Legal Briefing: Republic of Ireland ‘No Purchase’ Promotions Update

Mani Roberts, Regulatory Affairs Manager at The IPM

18th December 2019

Promotions running in the Republic of Ireland have additional legal requirements. It’s widely understood that a lottery licence is required for some promotions linked to purchase but there is exactly the same requirement for ‘no purchase’ promotions. Here’s a reminder of the situation:

A part of the definition of a lottery in ROI is ‘payment of consideration’. By requiring a customer to take some step to enter a draw ‘consideration’ can be present even where there is no purchase requirement.
As a consequence, promotions where no purchase has been made are part of the definition of ‘payment of consideration’. This position has been supported by various court cases.
Another part of the definition is that prize distribution is based mainly on chance rather than skill. A completely skill-based promotion would mean no licence is required.
Licences can be obtained if it’s shown that the lottery is being run for some charitable or philanthropic purpose. In practice this means it is run in conjunction with a charity.
As part of the application process details of the promotion including the mechanics and prizes must be served to the An Garda Síochána (the Irish police force) 28 days before the application is made to the relevant District Court.
The application for a licence has associated costs usually starting at approximately £2000.
In most District Courts the application is usually granted on the first occasion so, in theory, it’s possible to complete the process within 4-6 weeks of submitting instructions. However, it often takes longer as courts can adjourn matters on several occasions before making a decision.
The name and address of the holder of the licence and the Court or Superintendent who granted the licence must be stated in both shortened and full terms.
If prosecuted there’s currently a potential fine of up to €127 and/or imprisonment for a term not exceeding three months. A director may also be found guilty of an offence if found to be involved.
The rule is not meaningfully enforced and the risk of prosecution is low, there have been prosecutions but none in the last several years.

A new Bill has been published which will amend the Gaming and Lotteries Act 1956 which this rule is based on, this could result in enforcement action in the coming months but it’s more likely the current ‘relaxed’ regime will continue until the Bill comes into force.

The Bill proposes a number of changes though it’s unclear when it will be signed into law and the changes come into effect. Amendments include extending the licence application lead time to 60 days, removing the requirement for a licence in some promotions and harsher penalties for contravention. The IPM will issue further guidance on the upcoming changes shortly.

The practice of not obtaining a licence for a ‘no purchase’ promotion is so widespread it would be difficult to pinpoint where to begin in terms of any legal action and overall the risks appear to be low at the moment. However, it must be factored into your promotion so please contact the LAS if you require more detailed guidance.

If you have any questions about ‘No Purchase’ promotions please contact the LAS via legal@theipm.org.uk.