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The Gambling Act 2005

11 December 2008

The Gambling Act 2005, which came into force on 1st September 2007 reforms all aspects of gambling laws in the United Kingdom. Once fully implemented, the Act will repeal all the existing law found in the Betting, Gaming and Lotteries Act 1963, the Gaming Act 1968 and the Lotteries and Amusements Act 1976.

The Gambling Act 2005 came into full effect on 1 September 2007. The new Act has profound implications for promotional marketing.

To understand the new law it is helpful to look at the problems under the previous regime.

Problems with the old law

Lotteries and Prize Draws

The old law, set out in the Lotteries and Amusements Act 1976 presented promoters with many difficulties.

The 1976 Act was not a triumph of drafting. Section 1 stated that all lotteries are illegal, but the Act did not provide a definition of a lottery. Case law defined a lottery as a promotion which distributed prizes by pure chance, in which participants had to pay for a chance to enter the draw.

In 1980, the Imperial Tobacco case decided that if a chance in a lottery was only provided to purchasers of goods or services, it would be an illegal lottery, even if the price of the goods or services stayed the same. This heralded the introduction of the “No Purchase Necessary” (“NPN”) route.

The Crown Prosecution Service (“CPS”) subsequently provided guidance on the requirements for a valid NPN route. The NPN had to be a genuine, realistic and unlimited alternative to entry with purchase. However, as there were few prosecutions under the 1976 Act, there was little case law to clarify the substance of this requirement. It was the Telemillion case in 1995 that established the free entry route must be promoted genuinely. In that case, because only a tiny percentage of entrants used the NPN route, preferring the heavily promoted premium rate telephone service entry route, Telemillion was found to be an illegal lottery.

Before September 2007 although reputable promoters created, funded and operated NPN routes, in practice they were often only used by a small percentage of entrants.

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