Game Of Skill Competitions: Creating Terms And Conditions Legally

Running a competition is a great way to build buzz, grow your audience and reward your community. If you’re planning a game of skill - think “best recipe”, “25 words or less”, design challenges or merit‑based photo contests - you’re already making a smart move from a compliance point of view.

However, even skill‑based promotions have legal guardrails in Australia. The fine print matters: how you describe your contest, how you judge entries, and the way you handle personal information all need to be thought through carefully.

In this guide, we’ll unpack what counts as a game of skill, when permits may apply, what to include in your terms and conditions, and which Australian laws you need to consider. Our goal is to help you launch a fun, fair and compliant competition, without second‑guessing the legal bits.

What Is A Game Of Skill (And How Is It Different To A Game Of Chance)?

Australian promotion rules distinguish between a “game of skill” and a “game of chance”. That distinction affects permits, processes and how your terms should be drafted.

Game Of Skill

In a game of skill, winners are chosen based on merit - for example, originality, creativity, insight, effort or demonstrated knowledge. Typical formats include:

• Creative question answers (e.g. “Tell us in 25 words or less why you love…”)
• Photo, video or design submissions judged against stated criteria
• Recipe, logo or slogan competitions assessed by a panel
• Trivia where the fastest correct answer wins on skill, not by draw

The key is that judgment - not randomness - determines the outcome. Your judging criteria should be clear and applied consistently.

Game Of Chance

In a game of chance, winners are selected randomly (lucky draws, raffles, “spin to win”, instant wins, etc.). Even if you require an action (like a purchase or form fill), if the final selection is random, it’s chance‑based.

Why this matters: games of chance often need permits in certain Australian jurisdictions. Pure games of skill generally don’t - provided there’s no random element creeping in at any stage.

Do I Need A Permit For A Game Of Skill In Australia?

For most genuine games of skill, permits are not required in Australia. That said, it’s important to sanity‑check your format and where your entrants live.

Skill Promotions: The Usual Position

Typically, if your contest is entirely merit‑based, a trade promotion lottery permit isn’t needed in any state or territory. To stay on the right side of that line:

• Use transparent, pre‑defined judging criteria, and keep records of how decisions were made.
• Ensure the final selection is based on skill only (not a lucky dip or tiebreaker by chance).
• Brief judges on the criteria and manage conflicts of interest.

Be careful with “hybrid” formats. If you introduce a random draw at any stage - for example, to pick finalists or break a tie - your promotion can become chance‑based. That can trigger permit obligations in some jurisdictions.

Games Of Chance: Where Permits Commonly Apply

Random draws and other chance‑based trade promotions commonly require permits or notifications in certain states and territories (rules differ, and thresholds can change over time). In New South Wales, administration of trade promotions sits with Liquor & Gaming NSW; the Australian Capital Territory and South Australia also have relatively prescriptive regimes for chance‑based promotions.

If your campaign runs nationwide, map out where your entrants are located and check each state or territory’s current settings for chance‑based promotions. When in doubt, get advice before launch - it’s much easier to adjust structure up front than to unwind a live campaign.

What Should Go In Game Of Skill Terms And Conditions?

Terms and conditions are the rulebook for your competition. While there isn’t a single federal law that forces every business to publish T&Cs, having clear, accessible rules is best practice and often required by platforms, sponsors and (for chance promotions) permit conditions. They also form a binding contract between you and entrants and reduce the risk of disputes.

For a game of skill, make sure your terms cover at least the following:

• Eligibility: Who can enter? Specify age, residency, excluded groups (e.g. employees), and any other criteria that matter for your campaign.
• How To Enter: Describe the entry steps, format (e.g. 25 words, photo specs), limits on entries, and any conditions (for example, the entry must be original work).
• Competition Period: State the opening and closing times (with time zone), plus any milestones (shortlisting, judging dates, announcement).
• Judging Criteria: Set out the criteria you’ll apply (for example, originality, creativity and relevance to the theme), how judging will occur, and how many winners will be selected. If you use a panel, describe who they are (e.g. internal panel, independent judge) at a high level.
• Prizes: Describe the prize(s), approximate value, number of prizes, and any conditions (e.g. expiry dates, travel dates, transferability, tax implications). Be precise and avoid overstating value.
• Winner Notification: Explain how winners will be contacted (email, DM, phone) and when, how long they have to respond, and what happens if a winner can’t be reached.
• Publication: Say whether you’ll publish winners’ names or entries and where (website, social, in‑store). Some brands publish first name and suburb only for privacy.
• Use Of Entries (IP): If submissions may be reposted or used in marketing, include an appropriate licence from entrants and state any moral rights consents. For image‑based promotions, consider how this interacts with photography consent laws.
• Content Rules: Reserve the right to moderate or disqualify entries that are unlawful, infringe third‑party rights, or breach your guidelines or platform terms.
• Privacy: Explain what personal information you’ll collect and why, and link to your Privacy Policy. If you collect data at the point of entry, also include a short privacy collection notice.
• Liability & Variations: Include limits on liability to the extent permitted by law, and state your ability to amend, suspend or cancel the promotion if necessary (for example, technical issues or public health restrictions). Note that these clauses operate subject to the Australian Consumer Law.
• Governing Law: Nominate the Australian state or territory whose laws govern the terms and any disputes.

Avoid vague or subjective wording that can’t be defended later. Clear criteria and practical processes make it easier to choose winners fairly and respond to questions from entrants or regulators.

Which Laws Apply To Game Of Skill Competitions In Australia?

Even when no permit is needed, you still need to comply with general laws that apply to promotions and content you publish. Key areas include:

Australian Consumer Law (ACL)

Your promotional claims, T&Cs and prize descriptions must be accurate and not misleading or deceptive. This flows from Section 18 of the Australian Consumer Law. If you say the prize is worth $2,000, you should be able to substantiate that valuation. If you promise judging on “creativity and originality”, make sure that’s how you actually choose the winner.

State And Territory Trade Promotion Rules

For games of skill, you generally don’t need a permit, but you still need to ensure the activity is genuinely merit‑based. In NSW, Liquor & Gaming NSW administers trade promotions; the ACT and SA have their own frameworks for chance‑based promotions. If you ever plan to introduce a random element, check current rules before launch.

Privacy And Data Handling

Most promotions collect personal information (names, emails, social handles, images). The Privacy Act 1988 (Cth) applies to Australian Privacy Principles (APP) entities. Small businesses under $3 million annual turnover may be exempt unless a specific exception applies (for example, trading in personal information or providing health services). Regardless of size, it’s good practice to be transparent, collect only what you need, and link to your Privacy Policy and a concise privacy collection notice in the T&Cs and entry form.

Intellectual Property And Content Rights

Entrants should confirm their submission is original and doesn’t infringe third‑party rights. If you plan to reuse submissions (for example, reposting a winning photo), include a licence that lets you use, reproduce and adapt the content for promotional purposes. If the competition helps launch or promote your brand, you may also want to register your trade mark to protect your name and logo.

Platform And Advertising Rules

If you run the promotion on a platform (Instagram, Facebook, TikTok), comply with that platform’s promotion policies. Also ensure your advertising and email capture comply with local advertising standards and email marketing laws.

Using Photos, Minors And Sensitive Content

If entrants submit images or videos containing identifiable people (especially children), consider consent and publication issues early. Your terms and entry form should address who can be featured, whether parental consent is required, and how you’ll use the content - aligning with photography consent laws.

Step‑By‑Step: Setting Up A Compliant Game Of Skill

Here’s a practical roadmap you can follow from concept to launch.

1) Confirm It’s Truly Skill‑Based

Pressure‑test your format to ensure judging - not chance - decides the outcome. Remove any random elements (no draws, lotteries or chance tiebreakers). Decide the judging criteria and how you’ll document the decision.

2) Map Entrant Locations And Rules

If your competition is open to entrants across Australia, confirm it remains skill‑based under each state’s definitions. If you have any chance component, check local permit requirements before you go live (NSW, ACT and SA are often the first stops for chance‑based promotions).

3) Draft Clear Terms And Conditions

Write user‑friendly terms that match your actual process. Keep them accessible on your website or entry page and make sure any social posts refer to where entrants can find the full rules. If the promotion runs on your site, it’s also sensible to maintain up‑to‑date Website Terms and Conditions.

4) Sort Out Privacy And Data

Collect only what you need, safeguard it, and state how you’ll use it. Link to your Privacy Policy and display a short privacy collection notice at the point of entry. If you plan to add entrants to a marketing list, obtain express consent and make it easy to opt out.

5) Prepare Your Content Permissions

Include an IP licence in your terms if you’ll repost or repurpose entries. Clarify that entrants must own or control the rights in their submission and that they grant you the permissions you need for your campaign. If photography or filming is involved, align your approach with relevant consent principles and be mindful of minors.

6) Set Up Judging Logistics

Choose your judges and brief them on the criteria. Decide how scores or decisions will be recorded, and how you’ll handle questions or complaints. If you’re shortlisting entries, do so consistently using the stated criteria.

7) Announce Winners And Deliver Prizes

Notify winners within the timeframe in your terms, and allow a reasonable period to claim. Have a plan for unclaimed prizes that aligns with your T&Cs. When publishing winners, stick to what you’ve said you’ll disclose.

8) Keep A Paper Trail

Retain copies of the final T&Cs, key dates, judging notes and winner notifications. Good records help if any questions arise later.

What Legal Documents Do You Need?

The documents you’ll need depend on your setup, but most game of skill promotions benefit from the following:

• Competition Terms And Conditions: The rules of entry, judging method, prize details, disqualification grounds and other conditions. Clear terms reduce confusion and help you manage risk.
• Privacy Policy: Explains how you collect, use and store personal information. Even if you’re a small business, publishing a transparent Privacy Policy is widely expected by customers and platforms.
• Privacy Collection Notice: A short notice at the point of collection that tells entrants why you’re collecting data and how it will be used - for example on your entry form or landing page. You can use a tailored privacy collection notice to keep this simple.
• Content Licence/Consent Wording: If you’ll use, repost or adapt entries, include a licence to do so in your T&Cs. Consider additional consent wording if entries depict people, locations or brands.
• Website Terms And Conditions: If your competition runs on your website, your general Website Terms and Conditions should be up to date and consistent with the promotion terms.
• Brand Protection: If the promotion is part of a brand launch or campaign, it’s a good time to assess trade marks and consider whether to register your trade mark for your name and logo.
• Liability And Risk Language: Include appropriate limitations of liability (as permitted by law) and practical risk management terms. If you use participant acknowledgements, ensure they’re sensible and note that waivers have limits under Australian law.

Not every promotion needs every document, but most will need competition terms, privacy wording and content permissions at a minimum. If you’re unsure, getting a short legal review before going live is an easy way to avoid headaches.

Key Takeaways

• Games of skill choose winners on merit, not randomness. Keep judging criteria clear and remove any chance elements to avoid triggering permit regimes.
• Permits generally aren’t needed for genuine skill‑based promotions. If your contest adds a random draw at any point, check local rules - especially in NSW (administered by Liquor & Gaming NSW), the ACT and SA.
• Publish clear, practical terms and conditions. Cover eligibility, how to enter, judging criteria, prize details, winner contact, content permissions and privacy.
• Comply with the Australian Consumer Law by keeping claims accurate and your processes consistent with what you’ve promised.
• Handle personal information responsibly with a visible Privacy Policy and a concise privacy collection notice at the point of entry.
• If you’ll reuse entries, secure an IP licence and be mindful of image consent, minors and platform rules. For broader compliance context, review the general giveaway laws in Australia.

If you’d like a consultation on drafting game of skill terms and conditions and setting up a compliant competition in Australia, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.