ITA Clarification 25 - Fixed Prize Games

The Commission would like to clarify that, for Fixed Prize Games, the operator will be expected to bear a proportion of the risk that the actual prizes payable in relation to any particular draw will be materially higher or lower than the expected level of prizes. Accordingly net sales will be calculated by deducting actual rather than expected prizes (along with duty, retailer commissions and the gross sales retention) from gross sales. This will affect both the operator’s net sales retention and the primary contribution to good causes (which accounts for the rest of net sales). If, for example, the prizes payable for a particular draw are lower than expected, then net sales (and hence both the net sales retention and the primary contribution to good causes) will be higher than expected. Both the operator and good causes will benefit in this case. Equally, they will both share the additional cost if prizes are higher than expected.

Issue date: 24 November 2006