Can a prize promotion be run where there is an element of chance in the selection of the winner?
Trade promotions that involve an element of chance are permitted in all States and Territories of Australia. See below for specific requirements.
Australian Capital Territory
A permit is required if the promotion involves distribution of prizes determined by any means that includes an element of chance or a mixture of skill and chance, and entry must be free.
A permit is not required if the only prizes offered are rebates or discounts off goods sold by the business holding the promotion and the promotion is open to all customers of that business (i.e. a 'private lottery') or if the total prize value does not exceed:
- A$3,000 (approx. US$2,077) for a Trade Promotion Lottery;
- A$2,500 (approx. US$1,731) for a Raffle;
- A$1,000 (approx.US$693) for a Housie session; and
- A$1,000 (approx. US$693) for a Calcutta event.
However if the prize value exceeds A$3,000 (approx.US$2,077), the business will need to obtain a permit from the ACT Gambling and Racing Commission.
New South Wales
A permit is required for all trade promotion lotteries and games of chance conducted in NSW.
Entry must be free. Accordingly, entry into the trade promotion lottery cannot be gained by participants providing anything that has intrinsic value. For example, participants cannot redeem loyalty or reward points for entry into a trade promotion lottery. However, a trade promotion lottery for which entry is gained by purchasing goods or services at their normal retail value (for example, where proof of purchase is required) is still allowed.
An entrant or other person must not be required to call or message a telephone service on more than one occasion to provide personal information or particulars, or to answer questions, or for any other reason in order to obtain a right to a valid entry into the proposed trade promotion lottery.
Please note it is inappropriate for business directors, management and employees, their immediate families, their retailers, suppliers, associated companies and agencies to participate in a game of chance conducted for their own business –unless the lottery is specifically conducted as an 'in house' lottery (for example among sales staff). Only members and guests of a registered club should participate in a lottery aimed at promoting the business of the club.
A permit is required for the conduct of a 'major' trade lottery (ie where the total prize value is greater than A$5,000 (approx. US$3,463).
Additionally, the Northern Territory recognizes permits issued by other Australian states and territories. If the promoter holds a current permit to run the promotion in New South Wales for example, it will not need to obtain a Northern Territory permit.
Each entry must have an equal probability of winning the major prize.
No employees of the business or family members of those employees may participate in the trade promotion lottery.
No permit is required but the promotion must comply with certain requirements if it is a game of chance.
A person is not eligible to enter if the person is:
- A member of the management committee of the eligible association conducting the art union; or
- Directly engaged in conducting the draw of the art union; or
- The eligible association conducting the art union; or
- A member of the immediate family of a person mentioned in (1) or (2).
A permit is required for a 'major' trade promotion lottery which is where the total value (nationally) of all prizes in the lottery exceeds A$5,000 (approx. US$3,643), or the prizes include both instant and drawn prizes (regardless of the value of the prizes).
A permit is not required for 'minor' trade promotion lotteries (ie ''where the maximum prize value is less than A$5,000 (approx. US$3,643)), however they must comply with the minor trade promotion lottery rules.
No permit or approval is required for trade promotions.
However, if making a purchase is necessary to enter a trade promotion, the following conditions apply:
- the cost of the goods or services must not exceed the prevailing market price; and
- determination of the market price lies with the Commission.
No permit or approval is required. However, trade promotions lotteries must comply with conditions set out in Gambling Regulation Act 2003 (Vic) and related regulations.
Please note that a members’ draw is considered a trade promotion lottery and involves the drawing of a member's number from a pool of numbers. Terms and conditions should be available at the place of entry and to all members. The conditions of entry only require the member to be present at the draw if the entry and draw are to occur on the same day. If a member enters the draw through buying goods or services throughout the week, then the member does not need to be present at the time of the members' draw.
A permit is not required if the trade promotion lottery complies with the terms and conditions of the blanket permit published on the Department of Racing, Gaming and Liquor's website (see here). Otherwise a permit will need to be obtained to be able to vary these terms and conditions.