When the Gambling Act 2005 came into force and legalised most purchase to enter prize draws, industry enthusiasm was dampened by the exclusion of Northern Ireland from the change. Now at last the NI powers that be are looking at falling into line with GB, as Stephen Groom reports.
Topic: Promotion marketing
Who: The Department for Social Development
Where: Northern Ireland
When: Consultation closes 31 May 2011
Law stated as at: 1 April 2011
What happened:
Six years on from "purchase to enter" prize draws becoming legal in Great Britain under the Gambling Act 2005 ("GA"), Northern Ireland is finally consulting on whether to bring the province's gambling and lottery laws into line with those of the mainland.
Since the coming into force of the GA, promotional prize draws which require a purchase before entering have not breached Great Britain lottery/gambling laws provided the price or rate payable for the purchase does not "reflect the opportunity to participate in [the promotion]." (Para 2 (c) of Schedule 2 to the GA).
In other words, provided the price or rate payable is normal and has not been artificially inflated to help cover the additional costs of running the promotion, having to make a purchase in order to enter the draw is perfectly legal in Great Britain.
In Northern Ireland, however, it's the old, unreconstructed lottery laws that still hold sway. This means that unless it comes within limited private society/good cause exemptions, running a purchase to enter prize draw will be a criminal offence as a lottery.
So it came to pass that "Legal residents of Northern Ireland may not enter" became common in prize draw rules. Also popular for those determined to be inclusive have been special alternative free entry routes for NI residents. Care is needed here as it is clear from the writer's experience that certain eagle eyed Ulstermen have been keeping a whether eye on promotions of this type and swooping to take advantage of promotion rules if they see a chance of cashing in.
GB/NI prize competition laws also differ
Another point of GB/NI difference relates to prize competitions.
Great Britain now allows these provided either:
- no payment is required to participate or
- the level of skill required to win passes a new "deterrent" test.
In contrast, Northern Ireland still applies the "success must depend to a substantial degree on the exercise of skill" test previously applied in Great Britain. This means that any competition will be illegal (regardless of whether it is pay to enter) if the degree of skill required to win does not meet that test.
Now at last, there looks to be at least a chance that all this will soon be history.
Consultation published
The NI Department for Social Development has published a consultation document entitled "Future Regulation of Gambling in Northern Ireland."
With a deadline for responses of 31 May 2012, the consultation asks for views on whether there might be a change in NI law "to enable people in Northern Ireland to participate in prize competitions and free draws on the same basis as those in the rest of the UK."
The "free draws" reference is odd because the principal type of prize draw which would be affected by any alignment of NI law with that of Great Britain would not be "free draws" but "purchase to enter" draws. However the consultation document does seem to have a full alignment with GB law in this area in its sights. It says:
"In GB, prize competitions and genuine free draws are free from control under the 2005 Act. They can be run for commercial or private gain and can be used as a fun way of offering prizes or promoting a product."
Why this matters: This is definitely a case of "better late than never" for UK marketers and their legal advisers, and it will certainly be sighs of relief all round if and when the changes vaunted by this initiative are made. It remains to be seen, however, whether there are still forces at work in the province which will persuade the authorities that the status quo is to be preferred.
