Prize Claim Rules for Promotional “Lucky-Spin” Games in the Philippines

A practical guide for marketers, counsel, and consumers (updated April 2025)

1. Sources of Law & Regulation

Layer	Key Instruments	Core Take-aways
Statute	Republic Act No. 7394 (Consumer Act of the Philippines), ch. III (Sales Promotion Practices)	Makes “misrepresentation or non-delivery of advertised premiums” an unfair practice; empowers DTI to issue rules and penalize violators.
Implementing Rules	DTI Department Administrative Order (DAO) No. 10-02, Series of 2010 (and earlier DAO 02-03)	Establishes permit system, mandatory mechanics, claim periods, taxes, publication, bond, documentation, and record-keeping.
Revenue Rules	NIRC 1997 (as amended), §24(B)(1); BIR Rev. Reg. No. 2-98, §2.57.2(H)	Prices above ₱10,000 are subject to 20 % final withholding tax; prizes below ₱10,000 are subject to regular income tax in the hands of the winner.
Special Laws	Data Privacy Act of 2012; Anti-Red Tape Authority (ARTA) Act	Require transparent consent for personal data collected during registration / claim; prescribe maximum processing timelines for frontline services (including prize release).

2. Before the Spin: DTI Sales-Promotion Permit

When Required – Any luck-draw, instant-win, or game of chance “designed to promote a brand, service or event” must secure a Sales Promotion Permit from the Department of Trade and Industry (DTI) at least 30 calendar days before launch, except:
- promotions whose total prize pool does not exceed ₱5,000 and run for ≤1 day;
- those directed exclusively to an issuer’s closed-user group (e.g., internal employee raffle).
Filings – Mechanics, list of prizes, certified market value, electronic play algorithm/odds, notarized undertaking to shoulder taxes, and a surety bond equal to 100 % of the total prize value (or 20 % if tie-in with DOH/CHED-approved social projects).
Mandatory Clauses – Mechanics must state: permit #; promo period; cut-off for earned entries; 60-day claim period (counted from publication of winners or receipt of winner notice, whichever is later); documentary requirements; DTI’s hotline for complaints.

3. Winner Selection, Notice, & Publication

Item	Minimum Rule	Practical Tip
Draw/Spin Supervision	At least one DTI representative or, for completely electronic RNG draws, digitally signed audit logs submitted within 24 h.	Keep CCTV or screen-capture; retain 2 yrs for audit.
Notice to Winners	Written and phone/e-mail notice within 7 calendar days.	Use multiple channels and document attempts.
Publication	Winners of prizes ≥ ₱5,000 must be posted on-site, on the brand’s official page, or in one newspaper of general circulation within 2 weeks.	Keep screenshot/tear-sheet for bonding company.

4. Claiming the Prize

Standard Claim Period – 60 calendar days from receipt of notice / publication (whichever is later). After this, prizes are forfeited in favor of DTI.
Documentary Requirements
- Signed Claim Form (template in DAO 10-02)
- Government-issued ID matching the name on winning stub/entry; must clearly show birth date to establish majority (19 yrs in PH).
- Tax Identification Number (TIN) for prizes > ₱10,000.
- Affidavit of Loss (if QR code / ticket lost).
- Special Power of Attorney with ID copies if claiming through a representative.
Venue – Organizer’s principal office or the promo venue stated in the mechanics; for nationwide digital promos, delivery by registered mail or courier is allowed (at promoter’s cost).
Release Time – DAO 10-02 requires award within 15 working days after complete submission of documents, except motor vehicles/real estate, which get 60 days to register/transfer title.
No “Processing Fee” – Any fee charged to a winner (except legally due taxes) is an unfair practice under RA 7394 and void.

5. Tax & Fees Allocation

Prize Category	Tax Treatment	Who Pays
≤ ₱10,000	Part of the winner’s regular taxable income (graduated rates); BUT promoters often shoulder for goodwill.	Optional by promoter
> ₱10,000	20 % final withholding tax under §24(B) NIRC.	Promoter must withhold and remit; must give BIR Form 2306 to winner.
Non-cash prizes	Tax is based on fair market value (FMV) certified at permit filing.	Same rule as above.
Customs/registration fees (vehicles, gadgets)	Not considered “tax” but may be charged to winner if disclosed in mechanics.	Follow disclosure rule.

6. Minors, Overseas Winners, & Deceased Winners

Minors (< 18 yrs) – Prize delivered in trust to parent/guardian upon submission of PSA birth certificate and notarized parental consent.
Overseas Filipino Winners – May execute a consular notarized SPA; courier costs still borne by promoter.
Death of Winner within claim period – Heirs may claim by submitting: (a) death certificate; (b) proof of heirship (e.g., PSA-issued Certificate of No Marriage for single decedents, or extrajudicial settlement); (c) SPA among heirs designating a representative.

7. Forfeiture & Disposition of Unclaimed Prizes

After the 60-day window, promoter must create a sworn liquidation report within 10 days and remit the value of unclaimed prizes to DTI’s Consumer Welfare Fund or conduct a redraw, if this alternative was pre-approved in the permit.
Failure to do so incurs an administrative fine of ₱100,000–₱300,000 per violation and possible suspension of future permits.

8. Record-Keeping & Post-Audit

Promo File – Keep mechanics, permit, winner list, claim forms, tax filings, and proof of prize release for 2 years.
Audit Finding – DTI may call for an on-site or desk audit; discrepancies may result in additional bonding or revocation of permit.
Data Privacy – DAO 10-02 requires deletion/anonymization of unused personal data one year after promo closure, unless separate consent exists.

9. Common Pitfalls for Promoters

Pitfall	Why It Fails	How to Fix
“Winners shoulder 20 % tax” buried in small print	DAO 10-02 requires conspicuous disclosure and prohibits passing taxes for “consolation” prizes.	Provide a bold, separate tax clause; or better, shoulder tax.
Requiring purchase to claim	Unreasonable condition (RA 7394)	Claim must be free of extra consideration.
Shorter than 60-day claiming window	Violates mandatory period	Mechanics cannot shorten statutory right.
Asking for multiple IDs not in mechanics	Unfair additional hurdle	List all acceptable IDs in advance.
“Processing/handling fee”	Treated as illegal fee	Remove; factor costs into promo budget.

10. Remedies & Enforcement

Consumer – File complaint with the DTI Fair-Trade Enforcement Bureau (FTEB); mediation within 10 days, adjudication within 30 days.
Criminal – RA 7394 imposes fines up to ₱300,000 or imprisonment of up to 1 year for willful unfair practices.
Civil – Winner may sue for specific performance and damages; Consumer Act allows a treble-damages remedy for certain deceptive acts.

Conclusion

Running a “Lucky Spin” in the Philippines is not just a marketing gimmick—it is a regulated sales promotion requiring meticulous compliance with DTI permit conditions and consumer-protection statutes. Organizers who bake the 60-day claim period, tax handling, and documentary rules directly into their mechanics—and who budget for the inevitable bond, taxes, and logistics—rarely run into disputes or fines. Conversely, shortcuts (e.g., hidden fees, late tax remittances, or failure to publish winners) trigger swift penalties and reputational damage. For consumers, knowing the exact documents and statutory timelines ensures you never lose a legitimately-won prize.

This article synthesizes the current framework as of April 30, 2025. For complex or high-value promotions, always cross-check with the latest DTI administrative issuances or consult specialized counsel.