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ARTICLE · 02 JULY 1999

Prize draws are under threat

Macfarlanes LLP
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Macfarlanes LLP

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United KingdomCorporate/Commercial Law

Background

The "no purchase necessary" arrangement of prize draws and scratchcards has come into question following a High Court case reported 23 June 1999.

The judge based his decision on the substance of the promotion. Whilst there was a free entry route available, it was not intended or expected that people would in fact take up the opportunity. It wasn't real, he said.

He relied on the Reader's Digest case that shows that "a lottery is the distribution of prizes by chance where the persons taking part ... or a substantial number of them, make a payment or contribution". Other cases, though, have allowed promotions which had a genuine free entry route, even though a substantial number of entries did follow a purchase. Indeed he accepted that "the key [to Reader's Digest winning their case] is that it was not a condition of having an entry considered that there was a purchase".

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