On 24 February 2021, the Gambling Supervision Authority under the Ministry of Finance of the Republic of Lithuania (hereinafter referred to as the “Supervision Authority”) initiated an investigation in order to check whether the organisation of the competition (hereinafter referred to as the “Competition”) published on the website of the Internet site (data not published on) and broadcast on the air of the radio station (data not published on) does not violate the requirements of the Law of the Republic of Lithuania on Lotteries (hereinafter referred to as the “Law”).
By decision of the Supervisory Authority of 30 September 2021, S.Z. was fined under Article 134(2) of the Administrative Offences Code of the Republic of Lithuania (hereinafter ‘the Administrative Offences Code’) by a fine of EUR 900 for organising and conducting a competition on the air of the radio station during the period from 1 February 2021 to 5 March 2021, which corresponds to the characteristics of a lottery, without having a licence for lottery activities.
The decision of the Vilnius City District Court of 7 December 2021 upheld the decision of the Supervisory Authority and dismissed the complaint of S.Z., who was held administratively liable.
By order of the Vilnius Regional Court of 27 January 2022, the appeal against the order of the Vilnius City District Court of 7 December 2021 lodged by Mr Z.’s representative, Mr V. Radvila, was dismissed.
By order of the Panel of Judges of the Criminal Division of the Supreme Court of Lithuania of 14 April 2022, at the request of the lawyer of S.Z., who was held administratively liable, the administrative offence case was reopened. The request for reopening of the administrative offence disagrees with the decisions of the Supervisory Authority and of both courts to declare the game a lottery.
In the present case, it is established that the game was broadcast live on the radio station.
In order to participate in the game, persons had to identify a track (or two or three tracks in a row) of the artist playing on the air and, while the track was playing (or after a maximum of 60 seconds from the end of the track), to send a premium-rate SMS message costing EUR 1, with the game code, and then to be registered in the system as a participant in the game and to be entitled to win a prize of EUR 30, EUR 300 or EUR 3000.
The total prize pool for the game was EUR 30 000.
The Supreme Court of Lithuania, in a ruling of 29 December 2022 in an administrative offence case, upheld the ruling of the Vilnius Regional Court on the grounds that lotteries (as well as other gambling or games of chance) are an activity that can cause harm to human health, strong addiction, negative financial consequences for individuals and families, and that lotteries can also be used for criminal offences such as fraud, money laundering.
Therefore, lottery activities in the Republic of Lithuania are licensed and strictly controlled by the State. Accordingly, persons carrying out lottery activities and their activities are subject to strict requirements of transparency, integrity, financial stability, etc., which are primarily related to the acquisition and possession of a licence for lottery activities.
The Supreme Court of Lithuania has indicated that, pursuant to Article 2(4) of the Law, a game shall be classified as a lottery if it meets the following characteristics of a lottery set out in the Law:
(1) the player buys tickets, i.e. pays for participation in the game (risks the amount of money paid);
(2) participation in a game based on chance and luck;
3. there is a chance to win prizes of money and/or goods and/or gratuitous services. The Supreme Court of Lithuania stated that the courts which heard the case correctly found that the game meets the definition of a lottery set out in Article 2(4) of the Law on Lotteries, because:
First, a person’s participation in the competition was determined by the possession of a ticket, i.e. by the existence of an entry in the database of the organiser of the competition. In order to participate in the competition, persons had to send a premium-rate SMS message to the telephone number indicated, with the text, and conversely, persons who did not send such a message were not eligible to participate in the prize draw.
This is in line with the provision in Article 5(2) of the LC that lottery tickets may also be distributed by telephone, where the information necessary to participate in the lottery is transmitted to the lottery computer system database by telephone and a record is made in the lottery computer system database confirming the player’s participation in the lottery.
Second, the winners of the prizes in the game were selected at random. The main criterion for the identification of a lottery is the requirement of randomness, which determines whether a person who purchases a lottery ticket is likely to win prizes of money and/or goods and/or gratuitous services.
The criterion of randomness is intended to distinguish the lottery from other games in which the winner is selected on the basis of his or her skills, knowledge and abilities. In the case where the persons participating in the lottery have to use both certain skills/knowledge and their winning depends on chance, it should be assessed which aspect (skills/knowledge or chance) is dominant and determines the lottery winner.
Although, in order to participate in the game, individuals had to, among other things, have certain knowledge and perform certain actions, i.e. listen to the live radio broadcast of the radio station at a specific time, identify the music being played, send a text message with the text in time, etc..,
However, such actions were only the initial conditions for the purchase of a ticket by sending an SMS in order to be able to participate in the game and to claim the prize, and the decision as to which of the persons who participated in the game were to be considered as winners depended on a random act, namely the decision of the producers of the programme to select the winners of the prize money.
Thus, in the present case, it is the randomness, i.e. the random selection of the winners, which is to be regarded as the dominant factor, since such selection did not depend on the knowledge or skills of the participants in the competition ‘(unpublished data)’, but on the way in which they were randomly selected by the programme producers.
Thus, the Supreme Court of Lithuania held that the game organised by Mr S.Z., , fulfilled the characteristics of a lottery set out in Article 2(4) of the Law on the Functioning of the Republic of Lithuania, and that the requirements of that Law had to be complied with when organising and conducting it, including the possession of a licence for such activities issued in accordance with the procedure laid down in Article 9 of the Law.