This chapter contains explanations of policy on the following subjects:

  • definition of a lottery scheme;
  • lottery schemes versus promotional contests;
  • prohibited lottery schemes;
  • advertising licensed lottery events;
  • registration requirements;
  • general operational requirements for lottery events; and
  • general financial requirements.

3.1.1. DEFINITION OF A LOTTERY SCHEME

In simple terms, a lottery scheme may be defined as any scheme that has the following three components:

  • a prize;
  • a chance (to win the prize); and
  • consideration or a fee.

Therefore, a lottery scheme exists if money is paid or some other consideration is given for a chance to win a prize.

There are many types of lottery schemes for which licences are not available. The licensing authority will confirm whether or not a licence is available for a proposed lottery scheme. If the proposed event is one for which a lottery licence is available, the organization must apply for a lottery licence. The organization is responsible for ensuring that all its schemes are operated legally.

3.1.2.GAMES OF CHANCE AND GAMES OF SKILL

Licences are available for certain types of games of chance and games of mixed chance and skill.

3.1.2 (A) Games of chance

Games of chance, sometimes called “mechanical games,” do not involve any element of skill. Games of chance are the most popular form of gambling. There are hundreds of these games, including raffles, bingo, wheels of fortune and break open tickets.

3.1.2 (B) Games of skill

In games of skill, the element of chance is virtually non-existent. Checkers, chess, bowling, tennis, golf and all sports contests are examples of games of skill.

3.1.2 (C) Games of mixed chance and skill

Games of “mixed chance and skill” combine both elements and include most games played with cards. Blackjack is an example of a game of mixed chance and skill.

3.1.3. PROMOTIONAL CONTESTS

Organizations may conduct contests resembling lottery schemes to promote their products and increase sales. Although there is no formal definition of a contest, contests are often operated by commercial for- profit organizations or their representatives. These organizations cannot be licensed to operate a lottery because they are not charitable. Therefore, the company must ensure that the contest does not fall within the definition of a lottery scheme.

Prior to conducting a contest, organizations may first wish to:

  • obtain a legal opinion to ensure that the contest is not a lottery scheme;
  • contact the federal Competition Bureau to obtain detailed information on promotional contests.