EUROPE, MIDDLE EAST & AFRICA: RUSSIA
RECENT CHANGES IN SWEEPSTAKES REGULATION IN RUSSIA
Authors: Irina Anyukhina and Yulia Gurieva, ALRUD Law Firm
A couple of years ago gambling activity was restricted to a few territories of Russia exclusively. As a result illegal gambling out of a gambling zone was developing undercover “lotteries”.
With this respect the new Federal law № 214-FZ amending the Federal Law on lotteries was enacted on July 27, 2010 and came into force on August 6, 2010 (the “Law”). The Law is aimed at restraint of illegal gambling, particularly illegal gambling out of a gambling zone under the guise of sweepstakes.
The Law provides that use of mechanical or electronic equipment and other technical devices may not be used for the purposes of identifying prizes of any sweepstakes. Sweepstakes rules may not include conditions, according to which entrants of sweepstakes should use mechanical or electronic equipment in order to indicate and/or acquire a prize.
The said provision raises a question: whether a sweepstake may be conducted through the Internet or not? For example, if a prize for participation in a sweepstake is an electronic license to software or a music album, available at an identified web-site, should the rule apply? Generally, a winner acquires its prize by means of his/her computer, which is electronic equipment. Formally speaking, the mentioned sweepstakes schemes fall under the said restriction of the Law.
However, we believe that the practice may bring it to another conclusion as far as such schemes are in line with the general concept of the Law and may not obviously bring to illegal gambling activity.
We should note that the restriction regarding usage of mechanic and electronic equipment applies only to identification and acquisition of prizes. Therefore such equipment could be used for identification of winners. With this respect the other provision of the Law should be taken into account: lottery equipment may not be used with regard to sweepstakes. This means that equipment, specially developed for the purposes of lotteries or which uses lottery software, should not be used for the purposes of identifying winners of sweepstakes.
Additionally according to the Law, in case a drawing sweepstake is terminated its prize fund shall be drawn in full, including super-prize, in the last drawing.
The Law also provides for the requirements on reporting and audit of lotteries and sweepstakes promoters. Non-governmental lottery promoters and operators of state and municipal lotteries shall publish annual report on holding a lottery and results of an annual audit in the media and/or on the Internet no later than on the 1st of July of the year following the reporting period.
It is important to note that the Law does not apply to sweepstakes which were filed for registration before August 6, 2010. Promoters of such sweepstakes are entitled to proceed with this sweepstakes pursuant to the previous edition of the Law up to December 31, 2010.