Revenue Administrative Bulletin 1989-29

Approved: April 12, 1989

GAMES OF CHANCE - CIGARETTE SALES OR PRIZES

RAB-89-29. The purpose of this Bulletin is to give guidance to persons promoting games of chance and contests that may be in violation of the Cigarette Tax Act.

Michigan's Cigarette Tax Act, MCL 205.506, [Tobacco Products Tax Act, MCL205.426(4)], and Department of Treasury Cigarette Tax Rules, 1979 AC, R 205.408, prohibit the use of any device or game of chance to promote the sale of cigarettes. The giving of cigarettes as prizes is also prohibited. Therefore, if the element of chance does not exist in a promotion and the prizes awarded are not cigarettes, then the promotion is not considered to be in violation of the Cigarette Tax Act.

Guidelines

The following is an example of a contest recently approved for promotion in the State of Michigan. All of the following elements were necessary to approve the contest:

1. The element of chance did not exist.

1. The contest required the participants' skill in answering trivia type questions, and
2. All tie breaker situations were resolved with the participants required to answer additional questions, and
3. Drawings were not used in selecting the finalists and/or winner(s), and

1. Cigarettes were not promoted.

1. Cigarettes were not awarded as prizes, and
2. The participants were not required to purchase cigarettes to participate in the contest.