You want to get started with an SMS competition. But what rules should you be aware of? How much can you charge the receiver? What's in it for you financially? What is a gaming licence? And what types of games and competitions require one?
In the following, we describe everything you need to start an SMS competition. It can be a jungle of rules and regulations that can be difficult to navigate - so let us help you get through it easily and safely.
Goal: Collect more numbers
Firstly, let's start with the purpose of the competition. We always advise our customers to see the competition as a branding or marketing tool - rather than a form of financing. See your competition as an effective way to increase the potential of your lists by collecting more numbers/recipients.
For example, you could run an SMS competition where you give away a gift voucher for your store or webshop. Your customer enters the competition and thereby authorises you to send marketing material.
By only charging the recipient a small amount - i.e. a charge of 1-2 kr. - You'll also cover the cost of sending your messages and avoid the need for a gaming licence. So don't push your luck with additional pricing. Although it can be tempting.
Should the winner be chosen randomly or based on a skill?
That was the purpose. We continue with the type of competitions and gaming licence. There is a big difference in how you choose to pick the winner - whether it should be random or decided based on the skill of the participants.
If it is a random draw with competitions such as bingo, scratch cards, lottery tickets or raffles, these are 'lotteries' that require a gaming licence. We won't go into those as they are typically offered by monopolies (with the exception of charity lotteries).
If, on the other hand, a competition is decided by a combination of skill, e.g. by answering questions etc. and an element of chance, e.g. If, on the other hand, a competition is decided by a combination of skill, e.g. answering questions etc. and an element of chance, e.g. by drawing lots among all those who have answered the competition's questions correctly, it is a 'guessing competition'. Whether you need a gaming licence here depends a bit on how much money you choose to charge the recipient. You can learn more about that here.
If your competition is decided solely on the skill of your participants, it's a 'skill game'. They do not require a gaming licence. Quizzes, chess, guessing competitions without a draw, etc. are examples of skill games.
You can see the different scenarios here:
Speaking of taxing…
As mentioned earlier, we recommend that you only charge the recipient for the costs associated with sending text messages.
But if you do venture into additional pricing, here's an overview of what you get out of a specific pricing. We write approximately because, by law, an SMS confirmation of the tariffing must be sent and the price of this depends on the agreed SMS price.
Therefore, consider these prices to be indicative:
Rate of DKK 1 incl. VAT - DKK 0.64 incl. VAT
Rate of DKK 2 incl. VAT - DKK 1.43 incl. VAT
Rate of DKK 5 incl. VAT - DKK 3.83 incl. VAT
Rate of DKK 50 incl. VAT - DKK 40.39 incl. VAT
And that gaming licence...
A gambling licence is an authorisation to provide and advertise gambling. However, the process of obtaining a gaming licence is a little more complex. But if that's what you're after, you'll probably need a so-called "mini licence". It is offered by the Danish Gambling Authority, costs DKK 50,000 and is valid for up to one year. You can read more about the rules and conditions here. But first you need to be certified, and it's important that you get the right certification.
We therefore advise you to contact the Danish Gambling Authority first by phone or email and get guidance in relation to your specific situation. And then fill out the application form, possibly with the expert guidance of a lawyer.
For more info
Ourresponse to the current regulations is based on advice from the Danish Gambling Authority, but you can also read more on the Framework agreement for mobile content and payment services.
