LegalVision receives some interesting questions from our clients about trade promotion lotteries including, whether you can donate unclaimed prizes which have been subject to a re-draw to a charity, or whether you must redraw the lottery until you dispose of the prizes. This article will outline the law surrounding trade promotions and unclaimed prizes, and whether you can donate these unclaimed prizes to charity.

What’s the Law Surrounding Trade Promotion Lotteries?

Different states have slightly different laws around trade promotion lotteries. For instance, in the state of South Australia, the Lottery and Gaming Act 1936 (SA) (the Act) and the Lottery and Gaming Regulations 2008 (SA) (the Regulations) governs trade promotion lotteries.

The Act and Regulations hold that you must promote and conduct any trade promotion lottery in a manner that presents a true, accurate and complete picture of the competition.

Accordingly, the Act and Regulations prescribe transparency measures that you as the promoter must comply with in running the trade promotion. Consequently, promoters usually draft detailed trade promotion terms and conditions which set out, amongst other things:

  • The condition(s) of entry;
  • Eligibility requirements (i.e. age restrictions);
  • The period over which the competition will be run (promotion period);
  • The opening and closing date of the competition;
  • Relevant draw dates and the draw method;
  • Unclaimed prize procedures;
  • Particulars of the prize/s to be awarded;
  • Information about what the promoter will publish about the winner and in what medium.

Unclaimed Prizes

The Regulations hold that promoters must afford minor prize winners a reasonable opportunity to claim their prize. Furthermore, the Minister has the power to refuse to grant a trade promotion licence if the terms and conditions do not allow winners a reasonable opportunity to claim their prize.

For this reason, promoters should implement procedures for unclaimed prizes. An unclaimed prize procedure outlines the circumstances under which a promoter will declare a prize forfeited, return it to the prize pool and make it subject to a redraw.

Major prize draws are also subject to the unclaimed prizes provisions. In particular, promoters must preserve the prizes until they are claimed or distributed. However, where prizes remain unclaimed for three months or more, promoters are required to give notice of this to the Minister. The Minister will then issue directions as to how the promoter should dispose of the prize.

Donating Unclaimed Prizes to Charities

In agreement with the above laws, there are some steps that promoters should take before they donate unclaimed prizes to charity. We recommend the following:

  • It is always prudent to have an unclaimed prize procedure for both minor and major prize lotteries;
  • Any unclaimed prize procedures must allow the original and any subsequent draw winner a reasonable opportunity to claim the prize;
  • In the unlikely event that a prize remains unclaimed after a redraw, the promoter should inform the minister of this fact and advise the minister that they wish to donate the prize to charity.

***

If you require assistance in drafting or reviewing trade promotion terms and conditions, applying for a trade promotion licence or if you simply have further queries regarding unclaimed prizes, get in touch with our contract lawyers on 1300 544 755.

COVID-19 Business Survey
LegalVision is conducting a survey on the impact of COVID-19 for businesses across Australia. The survey takes 2 minutes to complete and all responses are anonymous. We would appreciate your input. Take the survey now.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. For just $199 per month, membership unlocks unlimited lawyer consultations, faster turnaround times, free legal templates and members-only discounts.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

Our Awards
  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2019 NewLaw Firm of the Year - Australian Law Awards 2019 NewLaw Firm of the Year - Australian Law Awards
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer