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Change in law

18 February 2019

Sales promotion sweepstakes under the new Money Games Act 

The Swiss Federal Act on Money Games, which came into force on 1 January 2019, replaces the Swiss Federal Lotteries Act of 1923.

Under the old Lotteries Act, the legality of sweepstakes for sales promotions was deduced from the legal definition of a lottery. Hence, if a sweepstake was not covered by this definition, it was permitted. In addition, to be allowed a sweepstake had to offer the possibility of free participation.

Under the new Money Games Act, lotteries and games of skill for sales promotions are only permitted under certain precisely defined conditions. If these conditions are met, a licence or concession is not needed, even if the lottery or game is offered via an app or online.

Of course, sweepstakes that are not money games within the definition of the Money Games Act may be carried out irrespective of the provisions of the new law. Money games within the meaning of the Money Games Act are characterised by two elements: the existence of a stake and the possibility of winning a prize. Both the stake and the winnings must consist of money or a monetary surrogate, which includes products in kind. The conclusion of a legal transaction of any kind is equal to a monetary stake.

Thus, as soon as a monetary stake is involved, lotteries fall under the concept of money games and are subject to approval and licensing. However, in Article 1 para. 2 lit. d of the Money Games Act, an exception has been made for the licencing requirement of promotional games, provided that the following three conditions are cumulatively fulfilled:

  • The lotteries and games of skill are carried out for a short period of time to promote sales;
  • The lotteries and games do not pose a risk of excessive gambling; and
  • Participation is possible only through the purchase of goods or services offered at prices that do not exceed market levels.

If a sweepstake for a sale promotion fulfils all of the above conditions, it may be carried out without having to apply for a licence. This is also the case if it is conducted online, automatically, or in more than one canton. Hence, the conduct of a sweepstake to promote sales of goods or services via an app or online is permitted. In addition, it is also no longer necessary to provide the possibility of participating in the sweepstake for free (i.e. without making a stake or concluding a legal transaction), which is another significant and welcome change compared to the previous legal situation. This relaxation of the regulation, however, does not apply to media companies (see Article 1 para. 2 lit. e of the Money Games Act).

Related people

Dr Simone Brauchbar Birkhäuser, LL.M.
Counsel
Zurich
Aline Steffen
Associate
Zurich