Promotional activities involving prize draws, raffles, competitions or giveaways have become increasingly popular marketing tools for companies. However, these initiatives are subject to a specific legal framework, and lack of awareness of the applicable rules may give rise to significant risks, including the inability to carry out the campaign or the imposition of sanctions.
Decree-Law No. 98/2018 reformulated the Portuguese Gambling Act regarding the legal regime applicable to related games of chance, introducing important changes, particularly concerning the authority responsible for authorising such operations.
One of the most impactful amendments was the transfer of competence to authorise related games from the Ministry of Internal Administration (MAI) to the Municipal Authorities.
Under the Gambling Act, related games of chance are operations offered to the public in which the expectation of winning depends:
- jointly on chance and on the player’s skill, or
- exclusively on chance, and
- which award prizes consisting of goods or benefits with a predetermined economic value.
The following activities fall within this category: raffles, prize draws, promotional competitions, knowledge-based competitions and giveaways.
Since 1 January 2021, the authority to approve the operation of related games of chance lies with:
- The Mayor of the Municipality in whose territory the operation takes place, where it is limited to a single municipality; or
- The Mayor of the Municipality of the registered office or residence of the promoting entity, where the operation has a wider territorial scope.
The Gambling Act grants each Municipality the power to establish the conditions it deems appropriate for the operation of these activities, and such conditions must be expressly set out in the authorisation granted.
In practice, many Municipal Authorities have adopted procedures like those previously applicable under the MAI, which generally include:
- Submission of an application addressed to the competent Mayor.
- Delivery of the rules or terms and conditions of the prize draw, competition or giveaway.
- Submission of any additional documentation required by the Municipality.
- Payment of the applicable municipal fee.
- Once authorisation is granted, notification of the promoting entity of the relevant decision.
The transfer of powers to the Municipal Authorities has resulted in greater administrative proximity, but also in a certain degree of procedural fragmentation, as different municipalities may adopt different approaches.
If Municipal Authorities are not adequately equipped with the necessary resources and clear procedures, practical obstacles may arise in the implementation of these promotional actions, placing their planning and execution at risk.
For this reason, obtaining prior legal advice is particularly important to ensure full compliance with the applicable legal requirements.
Belzuz Abogados, S.L.P. – Branch in Portugal is an international law firm, with headquarters in Madrid and offices in Lisbon and Porto, providing legal advice to national and international companies on the drafting of terms and conditions, legalisation of prize draws, giveaways, promotional contests and other marketing campaigns, ensuring full compliance with the Gambling Act, applicable municipal regulations and all other relevant legislation.