ROI Lottery Licence Q&A
Laura Fannin from Hayes Solicitors answers your questions
on Lottery Licences in the Republic of Ireland. Find out what constitutes a
test of skill, whether EU legislation supersedes Irish law and get practical
advice on the application process.
This is a transcript from part of our Legal Briefing:
Focus on Ireland webinar. Click here to listen to the full recording from 21st March 2017.
Q: Does the EU Unfair Commercial Practices
directive not supercede both Irish and UK law and work to harmonise the rules
A: As a general point, European law is supreme in
Ireland given that we’re a member of the European Union and we have implemented
the Unfair Commercial Practices directive in our Consumer Protection Act 2007.
This has implemented that particular directive. This question is very interesting, as a
point that seems to come up again and again. I’m not sure of the origins of
this but there was a particular judgement of the European Court of Justice a
number of years ago in relation to the implementation by the Germans of that
particular directive. The national German legislation says that it prohibited
any promotions ever linked to a purchase and the European Court of Justice said
that was incompatible with that particular directive, given that it went
further than that. Somehow, somewhere, someone interpreted that as meaning the
Irish lotteries legislation was incompatible with that directive and so was no
longer enforced. The Irish legislation is in being until it is struck down by
our supreme court or struck down by the European Court of Justice or repealed
by the Irish government, neither of those three things have happened. The
German case is quite different to the Irish legislation. The Irish legislation
did not say that promotions linked to purchases are illegal. It is that to run
a promotion where there is a cost to enter, you need to get a license for it.
So there isn’t anything in that particular directive which is incompatible with
our lotteries legislation and our lotteries legislation is still enforced and
has not been overtaken by any European law at the moment.
Q: I've heard of companies running promotions
in Ireland but hosting the T&Cs and redemption platform on a UK URL in
order to avoid having to pay for a lottery license - is this a viable loophole?
A: I don’t think so because you would still be
promoting the lottery here in Ireland and what the act says is that it’s a
prohibited to run or promote a lottery. It would be very difficult to allow
residents in if there’s no promotion of it in Ireland so I don’t think that
that is a viable option.
Q: Regarding the value of each prize shall be
stated on every ticket - does the prize value in euro need to go on pack in
the summary terms?
A: You should have the value of your prize in the
T&Cs; whether or not it needs to be on the short form T&Cs, that’s
really a question for yourselves. I know there are printing restrictions. It
should be most definitely in the long form T&Cs and ideally in the
short form T&Cs if there is room.
Q: One of our clients is currently running a
promotion whereby ROI consumers are just asked a simple question in order to
enter a free prize draw with all UK entries. This is completely illegal, yes?
A: Yes, it is problematic. That is what I’m talking
about; these common misconceptions that by asking this question and then being
entered into a prize draw so by means there is a truer test of skill and it’s
not a lottery. Unfortunately it is still a lottery as there is that element of
chance in that the correct answers go into to the draw; so there is still that
element of chance to determine the winner. Unfortunately it is illegal but we have
already talked about the enforcement there.
Q: I thought the Late Late Prize draw had a
test of skill (very low level!) which meant it is not considered a lottery
A: That is going back to the same
point that the previous question dealt with. The Late Late show is an
example of this misconception. The Late Late show for any of the Irish
listeners, they will be very familiar with the format of this promotion. They
ask a very simple question, they’ll ask something like what’s the capital of
France? Is it a) London b) Paris c) Dublin. And all the people that answer that
correctly will then be entered into a draw and the winner will then be selected
at random. So you have the element of chance in selecting the winner, as all
the correct entries are going into a draw. All of those who put in the correct
answer will all have an equal chance of winning, so there is an element of
chance so it is still a lottery.
Q: What is the lead time of obtaining a
A: About 4-6 weeks. You need to give the Irish police force 28
days’ notice of your application and then you need to get a court date. You
probably should give your solicitor, to avoid any stresses, about 6 weeks’
notice. Particularly if the charity is based outside Dublin, the district court
may not see it every week so by the time your solicitor identifies the date of
the application, gets the application together, drafts it, gets it approved by
you and then is out to serve it on the 28 days advanced before the
actual court date, it probably takes about 6 weeks.
Q: Is there not a contradiction between Irish
law, and the overarching laws from the EU, mainly the UCPD, that would allow
prize draws without a licence?
A: I think I’ve already dealt with that. There
isn’t at the moment any argument that has been made in any of the Irish courts
or European courts that the gaming lotteries of 1956 are somehow incompatible
with that directive and in my view the Gaming lottery’s act of 1956, in the
view of an awful lot of my colleagues, it is very different from the relevant
German legislation/European decision which I think you’re referring to there
was dealing with.
Q: What information is required for the court appearance?
For example, will full T&Cs be requested?
A: No, so the application is fairly pro forma. There are specific
district court rules that provide a template that the application must follow.
What you should be including is the general mechanic of the promotion, the
start and end date of the promotion, a breakdown of the prizes and the value of
the prizes and then the full details of the charity and the full details of the
promoters of the company that is running the promotion, that’s the actual brand
itself as opposed to the agency and a confirmation that a donation has been
made to the charity or will be made to the charity.
Q: Are there any restrictions concerning
digital only promotion?
A: No, the same provisions apply in terms of the lottery’s
legislation where you’re running an online or digital only promotion.
Q: What’s an average donation made to a
charity for each lottery licence and can the lottery licence cover more than
one promotion, i.e. how long will the lottery licence run for?
A: You can get a lottery license for up to 12
months. Ideally you should really just have one license per promotion but if
you know the details of say, 3 or 4 promotions that you’re going to be running
in the next 12 months, you could potentially throw them all into one
application. And as long as you’re sufficiently able to provide that kind of
detail for each of those 3 or 4 promotions you’re running (so the brief
description of the mechanic and the breakdown of prizes) that should be
sufficient to cover it. Also if you’re running 2 or 3 promotions and they’re
running concurrently as opposed to consecutively, you’re going to be wanting to
make sure you aren’t giving more than €30,000 in any one week or any one
draw in terms of the prizes. Going back to the point about the average donation
to a charity, it really depends on the charity. Some charities, it’s a matter
of negotiation really between the brand and the charity. On average, if I had
to put a figure on it, I would have to say €5000. Some charities will accept
less, some charities will want more. Some brands may have a relationship with a
particular charity through their corporate social responsibility and will be
making a donation in a wider context and they may be able to negotiate with the
terms as part of that donation with the lottery license so it really is a
matter of negotiation. I would say if you were trying to pitch it first I would
be pitching it at €5000.
Q: The simple solution we usually recommend is
to say the promotion excludes Ireland. I assume there are no issues with this
A: If you’re running a promotion in the UK
and you just want to try and avoid this whole lottery license problem then you
don’t run it in the Republic of Ireland, obviously then the law does not apply
to you. Or if it’s an on pack promotion, in ROI you basically have in
your terms and conditions state UK residents only and that covers you.
Q: Is there then no point to asking the simple
question - test of skill if it is a lottery in any case?
A: I think that’s a bit of a hangover from that misconception that this
was enough to be a test of skill, which it isn’t. The only real test of skill
is the pure test of skill if it’s a tiebreaker in the best short story or
Q: Should the lottery licence and charity be
specified on the short terms on all communication pieces, on pack etc.?
A: The lottery license should be on the short form
terms and conditions on pack, ideally it should be.
Q: Is there a cost for the license?
A: You’ll obviously have your legal fees so whatever fee you agree on
with your solicitor when you’re applying for it and the donation to charity.
Those would be the two costs you would have. These would be individual to each
particular brand and agency.
Q: What is the penalty for giving away more
than €30,000, how is it enforced?
A: That’s going back to the enforcement point about the Gaming Lotteries
Act of 1956. I would be more concerned about that, than I would be about
running a promotion which was a lottery not getting a license. When you’re
getting the lottery license, you’ll be saying to a court, putting into evidence
and saying on a court document “I confirm that there is no more than 30000 Euro
to be given away in any one draw or any one week”. And if you are then
blatantly disregarding a court order, that’s a whole other issue than breaching
the 1956 act and you potentially could be (though I’m not aware that it’s ever
happened) getting yourself into huge difficulty there where you are seen to be
playing fast and lose court order and potentially be held in contempt at court.
I would actually say that is quite a risky thing to do where you’d get a
lottery license and you would blatantly know that you are not going to stick to
the 30000 Euro but you just get a lottery license anyway and start to give away
more than 30000 Euro if that was to be picked up on by the guards. You have
notified the guards about your promotion, the guards could potentially see your
promotion happening and see that you are giving away more than 30000 euros in
one week, that application is just completely incorrect and they just totally
misled the court. The guard could haul you to court for that and bring you back
before the judge and that would be something that would be quite serious.
Q: How will the Courts feel about giving a
charity lottery licence for a prize promotion that runs across multiple
countries, so we do not know what prizes will be awarded in Ireland (shared
A: That’s something that comes up quite a lot. What brands tend to
do there is they say that the total prize pool is whatever many million but we
estimate that based on the Irish entries, we estimate that 10% prizes will be
given away in Ireland and brands are able to come out with that statistic. That
is what you do on the court application, say it’s to the best of our knowledge.
We believe that the prize value in Ireland will be, whatever it may be.
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