Can a prize promotion be run where there is an element of chance in the selection of the winner?
Yes, but ensure that:
- The purchase of a product or service is not a requirement in order to be able to participate in the promotion; the elements needed to enable a person to participate must be made available for free to anybody willing to participate
- Prior authorization from the Federal Lottery Agency (and in some cases by the Provincial entities regulating chance games) needs to be obtained when the prize exceeds AR$ 6,666 (approximately USD$425) in value
Please note that awards based on answering general culture questions do fall within this category under Decree 588/1998.
Trade promotions that involve an element of chance are permitted in all States and Territories of Australia. See below for specific requirements.
Australian Capital Territory
A permit is required if the promotion involves free entry with the distribution of prizes being determined by any means that includes an element of chance or a mixture of skill and chance.
A permit is not required if the only prizes offered are rebates or discounts off goods sold by the business holding the promotion and the promotion is open to all customers of that business (ie a 'private lottery') or if the total value of prizes does not exceed:
- A$3,000 (approx. US$2,220) for a Trade Promotion Lottery
- A$2,500 (approx. US$1,850) for a Raffle
- A$1,000 (approx.US$740) for a Housie session, and
- A$1,000 (approx. US$740) for a Calcutta event
However if the prize value exceeds A$3,000 (approx.US$2,220), the business will need to obtain a permit from the ACT Gambling and Racing Commission.
New South Wales
A permit is required for all trade promotion lotteries and games of chance conducted in NSW.
Entry must be free. However, a trade promotion lottery in which entry is gained by purchasing goods or services at their normal retail value (for example, where proof of purchase is required) is still allowed.
As entry must be free, entry into the trade promotion lottery cannot be gained by participants providing anything that has intrinsic value. For example, participants cannot redeem loyalty or reward points for entry into a trade promotion lottery.
An entrant or other person must not be required to call or message a telephone service on more than one occasion to provide personal information or particulars, or to answer questions, or for any other reason in order to obtain a right to a valid entry into the proposed trade promotion lottery.
Please note it is inappropriate for business directors, management and employees, their immediate families, their retailers, suppliers, associated companies and agencies to participate in s game of chance conducted for their own business – unless the lottery is specifically conducted as an 'in house' lottery (for example among sales staff). Only members and guests of a registered club should participate in a lottery aimed at promoting the business of the club.
A permit is required for the conduct of a 'major' trade lottery (ie where the total prize value is greater than A$5,000 (approx. US$3,700).
Additionally, the Northern Territory recognizes permits issued by other Australian states and territories. If the promoter holds a current permit to run the promotion in New South Wales for example, it will not need to obtain a Northern Territory permit.
Each entry must have an equal probability of winning the major prize.
No employees of the business or family members of those employees may participate in the trade promotion lottery.
No permit is required but the promotion must comply with certain requirements if it is a game of chance.
A person is not eligible to enter if the person is:
- A member of the management committee of the eligible association conducting the art union or
- Directly engaged in conducting the draw of the art union or
- The eligible association conducting the art union or
- A member of the immediate family of a person mentioned in (1) or (2)
A permit is required for a 'major' trade promotion lottery which is where the total value (nationally) of all prizes in the lottery exceeds A$5,000 (approx. US$3,700), or the prizes include both instant and drawn prizes (regardless of the value of the prizes).
A permit is not required for 'minor' trade promotion lotteries (ie that are not a 'major' trade promotion lottery) however they must comply with the minor trade promotion lottery rules.
No permit or approval is required for trade promotions.
However, if making a purchase is necessary to enter a trade promotion, the following conditions apply:
- The cost of the goods or services must not exceed the prevailing market price, and
- Determination of the market price lies with the Commission
No permit or approval is required.
Please note that a members’ draw is considered a trade promotion lottery and involves the drawing of a member's number from a pool of numbers. Terms and conditions should be available at the place of entry and to all members. The conditions of entry only require the member to be present at the draw if the entry and draw are to occur on the same day. If a member enters the draw through buying goods or services throughout the week, then the member does not need to be present at the time of the members' draw.
A permit is not required if the trade promotion lottery complies with the terms and conditions of the blanket permit published on the Department of Racing, Gaming and Liquor's website (see here). Otherwise a permit will need to be obtained to be able to vary these terms and conditions.
- Participants do not pay to enter
'Payment' is broadly interpreted by courts and includes a scenario where the purchase of goods or services is a pre-condition for participation and the price for the goods or services is higher than the market rate for such goods or services. A requirement to use a telephone number triggering a higher than standard rate is considered an unlawful payment for entry.
- The promotion does not invoke a psychological pressure on participants to buy the promoted products or services, and
- The conditions for participation are stated clearly and unambiguously
Note: If participants pay to enter, in order to participate, a license, granted under the Austrian Games of Chance Act, is required.
- The promotion also involves some degree of physical or intellectual effort, hence the promotion does not solely depend on chance. If no effort is required from the participant, the contest is to be considered a prohibited lottery (note: a company can organize a lottery in collaboration with and through a not-for-profit organization that has obtained a license from one of the competent public authorities but this is likely to substantially increase the cost of the promotion).
- Participants do not pay to enter. 'Payment' is interpreted to mean any stake or direct contribution required from the participants to enter, eg any price to be paid or the obligation to purchase goods or services at a price higher than its market rate (ie purchasing a newspaper containing a participation form at its normal price is not considered a stake from the participants). Internet connection, mail and phone costs (with the exception of phone calls to an 0900- or an 070- number (ie at higher rates) and premium text-messages) are not considered to be a stake from the participants.
Or, if it is the case that (1) is not applicable (hence, participants do need to pay to enter the promotion):
- A license is obtained from the Belgian Gaming Commission (required both for the offline and online offering of games of chance)
For the prize promotion formats known as Prize Draws and Coupons, winning is connected to chance.
Firstly, with respect to Prize Draws, assigned numbers must be issued and distributed concomitantly, randomly and equitably.
As regards to the Coupons format of prize promotion, the method of winning is instantaneous, as it occurs by the winning coupon or prize being discovered inside the product or its packaging. This must be done in accordance with rules set forth by government agencies responsible for public health and control of weights and measures. In this case, the maximum value of the prize cannot exceed R$ 400.00 (approx. US$130).
Yes, but before being awarded a prize, contestants must correctly answer a skill-testing question. The question must be a true test of skill, and ideally should be administered within a limited amount of time.
Also, contestants must be able to enter the draw without paying any money or providing any other form of consideration.
Yes, but only in the cases specifically permitted by law:
- Sweepstakes authorized by the Law on the protection of consumer rights, ie sweepstakes used as a method to carry out a promotion, which imply an additional benefit for the consumer for the acquisition of a product or service by the consumer. Sweepstakes that are not for this purpose are illegal.
- Sweepstakes authorized by the Law 20,851, which regulates bingos, lotteries or other similar sweepstakes, with a beneficial purpose.
Any other sweepstakes where there is an element of chance in the selection of the winner would be a potentially deemed an illegal lottery or game of chance, which defined in Law 19,995 of Casinos as 'those games whose results do not depend exclusively on the skill of the players, but essentially on chance or luck'. Only authorized operators can directly exploit the games of chance and can only develop the games officially incorporated in the catalog of games.
Unlawful (potentially deemed an illegal lottery, fraud and/or violation of the relevant anti-unfair competition laws and regulations), unless participants do not pay to enter or to claim/receive prize. China does not allow companies to conduct lotteries, although it does operate a couple of 'state' operated lotteries).
The laws and regulations are not clear or specific about 'payment'. However, according to the relevant cases and professional opinions, it can be inferred that in the following situations payment is required:
- 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
- Paying for goods and services at an inflated rate in order to take part in the promotion
Under the current practice (which could change in the future), the provision of data does not amount to payment.
Yes, Colombian law specifically regulates prize promotions when there is an element of chance in the selection of a winner.
Considering that article 336 of the Colombian Constitution establishes that all profits from prize promotions and gambling activities where winners are chosen randomly, are considered as a state monopoly, such activities can only be performed with a governmental authorization and by paying the corresponding fee.
Performing the activity without obtaining a governmental authorization is illegal and may be prosecuted under Colombian criminal law.
Yes. However, see also Other local requirements section.
- No financial contribution from the participants is required by the organizer (irrespective of whether reimbursement of the financial contribution is offered in the terms and conditions)
- It is a promotional lottery as mentioned in article L. 121-20 of the Consumer Code that is not an unfair commercial practice under article L. 121-1 (which means in particular that entry conditions must at all time be clear, express and transparent)
Under Section L. 121-20 of the Consumer Code, a chance-based prize draw consisting of a promotion organized by professionals to consumers is lawful to the extent it is not an unfair commercial practice.
Unfair commercial practices are either:
- Misleading practices (deemed - there is a list of 22 practices that are deemed misleading; or proven, under articles L. 121-2 et seq of the Consumer Code). For example, a promotional lottery would be deemed unfair if the prize or reasonable equivalent is not actually awarded, or if the promotion is presented as 'free' when in fact the consumer must pay anything other than the inevitable costs related to the response to the commercial practice and to taking possession of delivery of the item.
- Aggressive practices (deemed- there is a list of 8 practices that are deemed aggressive; or proven, under articles L. 121-6 et seq of the Consumer Code). For example, repeated solicitations, physical or moral constraint and certain other practices are deemed aggressive.
- 'Simply' unfair: when the practice is:
- Contrary to professional diligence (not defined but see eg, recommendations of ARPP, ICC Code on Advertising and Marketing Communication Practice) and
- Substantially alters the economic behavior of a reasonably careful and informed customer in respect of a good or service, under article L. 121-1 of the Consumer Code.
These criteria leave it to the discretion of the French consumer protection authority (DGCCRF/DDPP) and of the courts, to determine whether the practice is unfair.
- Contrary to professional diligence (not defined but see eg, recommendations of ARPP, ICC Code on Advertising and Marketing Communication Practice) and
- It is a charity raffle (article L. 322-3 of the Internal Security Code ) or a traditional lottery, if organized for a limited amount of people and for a social, cultural, or educative goal (article L. 322-4), or within a funfair (article L. 322-5).
Yes, prize promotions based on chance (prize draws also known as 'sweepstakes') are allowed, but ensure:
- Prize draws or sweepstakes should not constitute gambling under the German gambling regulation. Therefore, no payment should be required to enter.
Note: 'Payment' is interpreted to mean that the participant renders a financial sacrifice in order to obtain a chance to win. 'Irrelevant' amounts are excluded, and participation fees of up to € 0.50 are considered irrelevant; this would include fees paid to use standard telephone and postal services.
- Sweepstakes addressed to consumers should not give the impression that the prize is already won, otherwise the consumer may have a valid claim under sec. 661a BGB and this would also constitute an unfair commercial practice pursuant to no. 17 of the Annex to sec. 3 para. 3 UWG.
- The UWG does not differ between skill competitions and sweepstakes, so that the key requirements have to be fulfilled for each (see also Other local requirements section).
In most cases, competitions will be considered as 'Trade Promotion Competitions' under the Gambling Ordinance as a competition that is 'promoted, conducted or managed for the purpose of promoting a trade/business/product by way of a game that distributes or allots prizes by lot/chance'. Trade promotions competitions may be caught by the definition of 'lottery' or 'gaming' under the Gambling Ordinance.
Under the Gambling Ordinance, a prize draw is considered to be a form of 'lottery'. 'Lottery' includes raffles, sweepstakes, local Chinese games and gambling (po piu (舖票), hung piu (紅票) and tse fa (字花)) and any competition involving guessing or estimating results that does not depend to a substantial degree on skill of competitors which distributes or allots prizes by lot or chance.
'Gaming' means the playing of a game or any game played for monetary benefit or other property, whether or not any person playing the game is at risk of losing any money or other property.
In most cases, prior approval is needed for a prize draw in the form of a license and for the majority of competitions, this will need to be in the form of a Trade Promotion Competition License.
Selling, disposing, printing and publishing tickets without a license are criminal offences along with publishing and forecasting results and providing money for unlawful lotteries, all punishable by fines or imprisonment.
A Trade Promotion Competition License is granted for particular competitions and if there is more than one competition running simultaneously, corresponding licenses may be required for each competition or location, depending on the connection between the two competitions.
If a competition is determined predominantly on the basis of chance, then it is unlawful if participants pay to enter or to claim/receive a prize. However, a prize promotion which is skill based and only has an element of chance may not be illegal per se.
Unlawful (potentially deemed an illegal lottery in the absence of a permit or license), unless participants do not pay to enter or to claim/ receive prize. Where a prize draw involves payment/purchase of a product (thus not satisfying a free route to entry), Irish promoters often include an element of skill at the start of the entry mechanism (such as a qualifying question) intended to reduce the risk of the prize promotion being considered an unlawful lottery. There is no guarantee that such efforts would be successful. However, this is common practice in Ireland.
'Payment' is not defined in the Gaming and Lotteries Acts. In order to fall within the statutory definition of a lottery the prize draw must be 'for money or money’s worth'. Therefore, it is possible that an Irish court could conceivably consider the following to be a payment: 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 a requirement to provide a large quantity of data, especially if the promoter intended to sell such data to third parties.
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 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.
Some lotteries requiring payment to enter may be lawfully run without a permit or license. However, this exemption is only available in respect of:
- Private events (eg a workplace sweepstake)
- Lotteries promoted as part of a dance, concert or other like events and the persons arranging the event derive no personal profit from the event or the lottery and the total value of the prize(s) in the lottery is limited to €31
- Lotteries promoted as part of a circus or other travelling show, on certain days
- Lotteries promoted not for profit and as part of a carnival, bazaar, sports meeting, local festival, exhibition or other like event on certain days, and
- Lotteries promoted by the licensee of a licensed amusement hall or funfair
Exemptions (3) to (5) are subject to additional requirements:
- The tickets are not sold outside the place or premises where the event is in progress
- The tickets are sold only on the same day or night as the draw and announcement of results
- The price of each ticket is not more that €0.08c, and
- Neither taking part in nor the result of the lottery entitles the participant to take part in any other lottery or game or otherwise to receive or be eligible to compete for any money or money's worth
Same restrictions that apply for skills competitions (see Skill competitions section) also apply to prize draws (both called Concorsi a premio).
Under the AAUPMR and the Notification on Premium Offers by Lotteries or Prize Competition (the Japan Fair Trade Commission's Notice No.3 of 1977) and Guidelines for the Interpretation of the Notification on Premium Offers by Lotteries or Prize Competition (Japan Fair Trade Commission's Secretary General Notice No.4 of 1977) (collectively the 'Notification'), prize draws are generally permitted. For the purposes of this regulation, prize draws will generally be considered to be in one of the following two categories:
- 'Closed' prize competitions, which require purchase of products/ services to participate in the prize draw, or
- 'Open' prize competitions, which do not require such purchase
Only 'Closed' prize competitions are regulated under the AAUPMR and the Notification.
The AAUPMR and relevant notifications regulate the maximum single prize value and maximum total value of all prizes.
On the other hand, 'Open' prize competitions are not regulated under the AAUPMR and the Notification.
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.
Subject to compliance with other requirements (see Other local requirements section), advertisers are allowed to organize a promotional game of chance where the entrant wins a free gift(s) (eg prize draw, sweepstake).
In instances where the total value of prizes (or a prize if there is only one prize) to be won is equal to or exceeds € 4,500 but does not exceed € 100,000, a prize draw may be organized once per year per product, service, brands or company, provided that:
- Participants do not pay to enter
- That terms and conditions are in accordance with the Code of Conduct, and
- The marketing and terms and conditions are not misleading, incomplete or give rise to false expectations.
Also, rules apply regarding the amount of actual draws for each promotion ie the number of occasions per year when winners can be selected.
In instances where the total value of prizes (or a prize if there is only one prize) to be won is below € 4,500 per year, there is no limit to the amount of prize draws that may be organized (although rules apply regarding the organization and marketing of the prize draw).
Prize draws where the total value of prizes (or a prize if there is only one prize) exceed € 100,000 are not allowed.
A sweepstake is considered a lottery under the Gambling Act and as such will be permitted as a prize promotion if it meets the criteria of a 'sales promotion scheme' (defined in section regarding skill based competitions). Otherwise, the gambling will normally be unlawful unless it is organized by a charitable society who receives the proceeds. Also, a license may be required from the Department of Internal Affairs, depending on the total value of the prizes and the turnover of the gambling.
Where a product purchase is not required and no other entry fee is paid to enter a prize draw, a license or permit is not required. This is because the entrant is not 'paying or staking consideration seeking to win money' and as such it does not amount to gambling. However, the Fair Trading Act would continue to apply (as above).
Unlawful (potentially deemed an illegal lottery in the absence of a license), unless participants do not pay to enter or to claim/ receive a prize.
Any payment of 2 NOK (approx. US$0.20) or above will be deemed as payment.
Sweepstakes related to horse racing and sports competitions are regulated by different laws. With horse racing, certain licenses are required, while gambling on sporting competitions is in principle not allowed. All other types of sweepstakes where a stake is to be paid would be considered a lottery, and would require a license to be legal.
This is unlawful (it may be considered as a lottery, which requires obtaining official approval under the Gambling Act), unless participation in the promotion is not conditional on the purchase of goods, services or another game ticket.
Under Polish law, it will be deemed to be a lottery where the outcome is significantly conditional on chance (the main condition), the prize is either cash or a material prize (there is no legal definition of material prize under Polish law, however a prize is considered to be material if it is neither cash nor its equivalent (eg gift certificates, vouchers etc.); thus, for instance material prizes are cars, books, trips etc.), and participants purchase goods, services or another game ticket to enter the lottery.
If the purchasing of goods, services or another game ticket is optional, the game should be generally treated as a prize promotion, not as a lottery.
Yes but depends on prior authorization from local competent authority (General Secretary of Ministry of Internal Affairs). Please note that Prize Draws are considered to be games similar to fortune games which depend on chance or on chance combined with skill and, therefore, they are subject to specific legal requirements:
- It must not be performed by entities with profitable purposes except as a means to promote and advertise products or services provided by such entities
- The participant may not incur any expenses other than post or telecommunication expenses (with no value added, whatsoever), or expenses higher than the cost of the product or service that the contestant is intended to claim
- It cannot be similar to or use themes from fortune games (such as poker, fruits, roulette, dice, bingo, numbered lotteries, etc)
- Worldwide prize draws are not accepted for authorization by the competent authority (only local prize draws)
Note as above in the Governing law section, the regulation of games of fortune and state-run social games (such as state lotteries) are specific, and are beyond the scope of this guidance.
A prize draw may be conducted if the participants do not have to make direct or indirect payment to enter the competition. (An example of an indirect payment is where an additional payment is required on top of the price of a product/service that is required to be purchased as condition of entry into the competition or an inflated price is charged for the good or service).
Expenses incurred by participants in respect of postal services as well as normal telephone costs are allowed.
A consumer competition could also be considered a game of chance and, thus, fall under the provisions of the gambling legislation if:
- Material prizes, generally monetary, are awarded following a public offer of potential winnings by the organizer and acceptance of this offer by the participant
- A direct or indirect payment of a participation fee is required other than the normal cost of purchasing a good or service, and
- Winnings are awarded on the basis of game rules through a random selection of the results of the events to which the game relates, regardless of how these results are achieved
If this is the case, the organizer must obtain certain authorizations and licenses.
Yes. In this case, the promotion will fall under the definition of 'lottery' (which is regulated differently and separately from skills-based competitions). The main requirements set out in the Code and in the Law are:
- A lottery conducted in Russia must adhere to certain formal requirements and must be registered as such
- The terms of the lottery must contain the timeframes of conducting the lottery, order of determining the award and its amount and other formal requirements
- If the timing for payment of the award is not indicated, the award must be paid out not later than 10 days commencing on the date of determination of the results of the lottery (general rule). In case of non-payment the participants may claim the redress of damages in full amount from the organizer
- The refusal to conduct the lottery in the pre-agreed term will give the participants the right to demand the pay out of damages (only real damages, not lost profit)
Yes, the ACFR does not expressly prohibit prize draws where there is an element of chance in the selection of the winner. However, there are a number of requirements and restrictions under the ACFR that must be complied with in relation to any prize promotions/competitions. For example, there is a requirement that, amongst others, purchasing (a ticket, product or anything else) must not be set as a condition for participation.
On the assumption that such a prize promotion falls within the definition of 'public lottery' as defined in the RGA (please see section on skill based competition) and/or the CGHA then such a prize promotion is unlawful. However, it would be allowed if it qualified under one of the prescribed statutory exemptions.
Under the Remote Gambling (Exempt Persons) Order 2015, the following remote gambling services are exempt subject to certain conditions:
- Public lotteries conducted by a business organization to promote the sale of products and services (other than a gambling service) sold or supplied by that business organization in the course of business in Singapore ('Customer Lotteries'). The business organization must not charge a fee to enter the lottery, except a reasonable fee for the value of the product or service where sold or supplied.
- Lotteries promoted by charities or institutions of public character ('Non-commercial Organization Lotteries').
- Public lotteries incidental to events such as fairs, dinners, sporting or athletic events or other similar events taking place in Singapore that may be attended by members of the public ('Incidental Lotteries'). The organizers of the event must not charge a fee to enter the lottery, except any reasonable fees for attending the connected event.
Under the Common Gaming Houses (Exemption) Notifications, the following public lotteries are exempt subject to certain conditions:
- Public lotteries conducted by a business organization for the purposes of promoting the sale of any product or service are exempt from the CGHA ('Sales Lotteries')
- Lotteries promoted by certain charities or institutions of public character
Private lotteries, which are lotteries in which tickets or chances are confined for sale only to members of a society which is established for purposes not connected with gaming, wagering or lotteries, are governed by the PLA. Under the PLA, private lotteries are prohibited unless a permit is granted.
Besides this, any person or organization running sweepstakes in Singapore may apply to the MHA to get an exemption under the CGHA or the RGA.
The Act on Speculative Acts prohibits 'obtaining goods or benefits from several people and using chance-based methods to determine win/loss to give such people profit or loss.' A person must obtain approval from the district police to engage in 'speculative acts' such as lotteries, sweepstakes, lucky draws, and giveaways.
However, it is unclear whether this requirement applies to a contest in which the contest sponsor does not directly collect commission or fees from the contest itself, but rather receives an indirect benefit, such as publicity. As far as we are aware, there has been no judicial or administrative precedent that addresses whether deriving indirect benefits or profit would render promotional activities a speculative activity.
- Participants do not make an additional payment to become eligible. Examples of additional payment are premium SMS or premium calls. (Standard postage, SMS or call charges would generally not be regarded as additional payments except if the call takes too long or several standard SMSs are required). Purchases of products without extra charges or requiring the condition of being a client are not considered as an additional payment.
- The promotion is intended exclusively for promotional or marketing purposes.
Unlawful even if participants do not pay to enter or to claim/ receive a prize, unless a license from the Swedish Gambling Authority has been obtained.
Only certain entities are allowed in the Swedish gambling and lottery market, namely non-profit organizations, the horse racing industry and the Swedish state. In principle, commercial entities are excluded from the Swedish gambling and lottery market, with the exception of a certain level of entertainment gambling, ie gaming with low-value bets and low-value prizes. Such gambling may be carried out by private entities.
Note: In contrast with many other European countries, the payment of a stake is not required to render an activity as regulated gambling. Instead, all chance-based activities where a participant may obtain a prize of a higher value than the other participants generally constitutes regulated gambling under the Swedish Lotteries Act, including certain gift-for-free activities with a limited number of gifts.
Unlawful, as it is considered 'gambling' under the TGA, unless the participants do not pay to enter or to claim/receive the prize.
If the participants do not pay and it is not considered gambling under the TGA, it will be considered a 'prize promotion event' which is controlled under the TGA. A license must be obtained from DOPA prior to the prize promotion event.
Under the TGA, a prize promotion event is considered to be an arrangement for complimentary gifts or prizes, awarded to people trying their luck in any manner in the conduct of a business or in the pursuit of an occupation.
United Arab Emirates - Dubai
Only prize draws are permitted, provided:
- Participants do not pay to enter (but participation may be linked to paying for the promoted product or service), and
- A permit is obtained from the Department of Economic Development (DED) for conducting the promotional campaign and its relevant draw
Unlawful (potentially deemed an illegal lottery in the absence of a license), unless participants do not pay to enter or to claim/ receive prize.
'Payment' includes: 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 paying for goods and services at an inflated rate which reflects the opportunity to take part in the promotion. As a general rule, the provision of data does not amount to payment, but a requirement to provide a large quantity of data could amount to payment, especially if the promoter intended to sell such data to third parties.
Note: In Northern Ireland (which is part of GB but not the UK), a genuine, no-purchase route to entry must be provided. This is not a requirement in the UK, but it can be a good way to avoid the risk of there being a payment.
The Law of Ukraine on 'Prohibition of Gambling in Ukraine' prohibits gambling activity in Ukraine. Within the meaning of the said law, gambling is any game, a compulsory condition of which involves the payment of money by the player, including via e-payment, which will enable the participant to either get the winning (prize) in any form, or to not get it, depending on chance.
The following (among other things) are excluded from the prohibition on gambling and can be run in Ukraine:
- Prize draws based on chance run on a free of charge basis aimed at promoting (popularizing) certain goods, services, trademarks, company names or areas of business offered by a business entity, commercial program which provide for prizes either in monetary or property form, and
Lotteries are subject to separate regulation by the Law of Ukraine on 'State Lotteries in Ukraine'. In particular, the law prohibits holding lotteries without a license. Currently, the application process for lottery licenses is blocked due to the absence of adopted license requirements. State lottery operators are operating based on the respective licenses issued to them prior to adoption of the Law of Ukraine on 'State Lotteries in Ukraine'; thus, existing lottery operators are conducting their activity based on the old licenses, but the order allowing new licenses to be obtained has not been adopted yet.
Prize draws are generally allowed, but you cannot require consideration as a condition for entering or awarding a prize in a chance competition. Most states prohibit illegal lotteries, which is a defined as a scheme that involves a prize, chance, and consideration. Consideration usually takes two forms: monetary consideration which involves a product purchase or payment, and non-monetary consideration in which the entrant expends substantial time or effort which benefits the sponsor or provides some other thing of value to the sponsor.
A legal sweepstakes avoid being an illegal lottery by removing the element of consideration. One way to eliminate consideration is offer a free, alternative method of entry (AMOE). The AMOE must be truly free and have equal dignity (eg the same number of entries or chances to win) as a purchase method of entry. The AMOE must be clearly and conspicuously disclosed in the advertising of the sweepstakes.
A skill contest avoids being a lottery by removing the element of chance from the competition. The key here is making sure the winner of the contest is determined by skill and not chance.
The DMA requires that sweepstakes mailings include statements that disclose, among other things, that a purchase is not necessary to enter and will not improve the chances of winning, a name and address where the sponsor can be contacted, the terms and conditions, the entry procedure, the estimated odds of winning each prize, the quantity and estimated retail value of every prize, and a statement of the payment schedules of any prize. 39 U.S.C. § 3001(k)(3)(A).
Arizona – Permits 'amusement gambling', which it defines as being determined by skill rather than chance. A.R.S. §§ 13-3301(1), 13-3302, 13-3311.
California – Prohibits prize draws where the participants must pay something of value as a term of entry. Cal. Bus. & Prof. Code § 17539.3; People v. Cardas, 137 Cal. App. Supp. 788 (1933).
Florida – Prohibits requiring an entry fee, payment, or proof of purchase as a condition to entering a game promotion. Fl. Stat. §849.094(2)(e).
Illinois – Defines 'prize' to include prizes from games of chance. Sponsors must not charge a fee for entry or require purchase. 815 ILCS 525/10, 20.
Georgia – Prohibits promotions that require person to pay money, including payments for service fees, mailing fees, or handling fees. Ga. Code Ann. § 10-1-393(b)(16)(C).
Kansas – Prohibits lotteries for consideration, but mere registration without the purchase of goods or services does not constitute consideration. Promotions therefore cannot require the purchase of goods or services or attendance at places or events which require the payment of an admission fee. Kan. Stat. § 21-6403.
New Mexico – Prohibits any promotions for consideration unless certain disclosures are made in each and every representation made in connection with the promotion. N.M. Code R. § 126.96.36.199.
New York – Requires posting of minimum number and value of prizes and the rules of the promotion in every retail establishment offering participation. N.Y. Gen Laws § 369-3(2).
Texas – Prohibits allowing individuals to choose a prize unless that choice appeared on the entry form and is in no way connected to an order form or other purchasing mechanism. Tex. Bus. & Com. Code § 622.103.