NEW SWEEPSTAKES REGULATIONS IN THE NETHERLANDS
Sweepstakes are popular for product promotion
Article 1 of the Netherlands Act on Games of Change prohibits: absent a permit, offering the opportunity of contending for prizes or bonuses if the winner is selected by any determination of chance, which determination is not subject to a preponderating influence by the participant. Therefore, games of chance (e.g. lotteries) are regulated by law and permitted under the condition that the organizing company obtains a license to do so in advance. Whether sweepstakes fall within the scope of the Act is not entirely clear, but if so, they are forbidden and no permit can be obtained.
However, sweepstakes are quite common in the Netherlands for many years already. If certain conditions are observed, sweepstakes are tolerated by the Dutch authorities. On 1st January 2006, the Code of conduct promotional games of chance (‘Gedragscode Promotionele Kansspelen’) enters into force. This Code is drafted by (or: under responsibility of) the Minister of Justice and replaces the current Code, drafted by the Dutch Advertising Code Foundation.
Under the new Code sweepstakes are allowed once a year for each product, service or business of the organizing company. Participants may only be charged with communication costs which may not exceed Euro 0.60. The total amount of prizes involved may not exceed Euro 100,000 per year. The Code contains several other conditions too.
The Dutch Act and the Dutch Code are not applicable in the Netherlands Antilles. In the Netherlands Antilles there is no specific sweepstakes regulation.
Karel Frielink
Attorney (Lawyer) / Partner
