KNOWLEDGE BASE Contests- Sweepstakes Law In The UK

 

On March 29, 2017, UK Prime Minister Theresa May triggered Article 50, which formally started the process whereby the UK will leave the European Union. Article 50 was just the beginning of the withdrawal process, as it allows the UK two years to negotiate its leave with the other EU member states. UK laws and regulations did not and will not change overnight. We will update our site with any relevant changes and information as it becomes available. You can learn more on the UK government site.

 

Contests- Sweepstakes Law In The UK

 

Prize promotions (also known as free prize drawings and sweepstakes) and competitions can be invaluable for your business, particularly a new or startup business. There are many reasons your should consider a prize promotion or competition. Prize promotions and competitions can:

  • create ‘buzz’ around your product or service;

  • encourage people to visit your website;

  • help to expand your email list;

  • provide your with valuable market research;

  • strengthen the relationship between you and your customers.

 

What laws or regulations apply?

The Gambling Act 2005 governs gaming, betting, and lotteries in Great Britain (England, Scotland, and Wales), the rules in Ireland are different, and must be considered when running a UK-wide promotion. The Gambling Act defines and differentiates gaming (playing a game of chance for a prize), betting (can include some competitions), and lotteries. Prize promotions (sweepstakes or free prize drawings) and competitions (winner is chosen based on skill) remain outside the Gambling Act. The Gambling Commission only monitors the boundary between lotteries and prize promotions and competitions to ensure that the people who are running lotteries are properly licensed. It is important to structure your promotions and competitions so that they do not inadvertently fall within the definition of gaming, betting, or a lottery.

Under the Gambling Act, a promotion or competition will not be considered an illegal lottery if no payment (or purchase) is required to enter or if it satisfies the “skills test.”

 

Promotions

In this context, a promotion will mostly likely be a free prize drawing. Your promotion will not be considered an illegal lottery as long as you do not requirement payment or purchase to enter. You do not need any kind of license to run a free prize drawing. The rules and conduct of your prize drawing are completely in your discretion and your responsibility. The Gambling Commission does not regulate the rules and conduct of a promotion.

 

Competitions

In order to fall under the definition of a competition, success (winning) must depend to a substantial degree on the exercise of skill, knowledge, or judgment. You must ensure the competition does not rely on chance, if it does, it could be considered an illegal lottery. As long as your competition passes the “skills test,” it will not be considered an illegal lottery. The “skills test” is satisfied if the skill requirement is not reasonably expected to deter a significant portion of potential participants from entering or prevent a significant proportion of entrants from receiving a prize. You do not need any kind of license to run a competition. This test will be analyzed by the courts, not the Gambling Commission.

Examples of competitions include, answering questions, solving puzzles (crossword, numbers, etc.), and tie-breakers. Your competition will still be considered a competition even if the entrants that successfully completed the puzzle are then entered into a drawing to determine the winner.

 

What are the risks of noncompliance?

If your promotion or competition is determined to be an illegal lottery, you could face criminal prosecution.

Gambling Act 2005

Gambling Commission

Gambling Commission—Prize competitions and free drawings: the requirements of the Gambling Act 2005

KNOWLEDGE BASE Contests- Sweepstakes Law In The UK