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• Governing law

  Name	Law or Code?
  Federal Civil Code ('Civil Code') [Código Civil Federal] Published on the Official Gazette on August 31st, 1928	Code
  Federal Criminal Code ('Criminal Code') [Cdigo Penal Federal] Published in the Official Gazette on August 14th, 1931	Code
  Federal Law for Gaming and Lotteries ('Gaming and Lotteries Law') [Ley Federal de Juegos y Sorteos] Published in the Official Gazette on December 31st 1947	Law
  Regulations for the Federal Law of Gaming and Lotteries ('Gaming and Lotteries Regulations') [Reglamento de la Ley Federal de Juegos y Sorteos] Published in the Official Gazette on September 17th 2004	Regulation
  Federal Income Tax Law ('Income Tax Law') [Ley del Impuesto sobre la Renta] Published in the Official Gazette on December 11th 2013	Law
  Federal Law for the Protection of the Consumer ('Consumer Law') [Ley Federal de Protección al Consumidor] Published in the Official Gazette on December 24th, 1994	Law
  Regulations of the Federal Law for the Protection of the Consumer [Reglamento de la Ley Federal de Protección al Consumidor] Published in the Official Gazette on August 3rd, 2006	Regulation
  Regulations for Promotions and Offers ('Promotions and Offers Rules') [Reglamento sobre Promociones y Ofertas] Published in the Official Gazette on September 26th, 1990	Regulation
  Internal Regulations for the Ministry of Interior ('Ministry Regulations') [Reglamento Interior de la Secretaría de Gobernación] Published in the Official Gazette on April 2th, 2013	Regulation
  Official Mexican Standard number: NOM-028-SCFI-2007 Commercial practices – information elements required for collectable promotions and/or promotions by means of raffles and contests. ('NOM 028') [NORMA Oficial Mexicana NOM-028-SCFI-2007, Prácticas Comerciales-Elementos de Información en las Promociones Coleccionables y/o Promociones por medio de Sorteos y Concursos] Published in the Official Gazette on October 5th, 2007	Compulsory Official Standard (Norma Oficial Mexicana)

  Last modified 10 Feb 2017

• Extra-territoriality

  The Consumer Law is the main body of legislation that regulates prize promotions. However, it only applies for operations within Mexico.

  Pursuant to s. III; Art. 12 of the Gaming and Lotteries Law, Mexican entities or individuals located in Mexico, should not participate in the sale or distribution of lottery tickets (ie prize draws) or gambling that takes place abroad without the required authorization from the Ministry of Interior. Failure to obtain such authorization may carry a fine between MXN$ 500 (approx. US$24) to MXN$ 10,000 (approx. US$490) and imprisonment between 3 months to 3 years.

  Last modified 10 Feb 2017

• Skills competitions

  There is no existing regulation applicable for skill competitions.

  Last modified 10 Feb 2017

• Prize draws

  The Gaming and Lotteries Law prohibits games of chance and gambling (art. 1). However, limited types of games that involve a certain degree of chance are allowed (Art. 2), such as chess, domino, dice, races (by human, vehicle and animal),and any type of prize draw. The responsible authority to regulate these activities and grant licences is the Ministry of Interior (Art.7 of the Gaming and Lotteries Law and Art. 16 of the Ministry Regulations).

  Businesses that offer any of the authorized games must have a license from the Ministry of Interior. Further, every prize draw has to obtain a registration from the Ministry of Interior (General Office for Gaming and Lotteries ('GOG': Dirección General de Juegos y Sorteos)). The only exception by law is prize draws organized by the government through the national lottery organization named Loteria Nacional.

  Last modified 10 Feb 2017

• Selection of winners

  Alongside other requirements, such as the requirement to obtain an authorization from the GOG, the applicant must provide:

  • A guarantee equal to the value of the prize(s)
    
    
  • Details relating to the procedure for selection of participants, draw operation, selection and publication of winners
    
    
  • Ticket sample
    
    
  • Identity of the ticket supplier (only applicable for instant draws)
    
    
  • Valuation of the goods to be given as prizes
    
    
  • The structure of the promotion eg selection procedure and draw operation etc. for different prizes, and
    
    
  • Payment of government duties

  The GOG performs random reviews of the licenses it has granted to confirm they were performed in accordance with the procedure indicated in the application and the Gaming and Lotteries Law. In some cases a representative from the GOG attends the winner selection event and prize giving.

  Last modified 10 Feb 2017

• Judges

  There is no regulation relating to judges and judging in skill competitions.

  Last modified 10 Feb 2017

• Prizes

  There is no applicable law enacted that limits the amount or types of prizes. However, they cannot be illegal products or regulated products without their respective authorization/license.

  Last modified 10 Feb 2017

• Registration requirements and fees

  It is necessary to have either a registration or authorization from the Ministry of Interior through the GOG for any of the limited authorized games that involve chance and prize draws as discussed above.

  In addition, there are certain government duties to be paid, such as participation on earnings by the government, fees for inspections and registration of the prize draw, etc.

  As an example, a government duty of MXN$ 1,581.00 (approx. US$77) is to be paid for each of the inspections to be carried out by the GOG (ie inspection prior to the issuance of the authorization or the delivery of the prize to the winner).

  Further, if the prize is not collected by the winner, the organizer needs to deposit such unclaimed prize, either physically or its value in cash, before the GOG.

  The Income Tax Law provides that Income Tax may be withheld from the prize winner and be payable by the prize promotion organisers for the income generated to the prize winner. This only applies for prize draws organized in Mexico. The percentage is 1% over the total amount to be distributed among the winning tickets in states where there is no income tax for prize draws or such tax is not higher than 6%. However, in the states where such state tax is higher than 6%, the federal tax increases to 21%. The tax should be withheld by the party making the payment, and it is considered as a final tax, which must be remitted to the Mexican Tax Authorities. In cases where a corporation or a non-profit organization receives this type of income, they may be relieved from a withholding tax; but should report it separately (Art. 138).

  Notwithstanding the above, if an entity or individual intends, exclusively, to conduct a promotion, it is only required to notify or obtain an authorization before the Consumer Attorney-General ('Profeco') if such notification or authorization is required by any Compulsory Official Standard or could potentially harm the consumer (art. 47 Consumer Law). A promotion is a prize draw involving a product or service provided by the promoter.

  Last modified 10 Feb 2017

• Other local requirements

  The entity or person doing a prize draw must include in the communication of the same (eg in the official rules) to potential entrants the following information (Nom 028):

  • Authorization number granted by the Ministry of Interior
    
    
  • Number of entry tickets issued
    
    
  • Total number of prizes
    
    
  • Mechanism to obtain the entry ticket
    
    
  • Mechanism to know the winner, place and date where the prize draw is going to occur
    
    
  • Communication means and dates when the winner is going to be announced and the prize giving
    
    
  • Term and place to collect the prize
    
    
  • Contact numbers and schedules for general information and enquires

  The entity or person operating a promotion must include in the communication of the same (eg official rules) to potential entrants the following information (Nom 028):

  • Name and address of the promoter
    
    
  • Goods or services subject to the promotion
    
    
  • Incentive offered in the promotion
    
    
  • Terms and conditions of the promotion
    
    
  • Geographical coverage
    
    
  • Establishments where the promotion is applicable (if any)
    
    
  • Restrictions (if any), and
    
    
  • Guarantees offered to such promotion

  Any amendment to the terms and conditions must be delivered by the same means of the initial offer. It is not advisable and we do not recommend changing the terms and conditions once the initial offer has been published. The authority responsible for the surveillance of the terms and conditions of promotions is Profeco.

  Profeco has the authority to issue sanctions against individuals or entities that do not comply with the Consumer Law and it focuses its attention to misleading, wrongful, fraudulent, unlawful promotions or advertisements (ie prize draw publicity). Therefore, great care is advised in content selection for the advertising of any type of prize draw.

  Last modified 10 Feb 2017

• Timing

  Yes, where a licence/registration is required, time is required to apply in some cases.

  For instance, in accordance with the NOM 028 if an entity issues promotions of collectable items by means of draws or contests it shall provide information about the promotions to Profeco 3 days prior to the starting date of such promotions.

  Last modified 10 Feb 2017

• Translations

  There is no specific requirement to have the promotions or prize draws terms and conditions written in Spanish.

  However, please note that the Consumer Law indicates that the promotional material of products must be written in Spanish (art. 34).

  Last modified 10 Feb 2017

• Penalties for non-compliance

  The Gaming and Lotteries Law, establishes a penalty of imprisonment between 3 months to 3 years and a fine between MXN$500 (approx. US$25) and MXN$10,000 (approx. US$490) to any Mexican entity or individual that participates in the sale or circulation of lottery tickets or gambling that takes place abroad without the required authorization from the Ministry of Interior (Art. 12).

  Further, the Gaming and Lotteries Law provides for 1 month up to 2 years imprisonment and a fine between MXN$100 (approx. US$5) to MXN$5,000 (approx. US$250) for people that knowingly lease a property to carry out illegal gambling or lotteries without the authorization from the Ministry of Interior.

  The Ministry of interior has the ability to close down any entity offering any type of gambling, chance game or betting (illegally or without due authorization) (Art. 8 of the Gaming and Lotteries Law).

  The Consumer Law via Profeco indicates different amounts for fines depending on the type of breach. However note that they can be as low as MXN$236.54 (approx. US$12) and high as MXN$7,948,063.22 (approx. US$390,000).

  The Criminal Code provides that the same penalties as fraud shall be applicable when a person keeps the prizes or money due to a prize draw instead of transferring the same to the winner (Art.387, sec. XI). The sentence for fraud can be between 3 days to 12 years of imprisonment and fines ranging from MXN$2,191.20 (approx. US$110 to MXN$8,764.80 (approx. US$430) (depending on the damage value; calculated on minimum wages) (Art. 386). 

  Last modified 10 Feb 2017

• Restrictiveness of regulations

  For prize draws, there is a requirement to obtain a licence/ registration (see Prize draws section), and there are also some quite specific requirements as to what must be included in terms and conditions (see Other local requirements).

  Last modified 10 Feb 2017

• Regularity of sanctions

  Profeco is likely to use some of its powers if a prize promotion does not comply at least with the general requirements indicated in the Other local requirements section, such as:

  • To instruct the offeror to stop the promotions
    
    
  • To instruct the correction of the promotional content
    
    
  • To close down the operator, and
    
    
  • Impose any other sanction applicable by law (arts. 35 and 128bis of the Consumer Law)

  Fines are common. However, prison sentences are rare.

  Profeco and the Ministry of Interior through the GOG will initiate an investigation upon receiving a complaint from any consumer. However, it is common for Profeco to realize random reviews in commercial establishments.

  Last modified 10 Feb 2017

• Key contacts
  

  Eduardo Gallastegui

  Partner DLA Piper Mexico [email protected] T +52 5 55 261 1807 View bio

  

  Pedro Manzano

  Associate DLA Piper Mexico [email protected] T +52 5 55 261 1854 View bio

  

  Rodrigo Garcia Moncada

  Associate DLA Piper Mexico [email protected] T +52 5 55 261 1821 View bio