Decree No. 30/2007/ND-CP on Lottery Business

 DECREE

On lottery business

___________

 GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Considering the proposal of the Minister of Finance,

DECREE:

PART I

GENERAL PROVISIONS

Article 1. Scope and Applicability

1. This Decree stipulates the activities of lottery businesses conducted by lottery enterprises and related organizations and individuals within the territory of the Socialist Republic of Vietnam.

2. This Decree does not regulate the organization of prize programs with a chance element that are linked to the purchase of goods or services under promotional forms as prescribed by the Law on Trade.

Article 2. Interpretation of Terms

In this Decree, the following terms shall be understood as follows:

1. Lottery business is a commercial activity based on events with random outcomes, organized on the principle that enterprises collect participation fees from customers and pay out prizes to winning customers.

2. Random outcomes used for lottery business include:

a) The random outcome of the appearance of a set of digits or letters;

b) The random outcome of the appearance of a set of symbols or signs;

c) Other random outcomes.

3. Traditional lottery is a type of lottery printed with a fixed ticket price; customers choose digits or letters to participate in the draw. The number of digits or letters is limited within the scope of issued tickets, and the determination of winning results is carried out after the issuance of tickets.

4. Customer is a person participating in the lottery draw.

5. Lottery enterprise is an enterprise established and operating according to this Decree and other relevant laws to conduct lottery business.

6. Agent commission is the amount of money paid by a lottery enterprise to a lottery agent as a percentage of the value of sold tickets.

7. Prize payout ratio is the ratio between the value of prizes and the value of issued tickets or sales revenue.

8. Ticket is a means issued by a lottery enterprise to distribute to customers. Tickets are issued in the form of certificates, cards with printed denominations, or other forms and means allowing customers to participate in the lottery draw.

Article 3. Principles of lottery business

2. Lottery business activities must ensure transparency, objectivity, honesty, and protect the rights and interests of all parties involved.

1. Adhere to state regulations on lottery business activities.

2. Conduct business operations strictly in accordance with announced rules for customers.

3. Pay out full and timely prizes to winning customers; ensure confidentiality about winning information and prize collection information at the request of winning customers.

4. Fulfill all tax obligations, financial obligations to the State, and legal provisions during the course of business operations.

Article 5. Responsibilities and benefits of participants in lottery draws

1. Participants in lottery draws have the responsibility to comply with state regulations on lottery business; participation rules announced by lottery enterprises, and fulfill all tax obligations to the State as prescribed by law.

2. Participants in lottery draws enjoy the following benefits:

a) To be paid the full value of prizes won by the lottery enterprise. In cases where they cannot personally claim the prize due to objective reasons (illness, etc.), they can authorize a legally authorized representative to claim the prize on their behalf;

b) Foreign individuals and overseas Vietnamese entering Vietnam legally upon winning a prize are allowed to purchase foreign currency and transfer it abroad in accordance with state regulations on foreign exchange management;

c) To request the lottery enterprise to keep confidential information about winning and prize collection;

d) To enjoy other legitimate benefits as announced by the lottery enterprise in participation rules.

Article 6. Prohibited Acts

1. Conducting lottery business illegally in any form and through any means.

2. Using lottery results issued by lottery enterprises to organize prize programs.

3. Issuing lottery from abroad to domestic organizations and individuals.

4. Tampering with winning results.

5. Using state funds to participate in lottery draws.

6. Counterfeiting tickets in any form.

7. Using lottery as a means to launder money.

Chapter II

CONTENT OF LOTTERY BUSINESS

Article 7. Types of lottery

1. Traditional lottery.

3. Instant result lottery (scratch-off, peel-off).

4. Other types of lottery as prescribed by law.

Article 8. Business territory for lottery

Enterprises shall conduct lottery business nationwide or in specific areas as prescribed by the Ministry of Finance.

Article 9. Participants in lottery contests

1. Vietnamese citizens residing in Vietnam.

2. Vietnamese citizens residing abroad who enter Vietnam legally.

3. Foreigners entering Vietnam legally.

Participants in lottery contests must be individuals with full capacity for civil acts according to Vietnamese law, except where international treaties to which Vietnam is a party provide otherwise.

Article 10. Lottery tickets

1. Lottery tickets are issued and distributed by enterprises conducting lottery business to customers to participate in lottery contests. The face value of lottery tickets is determined by the Ministry of Finance for each period.

2. Lottery tickets shall contain the following information:

a) Name of the issuing organization;

b) The purchase price of the lottery ticket;

c) The serial number of the lottery ticket;

d) Random numbers, letters for customers to choose from;

đ) The draw date or validity period of the lottery ticket;

e) Anti-counterfeiting marks;

g) Other related information.

1. Enterprises conducting lottery business must ensure sufficient supply of tickets according to the announced issuance of each type of serial number for customers to select results to participate in contests.

2. Lottery tickets are distributed to customers by enterprises conducting lottery business through the following methods:

a) Selling directly to customers;

b) Through lottery agency systems;

c) Through electronic devices, telecommunications means, Internet.

1. Lottery agencies are organizations or individuals that enter into contracts with enterprises conducting lottery business to sell tickets and pay prizes to customers when they win.

2. To become lottery agencies, organizations and individuals must meet the following conditions:

a) They must be Vietnamese citizens permanently residing in Vietnam, having full capacity for civil acts; if they are organizations, they must be economic organizations established and operating legally in Vietnam;

b) They must have a form of payment guarantee as stipulated in Article 13 of this Decree to ensure their payment obligations to enterprises conducting lottery business.

3. Lottery agencies earn commission on the value of sold lottery tickets and processing fees on the value of paid prizes.

Article 13. Guaranteeing the fulfillment of payment obligations by lottery agencies

Enterprises conducting lottery business shall apply measures to ensure the fulfillment of payment obligations by lottery agencies, including:

1. Pledging assets.

2. Mortgaging assets.

3. Depositing collateral.

4. Establishing a trust fund.

5. Providing guarantees.

Article 14. Prize structure

The number of prizes for each lottery issuance period is determined by enterprises conducting lottery business in accordance with the payout ratio and prize structure as prescribed by the Ministry of Finance.

1. The number of draws conducted by enterprises conducting lottery business during each period is prescribed by the Ministry of Finance.

2. Determination of winning results must ensure transparency, objectivity, honesty, and compliance with the rules of the draw already published.

3. Draw results must be supervised and confirmed by the Oversight Committee for Draws.

The Ministry of Finance shall prescribe the composition, structure, tasks, and powers of the Oversight Committee for Lotteries.

Article 16. Implementation of Prize Payments

1. Lottery enterprises have the responsibility to pay the full value of prizes to winning customers according to the participation rules for prize draws that have been announced.

3. Winners may claim their prizes in cash or by bank transfer.

Article 17. Management of Unsold Lottery Tickets and Winning Tickets

1. Unsold lottery tickets must be strictly managed to ensure they are not misused for claiming prizes.

2. The storage period and destruction of unsold tickets and winning tickets shall be carried out in accordance with the regulations of the Ministry of Finance.

ChapterIII

INFORMATION, ADVERTISING AND PROMOTIONS

Article 18. Principles of Information Provision

1. Information about lotteries must be accurate and timely and must be provided by organizations or individuals authorized by the state.

2. Lottery enterprises are responsible for the accuracy and honesty of the information they publish.

Article 19. Content of Information

1. State regulations related to lottery business activities.

2. Participation rules for lottery draws; number drawing and prize announcement rules.

3. Quantity of tickets issued, ticket serial numbers issued, prize structure.

4. Lottery winning results.

Article 20. Means and Locations for Announcing Information

1. Information about lotteries is announced at headquarters, branches, representative offices, and ticket issuance locations.

2. Lottery results may be announced on radio, television, and other mass media outlets.

Article 21. Advertising for Lotteries

1. Lottery enterprises conduct advertising for lotteries in accordance with the provisions of the law.

2. Strictly prohibited are the following advertising acts:

a) Advertising that winning is an automatic result of participating in lottery draws;

b) Advertising that participating in lottery draws will improve participants' financial situation;

c) Displaying images that violate social customs, aesthetics, and national cultural traditions;

d) Encouraging illegal behaviors in lottery business operations;

đ) Other prohibited acts as stipulated by law.

Article 22. Promotions for Lotteries

All forms of promotions for lotteries are strictly prohibited.

ChapterIV

LOTTERY ENTERPRISES

1. Lottery enterprises are limited liability companies with 100% state ownership.

2. Lottery enterprises currently operating under the state-owned company model must complete procedures to convert into limited liability companies according to the Enterprise Law and implementing regulations.

Article 24. Certificate of Eligibility for Lottery Business

1. The certificate of eligibility for lottery business is issued by the Ministry of Finance, confirming that enterprises meet the conditions to engage in lottery business.

2. The application dossier for the certificate of eligibility for lottery business includes:

a) A request for issuance of the certificate of eligibility for lottery business, specifying the type of product to be permitted to operate;

b) Documents related to the establishment of the enterprise including:

- Decision on establishment of the enterprise; decision on conversion from state-owned company to limited liability company by provincial People's Committees;

- Business registration issued by the competent authority.

c) Articles of the enterprise;

d) Other related documents.

Article 25. Revocation of Lottery Business Qualification Certificate

The lottery business enterprise shall have its Lottery Business Qualification Certificate revoked in the following cases:

1. Violating state regulations in lottery business operations.

2. Having its business registration certificate revoked.

3. Being dissolved or declared bankrupt as prescribed by law.

ChapterV

FINANCE, ACCOUNTING AND AUDIT

Article 26. Financial System

1. The fiscal year for lottery business enterprises begins on January 1 and ends on December 31 of each calendar year.

2. Lottery business operations are permitted to establish a risk reserve fund for prize payments, which is recorded as a business expense.

3. The Ministry of Finance shall guide financial management mechanisms suitable for the special nature of lottery business operations and limit negative social impacts.

Article 27. Accounting and Reporting System

The accounting system, financial reports, and operational reports of lottery business enterprises shall be implemented in accordance with the provisions of the Ministry of Finance and relevant laws.

Article 28. Audit and Public Disclosure of Financial Reports

1. The financial report of lottery business enterprises must be audited annually.

2. After the end of the fiscal year, lottery business enterprises shall publish their financial reports as prescribed by law.

ChapterVI

VIOLATION HANDLING

Article 29. Acts Violating Laws on Lottery Business

1. Acts prohibited as stipulated in Article 6 of this Decree.

2. Violating regulations on issuing and distributing lottery tickets.

3. Violating regulations on organizing number draws and awarding prizes to customers.

4. Violating regulations on advertising and promotional activities in lottery business operations.

5. Violating regulations on financial management, accounting, statistics, and auditing.

6. Violating regulations on issuing qualification certificates, inspection, and supervision by competent state agencies.

7. Engaging in illegal competition.

8. Providing false information, data, and reports.

9. Other violations of lottery business laws as prescribed by law.

Article 30. Handling Violations

1. Organizations and individuals who violate the law, depending on the nature and degree of violation, will be subject to administrative penalties or criminal prosecution.

a) Seizure of property and means used in the violation.

b) Suspension of the right to use the qualification certificate for a certain period.

c) Restriction of business territory and product types.

d) Revocation of the qualification certificate.

ChapterVII

IMPLEMENTATION

Article 31. Responsibilities of the Ministry of Finance

1. Develop and submit to the competent authority for issuance strategies, planning, policies, and organizational models for lottery business operations.

2. Issue and guide the implementation of regulatory legal documents on lottery business.

3. Issue technical standards for lottery business.

4. Issue and revoke lottery business qualification certificates.

5. Conduct inspections, audits, and handle violations of lottery business laws.

6. Provide vocational training and international cooperation in the lottery sector.

Article 32. Responsibilities of the Ministry of Public Security

1. Coordinate with the Ministry of Finance to guide measures to ensure public security and social safety in lottery business operations.

2. Organize efforts to combat illegal lottery business activities.

Article 33. Responsibilities of other state management agencies

1. Ministries, ministerial-level agencies, and government agencies within their respective functions, tasks, and authorities shall be responsible for state management over lottery business activities in accordance with the provisions of the law.

2. People's Committees of provinces and cities shall implement state management over lottery business within their respective functions, tasks, and authorities on their respective territories.

Article 34. Implementation Provisions

1. Within twelve months from the date this Decree takes effect, existing lottery businesses must complete procedures to obtain certificates of eligibility to conduct business in accordance with the provisions of this Decree.

2. This Decree shall take effect fifteen days after its publication in the Official Gazette.

The Minister of Finance shall be responsible for guiding and organizing the implementation of this Decree.

Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Committees directly under the Central Government shall be responsible for implementing this Decree.