In October 2020, I mentioned in an article published in Abogados.com.ar[1] that in order to organize sale promotions with delivery of prizes distributed with the play of chance and effective at a national level, it must be borne in mind that some provincial jurisdictions have issued rules to regulate their performance.
I made a brief reference in said work, to the regulations in force in the provinces of Mendoza, Neuquén, Río Negro, Salta and Tierra del Fuego, which, according to my experience, from the jurisdictions having regulations, these were the provinces that at that time caused most of the advertisers’ doubts.[2]
On that occasion I highlighted that the compliance with said provincial regimes requires the investment, not only of time, but also of important amounts of money that, basically, must be used for the payment of rates, fees, royalties and taxes.
And that is the reason why frequently, when organizing promotional actions with prizes distributed with the play of chance, many advertisers exclude from their territorial area one or several or all these jurisdictions.
I mentioned then – and I still believe it – that more flexible regulations, especially as regards terms and a lower provincial tax burden would ease the inclusion of said provinces in the territorial area where the actions are valid.
Also, that the derogation of rules – which I believe are unnecessary, because promotions are sufficiently regulated by national regulations[3]– and the consequent suppression of local fees, royalty payments, rates and taxes that are levied upon them, would certainly cause the “automatic” inclusion of said provinces within the scope of the promotional actions that at present exclude them.
And I took the chance to conclude that the noticeable desire to regulate, which makes us, and probably the tax voracity – in the pursuit of financing unaffordable governments, each time larger and increasingly inefficient – had not only prevented it until then, but it would certainly prevent it in the future.
Unfortunately, the prediction was right.
▪ Now, Jujuy.
The regime recently issued by the Province of Jujuy must be added now to the five (5) provinces which regimes I discussed briefly by the end of 2020.
The legislature of said province enacted on August 26, 2021, Act 6.234 (published in the Official Gazette of Jujuy on September 3, 2021), that created the Provincial Institute of Games of Chance of Jujuy (INPROJUY).
The regulation sets forth that the purpose of the INPROJUY is the regulation, authorization, organization, management, administration, control, supervision and exploitation of games of chance and mutual betting and related activities, in its different modalities, in force at present or in the future, developed in the jurisdiction of the Province of Jujuy (Act 6,234, section 2nd).
As regards what concerns us here, the regulation provides that, in said section 2nd, the Institute has legal authority on the “random combinations with advertising or promotional purposes”, an expression used in Spain to refer to “…a game modality whereby a person or entity raffles a prize in cash or in kind, with advertising purposes, among those who acquire their products or services or hold the current or potential condition of its customers, without requiring a specific consideration in exchange.”[4]
Or, similarly, to “… those raffles or tombolas which, with a product or service advertising purposes and having as consideration the consumption of the good or service subject matter of the advertising, offer certain prizes in cash, in kind or services.”[5]
In short, the law of Jujuy 6,234, when it refers to the “random combinations with advertising or promotional purposes”, submits to the legal authority of the INPROJUY what in Argentina is usually called “sale promotions with prize” – or merely “promotions” – when the assignment of the offered prizes is subject to the play of chance, at present regulated, at a national level, by Emergency Decree 274/2019 – under the same terms in which they were regulated since May 1983 by the repealed Act 22.802, on Unfair Commercial Practices – and its regulatory and supplementary provisions.
The Provincial Institute of Games of Chance of Jujuy, states in the Whereas Clauses of the regulation – among other things:
“Whereas Act Nº 6234/2021 has decided that the Provincial Institute of Games of Chance of Jujuy, is the enforcement, authorization, organization, management, administration, control, supervisory and exploitation entity of the Games of Change in the Province of Jujuy; hence, it is necessary to regulate every activity related to gambling, in the Provincial territory;”
“Whereas every gambling activity, to be legal, must comply with two essential requirements: 1) to be authorized by the Government and 2) to use the collection proceeds to do charitable works;” and
“Whereas it is essential to regulate the activity, by approving updated Regulations on Games of Chance called BINGOS, RAFFLES and OTHER GAMES;”
On December 21, 2021, it issued Resolution 063-P/2021, published in the Official Gazette of the Province of Jujuy on January 5, 2022 (effective as from the day following its publication), approving the “REGULATIONS OF BINGOS, RAFFLES, LOTTERIES, CHARITY RAFFLE TICKETS AND PROMOTIONS OR RAFFLES ENCOURAGING SALES” of the Provincial Institute of Games of Chance of Jujuy, which was added to the Resolution as an Annex.
The regulation of the promotions in said Rules is extremely concise and in my opinion – at least – incomplete.
It has two (2) sections, 50th and 51st, at the end of Chapter XI of the Annex, entitled “PROMOTIONS OR RAFFLES TO ENCOURAGE SALES”, which regulate, the former, the granting of authorizations to carry out promotions and the second one, the “fee” to be paid to carry them out.
As regards the authorizations of promotional actions, section 50th reads as follows in its first sentence:
“The REGULATORY ENTITY may exceptionally authorize persons, entities, companies, for-profit businesses to carry out certain raffles tending to encourage sales and which final purposes are the awards of prizes.” (Emphasis added).
I shall not go into details in this work on the reasons why, in my opinion, they prevent the jurisdiction of the provinces to regulate sale promotions with prizes.
I will point out only that in view that sale promotions with prizes, are not “betting games” but mechanisms to encourage trade, they are regulated (allowed) by the Nation.
Therefore, I do not see which could be the legal reason whereby its authorization could be limited in Jujuy justifying the “exceptionality” set forth in section 50th.
To make matters worse – if that is possible – the regulation of Jujuy subject matter of this comment, does not contain any stipulation that gives at least a guideline on when “exceptionality” would appear allowing advertisers to carry out promotions in said province.
This is a dangerous crack through which arbitrariness may be introduced -to say the least-.
Aside from the legal uncertainty that causes the discretional power that INPROJUY attributes to itself to approve the making of promotions – or to deny them – I must admit that the formalities of the request of authorization are few, in comparison with those requested by other provincial regimes.
The second sentence of said section 50th reads as follows on the subject:
“To such end, as applicable, the following requirements shall be complied with: Note Addressed to the General Manager of the Provincial Institute of Games of Chance, with the Terms and Conditions of the promotion, Duration thereof, as well as the province in which it shall be carried out.”
Considering that, in accordance with section 2nd, subsection 4) of the National Executive Branch decree 961/2017, the starting and termination dates of the promotion and their geographical scope shall be informed in its Terms and Conditions, it will suffice, according to section 50th, to file a note requesting authorization and enclosing the Terms and Conditions of the action.
Next, section 51st of the regulations sets forth the “fee” that shall be paid for the service rendered in INPROJUY within the framework of the proceeding for the approval of the promotions, under the following terms:
“The entities, legal persons or businesses comprised in this chapter, shall pay to the REGULATORY ENTITY a fee of TEN PERCENT (10%) of the value of the raffled prize in cases of sales encouragement.”
The regulation does not specify the time on which the fee should be paid, nor how said payment should be made. It is not clear either if the fee shall be owed in case INPROJUY decides, finally, not to authorize the promotion.
It should be noted that the regulation of Jujuy does not exclude promotional actions offering prizes of little value from the need to request authorization. As in the case, for example, of the regulations in force in the provinces of Río Negro and Neuquén, in which promotions, prizes of up to AR$ 500,000 (Five hundred thousand Argentine pesos)[6] and up to AR$ 200,000 (two hundred thousand Argentine pesos)[7], respectively are at stake in said jurisdictions, do not require authorizations.
Consequently, even when the prizes at stake in the province are worth a few thousand pesos, it will be necessary to require the permit, which – certainly – will strongly discourage also the making of low cost promotions in the Province of Jujuy
In short, even though in my opinion the best – and more legal – would be that the sale promotions with delivery of prizes should not be considered as games of chance, since they are not, but incentives to trade, regulated by the Fair Commercial Practices and Consumer Defense regulations –, when they are addressed to consumers – while certain jurisdictions persist in getting them stuck as “games of chance” it is necessary that the regulations be clear and complete, so that the administrators may know what to expect.
It is not the case, in my opinion, of the regulation of Jujuy, that requires several precisions that grant to the organizers of promotions predictability and, ultimately, legal certainty.
Even – more so – bearing in mind that when INPROPJUY detects non-authorized sales promotions with prizes, it sends to its organizers warnings stating that:
“… in view of the lack of due authorization, any Game of Chance would be considered clandestine and subject to criminal actions for the commission of the crime typified in Section 301 bis of the Argentine Criminal Code, that provides for the following: The party that exploits, administers, operates or in any manner organizes, per se or through third parties, any modality or gathering of Games of Chance without having the relevant authorization issued by the competent jurisdictional authority, shall be punished with three (3) to six (6) years imprisonment.”
Buenos Aires, June 9, 2022.
[1] “Sale promotions with prizes. Brief summary of provincial legislation”, published in Abogados.com.ar on October 29, 2020.
[2] Other provinces that have also issued regulations, at different times, or have not regulated them in practice, do not apply them, hence the interest for said regimes is rather low and in some cases, null
[3] Basically by the Emergency Decree 274/2019 and its regulatory and supplementary regulation
[4] See Website of the Community of Madrid, in https://tramita.comunidad.madrid/comunicaciones-declaraciones/comunicacion-combinacion-aleat-fin-publi#:~:text=La%20combinaci%C3%B3n%20aleatoria%20con%20fines,sin%20que%20pueda%20exigirse%20una.
[5] See Website of the Government of Spain in http://tramites.administracion.gob.es/en/community/tramites/resource/combinaciones-aleatorias-con-fines-publicitarios/696698c6-bbb1-40d8-a6be-b9d64d334abc.
[6] The individual authorization of the promotion is not necessary – but the Annual Registration is necessary, pursuant to the criterion of the Lottery of Río Negro, – when the promotions offer prizes which as a whole do not exceed the value equivalent to twenty-five thousand (25.000) times the minimum bet of the “Quiniela” determined by the Lottery of Río Negro.
[7] The individual authorization of the promotion is not necessary – and the Annual Registration in Neuquén either when the promotions offer prizes that in whole do not exceed ten thousand (10,000) times the value of the minimum bet of the Traditional “Quiniela” of Neuquén.