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The Regulation Amending the Regulation on Non-Cash Lotteries and Draws of the General Directorate of the National Lottery ("Regulation") was published in the Official Gazette dated 16 June 2022. The Regulation introduces new application processes for the organization of non-cash lotteries and draws.
Recent development
The Regulation on Non-Cash Lotteries and Draws of the General Directorate of the National Lottery states that "commercial, social, charitable and similar arrangements, which will be referred to as lottery, in which the right to participate is given by selling tickets, coupons, participation numbers directly or due to the sale of a good or service or free of charge and winners of all kinds of non-cash goods, rights and similar bonuses promised by the organizer are determined by a drawing to be held" are accepted as non-cash lotteries. Additionally, draws conducted to determine the participants who will win the promised bonuses as a result of the campaigns fall under the definition of "draws". As per the legislation, companies willing to organize non-cash lotteries and draws that cannot benefit from exemptions are obliged to apply to the General Directorate of the National Lottery ("Directorate") for authorization.
The Regulation that brings new principles to the authorization process has entered into force when published in the Official Gazette on 16 June 2022. The Regulation makes extensive changes to Article 12 regarding application evaluations under the Regulation no. 26309 on Non-Cash Lotteries and Draws of the General Directorate of the National Lottery, and introduces the definition of "intermediary entity".
The Regulation is available online here (in Turkish).
What's new?
The main amendments introduced with the Regulation are as follows:
- The definition of "intermediary entity" is added to the Regulation. A requirement on submission of electronic applications to the Directorate in accordance with the principles determined by the Regulation is introduced to those who wish to organize non-cash lotteries and draws. Additionally, legal entities willing to act as intermediaries to provide consultancy services to those applicants will be obliged to obtain a license.
- Entities that want to obtain permission to organize lotteries or draws within the scope of the relevant legislation will have to deposit the application and permission fee into the account of the Directorate upon application and submit the receipt of this payment to the Directorate together with the application documents. The Directorate may reject the permit application, unless the application and permit fee is fully paid.
- The amount of the application and permit fee will be determined by the Directorate within the limits of which do not exceed 40% of the market value of the lottery prize promised to be distributed for each campaign.
- Permit applications can be submitted electronically through the system to be set up by the Directorate, in a way that allows the intermediary entities that are license holders to follow-up this procedure.
- With the Regulation, the conditions that must be met by legal entities to obtain an intermediary license are regulated in detail. Accordingly, an intermediary agreement will be concluded between the intermediary entities and the Directorate, which will remain in effect for the duration of the license. The Regulation lists the cases where the Directorate can terminate the agreements.
Conclusion
Further to the amendments in the Regulation, a new process is introduced for the permit applications to be made before the Directorate in order to organize lotteries or draws. Companies that wish to organize a non-cash lottery or draw for consumers within the scope of promotional activities should carefully examine the changes and take the necessary measures to comply with their new obligations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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