Permanent or non-occasional raffles

Permanent or non-occasional raffles

A raffle is a type of game consisting in the awarding of one or more prizes through a random selection among the participants, who previously bought the raffle tickets differentiated among themselves, whether if these tickets are physical or digital. The raffle takes place in a date previously determined and, in addition, it is always necessary to take part in a prize draw that the participants have made a financial contribution in advance.

Not only the raffle prize could be a movable asset or an immovable property, but also entitlements related to them, as long as these prizes are not cash.

Taking the above into consideration, we could say that a raffle is a prize draw that requires a financial contribution as a condition for participating in this game of chance. Its legal regulation can be found under Law 13/2011 of 27 of May, which regulates games such as these raffles. Not existing, in this sense, raffles with onerous participation.

What are permanent or non-occasional raffles?

Likewise, the Directorate General for the Regulation of Gambling (“DGRG”), define the permanent or non-occasional raffle as that one that is periodically celebrated or is part of a Game Operator ordinary activity, provided that its periodicity is less than annually.

Are they legal?

According to the regulations established by the DGRG, the permanent or non-occasional raffles development, as any other gambling activity, requires the prior obtention of general and singular licenses, in accordance with gambling laws.

However, at the present time the normative development of this type of raffles has not been carried out. Therefore, the organization and commercialization of non-occasional raffles are not possible for the moment.

Consequently, according to the current regulation, this activity is prohibited in Spain as defined in the 5.3 article under Law 13/2011 of 27 of May, of Gambling Regulation.

Alternatives to permanent or non-occasional raffles

At this moment, raffles are only possible if they are occasional or sporadic, that is, a game which is not celebrated regularly or a game which has an annual periodicity.

In the same way, sporadic games cannot be part in the regular activity of the entities that organize them.

Consequently, the requirements to be able to carry out an occasional raffle are as follows:

• It should be occasional and cannot take part in the applicant regular activity.
• Identification of the individual concerned and, when applicable, of his/her representative.
• Place, date and applicant signature.
• It is essential to complete a data sheet.
• An authorization in order to carry out advertising, promotion or sponsorship activities.
• Payment of EUR 100.

That is why the permanent or non-occasional raffle alternative would be a contest or a draw. In this sense, and in case that a contest or a draw would be organized without an additional pricing for the participants, that is, if the participation is totally free, it is not necessary to obtain a license for these kinds of activities.

On the contrary, in those cases in which the participation entails an additional cost for those who want to take part in it, then it will be necessary to comply with the legal requirements and obtain licenses.

Another issue that we must take into account when organizing a contest or a draw on the Internet is its taxation.

In accordance with the Gambling Law, promotional draws are taxed at a tax rate of 10% of the value of the prize awarded, provided that the draw is based on random combinations for advertising or promotional purposes. That is, it would only be taxed in cases in which chance intervenes and not in those in which a jury decides the winners (contests).

At Letslaw we are specialists in Internet Law, Digital Law and New Technologies. If you want to find out about any of the keys to carry out a draw, contest or raffle, contact us at admin@letslaw.es or call us on 914323772.