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You can use trade promotions to promote your business, or perhaps a new product or service you are offering. If you plan on running a trade promotion lottery in New South Wales (NSW), before you start creating the advertisements for the promotion, you should make sure you are across the many rules and regulations that surround trade promotions. This article will address some of the requirements when running a trade promotion in NSW, including whether or not you need an authority and what you need to cover in your terms and conditions. 

Games of Chance and Games of Skill

Trade promotions can be ‘games of chance’ or ‘games of skill’. In games of chance, chance determines the winner. For example, entrants’ names are all placed into a barrel, and a name is picked out of the barrel to decide the winner. 

On the other hand, in a game of skill, the winner is decided by judges based on set criteria. For example, entrants must upload the most creative Instagram post, and a judge picks the winner. 

Games of skill do not currently need authorities or permits in Australia. However, you must still make sure that the way the promotion is conducted complies with the different regulatory requirements in the states and territories where the promotion is conducted. 

Is An Authority Needed?

If you are running a game of chance in NSW, you may require an ‘authority’. In other states, a ‘permit’ may be required for each promotion you run. However, the requirements are different in NSW. 

In NSW, you must apply for an ‘authority’ to conduct trade promotions where the total prize pool exceeds $10,000. Your authority then allows you to notify the NSW regulator of an upcoming promotion. Just because you have received an authority does not mean that your promotion has been approved. 

You can apply for an authority of either one, three or five years. Once you receive your authority, any time you wish to conduct a trade promotion during your authority period, and where the total prize exceeds $10,000, you must apply to notify the NSW regulator of your upcoming promotion. 

For example, if you plan on running several promotions over the next five years, where entrants could win prizes worth over $10,000, it may be worthwhile applying for a five-year authority.

Once you have received your authority, each time you plan on conducting a promotion with a prize pool of $10,000 or more, you will need to apply to notify the NSW regulator of the upcoming promotion. You will need to outline the details of the promotion, including the:

  • total prize value;
  • number of entries an entrant could receive;
  • rules for entry; and
  • start and end dates. 

Terms and Conditions

Your terms and conditions will need to meet the requirements under NSW law.

Your trade promotion terms and conditions will need to cover:

  • eligibility requirements and conditions of entry;
  • the start and end date of the promotion;
  • the draw date (for games of chance) or date on which the winner will be judged (for games of skill); and
  • a description of the prize, including its value.

Your terms and conditions must also cover the process of:

  • announcing the winner;
  • giving the winner the prize; and
  • what happens if the prize is not claimed. 

Other Requirements for Running a Trade Promotion in NSW

Having the appropriate authority and compliant terms and conditions are not the only steps you need to take when running a trade promotion in NSW. You must ensure that:

  • your promotion is free to enter;
  • your promotion genuinely promotes your business;
  • people cannot enter if they could unfairly get an advantage or cheat in the promotion, including employees of your business, or family or friends of your business; and
  • the prize/s are not prohibited. 

Prohibited prizes include firearms, prohibited weapons, tobacco or smoking products, poisonous products, and certain quantities of alcohol.

Key Takeaways

Running a trade promotion is a very effective way of promoting your business. However, there are many intricate rules that you must follow. Failure to do so can mean that you do not receive your permit or authority, or that your promotion can no longer go ahead. 

If you have questions about your promotion, whether you are required to have an authority or how you can run your promotion, please get in touch. You may also have other legal needs that we can assist you with, including how to comply with consumer laws and marketing laws when conducting the promotion. 

For assistance with any questions relating to running a trade promotion in NSW, contact LegalVision’s competition lawyers on 1300 544 755 or fill out the form on this page.

Frequently Asked Questions

What is the difference between a game of chance and a game of skill?

In a game of chance, chance determines the winner. Whereas in a game of skill, a judge decides the winner based on set criteria. You do not need a permit or authority for a game of skill in Australia.

When do I need to apply for an authority in NSW?

You must apply for an authority to conduct trade promotions when the total prize pool is more than $10,000. Your authority then allows you to notify the NSW regulator of an upcoming promotion.

How long does an authority last?

An authority can be for one, three or five years, depending on your application. Once you receive your authority, you must apply to notify the NSW regulator of your upcoming promotion when the total prize pool exceeds $10,000.

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