Another activity that can cause problems for organizers is when they try to force winners to participate in the promotion. Most winners like to pose for photos, but if they don`t want to, you have to respect that. You may not make participation in the Promotion a condition of entry and withhold the winner`s prize if the winner declines. However, complex questions always arise when the answer is much less clear. For example, questions often arise as to what constitutes a prize and whether a product offered falls into the category of gambling, betting or lottery as opposed to price competition. We are very experienced in advising – without having to hire outside lawyers – on how to structure a contest so that it can be legitimately organized commercially for private benefit and profit, rather than being classified as an illegal lottery. In these circumstances, our advice extends to issues of unfair commercial practices and consumer protection and we will ensure that the appropriate tax implications are duly taken into account. The ASA also noted that while COVID-19 was disruptive, it did not serve as a defence to THR`s decision to extend the closing date, as THR`s excuse that a delay was necessary because its competitions involved human interaction and that COVID-19 would interfere with that did not apply to the facts of this case. Q: I asked entrants to answer a question, but the answer can be found in the promotional materials posted on the contest page of my website. Is this a contest? There are objectives that are absolutely necessary. For example, you need to use the data to manage contests and select the winner. Other purposes are optional, such as: marketing future contests.
We`ve addressed these issues in programs as diverse as home sales contests, “win a car” contests, consumer goods promotions, free sweepstakes via mobile phones, text services, email and other web-based systems, fantasy football games, and skill machines. In some cases, the proposed regime will be legal and exempt from regulatory review. In other cases, without applying our practical advice and creative thinking, the proposed systems would be illegal and vulnerable to criminal prosecution by the Gaming Commission. The CAP Code contains rules established by the Advertising Standards Authority (ASA) that govern how you run and promote your contests. The Gambling Act 2005 regulates gambling in England, Wales and Scotland and is the most important piece of legislation you must comply with when running a competition. Free sweepstakes and contests can be held for commercial or personal use and can be used to promote a product or donate a high-value item such as a car. To be a free draw, the arrangement must be completely free or have a free entry method. This free mode of entry must be either a letter sent by regular mail (first class or second class mail) or another means of communication that is neither more expensive nor less convenient than the paid mode.
The prize system does not distinguish between free and paid entries. Now that we are clear about the different types of contests, let`s look at the laws that a contest organizer must comply with. The difference between sweepstakes, raffles, raffles and lotteries So you`re thinking of running a promotion? Great, we love them all! The first thing you need to decide is whether you want to run a contest with the question and the draw or a random “golden ticket”, because the law treats everyone differently. The main differences are as follows: If the owner of a winning ticket donates their prize to a club, this must be indicated as a donation in your lottery`s accounting records. The Gambling Commission prevents illegal gambling and can act if free draws or contests are held as illegal lotteries. Q: I would like to offer a prize to people who participate in a survey – is it a contest? But before that, we need to be clear about the type of competitions we organize. This is important because the words “raffle”, “lottery”, “sweepstakes” and “raffle” are often used interchangeably, but they actually describe different activities and different laws apply to each. These contests are regularly part of product advertising, whether on television or radio, in stores, in print or online. Many of these competitions are completely illegal. Another benefit of using the free compliance pathway is that you can open your competitions to residents of Northern Ireland. Northern Ireland has slightly different gambling laws than the rest of the UK and it is mandatory to offer a free entry route to run competitions.
The Commission will continue to monitor these competitions and take action if we consider that free draws or prize contests are not organised in accordance with the Gambling Act 2005 and/or are indeed lotteries. If you need help or advice running a lottery business or making sure it is legal, please contact us and we will be happy to answer your questions. Alternatively, you might be interested in my prize competition toolkit, which you can learn more about here. It seems that the organizers intend to organize contests such as contests or free raffles. The Gambling Act 2005 is not intended to regulate free draws or prize contests, but distinguishes between free draws, prize contests and lotteries, and determines what a contest or free draw needs to avoid being classified as a lottery. Q: I asked participants to “solve” a problem and only the correct answers will be entered into the free prize draw to win one of my free products or services? Is this a contest? With so many competition operators flouting the law, the Gambling Commission, the ASA and now Facebook (where most contests are advertised) are taking a much stricter approach in their interpretation of the rules, cracking down on anyone who doesn`t abide by them. The same general advertising rules that apply to all businesses also apply to a lottery business. However, in addition, there are additional rules that must be followed. These ensure that competitions are conducted fairly and that participants have all the information they need to make an informed decision about whether or not to participate. A quick guide to running free contests and draws is available from the UK Gambling Commission.
This fact sheet is only about sweepstakes and free drawers, not lotteries. In the United Kingdom, the Gambling Act 2005 (amended in 2015) regulates these competitions and is regulated by the Gambling Commission. In Northern Ireland, the current legislation is the Betting, Gaming, Lotteries and Amusements (NI) Order 1985. If set up correctly, contests are not gambling and you do not need a license to conduct them as they do not fall under the jurisdiction of the Gambling Commission. Make sure you get a contest web design from a developer who knows the rules themselves. The Gaming Act does not apply to contests and free sweepstakes, as long as they meet the conditions set out in the Act. The Gambling Commission has no regulatory responsibility for real prize contests and free draws, but it monitors the boundary between them and lotteries to ensure that systems that claim to be prize contests or free draws are not illegal lotteries. Privacy compliance is something all companies need to pay attention to, but again, contests can have specific issues. To be a contest, you must ensure that everyone who participates has a certain level of knowledge or judgment or displays an element of skill that prevents a significant portion of people from entering or winning a prize.
What we`re going to talk about today are the rules for holding a draw. These are usually paid for participation in competitions that take place for the organizer`s winnings. The winner will be selected at random from all participants who correctly answer the competition question (or who participate via the free registration channel – more on this below). The organizer of a raffle or lottery needs a license to organize it. So here it can be confusing if you`re actually running a contest but call it a “raffle” or a “lottery.” Northern Ireland is subject to rules that prevent any form of purchase that allows you to participate in a prize draw. Often, organisers of UK-wide sweepstakes exclude residents of Northern Ireland from the promotion. For sweepstakes in Northern Ireland, you must either exclude people living in Northern Ireland or find a way to promote the draw in Northern Ireland. Sweepstakes and lotteries are held to raise money for charities and good causes. People pay to enter and the winner is chosen at random. The difference between a sweepstakes/sweepstakes and a contest is that you don`t have to ask questions or offer a free entry path.
THR promoted its contest on Instagram and invited the public to enter in hopes of winning a Volkswagen motorsports car, provided they could correctly answer the question: “Who is the Managing Director of Team Hard Racing?” Contest organizers must be able to demonstrate that the required skills, knowledge or judgment: Free Contests and Lotteries – The Requirements of the Gambling Act 2005 Sometimes it is necessary to stipulate that no entries from residents of Northern Ireland will be accepted in order to avoid having to apply the laws of that jurisdiction, For example: In the UK, it is legal for participants to purchase a product in order to participate in a prize draw, but this is not allowed in Northern Ireland, where sweepstakes are only legal if they are free.