"No Purchase Necessary": three words that will be so familiar to anyone who has ever entered a UK prize draw that they almost evoke a sense of nostalgia. But could they soon be banished to history?
In the United Kingdom of Great Britain and Northern Ireland (UK), if a promoter wants to run a prize draw based on chance, in order to avoid it being an illegal lottery, participants should not be required to pay to participate.
The problem for promoters wishing to run a prize draw is that the definition of 'payment to participate' is different in Northern Ireland (NI) than it is in Great Britain (GB).
Side note: We are focusing on promotions based on chance in this update - the rules for skill based competitions are slightly different.
In GB, under the Gambling Act 2005, a promoter can make it a condition of entry into a prize draw that a consumer purchases a product or service at its usual price. Although consumers actually have to shell out for the product or service, this does not amount to a 'payment to participate' in the actual prize draw.
Example: So it's ok in principle to operate promotions in GB such as 'Buy this can of Diet Cola, send us your details, and we will enter you into a random draw to win a great prize', provided the price of the can of Diet Cola hasn't been inflated above its usual cost.
The same is not true in NI.
Under Northern Irish law, entry cannot be limited to those who purchase a product or service, even if that product or service is sold at its usual price.
In order to get around the discrepancy, promoters take one of two approaches:
- Including a "no purchase necessary" route (this might be available exclusively to Northern Ireland residents or it might be made available to residents across the UK); or
- All too often, NI residents are simply excluded from the promotion.
Now the Department for Communities in Northern Ireland has launched a consultation on gambling law. Among the topics up for discussion are the rules governing promotional prize competitions - specifically, whether NI law should be aligned with the GB approach.
The consultation also looks at other ways of bringing NI gambling laws in line with the Gambling Act 2005, which currently applies in GB but not NI; for example by easing restrictions on advertising and bringing in new controls for online gambling.
Brands would surely welcome the greater simplicity that would come with being able to operate the same prize draw rules across the whole of the UK.
But best not to speak too soon given it's now been seven years since the Northern Ireland Assembly previously announced its plans to bring the laws more in line with the rest of the UK, promising legislation by 2015. Half a decade and a Brexit referendum later - not to mention several years in the interim without a government at Stormont - it remains to be seen how high up on the legislative agenda this will be now that Stormont is back in action.
For now - unless and until the law changes in Northern Ireland - if you want your prize draw to encompass the whole of the United Kingdom, it would be wise to seek specific Northern Irish advice.
“There is no doubt that the current legislation is outdated and has not kept pace with industry and technological changes."