Lotteries Act restricts promotional competitions
Section 54 of the Lotteries Act, enacted in 1997 and amended in 2001, has been put into operation with effect from 2 May 2003. This section aims to regulate promotional competitions and the restrictions imposed by this section are aimed at, inter alia, protection of the National Lottery.
Section 54 will, however, severely influence the manner in which marketers conduct promotional competitions and because promotional competitions are an integral part of the advertising/marketing mix and therefore part of the freedom of commercial speech, the ambit of section 54 has a serious impact on freedom of commercial speech, says Piet Delport, Executive Director of the Freedom of Commercial Speech Trust.
The Freedom of Commercial Speech Trust stands for:
The right to produce, that
Bestows the right to promote,
Which ensures the consumer's right to choose.The Freedom of Commercial Speech Trust defends the right, as enshrined in the Constitution and recognized as such by the High Court, to freedom of speech in the commercial sense, on behalf of the marketing and communications industries in South Africa.
Section 54 places the following restrictions on promotional competitions with effect from 2 May 2003:
it must be conducted only in the Republic,
the price of goods or services in respect of which the competition is conducted must by the price ordinarily paid for the goods and services with no premium for the opportunity to participate in the promotional competition, the opportunity to take part in the competition must not be the only or substantial inducement to buy the goods or services,
the goods or services linked to the competition must be goods or services sold or provided by the person for whose benefit the competition is held,
the purchase of the goods or services must not be the only means through which a person can enter the competition.The last requirement places undue restrictions on the way the promotional competition is run, and careful consideration should be given to the formulation of the rules of the competition to ensure that the competition does not contravene this prohibition.
The use of promotional competition to award cash prizes may also be illegal from 2 May 2003 as section 54 also prohibits any promotional competition that is substantially the same as any competition, game or sports pool conducted by or on behalf of the National Lottery.
No evidence were ever published that the incidence and extent of promotional competitions in any way affect the popularity or clientele of the National Lottery and the restrictions therefore imposed through section 54 appears to be an unjustifiable restriction on the freedom of commercial speech.
Piet Delport
Freedom of Commercial Speech Trust
Tel: (011) 789 4446
Cel: 082 894 7153
