A prize promotion with an element of chance in the selection of the winner is permissible, provided participants are not required to pay to enter or to receive the prize. If these conditions are not met then this may be considered a lottery, which requires the relevant permit or licence.
'Payment' is not defined in the Gaming and Lotteries Acts. The prize draw must be 'for money or money’s worth'. It is possible that an Irish court could may consider payment to include: purchasing a product (subject to the exemption as noted below); where the only route of entry is a premium rate phone line; paying more than usual rates for delivery of the prize; paying to discover whether a prize has been won or to collect a prize; and/ or a requirement to provide a large quantity of data, especially if the promoter intended to sell such data to third parties.
A prize promotion with a payment to enter or receive a prize may not include an element of chance unless there is a free route to entry. However, it should be noted that where a promotion is stated to be free to enter, but a substantial number of persons make a purchase then, generally speaking, the promotion may nonetheless be unlawful. It was held in Flynn v Denieffe  2 IR 28 that the fact that not all participants made a purchase did not prevent a promotion from being a lottery where a substantial number of the participants did make a purchase.
There is a product promotion exemption, which allows the lawful promotion of lotteries, without having to obtain a lottery permit or licence, where the lottery is conducted in conjunction with the selling or marketing of a particular product and where:
- the total value of the prizes is not more than €2,500; and
- there is no charge for taking part in the lottery other than the purchase of the product concerned (if this is required) and there is no additional charge for the redemption of a prize.
Since the coming into force of the Gaming and Lotteries (Amendment) Act 2019 (“the 2019 Act”), the condition that the holder of a lottery permit cannot personally profit from the lottery has been removed. Therefore, a non-charitable organisation can apply to a Garda Superintendent of its local district for a lottery permit for which the total value of prizes is limited to €5,000 and the price of each ticket shall not be more than €10. However, such a lottery permit only covers a specific locality and therefore is unsuitable for country-wide promotional schemes.
Lottery licences can be obtained for lotteries with prize value limits of: (i) €360,000 if a single lottery is held during a year; and (ii) €30,000 if more than one lottery is held in any week. To obtain the licence, the applicant must show that of the total proceeds a maximum of 75% is for prizes, and a minimum of 25% is for charitable or philanthropic purposes. The licence holder is prohibited from deriving a personal profit from the lottery. A lottery licence may only be issued for a charitable or philanthropic purpose only. It cannot be granted for the personal benefit of a promoter. The 2019 Act introduces a number of new measures which are aimed at preventing non-charitable bodies using charities as a front to a licence application. For example, the District Court judge is now obliged to enquire into the purpose of the lottery and will refuse applications where it is apparent to the judge that the charity is not the main beneficiary under the licence application.
Note: Certain other exemptions apply to the requirement to obtain a licence to operate a lottery. However, these are unlikely to be relevant to the running of marketing promotions.
Last modified 1 Jun 2021