Extra care should be taken when conducting a competition draw to ensure that all valid entries are given a fair and equal chance of winning. The methodology used to determine the winners must ensure that the outcome is random and that there is no risk of interference with the results of the draw.
If more than one prize is to be awarded in a draw, the Major Prize should be drawn first. It is very important that the competition draw be held on the date and time specified in the competition terms as a member of the public or a regulatory authority may come and inspect the draw to ensure that it is conducted correctly.
Electronic draw systems
If you are planning to conduct an electronic draw you must ensure that the system you use, and the methodology you follow, is approved. Approval is required from the office of the Liquor and Gambling Commission in South Australia.
Approval is not required from New South Wales but the Promoter must ensure that they obtain two reports, an appraisal report and a draw procedure report. The Appraisal Report must detail whether the computerised system is random in its selection of winners. The Draw Procedure Report must detail the safeguards and controls in place to overcome any possibility of any person manipulating any stage of the draw or the announcement of the prize winners.
If you are using the services of a third party provider you should ensure that they are able to provide you with each of the above.
Permitz Group have an approved electronic draw system and can conduct an electronic draw on your behalf for a low flat fee provided that the total you are giving away is less than $10,000.
Prior to contacting a winner extra care should also be taken to ensure that the entry was compliant. If the winner still needs to verify their age or provide a proof or purchase you should refer to them as the ‘drawn entrant, subject to validation.’ In all cases ensure that you comply with the terms and conditions and permit conditions.
If the total you are giving away in a draw exceeds $10,000 you will need an independent scrutineer to oversee the draw.
According to the OLGR”
“The scrutiniser observes the draw process and decides to the best of that person’s knowledge and belief whether all entries to the lottery have been treated equally, and that no person has received an unfair advantage or unfair gain. The scrutiniser should take nothing for granted and should look directly at all relevant activities when a draw is undertaken.”
“An independent person is a person who, except for his or her involvement with the scrutiny of the draw:
• is not otherwise concerned with the management, conduct or promotion of the lottery for which the permit is issued
• is not a director, employee or otherwise employed by, or under contract to, the benefiting business or trade or an associated company, business or agency.”
The individual who oversees the draw must also complete a stat dec to the effect of the above.
If the value of prizes to be awarded in a draw is over $20,000 you must also ensure you comply with the requirements applicable from SA. Additionally they require that scrutineers be member of the classes specified including a Justice of the Peace or a Notary Public.
What about unclaimed prizes
If you have conducted a draw and attempted to contact the winners in accordance with the terms and conditions you may still have trouble getting a response. In such a situation you will need to take all reasonable steps to get into contact with the person drawn.
For a national promotion the general requirement is that you wait for three months prior to conducting an unclaimed prize draw. This gives the first person drawn a good opportunity to get into contact with you.