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Explained: Why lucky draw contests are banned in Tamil Nadu

Last week, a Twitter user posted a screenshot of a contest organised by HDFC Bank for its credit and debit card users, for which the prizes included iPhones and a Mercedes car. “Offer is valid for Indian citizens but not applicable to customers in Tamil Nadu,” read one of the eligibility conditions to participate in the contest. The tweet has garnered a lot of attention and many wondered why participants from Tamil Nadu were excluded.

The answer to the question lies in the Tamil Nadu Prize Schemes (Prohibition) Act, 1979, which bans games and contests that are modelled on luck-based lottery. The Act prohibits all kinds of games that involve selection of winners based on lucky draws or random lots. This would mean that apart from lotteries, contests organised by e-commerce players like Amazon and Flipkart are also banned for participants from Tamil Nadu. The ban has been in place for several decades now.

Why the ban?

According to the Act, any game, scheme, contest or event that enables people to win any award – be it money or property – is banned in Tamil Nadu.

“Any scheme by whatever name called whereby any prize or gift (whether by way of money or by way of movable or immovable property) is offered or is proposed to be given or delivered to one or more persons, to be determined by lot, draw or in any other manner from among persons who purchase or have purchased goods or other articles from shops, centres or any other place whatsoever specified by the sponsors of the scheme or on any event or contingency relative or applicable to the drawing of any ticket, lot, number or figure in relation to such purchasers,” reads the Act.

Tamil Nadu also considers such activities to be unfair trade practices, which gives businesses an edge in attracting new customers.

What’s the punishment for violation?

Those who violate the Act by conducting such contests in Tamil Nadu shall be liable to rigorous imprisonment for a period which could range from three months to three years.

Other offences in connection with the organising of such prize schemes, like printing of tickets and coupons or advertising them, also attract the same punishment.

Those who support such prize schemes in any other manner – procuring, aiding, abetting or acting as an accessory to the offence – will also be liable for the same punishment.

What else does the act prohibit?

Apart from such online contests, offline games like Tambola and Lucky Draws are also not permitted in the state.

Publishing of information on such prize schemes in contravention to the law will also allow the government to seize all copies of the publication.

Is this unique to Tamil Nadu? 

Yes. While as many as 13 states in India, including Tamil Nadu, have banned lotteries, no other state in India prohibits the conduct of prize schemes and contests. In fact, an oft-used point in Terms and Conditions of such contests is that the game is applicable to whole of India except Tamil Nadu.

So, next time you spot a contest or scheme you want to participate in, read the terms and conditions before enrolling or participating.

Source: The News Minute