Games of Chance

Contests & Sweepstakes

Contests and sweepstakes are interesting not only for the contestants, but for the businesses staging them as well. For instance, an exciting contest or sweepstakes can help attract large numbers of customers to an offer on the Internet that is otherwise rather dull. Contests and sweepstakes make it easier for businesses to form potentially profitable alliances aimed at specifically channeling customers in each other's direction. There's money to be made with them, too. And last but not least, a contest or sweepstakes can be used to gather the addresses of potential customers and to obtain their consent to being contacted by email, phone, fax or text message for advertising purposes.

Holding contests and sweepstakes involves not only many opportunities, but also many (legal) pitfalls. The various requirements laid down by law are scattered around among numerous statutes. For instance, anyone organizing a contest or sweepstakes needs to be familiar with competition law, the Teleservices Act, the Interstate Broadcasting Agreement and its competition statutes, the rules on games contained in the Industrial Code, the Criminal Code and the Interstate Gambling Treaty, not to mention data protection legislation. The basic statutory requirements are constantly changing, on top of which jurisdiction in this particular area is extremely dynamic, inconsistent and sometimes even contradictory. Without knowing what the latest statutory regulations are, holding a contest or sweepstakes can easily turn into an incalculable risk. Breaches of the law can end up in court or be penalized with large fines, on top of which there is a risk of costly disputes with competitors, consumer protection organizations and fair trading associations. Thus, in a contest or sweepstakes, the actual organizers and not just the contestants need to be aware of all the risks involved.

Gambling & Games of Chance

Gambling – as distinguished from a contest, sweepstakes or a game of skill – is when a player has to pay a substantial stake in order to take part, and the outcome of the game is essentially a matter of chance. In Germany, the State still has a monopoly on gambling, but it is not unlikely that the State monopoly will topple within the foreseeable future. Businesses taking strategic steps right now to equip themselves for tomorrow’s market will then be at a clear advantage. One question frequently arising in practice is whether a particular game counts as gambling in a legal sense and is therefore subject to the State monopoly, or whether by changing a few rules it could be legalized as a game of chance. In this area too, it is extremely risky to do anything without seeking legal advice beforehand.

Games of Skill

Games of skill differ from games of chance in that the outcome largely depends on the player’s capability and proficiency. With legislation in place that has reinforced and even extended the State’s monopoly in the Interstate Gambling Treaty, the importance of games of skill has increased markedly over the past few years. All the same, games of skill still harbor numerous legal issues on which the courts have not yet handed down sufficiently clear rulings and that are sometimes underestimated. However, market players are becoming increasingly aware of these issues and are paying closer attention to them.

Legal Advice & Counsel

We will give you advice on how to select, organize and advertise contests and games that might be beneficial to your business. We will point out the legal risks and help you to avoid them or at least keep them to a minimum. We will show you ways of making the right strategic decisions early on, enabling you to make a prompt and adequate response once decisive market developments begin to emerge. And we will assist you with legal and bureaucratic procedures in connection with organizing and advertising games.