What Permits Do I Need to Run a Trade Promotion Lottery?

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Table of Contents

• Types of Trade Promotions
• When Do You Need A Permit?
• Trade Promotion Permit Requirements
• Key Takeaways
• Frequently Asked Questions

A trade promotion can be an effective marketing tool. Promotions are an effective way of:

• gaining brand exposure;
• encouraging brand interest in certain products; and 
• ultimately generating more sales for your business. 

Trade promotions must be free for consumers to enter, as well as complying with other regulatory requirements.

You should familiarise yourself with the types of trade promotions and know which require a permit or authority. You should also consider which geographical location your advertising is targeting. When you operate a national competition, you will need to ensure you comply with each state or territory’s various legal requirements for trade promotions. 

This article sets out each state or territory’s permit or authority requirements for trade promotions.  

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Types of Trade Promotions

Trade promotions are used in different ways to achieve distinct goals. The type of trade promotion you choose to run will determine which regulations you should follow and whether you need a permit or authority. 

The two main types of trade promotions are:

1. games of skill; and
2. games of chance.

The primary difference between a game of chance and a game of skill is how you determine the winner.

A game of chance provides all entrants with an equal chance of winning and picks a winner at random. You (as the operator of the trade promotion) are not able to factor any skill when determining winners. The game of chance is the same as a ‘game of luck’.

Contrastingly, you are running a game of skill where you elect a panel of judges or publish a poll to select winner(s) based on judging criteria set out in the trade promotion terms and conditions. There is no element of chance or luck involved in determining the winner. Rather, you ask your entrants to perform skill-based activities to enter the trade promotion. 

When Do You Need A Permit?

You do not need a permit for a game of skill. However, you still need to comply with any state or territory laws or regulations that deal with trade promotions generally, as well as the Australian Consumer Law (ACL).

However, you may need a permit or authority for a game of chance, depending on: 

• where you operate your business; and 
• the dollar value of the total prize pool. 

The majority of states and territories do not require a permit. In those that do, the requirements can vary. If you are running a trade promotion across Australia, you should comply with each state or territory’s requirements for permits and authorities. 

Trade Promotion Permit Requirements

Key Takeaways

Running trade promotions is a great way for you to advertise,  promote new products, and raise brand awareness around your business or the goods and services you sell. 

You do not need a permit or authority for trade promotions that involve games of skill. Generally speaking, if the prize pool for your game of chance is:

• less than $3,000, you do not need a permit;
• between $3,000 and $5,000, you only need a permit in the ACT;
• $5,000 or over, you need a permit in the ACT, SA and NT; and
• $10,000 or over, you need a permit in the ACT, SA, NT and NSW.

Check the regulations in each state or territory before committing to your marketing campaign.

Regardless of where you are based, you will need to comply with any additional laws or regulations around lotteries, such as the ACL. If you need help with your trade promotion, our experienced competition lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions