CANADA
Instant win for Quebec residents? Sweepstakes contests are a popular way for brands to promote products by providing customers (and non-customers obtaining free entries through alternative means) with opportunities to win prizes. Cunning entrepreneurs have embraced sweepstakes contest principles to place additional emphasis on the sweepstakes component of a contest while still ensuring that the underlying product meets industry expectations from a quality and value perspective. These sweepstakes contests may be gambling-adjacent, but if conducted properly, are not considered gambling. In Canada, the primary Federal law sources for Canadian sweepstakes contest laws are the Code and the Act. Under the Code, contest providers must: (i) not charge a fee for entries; (ii) offer free alternative methods of entry to demonstrate that individuals not purchasing an underlying product may still enter the contest; and (iii) ensure that prizes are not awarded solely on the basis of chance (often manifesting as a skill-testing question). Quebec was the only Canadian province to have laws specific to sweepstakes contests (referred to in the Quebec Act as Publicity Contests). These laws required Publicity Contest providers to comply with numerous obligations, including by paying a fee and posting a bond to the Régie. As a result, contests were often void in Quebec, and sweepstakes-forward entrepreneurs did not operate in Quebec. In October 2023, the Quebec laws related to Publicity Contests were repealed. In theory, Quebec not having any laws specific to Publicity Contests should make it easier for sweepstakes contest operators to provide sweepstakes contests to residents of Quebec. However, it will be interesting to see whether this translates to more available sweepstakes contests in practice, due to Quebec language laws and Quebec having the most onerous corporate compliance obligations with respect to privacy.
sweepstakes to promote their underlying products. Examples include a clothing brand providing sweepstakes entries as a promotion for purchasing clothes and a social casino providing sweepstakes coins as a promotion for purchasing social casino coins. These would have been Publicity Contests and the contest providers would have been required to comply with the previous provisions of the Quebec Act. These sweepstakes providers were effectively locked out of Quebec due to the impracticality of complying with the Publicity Contest rules. Particularly in the case of social casino providers, it is unclear how to determine the nature of a specific contest whereby participants receive free sweepstakes coins which they can use to play games of chance and mixed and chance and skill. However, there are still unique features of Quebec as compared to the rest of Canada that sweepstakes contest providers must consider. First, the application of the Charter of the French Language means that all contest rules must be provided in French. Second, recent amendments to Quebec’s Act respecting the protection of personal information in the private sector 11 mean that Quebec is now the strictest jurisdiction in Canada with respect to privacy. The Quebec Privacy Act sets out numerous privacy compliance related obligations, including with respect to consent, collection of data, use of location tracking, and transferring personal information outside of Quebec. The Quebec Act applies not only to Quebec-based businesses, but also to entities outside of Quebec processing personal information of Quebec residents. Given the additional privacy compliance obligations for non-Quebec based businesses choosing to process the personal information of Quebec residents, it will be interesting to see if more sweepstakes contests will be open to Quebec residents.
JACK TADMAN Principal, GME Law For information contact jack@gmelawyers.com +1 (647) 567-1742
11 Chapter P-39.1, [hereinafter the “Quebec Privacy Act”].
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IMGL MAGAZINE | JANUARY 2024
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