Are you looking to promote your services or products through a nationwide trade promotion? If so, you should be familiar with the different permits and laws that you must comply with in each state. Laws about trade promotions vary significantly across the nation, and failure to comply with the correct laws may result in heavy fines or even imprisonment. This article will explain how to run a nationwide trade promotion that complies with the laws in different parts of Australia. 

What Is a Nationwide Trade Promotion?

A trade promotion is a free-to-enter competition used to promote a business’ goods or services. Typically, trade promotions are either a game of chance or a game of skill. For games of chance, a winner is picked at random. For games of skill, the winner is chosen based on his or her skills. There must be no element of chance involved in choosing the winner of a game of skills. 

For example, a giveaway run on social media where users enter simply by tagging a friend on a certain post would be a game of chance.

However, if users enter by commenting on the post “why they should be chosen as the winner in 25 words or less” the promotion would be a game of skill. 

What Permits Do I Require?

In certain states, you must obtain a permit to run games of chance. In New South Wales, South Australia, the ACT and the Northern Territory, this permit will depend on the total value of the prize pool. You do not need a permit to run a game of chance in Western Australia, Queensland, Victoria or Tasmania.

Make sure that you have enough time to apply for each permit you require before you announce the promotion. Failing to do so may mean that you have to push back your marketing campaign and launch date. This is especially important in a nationwide trade promotion, as each state and territory may take a different amount of time to process your permit application. 

NSW

In NSW, you will need to obtain a single promotion permit or a permit to run multiple games of chance for a specific period of up to 12 months. Permit fees depend on the value of the prize. After submitting your application for a permit, it can take up to 20 business days for the NSW permit office to process the application.

ACT

In the ACT, you will need a permit if the prize is worth more than $3,000. It generally takes seven business days for the ACT permit office to process a permit application.

SA

In SA, you will generally only need a permit if the prize is worth over $5,000. However, you will also need a permit if the competition is an instant scratch or break open ticket with hidden numbers, letters or symbols. The SA permit office generally takes 14 business days to process a permit application.

NT

In NT, you will need a permit if the prize is worth more than $5,000. However, if you are running the trade promotion elsewhere in Australia and hold a permit in another state or territory already, you will not need a local NT permit. 

For example, if you run an interstate competition and obtain a permit in SA, you will not need to obtain another permit to promote the competition in NT.

The NT permit office generally takes 10 business days to process a permit application.

Terms and Conditions 

Each state and territory requires that you include certain information in your trade promotion terms and conditions. For example, most states and territories require you to outline:

  • the eligibility requirements for entrants;
  • the permit number if a permit is required;
  • details of the prizes;
  • how and where entrants may submit their entries;
  • the start and closing date of the trade promotion;
  • the date and time of the draw and the total prize pool value;
  • how you will notify winners;
  • the address or location where the draw will take place;
  • when you will deliver the prize; and
  • any re-draw arrangements.

Depending on the details of your promotion, you may need to include additional details in your terms and conditions.

For example, if the prize is:

  • a holiday, you should clearly outline who can attend the holiday as well as exactly what is and is not included in the trip;
  • a dangerous activity, you should ask the winner to acknowledge that they will participate in the activity at his or her own risk and possibly sign a liability waiver form.

Other Requirements

Most states and territories require that you keep records of all entries for a specified period of time after the trade promotion finishes.

Some states and territories also require that an individual scrutineer observes the draw process and makes sure that you treat all entries equally and fairly.

Consequences of Not Complying With the Laws 

Each state and territory has its own penalties for not complying with their laws. Maximum penalties include:

  • two years imprisonment; and 
  • fines of up to $50,000

To avoid these severe penalties, it is essential that you: 

  • prepare for your trade promotion well in advance;
  • obtain the relevant permits; and 
  • have a legally sound set of terms and conditions in place.

Key Takeaways

If you intend to run your nationwide trade promotion, certain states and territories require you to apply for a permit. You should: 

  • allow enough time for each permit office to process your permit application before your trade promotion starts; and
  • prepare your terms and conditions according to the laws in each state. 

Your business could face severe penalties for not complying with certain legal requirements. If you need assistance in preparing the terms and conditions for your business’ trade promotion, please contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.

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.
Rowan O'Neill

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