Legally Conducting Lucky Draws for Singapore Businesses
In Singapore, it is common for businesses to conduct lucky draws, that are open to public participation. These lucky draws are usually organised to promote the sale of a business’ product or service.
To this end, it is important to note that lucky draws can be a form of public lottery in Singapore. The default rule is that operation of public lotteries in Singapore is generally prohibited, as it is a form of gambling activity. However, public lotteries are permitted if they fall under one of the statutory exceptions in the Common Gaming Houses Act (CGHA).
Hence, the aim of this article is to explain some key considerations for businesses to bear in mind to ensure they can legally organise and conduct public lotteries in Singapore.
What is a Public Lottery?
A public lottery is defined under the CGHA as a lottery to which any member of the public has or may have access to. It is presumed by law that any lottery is a public lottery unless proven otherwise.
A lottery is further defined under the CGHA as including any game, method, device, scheme or competition whereby money or money’s worth is distributed or allotted in any manner depending upon or to be determined by chance or lot.
An example of a public lottery could be a draw conducted by an insurance company or bank after consumers purchase particular insurance plans or consumer banking products. Prizes such as flight tickets, holidays, cars and cash are offered, and winners are determined purely by chance.
If winning the draw involves some skill, e.g. participants are required to provide a short write-up to convince the business that they should win, then it may be possible that that draw is not considered a public lottery. Businesses should seek legal advice if in doubt on the nature of their draw.
How is a Public Lottery Different from a Private Lottery?
A private lottery is a lottery in which tickets or chances are offered for sale only to members of a society.
This society must be established for purposes that are unrelated to gaming, wagering or lotteries. An example of such a society would be clan associations, or professional societies such as those for the medical or legal profession.
Private lotteries are governed by the Private Lotteries Act. A private lottery permit is required for the promotion or conduct of any private lottery, such as fruit machines or a raffle. Under the Private Lotteries Act, private lotteries are prohibited unless a permit is granted by the Police. Permits are granted on a case-by-case basis.
On the other hand, public lotteries are open to participation from members of the public and are regulated by the CGHA.
As a general rule, any public lottery conducted by a business for the purposes of promoting the sale of any product or service is exempted from the CGHA if, the conditions set out in paragraphs 3 and 5 of the Common Gaming Houses (Exemption) Notification 1997 are complied with.
These conditions are elaborated in further detail below.
How is a Public Lottery Different from a Remote Gambling Service?
A public lottery is typically conducted on physical premises (e.g. a business’s building or in a shopping mall) as is therefore regarded as land-based gambling.
This is different from remote gambling, which refers to various forms of online gambling or gambling using remote communication.
The types of gambling activities include:
- Gambling remotely;
- Facilitating others to do so;
- Transmitting or receiving bets; and
- Providing remote gambling services.
A typical example of a remote gambling service would be online betting/web-based betting services, including betting through smartphone applications.
All forms of remote gambling activity are prohibited under the Remote Gambling Act (RGA), which was passed on 7 October 2014, unless certification of exemption is granted under section 26 of the RGA.
Currently, only the Singapore Turf Club and Singapore Pools have been approved by the Ministry of Home Affairs as exempt remote gambling operators under the RGA.
It is important to note that the criteria and conditions for exemption certificates are very stringent, and applications from potential operators will undergo a comprehensive assessment before exemption certificates can be granted.
The provision of an unlawful Singapore-based remote gambling service in violation of section 11 of the RGA is punishable with a fine of at least $20,000 and up to $500,000 and/or imprisonment for a term of up to 7 years.
What Businesses Need to Know About Legally Conducting Public Lotteries in Singapore
Conditions to be complied with
Under paragraph 3 of the Common Gaming Houses (Exemption) Notification, businesses that are conducting public lotteries must ensure that the following details are disclosed in printed publicity material, and copies should be freely available to all participants and members of the public:
- The method by which the public lottery will be promoted (e.g. print and/or social media);
- Details of the prizes to be distributed;
- The manner by which the prizes will be distributed;
- Whether the winners will be determined only by the results of the public lottery; and
- The time, date and place of the draw.
In addition, a business that wants to conduct a public lottery must also ensure that:
- If the total value of the prizes for the winners exceeds S$10,000, this information must be published in a newspaper. The newspaper has to be a major daily newspaper that is published in Singapore, for example, The Straits Times;
- The participants of the public lottery must also not be required to pay any money to participate in the public lottery, apart from payment for the product or service purchased to be eligible to participate in the draw; and
- Any increase in the cost of the product or service marketed must not be the result of the costs of conducting the public lottery.
There are additional conditions that are set out in paragraph 5 of the Common Gaming Houses (Exemption) Notification. These include:
- Ensuring that the lottery is conducted by the business and its officers;
- The draw must be conducted in public (e.g. a public place or location); and that
- All winners are notified in writing by ordinary post.
The full list of conditions in paragraph 5 that must be complied with are available here.
Requirement to notify the Criminal Investigation Department
The organisers of the public lottery must submit the Notification to Conduct Lucky Draw form and 2 copies of the printed publicity material to the Head of the Specialised Crime Policy Branch of the Criminal Investigation Department (SCPB CID) by registered post at least 4 weeks prior to the launch of the promotion of the public lottery.
The results of the lottery, and the description and value of the prizes must also be submitted to the Head of the SCPB CID no later than 3 months after the conducting of the public lottery.
The formats for these disclosures are provided in Annex B of the Notification to Conduct Lucky Draw form.
What are the Penalties for Non-Compliance with the CGHA?
Section 5 of the CGHA prescribes penalties for persons who assist in conducting a public lottery without authorisation, which is punishable by a fine of at least $20,000 and up to $200,000, and imprisonment of up to 5 years.
In addition, under section 6 of the CGHA, a person who advances or furnishes money for the purposes of establishing or conducting a public lottery without authorisation is liable to a fine of at least $5,000 and up to $50,000, and imprisonment for a term of up to 3 years.
What Other Legal Issues Should I be Mindful of?
Apart from ensuring that you comply with the applicable gambling legislation and permit application procedures highlighted above, you should also be mindful of the following legal issues:
Personal Data Protection Act (PDPA) Compliance
Organisers of lucky draws should be aware of Singapore’s data protection laws and must observe and comply with the requirements of the Personal Data Protection Act (PDPA) when collecting data from participants for the purposes of administering or managing lucky draws.
Organisers must ensure that they:
- Inform participants on the reasons for collecting, using and disclosing their personal data when participating in a lucky draw;
- Obtain the participants’ consent before collecting, using or disclosing their personal data; and
- Keep participants’ personal data in their possession secure from any unauthorised access, modification, disclosure, use or copying (whether in hardcopy or electronic form).
Businesses should avoid collecting, retaining or disclosing more personal data than is necessary for the purposes of a lucky draw.
For example, businesses should ensure that they only collect and use participants’ partial NRIC numbers (i.e. the last 3 numerical digits and letter) and other personal or contact details when necessary, such as to confirm the identity of a prize-winner.
When publishing personal data of the winners of a lucky draw on the business’ website or in the local newspapers, businesses should also only disclose the last 3 digits and letter of the winners’ National Registration Identity Card (NRIC) numbers.
Penalties for non-compliance with the PDPA
For breaches of the PDPA, a financial penalty of up to $1,000,000 may be issued by the Personal Data Protection Commission. The PDPA also provides for criminal sanctions, including fines of up to $10,000 and/or imprisonment up to 3 years.
Are There Any Fees or Taxes Payable for Conducting a Public Lottery in Singapore?
There are no duties, fees or taxes levied on businesses that are looking to conduct public lotteries in Singapore.
We hope that this article has helped you better understand the regulations and requirements that you are required to comply with if you wish to organise and conduct a public lottery in Singapore.
If you need legal advice on conducting a lucky draw in Singapore, you may wish to consult a corporate lawyer.
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