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.