What are the rule changes for running promotions in the Republic of Ireland?
Last December the rules for running prize draws in the Republic of Ireland were amended ahead of an overhaul of the Gambling Act. Amy Powell, Compliance Manager at PromoVeritas explains what has been amended.
“With effect from 1st December 2020, all lotteries operating in Ireland became subject to a new set of rules, governed by the Gaming and Lotteries (Amendment) Act 2019 which brought significant changes to the legal requirements and processes involved in running marketing promotions.
It goes without saying that that these rules in Ireland apply to purchase associated promotions, and not free to enter ones. It’s the payment element which makes these promotions fall within what is called a ‘lottery’ as the definition requires:
- Payment to participate.
- At least one prize.
- Prizes awarded purely on the basis of chance
What Are the Changes?
Previously, any purchase associated game of chance required a lottery licence which could only be obtained by a charity. Now, games of chance fall into three separate requirement categories depending on the total prize pool value:
1. Where the total value of the prizes is less than €2,500, the promotion will NOT require a licence or permit, provided there is no charge for taking part other than the purchase of a product at its standard rate, or redeeming the prize.
2. Where the total value of the prizes is not more than €5,000, the promotion will require a Lottery Permit. This application must be submitted at least 60 days before the start date to the local Garda and an application would only be applicable in the district the permit application is made in. This means that permits are not suitable for national promotions.
3. Where the total value of the prizes is not more than €30,000 in any week; the total value of prizes must not exceed €360,000 in any year for a brand and the promotion will require a Lottery Licence.
Applicants must go to the district court to apply, and the court is obliged to assess the suitability of the applicant and enquire into the purpose of the lottery. The judge will then refuse applications where it is apparent that the charity is not the main beneficiary.
The Act also states that the holder of the licence is not to derive any personal profit from the lottery. A number of new thresholds were also introduced under the Act which includes:
- not more than 25% of the total proceeds shall be retained by the holder of the licence and utilised for the expenses of the promotion;
- not more than 75% of the total proceeds shall be allocated to prizes; and
- not less than 25% of the total proceeds shall be allocated to a charitable or philanthropic purpose.
It is also a requirement to display the value of each prize and the name of the intended beneficiary.
What does this mean?
The impact of this on promoters is potentially huge – although there is no definition of “proceeds” in the Amendment Act, it is likely to be interpreted to mean the price of the product being purchased. So for a promotion that sells millions of units (chocolate bars or packets of crisps, for example) 25% of all sales should be donated to charity, likely rendering the promotion cost prohibitive.
It is clear that running promotions in the Republic of Ireland and in Northern Ireland can get complicated, there are potential solutions to making a promotion complaint with the Act, but the mechanic (i.e. way in which entry is required) and the total prize pool value play a part in determining the best way forward.