PRIZE PROMOTIONS AROUND the WORLD Chile

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PRIZE PROMOTIONS AROUND the WORLD Chile PRIZE PROMOTIONS AROUND THE WORLD Chile Downloaded: 28 Sep 2021 ABOUT PRIZE PROMOTIONS AROUND THE WORLD ABOUT Welcome to the fourth edition of DLA Piper's popular Guide to Prize Promotions Around the World. Prize promotions remain a popular marketing tool used globally by businesses to attract customers. The internet and various social media platforms make this an attractive, cost efficient means of reaching a large, multi-jurisdictional customer base; but it is not without its legal challenges. This handbook is designed to equip our clients with a useful tool to assist them with the management of the early development stages of a promotion, and to bring potentially problematic issues to their attention as soon as possible. NEW FEATURES AND TRENDS In response to client demand, this fourth edition of the Guide has been expanded to cover 39 jurisdictions which count among the most significant for our clients, with the addition of Denmark, Hungary, Nigeria and Turkey. As our interactive map shows, the extent of regulation and sanctions in this area is on the rise, with the most noticeable change being brought about by the introduction of GDPR across the EU. GDPR extends obligations around handling promotion entrants’ personal data (eg for winner publicity, use of promotions to generate marketing leads and use of UGC entries containing personal data), and introduces the possibility of huge fines for breaches of those obligations. ABOUT OUR GLOBAL ADVERTISING AND MARKETING TEAM The DLA Piper global advertising and marketing team is well-versed in handling complex, frequently multi-jurisdictional compliance projects. This includes advising on compliance aspects of international prize promotions, which we are often asked to clear across large numbers of jurisdictions, while working to short deadlines. More broadly, our global advertising and marketing team is able to support the full range of advertising-related work, from copy clearance to dealing with advertising regulators and litigation, to negotiating advertising and sponsorship deals, to e-privacy issues and ad-tech. Our advertising and marketing lawyers offer deep understanding of the advertising and media industries, and combine this with a sophisticated approach to cross-border working. DISCLAIMER This Guide is not a substitute for legal advice. Nor is it intended to be an exhaustive guide to all rules and regulations relating to promotions in the jurisdictions covered, or to cover all aspects of the legal regimes surveyed, such as specific sectoral requirements. Rather, it aims to simplify what are often complex provisions into a more manageable summary and to highlight areas of potential concern to promoters. It is current as at the last modified date stated in each section. 2 | DLA Piper Prize Promotions | www.dlapiperintelligence.com/prizepromotions/ PRIZE PROMOTIONS AROUND THE WORLD CHILE3 | DLA Piper Prize Promotions | www.dlapiperintelligence.com/prizepromotions/ PRIZE PROMOTIONS AROUND THE WORLD CHILE Last modified 04 April 2019 GOVERNING LAW What are the main applicable governing laws or codes for prize promotions? Name Law or Code? Chilean Civil Code Code Chilean Criminal Code Code Law 19,995, which establishes the general Law bases for the authorization, operation and control of casinos Law 20,851, which regulates bingos, lotteries Law or other similar sweepstakes, with a beneficial or solidarity purpose Law 18.568, which establishes standards of Law Lottery of Concepcion (Lotería) Decree No. 152, of the Ministry of Finance, Decree setting the refunded, coordinated and systematized text of the Chilean Charity Polla organic law Decree 1,298, which assigns to Polla the Decree administration of the system of sports forecasts (Sistema de Pronósticos Deportivos) Law 4,566, of Hippodromes Law Law N° 19.496, on the protection of rights of Law consumers rights Law 19,628, Data Protection Act 4 | DLA Piper Prize Promotions | Chile | www.dlapiperintelligence.com/prizepromotions/ PRIZE PROMOTIONS AROUND THE WORLD Protection Act Law N° 19,628, on data protection Law Note 1: Gambling is a regulated activity which is only lawful in situations expressly authorized by law. Games of chance are unlawful, unless authorized by special laws. There is no specific regulation regarding online gambling. Note 2: The Ministry of Finance regulates through decrees the games of chance administered by Lotería and the Chilean Charity Polla. The supreme decree will establish terms and conditions applicable to the games with regards to the operation of them, the steps that Lotería should take to modify them and the conditions for participation by gamblers. EXTRA-TERRITORIALITY Do national regulators enforce rules against entities operating abroad? There are neither specific rules nor jurisprudence in regard to these matters. However, according to the Chilean Law on the protection of consumer rights, if the promotion targets Chilean consumers, but is promoted from outside Chile (for example a non-Chilean website or direct marketing from outside Chile), the promoter must inform the consumers: The terms and conditions for the promotion; The amount or number of prizes; and The period in which the prizes can be claimed. Also the promoter should publish (as on the contest website) the results of the contests, competitions or raffles. The National Consumer Service (SERNAC) in turn requires that the terms and rules of contests or competitions must specify the following: Description of the prize; Number of prizes; The way to participate in the contest; How to collect the prize. SERNAC and the Superintendence of Casinos (SCJ) do not have sanctioning powers, but they will do what they can to take action; however, this is limited and they are unlikely to prioritise such cases. SKILLS COMPETITIONS 5 | DLA Piper Prize Promotions | Chile | www.dlapiperintelligence.com/prizepromotions/ PRIZE PROMOTIONS AROUND THE WORLD Can a prize promotion be run that is based on skill? Yes, since these kinds of competitions are lawful bets and games. However, it is important to take into account that the winner should be determined on the basis of ability and not chance, since in the latter case it would be considered gambling (which is only allowed in a limited manner as expressly authorized by law). PRIZE DRAWS Can a prize promotion be run where there is an element of chance in the selection of the winner? Yes, but only in the cases specifically allowed by law: 1. Draws authorized by Law Number 20,851, which regulates bingos, lotteries or other similar sweepstakes, with a charitable purpose. 2. Raffles authorized by the Law on the protection of consumer rights, that is sweepstakes used as a method to run a promotion, which imply an additional benefit for the user for the acquisition of a product or service by the consumer (sweepstakes for other purposes are illegal). Any other draw in which there is an element of chance in the selection of the winner involved, would be considered and potentially deemed an illegal lottery or game of chance, which is defined in Law 19,995 of Casinos as 'those games whose results do not depend exclusively on the skill of the players, but essentially on chance or luck'. The direct exploitation of games of chance and development of games officially incorporated in the catalogue of games can only be done by authorised operators. SELECTION OF WINNERS Are there any requirements for the selection of winners and award of prizes? The terms of competitions and sweepstakes must indicate the terms for claiming prizes. The names of the winners should be published (for example on the website of the promoter), and participants must be informed of the results of the contests, competitions or sweepstakes. The right to collect the prizes will expire after 60 days from the date of the relevant sweepstake (Law 18.568, which establishes standards of the Lottery of Concepcion). JUDGES Are there any particular requirements in relation to judges or judging for skills competitions? Not applicable. PRIZES Are there any restrictions on the prizes awarded? No, but as indicated before, the terms of competitions and sweepstakes should indicate the terms for claiming the prizes and a description of the prizes. 6 | DLA Piper Prize Promotions | Chile | www.dlapiperintelligence.com/prizepromotions/ PRIZE PROMOTIONS AROUND THE WORLD REGISTRATION REQUIREMENTS AND FEES Are there any registration requirements, or any fees/taxes payable? In relation to competitions and draws authorized by the Law on the protection of consumer rights, although it is not mandatory, it is recommended to deposit before a notary a copy of the terms and conditions of the competition or lottery. In addition, participants should be informed that the terms and conditions were deposited before a notary and they must be made available to the contestants, which is usually achieved by publishing the terms and conditions on the contest’s web page. The operators can only use the machines or implements previously approved and registered in a registry that carries the Superintendence of Casinos (as stated in the Law of Casinos). In regard to taxes, the Chilean VAT Law stated the delivery or free distribution of movable goods for promotional purposes is subject to Value Added Tax of 19%. The promoter should charge this tax. OTHER LOCAL REQUIREMENTS Are there any other key local requirements? The form of participation (including its conditions), the time or term of the competition or sweepstake, the amount of prizes and the method and the period to claim them must be indicated in the terms and conditions of the competition or sweepstake. Promoters should properly publish the results, including the winners, of competitions or sweepstakes. Any gambling not explicitly regulated is illegal and only authorized operators can directly exploit games of chance and develop games officially incorporated in the catalogue of games (Law of Casinos). The lottery system is reserved to Polla Chilena and Lottery of Concepción, except for those lotteries run for charitable purposes.
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