Tag Archives: Do you need competition permits

Do I need a competition permit?

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.

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Do you need competition permits?

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.

Common examples

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.

Skill and chance based competitions

By Connor James

The differences

A competition that is based on skill does not involve an element of chance in determining the winners. A competition based on skill does not require competition permits.

In any skill based competition judges should be qualified. An example of a skill based competition is one which asks a question for entrants to answer in 25 words or less. A competition that asks entrants to complete the wo_d is not a skill based competition as more than one person will get the correct answer. You can run a skill based competition where winners are determined on the number of votes i.e. in a search for Australia’s next top househusband. If you do run a vote based competition you would need to have a mechanism to determine the winner if two or more people get the same number of votes- i.e. the Promoter will determine the winner based on some element of the entry if there is a tie.

Chance based competitions are usually more difficult to set up but do attract more entries (as they are easier to enter). Competitions where winners are determined instantly, such as with a scratchie game card, or draw are chance based competitions. Chance based competitions require competition permits.

The essentials

There are many requirements to consider when establishing a competition. If you are drafting your own terms and conditions, be careful to fully set out how and when people can enter, what the prizes are, their value, how the winners will be determined and how you will notify winners. It is important to be clear to avoid confusion and complaints. You then need to ensure that everything you do is consistent with your terms and conditions i.e. your advertising material and the way you accept entries.

You should be careful to consider how many times you want people to enter your competition. If you only want entrants to enter once, be sure to set this out in your terms and conditions. If you fail to limit the number of entries you may end up with some people entering hundreds or thousands of times. This could, or could not, be what you want. You should consider noting that use of ‘scripting software to enter is prohibited’ and, if your competition is online, use CAPTCHA. 

One of your main responsibilities is to be fair and abide by your terms and conditions. If you are going to be running a number of competitions over time, you should consider implementing policies and procedures to ensure that your company complies with the applicable regulations.

Chance based competition requirements

For national competitions, where the winners are determined by an element of chance, there are a number of essential requirements. These include, but are not limited to:

  1. You need terms and conditions clearly setting out how and when people enter, the prizes including their value, the number of winners, and how you will notify the winners;
  2. Trade promotion permits ( competition permits ) will be required from NSW and ACT (unless an exception applies) if your prize total is $5k or less;
  3. Trade promotion permits will be required from NSW, ACT (unless an exception applies), SA and VIC if your prize total is over $5k.
  4. You cannot begin advertising your competition unless you have received all of the relevant permits;
  5. You will need to display minimum (condensed) terms along with permit numbers in all advertising of your competition; and
  6. You must collect entries, draw the winners and award the prizes you say you will in your terms and advertising. Records, including entries and winners, must be kept.

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Conclusion

When conducted properly, competitions can be an exciting and cost effective way of increasing sales and further promoting your company’s goods and services. Permitz Group can help set up your competition and apply for competition permits on your behalf. We work with both skill and chance based competitions.