In the US, the laws for the most part are pretty standard across all the states. With exceptions here and there regarding taxes and such.
However, overseas and north of the border, the laws can vary from township to township, province to province and even district to district. What might be legal one place, may not be legal 2 miles away.
Most contests will just blanket statement a contest with "Void where prohibited". But, then that leaves the responsibility in the hands of the contestants to find out they can participate or not. And, that can lead to legal issues, since most people are not going to read the rules of a contest, much less research their locality's laws.
The "Home Makeover" contest is a good example. I lived in Canada at the time but was a US citizen and not a legal resident of Canada. It was up to me to research both US and Canadian laws regarding my ability to qualify. Turned out I was good to go and did in fact win that contest on my server. But, that was after about 4 or 5 hours of paging through the WestLaw library on line. :P
The only other way to allow everyone, everywhere to participate, without any liability on SOE's part, would be to have their attorneys research every law in every existing government right down to counties and townships and then generate a huge list of excluded areas. That's an awful lot of money and resources to spend on a contest where the prize is worth less than $1000.