If you are considering running a chance-based competition there are a number of regulatory requirements that you need to be aware of. In this set of articles we provide a summary of some of the general requirements, assuming you are conducting a national chance-based competition.
The first question to consider is whether competition permits are required to conduct a competition. If your proposed competition involves an element of chance when determining winners you then you will need competition permits. Competition permits are required from New South Wales and the ACT for any competition where winners are determined by an element of chance.
Competition permits are also required from Victoria and South Australia for chance-based competitions with a prize pool of over $5000. If you are conducting an instant win promotion you will need a competition permit from South Australia, no matter how much you are giving away.
In Western Australia a trade promotion lottery is a lottery conducted to promote the sale of goods or the use of services for which a cost (i.e. entry fee) cannot be charged to enter, other than the cost of the purchase of goods or services, at their retail- ordinary value. So long as you meet the prescribed conditions associated with a trade promotion lottery then you are not required to apply for a permit to conduct a competition in Western Australia. The Gaming and Wagering commission authorises companies to conduct a trade promotion lottery so long as each of the conditions are met. In a practical sense, Promoters must ensure that a copy of the competition terms and conditions are emailed to the Gaming and Wagering Commission of Western Australia.
The other States and Territories each have their own set of requirements which must be met when conducting a competition but do not require you to obtain a competition permit.
The most common example of a chance-based competitions is one where winners are drawn randomly. Winners may be drawn manually, i.e. out of a barrel, or using an approved electronic system. 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.
The other most common example of a chance- based competition is an instant win or scratch game card promotion. Such competitions will always require a permit from South Australia, New South Wales and the ACT. It is a requirement from New South Wales that terms and conditions for an instant win promotion include a statement that all prizes from the advertise prize pool will be distributed and that all claims prizes will be met notwithstanding the advertised prize pool being exceeded.
In the next article we will review less common promotion types (i.e. First x to register, combined games of skill and chance, and fantasy sports promotions) and the requirements for permits in relation to these promotions.