Promoters should take legal advice before embarking on promotions with prizes, including competitions, prize draws, instant-win offers and premium promotions, to ensure that the mechanisms involved do not make them illegal lotteries (see the Gambling Act 2005 for Great Britain and the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985 (as amended) for Northern Ireland).
Promoters should contact the Gambling Commission or seek legal advice if they are concerned their prize promotion might be an illegal lottery.
What is a free entry route?
A “free entry” route allows consumers to enter a promotion without paying, or by paying no more than the minimum unavoidable cost of entering a promotion. “No-purchase-necessary” (NPN) routes, in which consumers can participate without having to make a purchase or any other payment to enter, will be considered free entry routes.
What is considered a minimum unavoidable cost of entering?
Entry routes which incur a minimum, unavoidable cost of entering are still likely to be considered free entry routes providing there is no additional cost. This may include the minimum rate of postage, the cost of a telephone call or the minimum cost of sending an e-mail or SMS text message.
Any costs which go beyond a minimum unavoidable amount, such as the requirement to send something via special delivery, or to call a premium rate number are likely to be considered unacceptable. Committee of Advertising Practice (CAP) has been asked whether promoters could require participants to call a premium-rate service if the cost of making that call was less than, or equal to, the cost of a first-class stamp. CAP believes that this is unlikely to be acceptable.
Directing participants to a website address where they can enter for free is likely to be considered a free entry route.
Do I need a free entry route?
Promoters should contact the Gambling Commission or seek legal advice before proceeding with any prize promotions to ensure that they are not running an illegal lottery.
CAP understands that lotteries are generally illegal unless licensed by the Gambling Commission or they are a small or private lottery or part of the National Lottery. A prize promotion might be considered an illegal lottery if participants are required to pay to enter or to pay for goods at a price that reflects the opportunity to participate. If promotors run a prize draw which has a payment to enter, the promotion must also have a free entry route, otherwise they may be considered illegal lotteries unless licensed by the Gambling Commission. (See Promotional Marketing: Lotteries and Betting and Gaming: Lotteries).
Having to buy a product to enter a prize draw is unlikely to be considered a payment to enter, provided the cost of that product has not been changed to reflect the opportunity to participate. Some examples of prices that reflect the opportunity to participate include increasing the price of a promotional pack compared to non-promotional packs before, during or after the prize promotion or reducing the quality or composition of the paid-for product or service during the promotion. In such circumstances, a free entry or NPN route will still be required in the UK generally.
Prize competitions are unlikely to need a free entry route, and it is fine to require a payment to enter. A prize competition must require entrants to exercise skill or judgment or to display knowledge, such that it can reasonably be expected to prevent a “significant proportion” of people from participating or from receiving a prize. Advertisers should contact the Gambling Commission or seek legal advice in relation to what constitutes sufficient skill or judgement.
How should the free entry route be presented?
Code rule 8.17.2 states that any free-entry route should be explained clearly and prominently. Regardless of whether a promoter is required to have a free entry route, or has chosen to do so, information about it is considered a significant condition and should be stated in the initial advertising material. The free-entry route should be explained clearly and prominently (See Promotional marketing: Terms and Conditions).
Advertisers should consider whether a free entry route is of a size and form that is readily found, equitable, understood and used by consumers. It should be genuine and realistic and promoters should not discriminate against those who enter using the free-entry route. Again, we advise that promotors seek legal advice to ensure the presentation and mechanism of any free entry route is sufficient.
In 2017 the Advertising Standards Authority (ASA) investigated whether an ad for a prize draw which participants could buy tickets to enter made the free entry route sufficiently clear. The ad separated the instructions for entering for free by post from the links to where participants could buy tickets. The links were followed by the text “WHAT ARE YOU WAITING FOR? LET’S GET STARTED WITH THE COMPETITION”; with a prominent visual device showing the text “BUY TICKETS” across two paper tickets. The ASA considered that participants could easily miss the free entry route and that therefore, it was not sufficiently prominent (HMV Competitions, 11 April 2018). See also Omaze Inc, 07 October 2020. (These rulings also concerns property being offered as a prize, and promotions which do so are likely to be subject to legislation. Advertisers should read the AOL on ‘Win a house’ promotions and seek legal advice before offering property as a prize).
Does this apply to promotions in Northern Ireland?
Currently, in Northern Ireland, prize promoters are still subject to the Betting, Gaming, Lotteries and Amusements (Northern Ireland) Order 1985 (as amended), and offering consumers a NPN route may be commonplace. Promoters should obtain legal advice if running promotions in Northern Ireland to determine how to run their promotion legally.
Don’t confuse entry routes and claiming routes
Promoters should not confuse entry routes and claiming routes, and promotions should never have a cost to claim (Rule 8.21.1). The ASA has upheld multiple complaints against an ad for a promotion because it required consumers to ring a premium rate service to claim an award, which was a breach of Code rule 8.21.1 (Churchcastle Ltd t/a Spencer & Mayfair 2011, 20 February 2013).
Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the ASA. CAP’s AdviceOnline entries provide guidance on interpreting the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing.
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