Turkey: Sweepstakes And Contests In Turkey

Last Updated: 3 May 2011
Article by Uğur Aktekin and Başak Gürbüz

The sweepstakes have become an increasingly popular way to promote products and services in Turkey. When this is the case, the rules and principles in order to organize sweepstakes became an important issue for the businesses who intend to conduct a promotion in order to market their products and services.

The most common types of promotional sweepstakes are competitions and prize draws, which will be explained in detail below. The National Lottery Administration ("NLA") has strict rules governing the mechanisms by which cash and non-cash prizes are awarded in Turkey. The Regulation on Lotteries and Drawings for Non-Cash Rewards No. 26309 (the "Regulation"), the Decree Law outlining the duties of the General Directorate of NLA, grants the institution the sole authority to organize games of luck and lotteries with cash rewards.

However, businesses are permitted to award non-cash prizes, provided that certain conditions are met. Lotteries in which the value of the prize does not exceed TL 49.62 (approximately € 25.00) need not seek official permission from the NLA. If the value of a prize awarded in a prize draw, lottery or game of luck exceeds the amount mentioned above, then permission from the NLA will be required. To participate in both contests and prize draws, all participants are required to be at least 18 years of age.

Article 2 /c, ç and d details the exemptions to the Regulation; the promotional mechanisms that meet these criteria do not require permission from the National Lottery Administration (the "NLA"):

  • 2/c: Mechanisms in which each participant who meets previously specified criteria is awarded a prize,
  • 2/ç: Contests in which no entrance fee is charged and that do not promote or sell a particular good or service, and
  • 2/d: Contests and similarly organized events in which no drawing occurs and the winners are selected according to previously specified rules, or those in which the winners are selected by means of a drawing held before all participants.

When organizing promotional sweepstakes businesses typically try to formulate the contest so as to qualify for one of these exemptions and eliminate the need to seek the official permission of the NLA. The most common mechanisms used to eliminate the requirement of the official permission of the NLA is either determining the value of the non-cash prize of a lottery or draw under the specified amount or arranging the mechanism as a contest (and not involving any draws in the mechanism) in order to be able to give cash prizes as it will fall outside the scope of the Regulation.

Coming to the possible sanctions in case of any violations under the Regulation, NLA is entitled to inform the competent governorship of the unauthorized promotion, lottery or drawing and claim the stopping of such organizations whereby the NLA can also make public announcements regarding the unauthorized organizers. In addition, the NLA is entitled to prohibit the violators of the Regulation from conducting lotteries, prize draws and promotions for a period of up to two years after the initial violation. The NLA may also request that the Supreme Council of Radio and Television in Turkey halt the broadcast of promotions deemed in violation of the regulations.

The two most common promotional mechanisms in Turkey are prize contests and prize draws.

Prize Contests

Competitions organized on television or radio, or in malls or businesses must meet the following conditions in order to circumvent the need for NLA involvement.

According to the Regulation, a contest consists of "events in which winners are determined according to the degree of knowledge and skill displayed by the participants and by elimination, depending on the degree of success at a task or a particular set of tasks, or by a jury selected to evaluate performance, the puzzles, riddles, entertainment programs etc. at the end of which an in-kind and/or cash prize is given."

The requirements must be such that chance factor should not be involved in the contest; skill or qualification should be necessary in order to win whereby the winners are selected by the elimination method considering their success degrees. Article 2/ç of the Regulation mandates that competitions cannot serve solely to promote or sell a particular good or service in order to qualify for the exemption. This exemption also does not apply to prize contests for which a pre-condition of entry is payment or purchases of any kind.

As promotional contests have become more and more popular, the NLA has taken an increasingly strict regulatory attitude and tends to consider most of these promotional mechanisms as within its regulatory purview.

The authority of the NLA in these cases hinges upon the phrase "do not serve the purpose of the promotion or sale of a certain good or service" in the definition of "contest". Until recently, NLA representatives had narrowly construed this phrase for determining its regulatory authority over such mechanisms. However, the NLA has begun to consider any promotional mechanism in which the promotion of a certain product or service is somehow purposed and that every person does not have an equal chance to participate and win the prize (for example, a contest or prize draw limited to the consumers of a certain product or service) to fall within the scope of its authority. In such cases, the NLA usually proposes that the organizers add a prize draw, since the addition of this sort of prize drawing automatically renders NLA involvement necessary. For instance, NLA used to construe the mechanisms which involve the participation of specific bank card holders in a contest as infringing the equal participation principle and on purpose of promoting the usage of a certain bank card; therefore did not regard it as a contest.

But the regulatory stance of the NLA can differ depending on the type of the mechanism organized. Several campaigns have recently been launched by banks or other businesses that hinge upon the stipulation that "those __ number of participants who make the biggest transaction/biggest shopping spree using ... cards, etc." These campaigns have been held to fall outside the purview of the NLA, and were launched (some of them are still ongoing) without the NLA's permission and supervision.

Foreign entities organizing promotional contests from outside of Turkey to attract Turkish customers need not do so from an entity established in Turkey, but Turkish consumer protection laws mandate that the participants be able to contact the organizing company if necessary. Besides, since the promotion targets Turkish citizens, the terms and conditions must be prepared in Turkish and understandable for the Turkish participants in order for the contest to be in compliance with Turkish Consumer Protection Law.

Prize Draws

The Regulation defines a prize draw as "the selection of a winner from among participants at the final stage of a promotion by way of lots of which the principles have been approved by the NLA." If the promotional sweepstakes is to include a prize draw and the value of its non-cash prize awarded exceeds the specified limit, then the sweepstakes will definitely fall within the scope of the Regulation and require the NLA's involvement.

It is possible for the organizer to set out the terms and conditions of the promotion –so long as they are in compliance with the NLA rules for the prize draws. The same rule for the prize contests also applies for prize draws organized by foreign entities targeting the Turkish participants from outside of Turkey.

When organizing a prize draw in Turkey, the organizer foreign entity usually works alongside a local agency or business associate in Turkey to facilitate the application to the NLA. Whether or not the foreign entity has a branch office in Turkey, if the promotion is to be organized in Turkey the Regulation will apply.

Mixed Mechanisms

It is also possible to arrange a two-stage promotional mechanism: one part prize draw and one part competition. For instance, there may be a skill based contest at the beginning of the mechanism and the participation is satisfied by the contest. Afterwards there may be a draw involved in the mechanism in order to determine the winners of which the names are randomly selected. In such cases, the competitive round must comply with Article 2/ç of the Regulation, that is, the contestants should be charged no entrance fee and the contest should not directly serve to promote the sale of a particular good or service. As for the prize draw part, the above-mentioned rules apply: if the monetary value of the prize exceeds the specified limit, then the official permission from the NLA will be required.

Conclusion

Though promotional sweepstakes are an increasingly popular marketing technique, in the interest of limiting the number that occurs, the NLA has adopted an approach designed to restrict the number of promotional sweepstakes that can be approved in order to prevent the uncontrolled increase of the promotions in the market. . Moreover, the NLA has begun to insist that any promotional sweepstakes that do not qualify for the exemptions and are subject to its approval be supervised to the greatest possible extent, which became a matter of worry for the companies. As a result of this approach, businesses typically prefer the less supervised competitions to the more regulated prize draws. However, since the value ceiling for non-cash prizes has been set very low in the Regulation, it has become more and more likely that in order for promotional sweepstakes to be successfully organized, the official permission and oversight of the NLA will be required which means loss of time and lot of paperwork for the organizer companies.

The regulatory approach of the NLA can be justified to an extent, considering the sheer increase in the number of promotional sweepstakes in Turkey. These promotions are often misleading, and can violate consumer rights if not properly supervised. Besides, the businesses usually try to formulate their mechanisms in the form of a contest or other exceptional mechanisms in order to eliminate NLA's involvement in the promotion. That's why NLA scrutinizes the promotion mechanisms to be completely in compliance with the rules under the Regulation and to prevent any abuses in formulation of the mechanisms.

As far as the more complex promotional campaigns are concerned, if there is any legal uncertainty whatsoever it is advisable to make a formal application to the NLA defining the proposed promotional mechanism in order to have their prior opinion before launching the promotion. The NLA itself suggests that applicants proceed according to this system, and will respond to applicants within 3 to 4 days with a determination as to whether their promotional sweepstakes are in compliance with the regulations. This system enables businesses to ensure their promotional mechanism will be permitted to go forward before their launch and by this way to be on the safe side both commercially and legally.

We are of the opinion that the Regulation should be amended, especially with respect to the value ceiling for the non-cash prizes. If the limit were increased, prize draws would be easier to promote, thereby decreasing the workload of the NLA. Considering the dynamics of the market and the consumer needs, a limit of TL 49.62 is very low and the value of the committed prize usually exceeds this limit. The value ceiling makes it advisable for companies to refrain from organizing prize draws and inhibits their marketing plans and strategies.

Lastly, both the guiding principles and the specific rules in the Regulation for the organization of promotional contests should be laid out in greater detail as the legal gaps on this issue lead the NLA to interpret the existing regulations to a greater extent than should be necessary and to narrow the scope of the term "skill based" contest in order to be involved in the promotional mechanism as much as possible. It is essential that the Regulation be amended in order to better balance the interests of the companies organizing the promotions and the interests of the targeted consumers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Uğur Aktekin
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions