Prize Promotions: Are you playing by the rules?
Many companies use prize promotions and giveaways as a way of advertising their business – particularly via social media channels. However, the Gambling Act 2005 extends further than you might think and there are a number of pitfalls that businesses should avoid in order to ensure that their promotion ‘plays by the rules’.
The first thing to work out is whether your promotion is a ‘lottery’, a ‘competition’ or a ‘prize draw’. Lotteries involve the distribution of prizes by chance to participants who have made a monetary contribution and they are (in general) illegal in the UK. As a result, businesses must make sure that any prize promotions are either ‘competitions’ (requiring a significant element of skill) or ‘prize draws’ (where there is no monetary contribution). If a competition involves guessing the outcome of a race or other sporting event then companies will also need to be careful not to breach the rules relating to unlicensed betting.
Rebecca Gardner, Corporate & Commercial Partner at Howat Avraam Solicitors comments: Competitions and prize giveaways are an excellent way to raise the profile of your business. However, in addition to ensuring that your promotion is not an unlawful lottery, businesses will also need to comply with the usual marketing and advertising standards for their industry. The Committee of Advertising Practice, UK Code of Non-broadcast Advertising, Sales Promotions and Direct Marketing (“CAP Code”) sets out certain basic information that needs to be included in all prize promotions. The CAP website contains other marketing and advertising resources which may be helpful for businesses in all sectors (www.asa.org.uk).
Howat Avraam Solicitors provide Corporate, Commercial, Employment, Intellectual Property and Contract Dispute advice to companies, business owners and individuals. As business owners ourselves, we have a pragmatic in-house approach to resolving issues before they arise by working alongside our clients, as part of their team. We are commercial, practical and entrepreneurial in our approach to legal services.
To discuss any Corporate or Commercial matter with us on a no obligation basis, please contact Rebecca Gardner on 020 3735 6700 or email Rebecca at Rebecca.Gardner@hasolicitors.co.uk. Alternatively, visit our website at www.howatavraamsolicitors.co.uk for more information.