Does this internet ad violate VA Code 59.1-416?
2) If so, does my state (VA) have jurisdiction?
3) If so, how deeply into the trap does one have to go before s/he is
legally considered to have "suffered a loss as a result of a violation
of the statute" (in order to trigger the statutory damages)?

As to question #1:

One of the purposes of Prize-Rewards.net's offer is to collect your
personal data and sell it to third parties.  So, I think the ad fits
the "in connection with the sale or solicitation for sale of goods or
services" language of the statute.

As to question #2:

VA Code 8.01-328.1 says: "A court may exercise personal jurisdiction
over a person, who acts as to a cause of action arising from the
person's:
1. Transacting any business in this Commonwealth;
2. Contracting to supply services or things in this Commonwealth;
3. Causing tortious injury by an act or omission in this Commonwealth;
4. Causing tortious injury in this Commonwealth by an act or omission
outside this Commonwealth if he regularly does or solicits business,
or engages in any other persistent course of conduct, or derives
substantial revenue from goods used or consumed or services rendered,
in this Commonwealth;"

I think the ad meets at least some of these (disjunctive)
requirements.

In 1957, SCOTUS decided (in McGee v. International Life, 355 U.S. 220)
that a foreign corporation mailing an offer to a person subjected that
corporation to the jurisdiction of the courts of that person's state.