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.
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 distribution of prizes determined by any means that includes an element of chance or a mixture of skill and chance, and entry must be free.
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 (i.e. a 'private lottery') or if the total prize value does not exceed:
- A$3,000 (approx. US$2,077) for a Trade Promotion Lottery;
- A$2,500 (approx. US$1,731) for a Raffle;
- A$1,000 (approx.US$693) for a Housie session; and
- A$1,000 (approx. US$693) for a Calcutta event.
However if the prize value exceeds A$3,000 (approx.US$2,077), 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. Accordingly, 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. However, a trade promotion lottery for 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.
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 a 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$3,463).
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$3,643), 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 ''where the maximum prize value is less than A$5,000 (approx. US$3,643)), 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. However, trade promotions lotteries must comply with conditions set out in Gambling Regulation Act 2003 (Vic) and related regulations.
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 or the required effort is too hard (e.g. a very difficult question, like how many people will participate in the promotion, so that it comes down to guessing), 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 (i.e. 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 (i.e. at higher rates) and premium text-messages) are not considered to be a stake from the participants.
Or, if it is the case that (2) 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$100).
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 allowed by law:
- Draws authorized by Law Number 20,851, which regulates bingos, lotteries or other similar sweepstakes, with a charitable purpose.
- Raffles authorized by the Law on the protection of consumer rights, that is sweepstakes used as a method to run a promotion, which imply an additional benefit for the user for the acquisition of a product or service by the consumer (sweepstakes for other purposes are illegal).
Any other draw in which there is an element of chance in the selection of the winner involved, would be considered and potentially deemed an illegal lottery or game of chance, which is 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'. The direct exploitation of games of chance and development of games officially incorporated in the catalogue of games can only be done by authorised operators.
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.
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; nevertheless, the state might authorize private entities or individuals to perform such activities. In this event, such activities can only be performed with a governmental authorization and by paying the corresponding fee.
For promotional games, providing that they do not require a direct payment to participate, they do not generate “profits”, and so the exploitation rights or fees are calculated based on the value of the award scheme. The value of each prize from the award scheme cannot exceed 160 times the monthly minimum legal wage (approximately US $44,166 [See note 1]), and the prizes shall be delivered within 30 calendar days. Performing the activity without obtaining a governmental authorization is illegal and may be prosecuted under Colombian criminal law.
Note 1: For all the purposes of this section, a Colombian monthly minimum legal wage for 2019 is equal to COP $828.116 (approximately USD $276).
Yes. However, in this scenario, it is necessary to avoid a situation where the prize promotion could be interpreted as a game of chance. Operation of games of chance is regulated by Czech law and is not allowed without a permit. The general distinction is that in order to be interpreted as a game of chance (and therefore subject to gambling regulation), the customer must provide a stake the return of which is not guaranteed and the result of the game must be determined based on chance or other unknown circumstance. In other words, it is not considered as gambling when the game either (i) does not require the customer to provide any stake or (ii) a stake is provided, but the result of the game is not in any way dependent on chance.
This means that if an element of chance is present in the selection of the winner, the participants must not provide any stakes (payment) the return of which would not be guaranteed.
Purchase of goods at their usual price or participation in a marketing event is not considered to be a stake. However, participation in a prize promotion cannot be tied, for example, to the purchase of goods at a price above their normal price. Similarly, if the prize promotion takes place via text messages (SMS), the price may not exceed the standard price according to the tariff of the mobile operator. Otherwise, the difference between the normal price and the increased price could be considered to be a stake within the meaning of the gambling regulation.
Yes, a prize promotion can be run, where there is an element of chance in the selection of the winners. However, see the other local requirements section.
Note: If the prize promotion entails payment of a stake, a license is required, otherwise it will potentially be deemed an illegal lottery. In Denmark lotteries are subject to monopolisation. However, permission can be given if a lottery is held with beneficial purposes or for other non-profit purposes.
Payment of a stake includes payments for goods and/or services, where the prices have been inflated to pay for the participation in the prize promotion. If, however, the price of the good and/or service corresponds with the value of the good or the service, the payment will not be considered a stake.
Yes. However, see also Other local requirements section.
No financial contribution from the participants is required by the organiser (irrespective of whether reimbursement of the financial contribution is offered in the terms and conditions); or
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 times be clear, express and transparent).
Under Article 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, scientific, educational, sports or social activity purpose (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 (approx. US$0.56) 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 s.661a BGB. This would also constitute an unfair commercial practice pursuant to no. 17 of the Annex to s.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).
Hong Kong, SAR
Under the Gambling Ordinance, a prize draw is considered to be a form of 'lottery'. Since there is no element of skill but only chance involved in a prize draw in general, a Trade Promotions License is required accordingly.
Yes. However, if the conditions of gambling mentioned above are met, it might be considered as a gambling activity, which is unlawful. Under the Gambling Act, 'prize draws' shall be reported to the GSA in advance (but no license is required). Pursuant to the Gambling Act, a prize promotion will qualify as a 'prize draw' only if the following requirements are met:
- it is related to the purchase of goods or services;
- free of charge (there is no payment in addition to the usual market price of the product or service);
- the determination of the winner is conducted through the 'public drawing' of a ticket.
If these requirements are not met (e.g. participation is skill-based and not based on purchase of goods), the organizer has no obligation to notify the GSA and the provisions of the Gambling Act will not apply, unless the activity is considered as gambling activity, e.g. because participation is not free of charge. Cash prize is not possible in the case of prize draws.
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.
This is 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 (approx. US$35);
- 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 €0.08 (approx. US$0.09); 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 Skills 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.
Yes, under the previous law (under which the exception in the 2002 Law applied), when the following conditions were fulfilled: (i) the organizer had to establish terms and conditions for the participation in such prize promotion, which had to be registered with a bailiff; (ii) the terms and conditions about the prize were not misleading; (iii) the participation form had to be separate from any purchase order for a good or service; (iv) the draw was not to be subject to any consideration of any kind, or any obligation to purchase; and finally (v) the organizer who gave the impression that the customer had won a prize, had to provide such prize to the consumer.
It is uncertain whether such conditions remain applicable given the current status of the law (see Governing law). A number of operators on the Luxembourg market nonetheless continue to apply the principles of the previously applicable law as good practice.
Actual games of chance such as slot machines, sports bets, and casinos are highly regulated, and under certain circumstances, prohibited, in Luxembourg.
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) (e.g. 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 (approx. US$5,000) but does not exceed € 100,000 (approx. US$112,000), a prize draw may be organized once per year per product, service, brands or company, provided that:
- Participants do not pay to enter;
- That terms and conditions are in accordance with the Code of Conduct; and
- The marketing and terms and conditions are not misleading, incomplete or give rise to false expectations.
Also, rules apply regarding the amount of actual draws for each promotion i.e. the number of occasions per year when winners can be selected.
In instances where the total value of prizes (or a prize if there is only one prize) to be won is below € 4,500 per year, there is no limit to the amount of prize draws that may be organized (although rules apply regarding the organization and marketing of the prize draw).
Prize draws where the total value of prizes (or a prize if there is only one prize) exceed € 100,000 (approx. US$) 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 the proceeds are applied or distributed for 'authorised purposes' which include a charitable purpose, a non-commercial purpose which is beneficial to the community, race meetings under the Racing Act 2003 or an electioneering purpose. 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).
Yes. Prize promotions with an element of chance fall within the scope of the definition of lottery under Section 57 of the National Lottery Act.
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 to be 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.
Game of poker where a stake is paid is considered to be an unlawful lottery, with the exception of two circumstances:
- Where poker is played privately, between acquaintances, with maximum 10 participants and the total stake per player is not more than NOK 1,000 (approx. US$114);
- National championships in poker that are licensed through the lottery authority.
Not without a permit. Namely, if a prize promotion includes an element of chance in the selection of the winner, it may be considered to be a lottery or a promotion lottery, which requires obtaining an official permit under the Gambling Act.
Under Polish law, a game will be deemed to be a lottery where the outcome is significantly dependent on chance (the main condition), the prize is either cash or a physical prize (there is no legal definition of a physical prize under the Polish law, however a prize is considered to be physical if it is neither cash nor its equivalent (e.g. gift certificates, vouchers etc.); thus, for instance physical prizes are cars, books, trips etc.), and participants purchase goods, services or another game ticket to enter the lottery.
Yes but depends on prior authorization from local competent authority. 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).
Please note that Game Law (applicable to contests/competitions depending on luck/chance or luck/chance combined with skill) was recently amended and one of the relevant amendments was the transfer of competences to authorize such contests/competitions from SGMAI (Secretaria Geral do Ministério da Administração Interna) to the (i) President of Municipality (in case the contest/competition is limited to the territorial area of a specific municipality); or (ii) President of Municipality of the residence or headquarters of the entity promoting the competition/contest (when it is not limited to the territorial area of one municipality).
In general terms, the amendments entered into force on 1st, January, 2019. However, from a formal standpoint, the transfer of competences may be refused by the Municipality, in which case SGMAI will, in principle, remain competent for such purposes. The competence to authorize prize draws shall be assessed on a case by case basis.
Note as above in the Governing law section, the regulation of games of fortune and state-run social games (such as state lotteries), as well as sales with price reductions (discounts), 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 refer to the Skills competition section) 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, institutions of public character ('Non-commercial Organization Lotteries') or full members or associate members of the National Council of Social Service.
- 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 ('Sale Lotteries'); and
- Lotteries promoted by certain charities, institutions of public character and full members or associate members of the National Council of Social Service.
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 and such number of guests of each member as the Minister for Home Affairs may prescribe by regulations, 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.
Yes. However, please note that a Swedish gambling license is required if participation requires payment of a wager, stake or similar.
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.
Yes, chance-based promotions are permissible, but this area is heavily regulated by the GDNL. Please note that chance-based games where cash is given as a prize can only be organized by the GDNL. On the other hand, chance-based games where non-cash prizes are awarded can be organized provided permission from the GDNL is first obtained. As an exception, if the value of a non-cash prize awarded does not exceed a specified limit (TRY 115,2 - approx. US$19, for the year 2019), the approval of the GDNL is not required before organizing the prize promotion.
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.
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.
This would be 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 (but a purchase requirement where the price of the product purchased is not inflated does not amount to a “payment to enter”). 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 that requirements to provide data separately raise various GDPR issues).
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.
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. § 18.104.22.168.
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.