The General Contour of the Lottery Regime
The lottery in Georgia sits in a special, exclusive permit regime. Article 3 of the law defines it: a lottery is a voluntary group or mass game during which the organiser plays out a prize fund under a publicly published, established rule and conditions; the occurrence of a win is a matter of chance and cannot be specially arranged. There are two types: a draw lottery, whose conduct is divided into draws — separate full cycles, from ticket production to the playing out of the prize fund — and an instant lottery, whose result is determined on the spot by checking the ticket or by a draw conducted directly on the ticket.
The commercial-versus-charitable distinction is not spelled out directly in the text of the law: the law defines the lottery organiser in a single way — the person who has won the tender organised by the Ministry of Finance and who operates in accordance with the conditions provided for by the law and the contract. Charitable purposes may be reflected at the level of the contract and the tender conditions, and the legal format of that differentiation must be spelled out precisely in those documents.
The Tender and the Exclusive Right
Article 6 sets the mechanism: the organisation and conduct of lotteries in Georgia is carried out by the winner of a tender held by the Ministry of Finance. The winner is the person who satisfies the tender conditions and offers the largest amount to be paid into the state budget for obtaining the exclusive right, but not less than the amount determined by the Government — taking into account a study conducted by a third party. The tender documentation must provide for bank guarantees securing the tender proposal and the performance of the contract, whose amounts are determined by government resolution.
The exclusive right is granted to the organiser for a term of 10 years; on the proposal of the Ministry of Finance, the Government may extend it until a contract is concluded with the winner of a new tender. The organiser also pays quarterly a percentage of the total value of the tickets sold during the conduct of the lottery, the amount of which is determined by government resolution.
Minimum Requirements for the Prize Fund
Article 9 establishes clear arithmetic. The prize fund of an instant lottery must amount to at least 45 percent of the lottery volume; for a draw lottery — at least 45 percent of the total value of the tickets sold in each draw. The organiser of a draw lottery may reserve up to 20 percent of the prize fund, which is played out in subsequent draws. The prize funds of lotto and bingo must likewise amount to at least 45 percent of the total value of tickets sold in the given game. And as the result of a lottery draw, an item prize must fall to only one ticket.
Article 15 adds another practical rule: the organiser of a lottery or promotional game conducts the draw even where the tickets have not been fully sold — a shortfall in sales does not by itself release the organiser from the obligation to conduct the draw.
The Consent Procedure and Control
Article 31 defines the procedure preceding each game: the organiser must apply to the Revenue Service 2 weeks before its organisation and submit documents. For a draw lottery these are the organisation conditions (the regulations), which must contain the general rules of the game, the lottery start date, the limited period and place for paying out winnings, the ticket price, the procedure and period for considering claims, and the quantity and numbering of the tickets to be printed; a contract with the ticket preparer (unless the organiser prepares the tickets itself); and a ticket sample. The regulations of an instant lottery additionally include the amount of the prize fund and the list, quantity and unit value of the prizes.
Other changes — a change of director or legal address, the printing of an additional quantity of tickets and the like, which do not cause a substantial change to the game — are notified to the Service in writing 3 days in advance. The organiser must ensure the publicity of the game rules and their unimpeded provision to players, create a commission of at least 3 invited members independent of the organiser, and submit information on the course and results of the draw to the Revenue Service within 5 working days. An instant lottery may be organised for a term of no more than 2 years.
Frequently Asked Questions
Who can be a lottery organiser?
Only the winner of the Ministry of Finance tender, who receives the exclusive right for a term of 10 years and performs the conditions determined by the contract.
How large must the prize fund be?
For an instant lottery — at least 45 percent of the lottery volume; for a draw lottery — at least 45 percent of the value of tickets sold in the draw; a reserve of up to 20 percent for subsequent draws is allowed.
Does the draw take place with partial ticket sales?
Yes — the organiser conducts the draw even where the tickets have not been fully sold.
When does the organiser apply to the Revenue Service for consent?
2 weeks before the organisation of each game, with the regulations, the ticket preparer’s contract and a ticket sample; instant lottery regulations add the prize fund details.
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