Businesses in Australia use promotional techniques to promote their goods and services. Using a competition to promote your business is called a trade promotion lottery or competition. If you plan to operate a trade promotion, it is important that you understand the regulatory framework of overseas trade promotions. Note that each state and territory’s requirements for the conduct of competitions vary slightly. Therefore, you should consider the location where your trade promotion will take place. Is your competition Australia-wide or specific to certain states or territories? Some states and territories require sign-off (permits or an authority) to run a promotion. You can familiarise yourself with each regulators website to keep track of current rules. This article will provide a short overview of the permit and authority requirements of each state or territory.

Game of Chance or Skill?

When running a lottery or competition, you should think about how you will determine your winner. Winners which are selected at random are more likely to require a permit or authority. A winner chosen based on judging criteria does not need a permit. 

A game of chance provides all competition entrants with an equal chance of winning. It involves someone randomly pulling the winner from a pool of entrants. Games of chance are also known as a ‘game of luck’.

On the other hand, a game of skill asks entrants to perform skill-based activities as a precondition to enter the trade promotion. The competition terms and conditions must state the judging criteria. An elected panel of judges might choose the winner against the criteria or the public might vote on the ‘best’ entrant. Further, there is no chance involved in determining the winner.

Terms and Conditions and Consumer Fairness

Drafting trade promotion terms and conditions is an essential element of conducting a trade promotion. You should make your terms and conditions available wherever the promotion is advertised. Additionally, they must be made available to entrants at the time of entering. To ensure that you operate a clear and fair competition, the terms and conditions guide can set out the promotion’s rules. Both you and the entrants must comply with the terms and conditions.

Furthermore, all trade promotions should carefully abide by state or territory regulations and the Australian Consumer Law (ACL). You should also take care not to engage in conduct that could mislead or deceive competition entrants.

Permits and Authorities

Location

Permit Required?

Regulatory Body

New South Wales (NSW)

Yes, an authority is needed if the lottery promotes a trade or business and the total prize pool exceeds $10,000.

You can use one authority across multiple trade promotions. Submit your trade promotion terms and conditions for each separate competition at least 10 days prior to the start of the competition.

Apply for your authority at NSW Fair Trading

 

Victoria

No.

The Victorian Commission for Gambling and Liquor regulates lotteries. 

South Australia (SA)

Yes, you need a permit if the lottery is a ‘major trade lottery’ where the total prize pool value is greater than $5,000. You also require a permit for a ‘scratch and win’ style promotion, regardless of the prize pool value.

Apply for your permit at Consumer and Business Services

Western Australia (WA)

No.

The Department of Racing, Gaming and Liquor regulates lotteries. 

Queensland

No.

Business Queensland regulates lotteries.

 

Tasmania

No.

The Department of Treasury and Finance regulates lotteries. 

 

Northern Territory (NT)

Yes, a permit is required if you are running a ‘major trade lottery’ where the total prize pool value is greater than $5,000.  

You do not need a permit in the NT if you hold a permit in another state or territory.

Apply for your permit at  Licensing Northern Territory.

Australian Capital Territory (ACT)

Yes, permits should be considered in the ACT  but exceptions apply. Trade promotions require a permit where the total prize pool exceeds $3,000.

Apply for your permit at the ACT Gambling and Racing Commission.

Key Takeaways

Running a trade promotion can be an impressive way to generate interest in your brand, engage new customers, or drive sales. You should be clear and fair in the way you run your promotion and make sure you comply with any relevant trade promotion regulations that apply in your state or territory. Trade promotion terms and conditions and the rules around permits and authorities are important but can be tricky to navigate. You are not required to hold a permit or authority for a game of skill. For assistance in understanding this space, contact LegalVision’s regulatory and compliance lawyers on 1300 544 755 or fill out the form below.

Frequently Asked Questions about Running Online Competitions

What is a Trade Promotion Lottery?

A trade promotion lottery is a free entry lottery where chance determines the award of a prize. The lottery can also be referred to as a sweepstake, competition, contest, game of chance or giveaway.

Who Can Conduct a Trade Promotion Lottery?

Any business with an Australian Business Number can conduct a trade promotion lottery.

What is a Game of Skill?

A Game of Skill is where the winner is judged or voted and selected for their skill on set criteria. In contrast, a Trade Promotion Lottery is based on chance and luck.

Can I Run a “Share to Win” or “Like and Share to Win” Competition on Facebook?

No. According to Facebook’s terms, you cannot use a personal Timeline to promote a business e.g. “share on your Timeline to enter” or “share on your friend’s Timeline to get additional entries” is not permitted.

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