Competitions are a great way for many businesses to promote the goods and services they provide.
They can also help to get traction and lead to growth for your business.
At first glance, it may seem simple to get one up and running.
However, there are strict rules and regulations in each of the States and Territories when it comes to trade promotions and competitions. As such, it’s important to seek legal advice on Operating A Competition.
For example, you may need a specific permit to legally operate a competition. If you’re unsure about whether you need a permit for the competition you want to run, don’t fret.
Here are the need-to-knows when it comes to running a competition in Australia
What Are The Types Of Competitions?
There are two types of competitions a business can run:
- A game of chance
- A game of skill
What’s the difference?
A game of skill tends to require more effort from the entrants.
Most of the time, people who enter games of skill need to create an original piece of work as their entry.
You don’t need to provide the reasons as to why the entrants did or didn’t win but it’s a good idea to keep a record of your judging process.
The winner of the competition is chosen for their skill.
An example of a game of skill is a competition which asks its entrants to answer a question in “25 words or less” or submit a unique piece of work like a photo or video.
On the other hand, the winner of a game of chance is based on pure luck.
Entrants don’t need to demonstrate any skill in a game of chance.
Examples include entering your email address or tagging a friend in a facebook post, in exchange for an entry.
I Am Running A Game Of Chance – Do I Need A Permit?
Depending on what State you’re based in, you might need to purchase a permit to run a game of chance, whether it be offline or online.
For games of skill, you generally don’t need a permit.
Depending on the State or Territory in which you wish to run the competition, you may need a permit.
|New South Wales
|Competitions with a prize pool of more than $40,000 require permits in NSW. You can get one from NSW Fair Trading and permits can last for 1, 3 or 5 years (pricing here).
|A permit is needed for all competitions if the price of the prize is more than $5000. Apply here.
|A permit is needed for competitions where the value of the prize is more than $5000. Apply here.
|Australian Capital Territory
|A permit is needed for games of chance where the value of the prize is more than $3000. Apply here.
|Victoria, Queensland, Western Australia, Tasmania
|No permit needed.
Do I Need Anything Else For A Competition?
Once you’ve got the relevant permit, you have to consider the legal docs you might need before opening your competition to the public.
These terms & conditions will outline the essential provisions that need to be made clear between you and the entrants.
These provisions include the eligibility criteria of the participants, competition duration, how the prize can be claimed and what happens if the winner is unable to claim their prize.
For a game of chance in New South Wales, Queensland and Victoria, there are a few extra things which you need to consider.
A game of chance requires that the draw must occur within 12 months of the permit being issued.
Once the winners are decided, they must be notified and published within 48 hours of the draw occurring.
Winners of a game of chance have to be provided with at least three months to collect their prize.
If the prize is worth more than $500 you must publish a public statement of the winners online or via print.
It’s important that your terms and conditions have the relevant information included in them as it promotes fairness and verifies the genuineness of the competition.
What To Take Away…
Running a trade promotion or competition is a great way to boost the visibility of your business.
A competition permit may be necessary to ensure that your competition is fair and reasonable, along with competition terms and conditions.
If you’re unsure about where to start when it comes to the legals of running a competition for your business, feel free to contact us on 1800 730 617 or send us an email at firstname.lastname@example.org – we are here to help!
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