The Gaming Control Authority (AJ) issued the new regulations to grant authorizations for business promotions in Bolivia, through Regulatory Resolution No. 01-00002-24 (new regulations), dated May 13.
Although the AJ has largely preserved the provisions of the predecessor regulation, it is necessary to highlight that certain substantial modifications have been introduced. In this article we will address the most relevant changes, taking into account their impact on the execution of this type of activities.
The new regulations propose modifications that will directly affect some of the marketing strategies that, until now, several companies actively applied. Such is the case of the so-called ”permanent activities”, which consist of promotional activities that remain unchanged for more than three years and that do not require authorization from AJ to be implemented.
The new regulations place special emphasis on two crucial points regarding this type of activities:
- Any modification to the initial conditions will cause the activity to be considered an unauthorized business promotion.
- It highlights that obtaining authorization resolutions from regulatory authorities does not exempt from obligations towards the AJ.
The first of these inclusions is intended to underline that any slight modification to the initial conditions of the permanent activity will cause it to lose that quality, becoming a regulated business promotion. Meanwhile, the second points out that, regardless of whether a company has authorization from the competent entities in its regulated sectors, such as the Financial System Supervision Authority or the National Hydrocarbons Agency, said authorization does not exempt it from control and sanction. by AJ.
This could cause a situation of uncertainty when companies that fully comply with the regulations approved by the competent authority of their sector are also subject to AJ inspections because this authority has a disparate criterion on what is meant by modification to a permanent activity. .
A second relevant change involves business promotions consisting of points clubs. The new regulation establishes the express prohibition of transferring, migrating or validating the points accumulated in business promotions to other activities, completely eliminating the possibility of resorting to this alternative that gained popularity in the past.
Likewise, a point that becomes extremely important is the new definition of the so-called ”payment for participation rights”. The new regulation maintains the provision of its predecessor, indicating that the application of this type of payment allows an activity to no longer be considered a business promotion. However, the definition implemented expressly excludes the following activities:
- The acquisition of goods and/or services marketed by the person developing the business promotion as a condition for participating in raffles, games of chance, any other means of access and/or sales with prizes of limited availability.
- Charges of a certain amount for the affiliation of one or more people to discount programs, accumulation of points or similar activities.
The second of these limitations is fundamental, since it was a common practice in the implementation of unregulated campaigns. Under the new regulations, charges for affiliation or membership in points clubs no longer allow the program to be considered a business promotion.
On the other hand, the use of computer media or other tools to carry out business promotions will require that the project explicitly contain a detailed indication of the media that will be used and the function they will fulfill in the development of the activity.
Regarding prizes, the new regulations prohibit offering vouchers or coupons for the exchange of prizes subject to registration. In addition, a new replacement obligation was imposed for prizes that consist of goods made of fragile material, with a replacement stock having to be provided in case of damage. On the other hand, for the donation of prizes that consist of perishable goods, a requirement was established that they have a minimum validity of one month, otherwise their donation to LONABOL will be made in the equivalent value in national currency.
Finally, ongoing business promotions and those requested prior to the new regulations coming into effect will be governed by the previous regulations. The applicability of the old regulations to requests for modification due to extension of the promotion may also become a topic of discussion, depending on the criteria that AJ is going to take on this issue.
