Guidelines on sales promotion measures when providing gambling

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1 Guidelines on sales promotion measures when providing gambling Contents 1 Introduction Gambling providers purchase-required games Examples of purchase-required gambling Jackpots and pools Gaming machines (AWP) Poker Pools for all the gambling Particularly on guessing competitions Other sales promotion measures Draws between customers The advertising of prizes Loyalty and customer binding programmes Legislation The Act on Gambling The Marketing Practices Act... 8

2 1 Introduction These guidelines are intended for citizens and companies etc. who have a licence to provide betting and online casino. In the guidelines it is possible to find the Danish Gambling Authority s assessment of the licence holders access to use sales promotion measures according to the gambling legislation. The Act on Gambling regulates gambling while the Marketing Practices Act regulates sales promoting. As examples of sales promotion measures you have competitions, draws and bonuses. These guidelines describe which sales promotion measures are considered as games which require a gambling licence from the Danish Gambling Authority and which implies that the game is subject to the gambling legislation, and which arrangements are not regulated by the gambling legislation but are regulated by the Marketing Practices Act. These guidelines are primarily intended for licence holders in the area of betting and online casino, but can be extended to other gambling areas. However, you must be aware that there might be certain limitation in e.g. the size of the prize for other gambling activities. The guidelines do not describe the access to provide purchase-required gambling for citizens and companies which are not licence holders. 2

3 2 Gambling providers purchase-required games By purchase-required gambling is meant a game where the participants by paying a stake in one game also participate in another game, like for instance a draw. Purchase-required gambling can only be provided if you have a licence to the given type of gambling. As a gambling provider you may only provide purchase required gambling if you have a licence to the type of gambling in question. In other words: - With a licence to online casino you may only provide purchase-required gambling that is covered by the following terms: roulette, baccarat, punto banco, black jack, poker, gambling on gaming machines (AWP), or if it is a combination game. A combination game is a game where the chance of winning a prize is dependent on a combination of chance and skill. - With a licence to provide betting you may only provide purchase-required gambling that can be characterised as betting. - Purchase-required gambling that is characterised as lottery may not be provided. 2.1 Examples of purchase-required gambling The licence holders purchase-required games are often presented as a new game within an existing game. A new game therefore exists when the player by participating in one game may be able to take part in another game. Both games are provided independently of each other. A game within a game may e.g. be a draw for a trip for two to London with admission to the athletic stadium among players who have placed a bet in connection with the Olympic Games. This is not permitted as a provider of betting does not have a licence to provide a lottery. It is also not permitted to draw lots among participants who play poker in a certain period of time for e.g. a trip to Las Vegas. On the other hand, the trip may be given as a prize for being the best ranked player in a tournament. 2.2 Jackpots and pools As a rule, sales promotion measures as jackpots and pools are permitted if the prize is triggered by a specific game. 3

4 2.2.1 Gaming machines (AWP) On gaming machines it is permitted to have pools generated by the stake of the players and where the prize is won through the gaming machine. An example is when the player on the machines wins access to a top game, and in the top game receives a 3 BAR and wins the pool. It is not permitted to e.g. give all players of a given period a lot and then draw lots once a week. In that case, the prize is not triggered by gambling on the gaming machine, but by an independent game, a so-called game within a game, which is a lottery Poker In poker it is permitted to have pools that are generated by the gambling of the player. This could be the so-called Bad Beat jackpots or a Bounty where a player is rewarded for eliminating another player. Awarding the highest ranked players with extra prizes is also seen to be caused by the gambling and is therefore permitted. It is not permitted to have a pool that is triggered by e.g. hand No. 100,000,000 played at a licence holder or triggered by a draw among everyone participating in a tournament. This is a lottery Pools for all the gambling It is not permitted to have a pool that is generated by the stake of the players and subsequently released by chance, e.g. when it reaches a certain size. This also covers cases where for example a car is distributed to the person No. 1,000 playing black jack or a similar game. 2.3 Particularly on guessing competitions Guessing competitions can be e.g. competitions where the participants are asked a question, and the competition is determined by a draw among all of those who have answered correctly. Guessing competitions are a combination game and will therefore be covered by the licence to online casino, unless stated otherwise in the licence in question. If you wish to have a purchase-required guessing competition, you must be aware of the following: The qualifying stake must be placed in an online casino game, and The game must be covered by the licence which means that reporting to SAFE etc. must take place. 4

5 It is not permitted to provide draws that do not include a preceding question since you can only supply combination games with an online casino licence. 3 Other sales promotion measures This section describes other types of sales promotion measures than purchase-required gambling. The following section is solely an assessment of whether the measure can be provided according to the gambling legislation. There has been made no assessment with regards to the Marketing Practices Act. 3.1 Draws between customers It is permitted to provide draws for e.g. - All customers who are registered in a certain period. - All customers who have logged into their gambling account in a certain period. - The total customer data base. - All customers who have deposited money on their gambling accounts. However, you may not require of the customer that he or she must place a stake in a game in order to participate in the draw. Regardless of the above mentioned, you may provide games if everyone who wishes to is permitted to participate. This includes both paying players and players who have not placed a stake in another game. 3.2 The advertising of prizes It is not permitted to provide a draw among players who have won a prize and who have published it on a social media. That is considered a game within a game. That is a lottery. An automated function where the licence holder encourages players to publish their prizes on a social media and award a prize to everyone who does so will be considered a prize in the game which is provided outside of the technical requirements, and is therefore not permitted. Awarding prizes to players who on their own initiative or e.g. via sponsorships praise a gambling operator is not covered by the gambling legislation. 5

6 3.3 Loyalty and customer binding programmes Of other types of sales promotion measures can be mentioned loyalty and customer binding programmes, including bonus and discount programmes. What characterizes these types of initiatives is that they often depend on how much money the customer is playing for or that they impose conditions such as requirements on registration or deposits. Examples of permitted initiatives The saving of points, which is dependent on how much money the customer plays for and on how much can be spent on e.g. goods in a point-shop, does not satisfy the condition that there must be a chance of winning a prize. These types of initiatives may therefore be provided. A so-called Rake Race where the player who pays the most in rake (duty) in the period where the Rake race is running, will win the Race. The chance to win is not based on chance and it is not a bet, and therefor this is not a game. 6

7 4 Legislation 4.1 The Act on Gambling In the remarks on the Danish Act on Gambling it says: In connection with participation in sales promoting games where participation is associated with the purchase of a product or a service, the purchase of a product or a service will not be comparable to payment of a stake in a game if the product or service has a separate economic value corresponding to the price the participant (purchaser) pays for the product or service. If, on the other hand, a participant in a sales promoting game must pay a separate stake of an economic value - in addition to the purchase of the product or service - to participate in the game, or if the product or the service is sold at a temporarily higher price to finance an associated sales promoting game, the payment will be regarded as a stake in a game. The Act on Gambling precedes the Marketing Practices Act. This means that if an activity is regarded as a game according to the Act of Gambling it is of no importance that it is permitted to provide purchase-required gambling according to the Marketing Practices Act. If the following three requirements are met, the activity in question will be regarded as a game that requires a licence: 1. The participants pay a stake (money or the likes), 2. The chance of winning depends on an element of chance or it is considered a bet, and 3. The participants have a chance of winning a prize (all kinds of prizes) through a deposit. When offering a purchase-required game in connection to the offering of other games with a stake, it is the Danish Gambling Authority s assessment that all three requirements are met. The requirement of a deposit is met even though the stake is paid in connection with another game, and even though it does not appear specifically that the player must pay an extra fee in order to participate in the purchase-required game. According to the Danish Gambling Authority the remarks have been written for business owners who are not gambling providers and therefore not intended for gambling 7

8 providers who operate a professional gambling business. It is the revenue of gambling that funds the purchase-required games. According to the Danish Gambling Authority a licence holder s supply of a purchase-required game is therefore a game which must be provided within the framework of the individual licence. 4.2 The Marketing Practices Act There has previously been a ban on purchase-required competitions in the Marketing Practices Act. This ban has now been repealed, and matters relating to purchase-required competitions are now regulated by the Marketing Practices Act 9 on sales promotion measures: Section 9. A sales promotion, including by means of gifts with purchase, trading stamps, discount or loyalty schemes, prize competitions and the like, must be presented in such a way that the terms of offer are clear, unambiguous and easily accessible to the consumer, and in general no material information may be omitted, including information on the value of any additional services likely to materially distort the economic behaviour of consumers. It is possible to acquire more information and see practical examples in the preliminaries to the act on changes of the marketing practices act. You can also find further guidelines on the website of the Danish Consumer Ombudsman. These are only available in Danish. 8

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