New Regulation on Organization of Lotteries and Draws in Turkey

TURKEY (March 22, 2023) — With the Amendment of Income Tax Law and Certain Laws and Decree Laws (“Law”) published in the Official Gazette on 09.11.2022, significant amendments were made to the Decree Law No. 320 on National Lottery (“Decree-Law”). Within the scope of these amendments, new regulations have been introduced regarding the penal provisions, organization of lotteries and draws.

Right to Organization of Lotteries and Draws

While an application fee has been paid to obtain a permit from the National Lottery Administration (“Administration”) by the virtue of practice, this fee is now regulated under legal regulation in Turkey. As per the amendment made to Article 41 of the Decree-Law, real persons and legal entities who apply Administration to organize any type of non-cash goods and similar lotteries and draws in Turkey are required to pay an application fee of TRY 2.000,00 as of 09.11.2022.

Furthermore, it is specified that 15% of the total market value of bonuses, prizes, or similar benefits offered in lotteries, which have been granted permission by the Administration following examination of the application, shall be subject to a separate charge as a permit fee. Moreover, if the bonuses, prizes, or similar benefits promised in the lotteries are imported from abroad or produced by other real persons or legal entities, a permit fee of 30% of the total market value shall be charged.

Lastly, the application fee shall be adjusted annually in accordance with the revaluation rate determined and announced under the Tax Procedure Law for the preceding year, starting from the beginning of each calendar year.

Penal Provisions

In line with the amendment made in Article 52 of the Decree-Law, the following new penal provisions have been stipulated for the violation of the Decree-Law;

1- Without relying on the authority or permission granted by the legislation or authorized institutions and organizations:

a- Those who organize or provide opportunities to play any kind of goods lottery, games of chance, or joint betting or similar games shall be sentenced to imprisonment from three to five years and a judicial fine up to ten thousand days,

b- Those who provide access to all kinds of goods lottery, games of chance, games of chance, joint betting and similar games played abroad via the internet or by other means, enabling them to be played in Turkey, shall be sentenced to imprisonment from four to six years and a judicial fine up to five thousand days,

c- Those who mediate the money transfer in connection with all kinds of goods lottery, games of chance and joint betting or similar games, shall be sentenced to imprisonment from three to five years and a judicial fine of up to five thousand days,

d- Those who encourage people to play all kinds of goods lottery, games of chance, joint betting or similar games through advertising and other means are sentenced to imprisonment from one year to three years and a judicial fine of up to three thousand days,

e- Those who play all kinds of goods lottery, games of chance and joint betting or similar games organized by third parties in physical or electronic environments, shall be sentenced to an administrative fine ranging from TRY 5.000,00 to TRY 20.000,00.

2- Within the scope of the organization of all kinds of non-cash goods lotteries, joint betting and similar games in physical or electronic environments; individuals who fail to conduct the draws, announce the results of the draws, or fulfil their obligations despite obtaining the necessary permits shall be punished with imprisonment ranging from two months to two years and a judicial fine of up to three thousand days.

The workplaces in which the aforementioned offences are committed shall be sealed and closed for a maximum of three months without prior notice by the highest local administrative authority. The licenses of workplaces that hold an operating license shall be cancelled by the authorized administration within five working days upon notification by the highest local administrative authority.

It is also important to note that in the event that the crimes specified in Article 52 of the Decree-Law are committed, all assets acquired through the crime will be subject to confiscation in accordance with the provisions on confiscation of property and earnings set forth in the Turkish Penal Code No. 5237 during the criminal investigation.

Finally, the measures related to (i) seizure of immovables, rights and receivables, (ii) detection, interception and recording of the communication, (iii) assignment of a secret investigator and (iv) monitoring by technical means, as set out in the Criminal Procedure Law No. 5271, as set out in subparagraphs (a), (b), (c) and (d) and paragraph 2 above, would be applied.

As it is seen, the Law has brought about significant changes in the national lottery legislation and has established more detailed conditions for organizing lotteries and draws. Furthermore, the scope of criminal liability has been expanded through much more comprehensive penal provisions compared to the previous version of the text.

The new amendments summarized above entered into force on 09.11.2022. You may access the Law by this link (Official Gazette, in Turkish).

NSN Law Firm

We are a well-established eminent law firm offering a full and comprehensive range of legal services to our clients at the utmost quality, with core strength in Commercial, Corporate, Transportation, Insurance, Intellectual and Industrial Property, Life Sciences and IT Law as well as regulatory matters.

Our team, comprised of seven partners, more than thirty lawyers and administrative personnel who graduated from well-known international and local universities, is a select group with extensive experience in their areas of practice. Additionally, on various technical matters within our areas of specialty, we work with a group of expert counsels who bring first-hand accumulated experience. With the qualified problem-solving skills and solid knowledge of our team, our objective is to render high-standard legal services to our clients.

Our firm, by combining deep sectoral knowledge and refreshingly creative thinking, provides a full range of legal services particularly on all areas of private law; and also supports its clients on dispute resolution, litigation and administrative issues before courts and administrative authorities nationwide.

Our firm, established and located in Istanbul, has strong ties and long-lasting cooperation with the associated legal offices in Izmir and Ankara, the other two largest cities in Turkey, as well as foreign legal offices in other countries, and thus we serve our clients with the ability to represent them both within Turkey and worldwide.

We always act in accordance with our core values for rendering our service competently, efficiently and creatively with an international business mind. These values are the foundation and the driving force of our success. We take pride in always aiming the highest standards to ensure consistently excellent service for our clients.

Article By:  Bilge Derinbay, Hande Ülker Pehlivan and İrem Sevinç Cantürk.

See the original article.

SOURCE: NSN Law Firm