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Lottery Law

When is a permit required for a draw?

If the draw involves a random selection principle and the prize fund exceeds the statutory limit, a permit is mandatory.

How much is the permit fee?

The permit fee for a promotional draw is 10% of the total value of the prize fund.

Are winnings taxed?

Yes, winnings valued over 1,000 GEL are subject to income tax, payable by the winner or withheld by the company.

Can I run a Facebook contest without a permit?

If the winner is chosen by a jury or based on "likes" (not randomly), a permit is generally not required.

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Lottery Law: Organization, Permits, and Regulations in Georgia

Lottery Law in Georgia is a strictly regulated field encompassing classic lotteries, instant lotteries, and draw-based games. According to the Law "On Organization of Lotteries, Games of Chance and other Prize Games," the exclusive right to organize the lottery is granted to one company ("Georgian National Lottery"). However, the business sector has the right to conduct promotional draws, which also fall under the lottery legal framework. Organizing any type of draw without a permit (including on social media) is considered illegal entrepreneurial activity and is subject to substantial fines. Lawyer assistance is essential to correctly determine whether your marketing activity is subject to lottery regulations, how to obtain a permit, and how to tax the prize fund.

What Does This Service Cover?

Specialists on Legal.ge offer full legal support in organizing lotteries and draws:

  • Legal Audit: Analyzing the planned activity (contest, draw) to determine if it requires a permit under lottery legislation.
  • Obtaining Permit: Preparing and submitting an application to the Revenue Service for a permit to organize a promotional draw.
  • Regulation Development: Drafting the legal rules and conditions (regulation) of the draw, which is a mandatory prerequisite for obtaining a permit.
  • Prize Fund and Taxes: Documenting the formation of the prize fund and defining rules for withholding income tax from winners.
  • Consumer Rights: Legal regulation of relations with participants and management of claims.
  • Advertising Materials: Checking advertising texts and banners for compliance with the Law "On Advertising."

Common Situations When You Need a Lawyer

Ignoring lottery regulations often leads to problems:

  • Facebook Giveaway: A company conducted a product giveaway on social media without a permit and was fined for organizing an illegal lottery.
  • SMS Quiz: You want to conduct an SMS contest with prizes and don't know its legal status.
  • Prize Refusal: A winner claims a prize, but it turns out they violated the draw rules, and you need legal justification for refusal.
  • Tax Audit: The Revenue Service checks the correctness of prize fund taxation.
  • Ticket Sales: You want to become an official retailer (agent) of lottery tickets and need contract review.

Georgian Legal Framework

The field is regulated by the Law "On Organization of Lotteries, Games of Chance and other Prize Games" and the Law "On Licenses and Permits." Permits for promotional draws are issued by the Revenue Service. Prize fund taxation is regulated by the Tax Code of Georgia.

Process: How Collaboration with a Specialist Works

The process includes the following stages:

  1. Consultation: The lawyer evaluates your idea and determines the need for a permit.
  2. Documentation: The draw regulation and application are prepared.
  3. Submission: Documents are sent to the Revenue Service.
  4. Permit: After receiving the permit, the draw begins.
  5. Reporting: A report is submitted to the regulator after the process is completed.

Why Choose Legal.ge?

Any marketing activity involving a prize and chance carries risk. Legal.ge connects you with lawyers who will help you plan the campaign legally. With our help, you will avoid fines and protect your company's reputation. Find a specialist on Legal.ge.

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