By Phillip Leaman

13 April 2014

Your marketing department has come up with a great marketing idea. Lets run a competition. But what about the legal stuff?

Depending on the nature and size of the competition will depend on whether or not you need a permit. Each state in Australia has different rules and permit requirements. Competitions which runs across Australia is likely to require permits in each state.

Competitions relying solely on skill (with no element of chance) are unlikely to require a permit.

In Victoria, a trade promotion lottery is a lottery which promotes a business by giving away prizes where there is an element of chance. Trade promotion lotteries require a permit if the retail price of the prize pool is greater than $5,000. If your prize pool is less than $5,000 and it is a trade promotion lottery, you still must abide by the obligations set out by the Victorian Commission for Gambling and Liquor Regulation.

So what’s involved with getting a permit in Victoria?

  • You need to prepare suitable competition terms which deal with, amongst other items, how the competition is run, who can enter, how the draw takes place and what happens if the prize is not collected;
  • Make an application to the Victorian Commission for Gambling and Liquor Regulation for a permit; and
  • Comply with the Gambling regulation Act 2003.

There are additional requirements for certain prizes such as cars, travel and accommodation, jewellery, house and land, motor vehicles, machinery and electrical appliances.

Irrespective of whether a permit is required, you must also be careful that any advertising of the competition is not contrary to the Competition and Consumer Act 2010 (formerly the Trade Practices Act) (for example, you cannot engage in misleading or deceptive conduct).

If you plan on using a 1900 number or SMS the telephone call or SMS cannot cost more than 70 cents per entry (including GST).

Entry fees cannot be charged for trade promotion lotteries but you can make purchasing a product or service as a condition of entry.

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