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Lottery Regulations

Does a Facebook giveaway need a permit?

If the giveaway involves a random selection principle and a prize fund exceeding a certain threshold, it may be considered a promotional draw requiring a permit.

How much is the lottery permit fee?

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

Who pays the tax on winnings?

Lottery winnings are subject to income tax, which is usually withheld by the organizer (tax agent) at the time of prize distribution.

How long does it take to get a permit?

Reviewing the application at the Revenue Service typically takes 20 working days.

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Lottery Regulations and Permits: Legal Aspects of Organizing Lotteries

Organizing a lottery in Georgia is a specific permitted activity, distinct from other forms of gambling. Legislation distinguishes between the state lottery and promotional draws conducted by companies for marketing purposes. The right to organize the lottery is exclusively granted to one operator via tender, but businesses have the right to conduct promotional draws based on a special permit. Conducting a draw without a permit (including on social media) is illegal and leads to high fines. Regulations also cover prize fund formation, ticket security, and prize distribution rules. Lawyer assistance is necessary to obtain a permit and ensure the draw conditions comply with the law.

What Does This Service Cover?

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

  • 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: Preparing documentation for the formation and confirmation of the prize fund.
  • Fee Calculation: Calculating the permit fee and the tax imposed on the prize fund.
  • Online Draws: Legal audit of contests planned on social media or websites to ensure they are not considered illegal lotteries.
  • Consumer Rights: Legal regulation of relations with winners and management of claims.

Common Situations When You Need a Lawyer

Lottery regulations often cause confusion for businesses:

  • Facebook Giveaway: A company conducted a product giveaway on Facebook without a permit and was fined for illegal entrepreneurial activity.
  • SMS Lottery: You want to conduct an SMS quiz with prizes and don't know if it requires a license.
  • Prize Distribution: 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.
  • Agency Network: You want to become a lottery ticket retailer (agent) 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.

Process: How Collaboration with a Specialist Works

The process includes:

  1. Analysis: Assessing the planned activity - whether it constitutes a lottery/draw in the legal sense.
  2. Documentation: Preparing the regulation and prize fund documents.
  3. Permit: Submitting the application and receiving the permit.
  4. Conducting: Legal oversight of the draw process.
  5. Completion: Processing winners and paying taxes.

Why Choose Legal.ge?

Any type of draw involving a random principle and a prize may require a permit. Legal.ge connects you with lawyers who will help you plan marketing activities legally. Avoid fines with the help of our experts. Find a specialist on Legal.ge.

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