Upcoming Courses

view-all

Upcoming Events

  • Legal Briefing18th July 2018IPM Members only. Sign up for ou...
    Wednesday 18 July 2018
  • Held at the stunning St Pancras Renaissance Hotel, join us f...
    Friday 28 September 2018
  • Legal Briefing10th October 2018IPM Members only. Sign up for...
    Wednesday 10 October 2018
view-all

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 across Europe?

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legislation is in being until it is struck down by our supreme court or struck down by the European Court of Justice or repealed by the Irish government, neither of those three things have happened.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 lottery license?

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 approach?

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 picture.


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 prize pool)

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.


Can't find the answer to your question? Contact the LAS team at legal@theipm.org.uk or call us on 020 3848 0447