CANADA Law and Practice Contributed by: Martha Harrison, Nikiforos Latrou, Eugenia (Evie) Bouras and Marissa Caldwell, McCarthy Tétrault
6.6 Other Rules This topic is not applicable; no other significant pri - vacy rules apply. 7. Sweepstakes and Other Consumer Promotions 7.1 Sweepstakes and Contests In Canada, contests or sweepstakes must be struc - tured in a specific manner to ensure that they do not violate the illegal lottery provisions of the Criminal Code. In general, contests must include: • an alternate method of entry that does not involve a purchase; and • a mathematical skill-testing question. Otherwise, the contest risks being classified as an illegal lottery, which can result in penalties includ - ing fines or imprisonment of up to two years. Pure skill competitions that require a purchase to enter are generally exempt from the illegal lottery provisions of the Criminal Code. To be considered a contest of pure skill, the winner must be determined solely based on the winner’s skill (eg, photography or writing contest). In other words, the competition should not involve chance. That said, if there is any question as to whether the contest is one of pure skill, sponsors most commonly continue to rely on the mathematical “skill-testing” question to mitigate risk. The Competition Act also requires that minimum dis - closures appear in contest advertisements such as: • the prize description; • prize value; • regional distribution (ie, five prizes in BC and three prizes in Ontario); • the odds of winning; and • any other information that could materially affect an entrant’s chances of winning the prize. 7.2 Contests of Skill and Games of Chance The Criminal Code does not define a game of chance or a game of pure skill. Instead, these types of games
have been evaluated and defined by the courts. In sum, the courts would consider a game to be of pure skill if there is no systemic resorting to chance and the elements of the game are within the player’s control – in other words, the outcome of the game are deter - mined by the player’s skills, decisions and strategies. On the other hand, a game of chance is one where the outcome of the game is outside the player’s control and there is a systemic resorting to chance. 7.3 Registration and Approval Requirements There are no registration requirements for contests in Canada. However, any business that wishes to offer a gaming product where payment is required to enter would be providing gaming/gambling services and would need to do so under a licence issued by the provincial gam - ing authorities. Ontario is currently the only province that allows private operators to provide internet gam - ing services to residents located in the province of Ontario. The remaining provinces only allow for gam - ing to be offered through provincial lottery corpora - tions. 7.4 Free and Reduced-Price Offers The claim “free” will be assessed by the general impression of the consumer. A product or service will be “free” if the consumer does not need to incur any fees or make a particular purchase to obtain the prod - uct or service. Reduced price offers or sales are governed by the ordinary sale price provisions of the Competition Act, which requires that sale prices be substantiated. These are known as the “ordinary selling price” provi - sions, which can amount to a civil infringement where a supplier’s promotional conduct meets three cumula - tive elements: • (a) the supplier makes a representation to the public; • (b) the contents of the representation clearly specify a price that is identified as being the price at which the product has been or will be ordinarily supplied by that person (“Ordinary Selling Price”); and
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