Can a prize promotion be run where there is an element of chance in the selection of the winner?
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.