Digital marketing could make your pub sweepstake illegal

With the pandemic forcing pubs to close for large periods over the past two years, we saw many establishments focus their attention on digital marketing to make sure their customers didn’t forget about them.

For some this proved so successful they continued such activities even after the UK returned to normal.

But pubs that are recent converts to social media and email marketing need to be careful if they are planning to hold sweepstake events for this weekend’s Grand National.

Sweepstakes are a type of lottery, which means customers pay to enter and gain the opportunity to win a prize based on chance. Typically, pubs will run such contests as customer lotteries, which are exempt from the usual rules set out by the Gambling Commission for lottery operations.

However, there are still strict rules about how customer lotteries are operated and one of these pertains to advertising. Pubs planning to hold a sweepstake for the Grand National – or any other event for that matter – are only allowed to advertise this at their business premises.

They are not allowed to advertise it online or send customers text messages or emails about it, so inclusion on the Facebook page or customer mailshot would fall foul of the rules. Advertising is also restricted to a single premises, so cross-marketing across a chain of pubs is also prohibited.

Advertising aside, there are a number of other rules that licensed outlets must follow when planning customer lotteries, including that all tickets must be allocated by chance and that all proceeds from ticket sales must be distributed as prizes, less deductions for reasonable expenses.

Tickets must be the same price and can only be sold to customers while they are in the pub. Tickets must be sold by management (not an external promoter) and they must show details of the organiser/premises and the price on the ticket, as well as stating that tickets are not transferrable.

The maximum value of a prize cannot exceed £50, though there can be more than one prize if a higher amount is taken in via ticket sales. Services can also be provided and as an example, a £50 meal voucher could be won. However, if the meal will only cost the business £30, the additional £20 should be used for other prizes.

Finally, given that the Easter bank holiday weekend falls less than a week from the Grand National this year, another important rule to bear in mind is that pubs can only hold one customer lottery in any seven-day period, which begins on the date of the previous draw. Therefore, any pub planning customer lotteries for both the Grand National and Easter should make sure that an Easter draw doesn’t take place on Good Friday.