Can a prize promotion be run that is based on skill?
Yes, but ensure that:
The purchase of a product or service is not a requirement in order to be able to participate in the promotion; the elements required to enable a person to participate should be made available for free to anybody willing to participate;
No element of chance should be used to determine the winner of the promotion;
The Rules are available in Spanish; and
You disclose information regarding prizes, territorial scope and participation requirements.
Prize promotions based on skill are permitted in all Australian States and Territories.
Importantly, any such skill competition must comply with Australia's national consumer law, the Australian Consumer Law (ACL) included in Schedule 2 of the Competition and Consumer Act 2010 (Cth). Under s.18 of the ACL, an entity can be held liable for misleading and deceptive conduct if terms and conditions are not clearly explained and displayed to a customer. To avoid this, the conditions of the promotion must be prepared prior to the commencement of the competition and be clearly displayed for all participants to see during the course of the event. The promotion must then be conducted in accordance with those conditions.
Please see below further requirements particular to each state and territory.
Australian Capital Territory
When the determination of the prize winner involves skill only (i.e. no element of chance is involved), an approval and permit is not required.
In this context, 'skill' means any competition that involves a decision or input by the participant, such as guessing a sound or number or weight, submitting a description of an item or activity or describing or stating reasons for liking something. Skill may also include any event or competition that is judged by people qualified in a field relevant to the event or competition.
New South Wales
A permit is not required for a game of skill whereby the winners are determined by qualified or expert judges, the decision is judged against set criteria and there is no element of chance involved.
A permit is not required if the promotion involves a game of skill which has no element of chance.
A game of skill which has no element of chance is not regulated and therefore not subject to the Charitable and Non-Profit Gaming Act 1999 (QLD).
However, guessing competitions are considered to be games of chance.
A competition in which the winners are determined by skill does not come under the Lottery and Gaming Act 1936 (the Act), and therefore does not require a permit. If, however, there is any random element to the prize draw (even where an entrant has answered a game of skill question first, but a winner is then drawn from all correct entries) a permit is required.
A permit is not required if the promotion is a game of skill which has no element of chance.
A game of skill with no element of chance is not regulated and therefore the Gambling Regulation Act 2003 (VIC) would not apply.
A game of skill with no element of chance is not regulated and therefore the Gaming and Wagering Commission Act 1987 (WA) would not apply.
Yes, but ensure the winner is picked on the basis of skill, not chance.
The skill element must be predominant, i.e. sufficiently complex to ensure that everyone cannot automatically be considered a winner.
- The promotion must not invoke a psychological pressure on participants to buy the promoted products or services; and
- The conditions for participation must be stated clearly and unambiguously.
Yes, but it should be ensured that the winner is selected only on the basis of his physical or intellectual skill, not on chance (not even partly). The skill involved should be sufficiently convincing (e.g. not: What is your name?, which requires no effort). There is no need to involve an external jury to assess the entries made in this respect.
Specific rules may apply in cases where the winner is selected on the basis of both skill and an element of chance (see Prize Draws section).
For the contest (Concurso) form of prize promotion, a contest occurs through intelligence tests, selection of predictions, calculations, or similar competitions of any nature. It is required that the conditions of promotions are applied uniformly, so as to guarantee equal treatment and opportunity for everyone interested in participating in the prize promotion.
Promoters may provide that entry is subject to the participant presenting or delivering a label, wrapping, or packaging and/ or satisfying any requirements, preconditions or stipulations required by the promoter, relating to the products or commercial activity of the promoter, provided that said material does not constitute a series of multiple labels/wrappers/ packaging (see Other local requirements).
Yes, and this avoids the need to impose a skill-testing question requirement prior to awarding a prize. However, it likely does not overcome the 'no purchase entry' requirement unless the amount of the potential prize is no greater than the purchase amount.
Yes, since these kinds of competitions are lawful bets and games. However, it is important to take into account that the winner should be determined on the basis of ability and not chance, since in the latter case it would be considered gambling (which is only allowed in a limited manner as expressly authorized by law).
Yes, but promoter/organizers should ensure the winner is determined on the basis of skill and not chance, particularly if the entrant needs to pay to enter. If the level of skill is not met, it could be categorized as a promotion judged on the basis of chance, and as such if payment is required, this could be considered a lottery, and may give rise to criminal liability.
There is no detailed guidance under the laws and regulations as to the level of skill, knowledge or judgement the entrants should exercise in a skill competition. The common practice in China is that the requirement for entrants to exercise skill or judgement or to display knowledge should either prevent a significant proportion of potential entrants from taking part or prevent a significant proportion of entrants from receiving a prize.
Yes, prize promotions can be based on skill; however, such activities are not subject to any specific regulation. They must only fulfil general Consumer Protection Law requirements and data privacy regulation, considering that through the competition, the company might collect personal data of the contestants or participants.
Profits obtained from competitions where the winners are determined merely on skill are not considered as part of a state monopoly. In this regard, when an element of chance is not involved, the activity might be carried out for marketing purposes, without requiring any specific permission from the Colombian authorities. Therefore, Law 643 applies to any game of chance whether the participant has to pay directly something to participate or not.
Yes, a prize promotion based on skill can be run. If the prize promotion is purely based on skill it is not covered by the Danish Gambling Act. However, it must be ensured that:
- the terms and conditions for the competition are clearly stated. See the Other Local Requirements section; and
- the winner of the competition is selected via the criteria stated in the terms and conditions.
Note: If a skill based competition e.g. a sporting event contains elements of chance, the competition is characterised as a combination game, and is thus not considered a pure skills competition. As a result, the competition will be covered by the Danish Gambling Act and a license from the Danish Gambling Authority must be obtained if the competition requires payment of a stake.
Note: It is by law considered unfair commercial practices if a consumer is given the impression that it has won, will win or by conducting a certain action will win a prize that either does not exist or includes the payment of an amount of money or other expenses.
Yes. Prize promotions can depend on the talent, knowledge and/or skill of the participants. However, also see Other local requirements section.
Yes, although the law is unclear and skill competitions could be risky in a B2B context.
For B2B skill competitions, ensure:
- The winner is picked on the basis of skill alone (e.g. quality, accuracy, originality) not in any way by chance; and
- Criteria for awarding prizes are clear, objective and precisely defined.
Articles L. 322-1 et seq. of the Internal Security Code et seq. prohibit any and all operations (including skill competitions) offered to the public under any name whatsoever, that create an expectation of gain and the outcome of which is determined, even in part, by chance and for which a financial contribution from the participants is required by the organizer.
Article L. 322-2-1 adds that the prohibition includes games the functioning of which relies on the player’s know-how. This could be interpreted as prohibiting skill competitions. However, there might be an argument that it means that the prohibition of chance-based games also applies when know-how is a factor in the determination of the outcome of the contest.
That being said, Article L. 322-2-2 provides that this prohibition does not apply to promotional lotteries mentioned in article L. 121-20 of the Consumer Code, which is why the risk that the skill competition be considered as unlawful is lower in a B2C context.
For B2B, if the competition is totally skill-based and based on clear and objective factors that show that chance is not a factor, the competition would be lawful. If there is doubt as to whether chance is a factor, it would fall within the general prohibition of lotteries, except if participation is totally free. If reimbursement of the financial contribution is offered in the terms and conditions, this is not sufficient to make it lawful.
Yes, prize promotions based on skill (promotional contests also known as 'skill competitions') are allowed, but:
- Public offers of reward may be subject to further restrictions, especially under sec. 657, 661 BGB; eg the public offer must include a time limitation.
Furthermore, unless other terms and conditions have been agreed, participants who achieve the same result would be entitled to an equal share of the prize. It follows that terms and conditions should be very clear on that point, eg by determining the winner as the one who has not only achieved the correct result but who was the first person to do so.
- The UWG does not differ between skill competitions and sweepstakes, so that the same key requirements have to be fulfilled for both (see Other local requirements).
Where the promotion is completely based on skill and there is no element of chance involved, such promotions do not require a license. If the promotion in any way involves chance, the promotion will be governed by the Gambling Ordinance and one of the two licenses mentioned above will be required.
Yes, prize promotions based on skill are allowed; however, if the following conditions are fulfilled it will still be considered as gambling and regulated by the Gambling Act:
- the player agreed to pay cash or any other form of consideration to participate in order to receive a cash prize or something of value in the event of a certain outcome or a future contingent event;
- winning or losing depends exclusively or to a material degree upon an element of chance.
Accordingly, if the skill element and the element of chance cannot be separated, it is most likely that such activity will be considered as gambling activity under the Gambling Act.
Yes, but ensure:
- That the winner is determined predominantly on the basis of his or her skill and not chance; and
- That the terms are notified to the entrant before entry into the competition.
Competitions where success depends on a substantial degree of skill i.e. one in which success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player, are permitted under Indian law. This being said, it may be noted that a prize promotion which is predominantly skill based would be constituted as a game of skill despite there being an element of chance. Such prize promotions would be permitted under Indian law.
Yes, but ensure the winner is determined on the basis of skill not chance, particularly if the entrant pays to enter.
The skill element requires entrants to exercise skill or judgement or to display knowledge as part of requirements which either prevent a significant proportion of potential entrants from taking part or prevent a significant proportion of entrants from receiving a prize. (If this level of skill is not met, it could be categorized as a promotion judged on the basis of chance and as such if payment is required, this would be a lottery, giving rise to criminal liability if the appropriate permit or license is not obtained).
Note: Case law in Ireland provides the element of skill introduced into the promotion (ie the qualifying question) should be more than a mere 'colorable skill'. In practice this means the question should be one that requires a degree of knowledge/skill. Also, the element of skill should be introduced at the point of entry and not, for example, after the winner has been randomly selected.
Yes, but it is necessary to ensure that:
- Participants are not required to pay any contribution.
'Payment' is interpreted to mean any kind of contribution/entry fee save for the price for the purchase of the promoted product/service
- The stringent formalities required by the DPR are complied with.
Unless a promotion falls under one of the exceptions provided by the DPR, it is not possible to run multi-jurisdictional promotions; any activity related to the prize promotion must be carried out in Italy and also the server used for the promotion must be located within the Italian territory.
The exceptions provided by the DPR include:
- Promotions aimed at spreading artistic or scientific works where the prize is due as remuneration for the work done;
- Promotions run by TV channels where the prizes are offered directly to the audience watching the show, unless the operation intends to promote products belonging to enterprises other than TV channels;
- Promotions where the prize consists of:
- Discounts on the same products/services (or products/services of the 'same kind’) as those purchased on a non-discount basis; or
- A discount on different products, provided that such discount is not aimed at encouraging the purchase of the discounted product.
- Discounts on the same products/services (or products/services of the 'same kind’) as those purchased on a non-discount basis; or
- Promotions under which the prizes, further to a purchase, consist of vouchers to be used in a subsequent purchase within the same point of sale or in any other point of sale of the same brand;
- Promotions where prizes have a very low value (such as small gadgets, flags, calendars etc.);
- Promotions where the prizes are granted to schools, hospitals or similar and have social or charity purposes.
In the above mentioned cases, the rules of the DPR do not apply. However, these exceptions are interpreted quite narrowly by the national regulator and therefore a case by case assessment is necessary.
Yes, skills competitions where winners are determined 'through superiority or correctness in a particular performance' are allowed. The AAUPMR guidelines, dated 28 June 2012, provide the following examples of permitted methods of determining winners:
- Soliciting predictions about matters that are not generally known at the time of application (e.g. the top ten news stories of the year) and determining winners through the superiority or correctness of responses;
- Soliciting catch-phrases, photographs, ideas for improving products and the like, and determining winners based on superiority;
- Soliciting answers to puzzles, quizzes and the like and determining winners by the correctness of those answers; and
- Determining superiority by contests such as bowling or fishing, performance, sports or other areas (excluding sales contests, exhibition contests, and other methods of determining winners by superiority on the basis of transaction volume or other transaction figures).
There is no existing regulation applicable for skill competitions.
Yes, purely skill based competitions are allowed, but ensure the winner is picked on the basis of skill and not chance.
Examples of what constitutes an element of skill include: drawing a picture, answering a riddle or answering certain types of questions.
Yes, but the winner must be determined only on the basis of skill and not chance, particularly if the entrant pays to enter (including buying a product in order to be eligible to enter).
If a prize promotion requires no purchase or consideration to enter, i.e. simply a skill question, the Fair Trading Act would apply. The main prohibitions under the Fair Trading Act are the prohibitions on misleading and deceptive conduct and false, misleading or unsubstantiated representations.
If the outcome is partly based on skill and partly based on chance (for example a skill question, with the correct answers going into a draw) a prize promotion might be considered as an authorized gambling activity under the Gambling Act if it meets the requirements of a 'sales promotion scheme'. The requirements are listed below:
- Participation in the prize promotion requires purchase of the goods or services being promoted for a price not exceeding the usual retail price.
- The entrant is not required to pay direct or indirect consideration to enter the promotion (other than purchasing the relevant goods or services).
- The date or period over which the outcome of the promotion will be determined is clear to the entrant at the time and place of sale.
- The promotion is run by the creator, distributor or vendor of goods or services to promote those goods or services.
- The promotion does not involve a gaming machine nor a restricted or prohibited prize.
According to the definition of lottery in Section 57 of the National Lottery Act, prize promotions can be run based on skill.
Yes, but ensure:
- The winner is picked on the basis of skill not chance; and
- Terms and conditions are clear and easily accessible to consumers.
Yes, under the following circumstances:
- The winner must be chosen on the basis of skills (i.e. the best work or act), and not on the basis of chance. If the conditions for winning have been fulfilled by several persons independently, each of them shall be entitled to a full prize, unless only one prize has been promised. If only one prize has been promised, the first person who comes forward to claim the prize shall receive it; and where several persons come forward at the same time – the person who first fulfilled the conditions for winning. Additionally, a public promise of a prize for the best work or for the best act is ineffective if it does not specify the period in which the prize may be claimed. The above rules stem from the provisions of the Polish Civil Code.
Even if a promotion contains elements of skill but the final result is determined on the basis of chance, this would likely be considered a lottery and official approval (by public authority) would be required. Elements of chance are acceptable as long as they are not decisive as to the final decision about the winner (e.g. it is acceptable that at the first stage of the promotion a limited number of participants are chosen by a draw if the final results regarding the winner are based on skill).
- Terms of the prize promotion should be notified to the participants prior to their participation in the promotion.
Yes, but ensure:
That neither the eligibility, the mechanics of the skill competition nor the selection of the winners depends on chance (even if combined with skill);
That no skill competitions are run where the entrant has to use machines or other devices and in which the result depends exclusively on the skill of the player but that may result in payment (as a prize) of money, chips or other goods with economic value (even if of small value);
Clear terms and conditions (including full information on the skill competition) shall be provided to the participants for acceptance prior to the beginning of the competition.
Yes, but the organizer must ensure that the winner is selected based on their skills, knowledge and intelligence as demonstrated by their performance or entry.
Yes, this is permitted and specifically regulated under the Code. The main requirements set out in the Code are:
- The competition must be directed to the achievement of socially amenable purposes;
- The announcement of the competition must contain, at least, the essence of the task, criteria and procedure of assessment of results, place, term and order of delivery of results, amount and type of award, order and terms of announcement of the competition's results;
- The competition organizer may modify or cancel the competition only within the first half of the set term of delivery and must make the announcement in the same way as the initial announcement. The organizer must reimburse the expenses incurred by participants before such cancellation or modification.
Yes, the introduction of an element of skill in a prize promotion is not prohibited under the ACFR. An application explaining the elements of the prize promotion must be submitted to the competent authorities in Saudi Arabia in order to obtain a license for conducting and/or advertising the promotion (please refer to Registration requirements for further information).
Yes, a prize promotion based on skill can be run in Singapore so long as it amounts to a 'game of skill' (as explained below) and does not fall within the ambit of the CGHA and the RGA.
The CGHA defines a 'game' as being a game of chance or of a combination of chance and skill for a money or money’s worth, and 'lottery' as any game, method, device, scheme or competition whereby money or money’s worth is distributed or allotted in any manner depending upon or to be determined by chance or lot, whether the same is held, drawn exercised or managed within or outside of Singapore. 'Public lottery' means a lottery to which the public or any class of the public have access or may have access to, and every lottery shall, until the contrary is proved, be deemed to be a public lottery. Please refer to the Extra-territoriality section for the definition of 'game of chance' in the RGA.
As of yet there is no published case law in Singapore discussing these definitions. However, traditionally, games of chance or of a combination of chance and skill include for example lotteries, wagers and casino-style games such as roulette, while games of skill include for example, chess and checkers. Therefore, it could be assumed that in order for a game to be categorized as a game of skill, the element of chance would need to play little or no part in determining the outcome.
Additionally, the definition of 'game of chance' in the RGA is similar to the definition used in the UK's Gambling Act 2005, and there has been case law in the UK (R v Kelly  EWCA Crim 137) explaining that 'games of combined skill and chance' shall be treated as games of chance without qualification, except in circumstances where the element of chance was so insignificant as not to matter.
There are no particular regulations concerning skill-based prize promotions, and such promotions would be regulated under the general provisions regarding unfair trade practices pursuant to the FTL. Such promotions would be permissible if the prizes are not improper or excessive (based on business norms) and as long as the terms and conditions of the promotion are accurately specified and advertised.
Yes, but ensure the winner is picked only on the basis of skill not chance.
For example, if winners are selected by providing the right answer to a questionnaire this would qualify as a skill game but if a draw is carried out to decide, among them, who shall be the final winner, then it would automatically become a chance based game. Sometimes, games allocating prizes to the first 100 entrants are considered to be based on chance because there is no or little skill involved.
Yes. However, please note that a Swedish gambling license may be required if the selection of the winner is not based solely on the participants' individual skills, if participation requires payment of a wager, stake or similar.
Provided the winner is determined on the basis of skill not chance, skills competitions are not subject to any restrictions under Thai laws.
Yes, skill based games are generally permissible, but this is subject to approval from the GDNL. Having said that, approval is not required if the contest fulfils any of the following conditions:
- every participant who meets a previously specified criteria is awarded a prize; or
- no entrance fee is charged and the contest does not promote or sell a particular good or service; or
- either (i) no random draw occurs, and the winners are selected according to previously specified rules, or (ii) the winners are selected by means of a draw held in the presence of all the participants in the contest.
Yes. Ukrainian legislation regulates prize promotions based on skill as a public promise of a reward, based on the result of competition. Specifically, the Civil Code of Ukraine establishes that skill competitions may relate to intellectual or creative activity, commission of a certain action, performance of work, etc.
United Arab Emirates - Dubai
Yes, provided that:
- A permit is obtained for the campaign (instant prize fees paid as skills competition prizes are considered instant prizes);
- Participants do not pay to enter, and
- Criteria for awarding prizes are clearly defined.
The skill element requires that the prize promotion is not based on a game of chance and the participants are not gambling or otherwise participating in a bet.
Yes, but ensure:
- The winner is determined on the basis of skill not chance, particularly if the entrant pays to enter.
- The skill element requires entrants to exercise skill or judgement or to display knowledge as part of requirements which either prevent a significant proportion of potential entrants from taking part or prevent a significant proportion of entrants from receiving a prize. (If this level of skill is not met, it could be categorized as a promotion determined on the basis of chance and as such if payment is required, this would be a lottery, giving rise to criminal liability if the appropriate license is not obtained).
Note: Asking one question the answer to which is widely known is unlikely to qualify as sufficient exercise of 'skill, knowledge or judgement'.and
- Terms are notified to entrant before purchase is made.
If a multiple choice format is used:
- There must be significant plausible alternatives to the correct answer, and
- The correct answer must not be obviously given close to the question
Note: Be ready to provide evidence of work undertaken to ensure sufficient level of skill is required.
Federal law has specific regulations for skill competitions offered through the mail. State rules differ regarding how much chance is allowed in a skill contest, however, a majority of states apply the rule that it is not an illegal lottery so long as skill is the dominant factor in determining the winner. Ellison v. Lavin, 179 N.Y. 164 (1904); State v. Stroupe, 238 N.C. 34 (1953). Several states prohibit charging entry fees or requiring other consideration to enter or participate in skill contests.
Whether a contest is determined by skill or chance is a fact specific analysis. A skill contest generally is one where success depends principally on the superior knowledge, attention, experience, and skill of the player whereby the elements of chance in the game are overcome. Contests should be structured such that one with skills has an advantage over non-skilled players.
A skill contest is a puzzle, game, competition, or other contest in which a prize is awarded or offered, the outcome depends predominately on the skill of the contestant, and a purchase, payment, or donation is required to enter. The DMA requires that mailings for skills contests include a clear and conspicuous statement which discloses all terms and conditions and provides a name and address where the sponsor can be reached. Additionally, the mailings must disclose certain information such as the number of rounds or levels, the cost to enter each round, the maximum cost to enter all rounds, the estimated number of entrants who may win, the qualifications of the judges, the method used in judging, the date prizes will be awarded and the value and nature of each prize. 39 U.S.C. § 3001(k)(3)(B).
Arizona – Before engaging in an intellectual contest or event that requires the purchase of a product, a sponsor must pre-register with the Arizona Attorney General. Ariz. Rev. Stat. § 13-3311.
California - To qualify as a contest the game must require a combination of skill and chance, but skill does not need to dominate the game. Haskell v. Time, Inc., 857 F. Supp. 1392 (E.D. Cal. 1994). Operators of a skills contest must clearly and conspicuously disclose the rules, regulations, terms and conditions of the contest, the maximum number of games which may be necessary to complete the contest and determine winners, the maximum amount of money which a participant may be asked to pay, and the dates upon which the contest will terminate, and how ties will be decided. Cal. Bus. & Prof. Code § 17539.1.
Colorado – Prohibits requiring a person to pay the sponsor money or other consideration as a condition of allowing the person to receive, use, compete for, or obtain a prize or information about a prize. Colo. Rev. Stat. § 6-1-803.
Illinois – Certain games of skill are exempted from Illinois’s prohibition on gambling. The contest must be a 'bona fide contest for the determination of skill, speed, strength or endurance...' 720 ILCS 5/28-1(b).
Oregon – Requires that a skills competition have a combination of skill and chance, but skill does not need to dominate the game. Or. Rev. Stat. § 646.651.
Texas – Contests that involve an offer of a prize, award, or compensation to the actual contestants in a bona fide contest for the determination of skill, speed, or strength are exempted from Texas's prohibition of gambling. Tex. Penal Code. § 47.01.