If a prize promotion falls within the definition of gambling, it is critical that that the promotion fits within the definition of a 'sales promotion scheme' in the Gambling Act so that it is an authorized gambling activity for the purposes of the Gambling Act.
Note that the retail value of non-cash prizes must be disclosed to the customer prior to entry into the competition.
If a competition or promotion amounts to gambling but is not a 'sales promotion scheme', it is likely to be considered as either an illegal gambling activity, or another form of gambling where a license may be required.
The net proceeds of a gambling activity are required to be used for 'authorized purposes' (essentially, charitable purposes or purposes which benefit the community) so it is generally not feasible to obtain a license.
Under the Consumer Guarantees Act 1993, any good or service provided by the promoter of goods and services must be reasonably fit for purpose.
It is an offence under the Fair Trading Act to offer a prize having no intention to deliver it as offered. The Fair Trading Act also prohibits misleading and deceptive conduct and making false, misleading and unsubstantiated representations.
For any personal information collected in connection with a prize promotion or competition, the Privacy Act 1993 requires that entrants are aware of:
- The fact that the information is being collected;
- The purpose for which it is being collected;
- The intended recipients of the information; and
- The name and address of the agency that is collecting the information and the agency that will hold the information.
Last modified 8 Jan 2019