A common question is whether permits are needed for skill-based competitions. The simple answer is no.
When determining whether or not a competition is based on skill it is important to consider if there are any elements of chance involved in the determination of winners.
Chance-based competitions include:
1) Competitions where winners are drawn;
2) Competitions where winners are determined instant (and determined randomly);
3) Scratch and Win type competitions; and
4) Competitions where the prize is dependent on the number of entries or any other factor outside of the control of entrants.
There are some competitions which include elements of skill and chance. These competitions will still need permits. For example, in the first round of a competition entrants must answer a question which is then judged, in the final round a winner is drawn- this is a chance-based competition.
Any competition that is chance-based requires permits (from at least NSW if conducted on a national basis).
Voting competitions do not require permits so long as there are no elements of chance involved. i.e. if you conduct a voting competition, how will you determine the winner if two or more entrants have the same number of votes? If you conduct a draw, then permits would be required.
The Victorian trade promotion regulator, the VCGLR, have announced changes to the way they assess lottery permits.
As of now, you will no longer need to attach a copy of competition terms and conditions to applications submitted online. The online form is very long, much longer than any other state and already goes into a lot of detail already provided in the competition terms and conditions. The other change is that a National Police Certificate will no longer be required.
The two most important implications of the change are:
1) It is likely that VCGLR will be faster in the review of online lottery permit applications; and
2) It is now more important than ever to ensure your competition terms and conditions are compliant, are consistent and make sense. The VCGLR were an important safety check, picking up errors. As they are no longer reviewing online applications it is now very important that Promoters carry out proper checks of their terms and conditions.
The above changes are part of a wider trend which will see the end of the need for competition permits from Victoria, this is expected early to mid next year.
If you have any questions about competition permits in Victoria, send us an email to email@example.com
This year Permitz has been lucky to work on some very interesting, unique and exciting consumer competitions. Overall we have noticed an increase in divergence away from a traditional online competition, a focus on the collection of actionable data and an increased understanding of how consumers react to promotions.
We have worked with brands that we love. From Lavazza, The Coffee Club and Sony. Many of our clients have come up with unique competitions. We have also worked with exciting solar energy, technology brands and agencies.
So far this year, we have not only been involved in awarding winners millions of dollars in prizes, we have been involved with competitions giving away awesome prizes such as a trip to Necker Island to meet Richard Branson.
Permitz has expanded our services and can now literally manage every aspect of competition marketing. From competition terms and conditions, lottery permits to winner selection and notification.
The year is not over yet and we look forward to continuing work in such an exciting area.
There is still time to set up a competition for your customers to coincide with Christmas!
Permitz suggests you consider submitting a request for terms and conditions and competition permits this week or early next week if you want to run a competition near Christmas.
Competitions can be a very effective way of increasing sales, building a customer database or launching a new product or service. To run a chance-based competition you would require competition permits from at least NSW and the ACT. Competition permits can take some time to be issued, so get in touch now.
In not particularly surprising news the Office of Liquor Gaming and Racing in NSW (OLGR) have been focusing on trade promotions which encourage the excessive consumption of alcohol.
The OLGR’s recently released newsletter noted the OLGR targeted 66 irresponsible alcohol promotions in 2013/14. One such promotion had the name ”Get your hangovers ready and livers prepared.”
OLGR Executive Director Paul Newson said OLGR will continue to target irresponsible promotions that risk encouraging misuse or abuse of alcohol or are out of step with community expectations.
The OLGR’s recent newsletter notes “Venues caught conducting irresponsible promotions will face increased inspections as well as bans or restrictions on their activities, with potential fines of $5,500 for failing to comply, and strikes under the Three Strikes disciplinary scheme.”
If you would like assistance in ensuring that your competition is compliant with the Liquor Promotion Guidelines and has the competition permits it requires, get it touch.
Changes will shortly come into effect which will make it easier for businesses to run chance-based competitions in Victoria.
Competitions are extremely common in Australia. They are used by businesses to attract customers, increase sales and to increase customer/ potential customer databases. Competitions, which give away prizes, are heavily regulated in Australia.
Trade Promotion Permits
A ‘trade promotion’ (aka competition) permit is required from a number of Australian states and territories to conduct a national chance-based competition. A chance-based competition is one which involves an ‘element of chance’ in the determination of winners. Common examples include those that involve draws or award prizes instantly.
A competition which does not involve chance may require entrants to answer a question in writing or submit an answer in another form. That answer would then be judged by a qualified judge or judges. To remove any element of chance there would need to be enough ‘scope’ in the question for unique responses; to determine the winner/s. A question such as “what is the largest ocean on Earth?” would not form the basis of a skill-based competition as a number of entrants would submit the correct answer.
Trade promotion permits must be obtained, for chance-based competitions:
- From NSW, regardless of the total prize pool value (i.e. combined value of all prizes);
- From the ACT, regardless of the total prize pool value (unless an exception applies);
- From SA, if the prize pool value is over $5k or the competition is an ‘instant win’ competition;
- From VIC, if the prize pool value is over $5k; and
- From the NT, if the prize pool value is over $5k and if a trade promotion permit has not already been obtained from another State/ Territory for the same competition.
In WA a permit is automatically given so long as the competition meets certain conditions. Other States have guidelines or requirements which must be met.
There are a range of further requirements which apply to competitions, regulating how the competition must be advertised and managed.
The diversity and complexity of regulation makes it difficult to run competitions. There are now specialist companies, such as Permitz Group, who can assist in the design and conduct of competitions.
Gambling and Liquor Legislation Further Amendment Bill 2014 (Victoria)
There are some changes coming which will make it easier to run a national chance-based competition.
The Gambling and Liquor Legislation Further Amendment Bill 2014 (Victoria) passed the second house (the Victorian Legislative Council) on Tuesday 2nd September. The bill will come into effect following Royal Assent & proclamation.
The Victorian treasurer, The Hon. Michael O’Brien, MP, noted in the first reading speech:
- The bill will remove the requirement to obtain a permit for all trade promotion lotteries, resulting in a significant saving for both small and large businesses.
- It is important to note that existing conditions that protect consumers, including limitations on entry prices, restrictions on trade promotion lotteries and gaming machine play and standard terms and conditions for trade promotion lotteries will continue to apply. Businesses conducting trade promotion lotteries must also still comply with Australian Consumer Law.
Whilst the complex maze of trade promotion requirements will largely remain, the removal of the need for a permit from Victoria will save businesses wishing to run a national chance-based competition some time and money.
From 5 November 2014, all current ‘like-gates’ will be pulled down. Facebook has announced the changes in an attempt to ‘improve’ the quality of Facebook page fans. This will have an impact on brands using a like-gate to ensure that fans like a page to enter a competition.
What is changing?
Facebook previously allowed you to ‘force’ someone to like your Facebook Page to
enter a competition or to access another incentive, such as downloadable content via a ‘like-gate.’
Here is an explanation of the change from Facebook’s developers post:
You must not incentivize people to use social plugins or to like a Page. This includes offering rewards, or gating apps or app content based on whether or not a person has liked a Page. It remains acceptable to incentivize people to login to your app, checkin at a place or enter a promotion on your app’s Page. To ensure quality connections and help businesses reach the people who matter to them, we want people to like Pages because they want to connect and hear from the business, not because of artificial incentives. We believe this update will benefit people and advertisers alike..
When are fans really fans?
Facebook’s concern is that like-gating encourages individuals to like a page where they are really only interesting in entering a competition.
The cynical view might be that ‘like-gating’ redirects attention away from Facebook advertising. One could also argue that it is up to brands themselves to determine which strategy results in better quality fans and that Facebook should concentrate on ensuring those fans are reached.
In any event, Facebook’s practice of continually changing weighting of company posts in individual’s feeds makes life difficult for page admins- with or without fans.
How will the change impact competitions?
Well the obvious implication is that you will not be able to use ‘like-gating’ any more. The unanswered question is whether Facebook will next prohibit (in its Promotional Guidelines) brands from requiring a ‘like’ to enter a competition under the individual competition terms and conditions (i.e. without the ‘like-gate’ in place but with a requirement under the competition rules).
Facebook’s changes are important for brands currently or intending on using the ‘like- gate’ feature. Overall, if the change does improve the quality of fans for brands then that is a good thing.
The truth is we can expect to continue to see changes, some positive and others negative, from Facebook.
There is still time to prepare a trade promotion in time for Father’s Day. With Australian’s spending in excess of $650 million on Father’s Day, the main winners typically being restaurants, retailers & gift card providers.
Chance-based competitions can be an effective way of giving consumers a chance to win fantastic prizes for their dads/ husbands. Competition permits will be required if you are giving prizes away on the basis of chance. If you require competition permits, need assistance with prize sourcing or ideas for a promotion- get in touch.
From time to time we are asked what the consequences would be if a client ran a chance-based competition without a competition permit.
Wanting to unneccesary avoid red tape
Understandably people don’t like red tape and don’t want to wait for a trade promotion permit to be issued. Unfortunately, like many things in life you can’t avoid the requirement to obtain competition permits if you need them.
So when and where do you need a competition permit
The two main categories of competitions are those based on skill and those based on chance. Competitions can involve both elements of skill and chance.
Competition permits are required in the following states for chance-based competitions (or competitions with elements of chance and skill):
ACT: You will need a competition permit from the ACT no matter what the prize pool is -if the competition is a game of chance. Note that there are some exceptions from requirement to hold a competition permit in the ACT, Give us a call to find out.
NSW: Again, no matter what the prize pool is if the competition is a game of chance. NSW issue permits very quickly and are inexpensive.If your prize pool (total given away under the competition) is over $5,000 then you will need a competition permit from VIC. VIC: If your prize pool (total given away under the competition) is over $5,000 then you will need a competition permit from VIC. The cost of a permit in VIC is not tied to the value of all prizes unlike in other states.You will need a National Police Certificate to obtain a permit from VIC
SA: If your prize pool (total given away under the competition) is over $5,000 or involves instant- win then you will need a competition permit from SA
WA: Under the WA regulations you are automatically issued a competition permit so long as you comply with the permit conditions. You will need to email a copy of the competition terms and conditions to the regulator and may need approval if you subsequently amend the competition terms and conditions.
NT: You will only need a competition permit from the NT if you don’t have a permit for that same competition from another state.
Elsewhere: You will not need a competition permit from any other Australian state or territory. States such as Queensland have guidelines which you will need to comply with- they are classified as Type 4 promotions.
Should I both obtaining a competition permit?
With so many sets of regulations to consider it is no wonder that many want to avoid the need for competition permits altogether. Unfortunately, if you fail to obtain competition permits when they are required you risk regulatory investigations/ prosecution and penalties- in short you will be breaching your legal obligation. Although the likelihood of getting caught may be low, the consequences could be very substantial.