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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.  

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’.

For example, you might hold a barrel draw to determine winners for those who enter your trade promotion. This would be a game of chance.

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. 

For example, a common game of skill is where you ask entrants to submit an answer to a question in ‘25 words or less’ and the judges pick a winner based on the creativity, skill or originality of response. Social media ‘post a photo’ competitions are another example of a game of skill.

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

Location
Permit Required?
Regulatory Body
New South Wales (NSW)

Yes, 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.

Apply for your authority at NSW Fair Trading.
Victoria
No. The Victorian Commission for Gambling and Liquor regulates lotteries. 
South Australia (SA)
Yes, 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, 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, but exceptions apply. These type of trade promotions do not need permits where:

 

  • the total prize pool does not exceed $3,000;
  • it is a private lottery not advertised publicly, with participation restricted to members of the same association or employees of the same employer; and
  • the prizes or rewards involve rebates, discounts, allowances or refunds that are also available to customers who do not enter the promotion.  

However, you need a permit if the promotion involves a lottery run on a website and the website is:

  • hosted in the ACT; or
  • not hosted in the ACT but the promotion is advertised in the ACT as well as on the website. 
Apply for your permit at the ACT Gambling and Racing Commission

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 then $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, contact LegalVision’s competition lawyers on 1300 544 755 or fill out the form on this page.

Frequently Asked Questions

What are the main types of trade promotions in Australia?

The two main types of trade promotions in Australia are games of skill and games of chance. A game of chance provides all entrants with an equal chance of winning and picks a winner at random. In a game of skill, you select winner(s) based on judging criteria set out in the trade promotion terms and conditions.

Do I need a permit to run a trade promotion?

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).
You may need a permit or authority for a game of chance, depending on where you are operating and the total value of the prize.

What regulations do I need to comply with when running a trade promotion?

As well as your state or territory-based regulations, you will also need to comply with any additional laws or regulations around lotteries. For example, this includes the ACL.

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