Are you a business owner looking to run a competition? Before you do, it’s important to be aware of the different legislation that applies to your state or territory. This is because a failure to comply with the relevant legislation and regulations can result in hefty fines or you facing legal action.
Australian states and territories vary in how they regulate competitions. Understanding the regulations surrounding competition permits can be a daunting task. To make things easier for you, we’ll provide a detailed breakdown of the competition permit requirements in each state and territory, what the main factor is when determining whether a competition permit is required, and we’ll answer other frequently asked questions.
Read along!
What is the main factor that determines whether a competition permit is required in Australia?
The primary factor that determines whether a competition permit is legally required is whether the competition is a game of chance or whether it’s a game of skill.
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What is a Game of chance?
A game of chance refers to a competition that does not involve skill. Therefore, the outcome of the game is primarily determined by chance than the use of a strategy or a skill. Examples of games of chance include the following:
- A raffle competition with giveaways
- Facebook ‘Share to Win’ competition
- Slot machines
- Lottery games
- Scratch cards
- Bingo
Some states regulate a game of chance by requiring permits from the organiser. Each state and territory regulate games of chance separately. Therefore, you should be aware that a national game of chance would have to comply with each state’s legal requirements and regulations.
A requirement for a permit is dependent upon a variety of factors. Factors that determine whether a game of chance would need a permit include the following:
- The prize value. This is because if the value of the prizes exceeds a certain threshold, a permit may be required depending on the state or territory
- The type of game, this is because some states and territories have specific rules about which types of games require a permit, such as lotteries, raffles, and bingo
- The purpose of the game
- The location of the game
- The frequency of the game
We also have an article about laws around free product giveaways competitions if you need further information.
What is a Game of skill?
A game of skill is a type of game where the outcome is primarily determined by the player’s skill, knowledge, and strategy rather than by chance or luck. Therefore, the competition is based on an individual’s skills. Generally, in a game of skill, there will be a panel of judges applying specific criteria to determine a winner.
Examples of games of skills include the following:
- Boxing
- Golf
- Basketball
- Chess
- Pool
- Darts
Another popular example of a game of skill are competitions that involve ‘25 words or less’ descriptions for entry into the competition are games of skill. For example, there may be a competition where the participants have to describe why they should win concert tickets. In this instance, the panel of judges would choose a winner based on who has submitted the most convincing or creative answer.
In the example above, there is subjectivity involved in choosing the winner of the game, unlike games of chance, where the winner is chosen by chance or randomly. Furthermore, another example of a game of chance of skill could be competitions requiring the submission of photos or written works. In this instance, the panel of judges would also choose the winner based on their skills.
You should be aware that an organiser of a game of skill does not need a competition permit in Australia. However, promoters of a game of skills still need to create adequate terms and conditions for the competition. Furthermore, the rules of the game of skill need to be outlined properly and the criteria that will be used to select a winner of the game.
We also have an article on how to run a promotional competition and include terms and conditions you can use to promote your business.
When are competition permits required for games of chance in Australia?
Which states don’t require competition permits?
There are some states in Australia that don’t require a competition permit, even for a game of chance. These states include the following:
- Victoria
- Queensland
- Western Australia
- Tasmania
However, the competition must follow the prescribed conditions of the state. For example, trade promotion lotteries are subject to conditions even though they require no competition permits in Victoria, Queensland, Western Australia and Tasmania.
A trade promotion lottery refers to raffles, competitions, or giveaways organised by a business to promote their business or trade. In Western Australia, a trade promotion lottery must be free to enter, and the prize must not be a surgical or medical procedure. Similarly, in Queensland, a trade promotion lottery must be free to enter, and there are limitations on what the prize can be.
In Victoria, the price to enter must not be more than $1. In Tasmania, trade promotions involving a purchase of a good for entry into the competition must not charge the price at a greater value than the market price.
Who regulates competitions in Australian states where competition permits are not required?
The regulators in each state where competition permits are not required are as follows:
- In Victoria, competitions are regulated by the Victorian Gambling and Casino Control Commission
- In Queensland, competitions are regulated by Queensland’s Government Business Queensland
- In Western Australia, competitions are regulated by the Department of Local Government, Sport and Cultural Industries
- In Tasmania, competitions are regulated by the Tasmanian Government’s Department of Treasury and Finance
Which states require competition permits?
Depending on the prize amount, New South Wales, South Australia, Australian Capital Territory and Northern Territory require a competition permit for a game of chance. It can take 14 days to 28 days for a permit, depending on the state. Notably, all states place some restrictions on the prize in a game of chance.
For example, firearms, tobacco products, and cosmetic or medical procedures are generally prohibited.
New South Wales
In the past, NSW required a competition permit for any game of chance regardless of the prize value. Now, the NSW Government’s Fair Trading only requires a permit if the prize value exceeds $10,000. The permit is called a trade promotion gaming authority.
Other eligibility criteria that have to be met for a trade promotion gaming authority include the following:
- It must be free to enter the competition
- The competition has to be a game of chance rather than skill
- The competition must genuinely promote the goods or services of your business
- The competition has to take place on the nominated date
South Australia
In South Australia, competitions are regulated by the South Australian Government Consumer and Business Services. In South Australia, for trade promotions used by businesses, the South Australian Government website states that businesses that use trade promotions must select the winner through a draw or by chance. It’s also important to note that trade promotion is still valid if there is only a minor game of skill in South Australia, for example, if a simple question must be answered to enter the competition.
Other requirements for a trade promotion in South Australia include the following:
- It must be free to enter the trade promotion. However, there can be instances where those wishing to enter the competition are required to purchase a service or good to enter as a condition of the competition. Similarly, if there is a phone cost to enter the competition, it can’t be more than 50 cents (plus GST and any mobile charges)
- Trade promotions must conclude within 12 months of the start date from when entries were accepted
You do not need a license or permit if your promotion has a total prize amount under $5,000 and you aren’t using instant scratch or break-open tickets. This is because you are running a minor trade promotion.
You need to apply for a major trade promotions license if your promotion has a total prize of over $5000. The application process will take 14 days to be assessed from when it’s received by
South Australia’s Consumer and Business Services. However, if you pay the premium fee for your application, you can receive your licence within five days of when the CBS receives your application.
If your promotion is using break-open or instant scratch tickets with hidden numbers, letters, or symbols, you must apply for an instant prize trade promotion license as your promotion will be an instant prize trade promotion. This requirement applies regardless of the value of the prize.
So, even where the prize is valued at less than $5000, an organiser must obtain a permit for a competition using instant scratch tickets.
ACT
In the Australian Captial Territory (ACT), competitions are regulated by the ACT Government’s Gambling & Racing Commission. In ACT, an organiser of a trade promotion lottery isn’t required to obtain a permit in which the prize is valued at under $3000. However, there are still conditions that have to be met even when there is no permit required that are outlined in the gambling & racing commission’s website trade promotion lottery information and conditions.
If the prize is over $3000, you will be required to obtain a Permit for Trade Promotion Lottery. It’s also important to note that generally before a lottery can be advertised or conducted in ACT, it must be approved by the Commission.
Northern Territory
In the Northern Territory, the Northern Territory Government regulates competitions. In the Northern Territory, permits are only required for a competition where the prize requires a permit only if the prize exceeds $5000. For a minor lottery, where the prize is between $5,001 and $20,000, you need a permit, and the lottery must also be run by an approved association.
The same rules that apply to a minor lottery also apply to a major lottery where the prize is over $20,000.
Frequently Asked Questions (FAQs)
What are the benefits of running a competition for your business?
Running a competition will benefit your business in the following ways:
- Increased brand awareness and publicity
- You can use it to advertise your business
- It can help people become interested in your business services and products
- A competition can help your business attract new customers
- It can help you connect with customers and engage them
- It can help you increase customer loyalty and reward customers
What happens if my competition is a combination of a game of chance and a game of skill?
If the competition you have created for your business is a combination of a game of chance and a game of skill, you may need to follow the laws applicable to games of chance.
Conclusion
Ultimately, it is essential for business owners to familiarise themselves with the relevant legislation and regulations when planning to run a competition in Australia. This is because different states and territories have varying regulations that businesses must follow to avoid hefty fines or legal action. The primary factor that determines whether a competition permit is legally required is whether the competition is a game of chance or skill.
It is important to note that even if a permit is not required, businesses still need to create adequate terms and conditions for their competitions. If you’re still feeling unsure about whether you need a permit for your competition or you need legal advice to ensure your competition complies with relevant laws and regulations, you should hire a lawyer.
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