In the UK it is legal to have a prize draw that you are required to have purchased something in order to be eligible to enter. The same is not true in ROI where the purchased item would be considered payment and without a lottery licence this would be illegal. Obtaining a license in ROI, can be a lengthy and expensive process.
Practical tips for compliance (and to avoid failing within the rules that require you to obtain a licence)
- Provide a free entry route: Entry should not be based upon purchasing a product and this should be communicated clearly.
- Ensure winning is contingent on skill not chance: Consider keeping a record/have a system in place that can demonstrate the element of skill and if appropriate consider whether your website is able to reliably judge how many people visited the site vs how many people actually entered the competition.
- Take care when using a question as the basis for entry to a competition: Ideally the question should be judgment based or subjective. The question needs to be challenging enough to deter people from entering the competition or be sufficiently difficult that you can demonstrate that a significant number of entrants get it wrong. Avoid multiple choice answers and one word answers as it could be difficult to prove that skill was involved and could be perceived as a risky option when complying with the rules.
- Be creative: Consider the nature of the business and whether you can introduce the competition entry into a broader marketing strategy. For example a baking competition, with the entries independently judged by a chef. When planned properly such competitions could bring added value for the business/brand. Though remember to ensure the entry conditions are clearly worded, with all relevant details especially if you want to impose any limitations on the acceptance of the prizes and any duties or obligations on the part of the winners post event for example in regard to post – event publicity.
- Ensure the competition is judged properly: It is important to have an independent observer (external to your organisation) to verify it was judged fairly.
- Beware of language used: The recent ASAI Code of Conduct for Advertising and Marketing Communications in Ireland (7th edition) states that promoters should not claim or imply that consumers are more lucky, fortunate or successful than they are. The Code gives the example of an entry to a competition, that all entrants cannot be told that they have made the “grand final” if all that was required to reach the “grand final” was entry to the competition.
The new ASAI Code of Conduct for Advertising and Marketing Communications in Ireland (referred to above) is effective from 1 March 2016. It is worth noting the Code introduced a new section on gambling. While marketing communications for Gambling products is within the previous edition of the Code, given the increased level of marketing communications for this product sector and general society concerns, it was decided to include specified rules. Under the Code gambling is defined as: gaming, betting, lotteries, bingos and amusement arcade games and the rules state that marketing communications should not state or imply that a player’s skill can influence the outcome of a game unless the skill can actually be demonstrated to affect the outcome of the game. Note that children should not be targeted by nor feature (in a significant manner) in marketing communications for gambling.
There is also a new provision under the Code and where marketing communications include a promotion and are significantly limited by time or space they should include as much information about significant terms and conditions as practicable and should direct consumers clearly to an easily accessible alternative source where all terms and conditions of the promotion are prominently stated. Participants should be able to retain this information or easily access it throughout the promotion. Note that promoters will now be responsible for all aspects and all stages of their promotions which reflects the principle that promoters and advertisers have responsibility for sales promotions and marketing communications. Therefore it will be important to ensure that ensure terms and conditions are easily accessible and prominently stated.
It is worth taking the time to engage with the new Code and ensure the necessary changes have been implemented in your business.
If you want further information about the new Code read our article: Are you complying with the new Code of Standards for Advertising and Marketing Communications in Ireland »
Author: Ursula Mulvaney, Regulatory Solicitor at DWF DublinThis information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.