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And the winner is...
The lucky draw: When is it an acceptable marketing tool, and when
is it considered illegal gambling? Chad Dowle & Corey Judson
explore what counts as permissible in the GCC region.
L
ucky draws, raffles, sweepstakes, wheels
of fortune and beyond are common to
spot while strolling through malls and
airports in this region: Shop and win!
Spin the wheel! Bring your receipts and
play! Yet, what is uncommon (rather, impossible) to
spot are lavish casinos on the Palm, slot machine
saloons in hotel lobbies, or freely accessible poker
sites online. The mechanics are the same however:
spend something in consideration for the chance
to win something of higher value. So what is the
legal distinction, and how can promoters protect
themselves from crossing the line?
To appreciate the nuanced difference behind what
is acceptable and what is not, it is first important to
understand the local restrictions against gambling
themselves. It should come as no surprise that
gambling (“maisir”) is strictly forbidden in Islam. This
restriction is directly addressed under many local
penal codes such as UAE’s law No 414: “Each person
who gambles is punishable by imprisonment for a
term not exceeding two years or a fine not exceeding
AED20,000.” Similar provisions exist in the laws of
other nations in the region. While the stark penal
implications are likely reserved for those guilty of
hosting high-stakes Texas hold’em tournaments
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Issue 39 • MARCH 2015
from their basements, it nonetheless highlights the
no-nonsense attitude of local officials with respect
to gambling. However, what is considered true
“gambling” is not so black and white. Further, how
pervasive the restriction is in practice varies widely
throughout the region.
UAE – beginner’s luck
In the UAE, one of the most significant requirements
of relevant authorities (such as the Dubai Department
of Economic Development, who are generally
responsible for approving promotional licence
applications in Dubai) is that - despite some tightlyregulated exceptions - participants cannot directly
pay to enter a draw. However, requiring participants
to make a qualifying purchase as a means of entry is
permitted. The rationale is that participants are not
actually taking a risk. In making the original purchase,
consumers have already received something in due
consideration for their payment. The draw is simply a
bonus. Put differently, upon losing, a participant is in
no worse position than had he or she not entered.
A second significant requirement is that promotions
cannot promote traditional gambling themes and
imagery. It may seem obvious, but it often trips up
promoters. For example, a spinning wheel of prizes
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can often resemble a roulette wheel, and a ticket barrel
can often resemble a bingo or keno pot. Playing cards
should never be a theme, and scratch-and-win tickets
can be high risk. Further, to distinguish a draw from
a lottery, the prize pool should not be dependent on
the number of entries; rather it should be fixed before
the promotion even begins. Some jurisdictions, such
as Abu Dhabi, even require the promoter to submit
evidence that the prize is already purchased before
approving a commercial promotion licence. It is also
worth noting that, even if a promotion is approved
initially, promoters are still vulnerable to consumers
taking offense to the mechanics. As such, a very
conservative eye should be taken early to avoid falling
victim to this restriction, because if there is one
thing more frustrating than being denied a licence
to operate, it is being shutdown while a promotion is
running at full steam.
KSA – a riskier deal
Beyond the above, however, the UAE is generally
flexible on lucky draws. KSA on the other hand has
many added layers of restrictions. This is in light of
KSA’s adherence to the strict and deeply-rooted form
of Islamic law (Shari’ah). As gambling is forbidden,
no commercial considerations or technical loopholes
are allowed to override the absolute prohibition.
These laws can bear so heavily on promotional
mechanics that many brand-owners often end up
hosting two separate promotions: one in KSA, and
one collectively across the remaining GCC countries.
Further, if brand-owners plan on harnessing onthe-ground advertising for a promotion, they should
note that KSA has a highly-active government
ministry (The Ministry for the Propagation of Virtue
and the Prevention of Vice) with responsibility for
uncovering activities deemed to present a threat to
the underpinnings of a strictly Islamic society. As
such, there is little room for error in hosting a noncompliant promotion in KSA.
As oppose to the UAE, the element of “random
chance” is prohibited in KSA. If grand prizes are
randomly distributed among participants, then
smaller consolation prizes should be made available
to everyone such that there is no chance of truly
losing. This is why “look inside to see if you’re a
winner!” mechanics are very risky, and rare to see
on cereal boxes in Saudi grocery stores. However, if
promoters wish to avoid costly consolation prizes
for all participants, introducing a skill-based entry
mechanism is often sufficient to avoid appearing
too “chancy.” It is common for promoters to require
KSA participants to answer a (usually obvious) trivia
question before he or she is entered. Another common
promotional game which is arguably skill-based
is requiring participants to collect a certain series
of game pieces, and upon amassing a full set, are
then declared winners. In the eyes of Saudi officials,
requiring a showing of skill upon entering is sufficient
to remove the promotion from the sphere of gambling
or chance, even if winners and their prizes are
ultimately decided at random.
Also unlike the UAE, another prominent restriction
in KSA prohibits promoters from requiring a qualifying
purchase as means of entry. If promoters do wish to
give entry tickets along with certain purchases, then
they are generally required to offer an additional nopurchase-necessary route to enter. Here, participants
may be offered the option to write to the promoter
and request entry into the promotion for free. While
the prospect of handing-out game pieces and entry
tickets ad nauseam may seem like a poor return on
investment for promoters, on a practical level, the
no-purchase-necessary route is much closer to being
only a formality. The process is rarely leveraged by
participants in light of the time and effort required on
their part to reach out to the promoter.
Other GCC Countries – a spread bet
For the remaining GCC countries, all generally fall
somewhere between the UAE and KSA as far as
restricted promotional practices are concerned. Each
country, however, still has its own particular rules,
such as Qatar’s restrictions on music-related prizes,
and Oman’s requirement that winners’ names be
published in two daily newspapers. As such, pan-GCC
promotional mechanics require planning ahead
so that they can be carefully vetted against each
individual jurisdiction’s laws, and promoters should
be flexible in fine-tuning promotions throughout the
gulf to minimise the risk of legal trouble.
1
2
Text by:
1. Chad Dowle, UAE country manager, Rouse & Co.
2. Corey Judson, junior legal consultant, Rouse & Co.
theoath-me.com • the Oath
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