Winners are grinners.

20 December 2017 | Reading time: 2 minutes

Competitions, lotteries, sweepstakes and other trade promotions are winners for generating hype and promoting an organisation’s brand. Who doesn’t love ‘free stuff’? However, organisations must always ensure they comply with the Australian Consumer Law (ACL) and applicable state or territory lottery laws when running competitions.

*The fine print – T’s & C’s.

The terms and conditions of a competition must comply with certain rules set out in the applicable state or territory lottery laws. Further, an organisation may be required to obtain a permit before conducting a competition.

Although each state and territory have different lottery laws, the following rules are common to all:

  • Conditions of entry – who can enter the competition? (eg Australian residents? age requirements?);
  • Entry dates – opening and closing dates for entry into the competition;
  • Winner announcements – when winners will be announced;
  • Promoter details – legal entity name, address and contact details;
  • Prize information – details of prizes (including conditions if any, relating to receiving, accepting or using the prizes);
  • Notification of winners – how prize winners will be notified and how winners can claim their prize (certain states / territories have specific notification requirements); and
  • Privacy – collection, storage, disclosure and use of personal information in compliance with the Privacy Act 1988 (Cth).

Organisations are also required to comply with the ACL when promoting competitions. For example, an organisation must not promote a competition which contains terms and conditions which are, or may be, misleading or deceptive.

In addition, lottery laws impose strict record-keeping obligations on the promoter of a competition.

Chance or skill?

In Australia, competitions are split into 2 categories:

  • competitions of ‘chance’ (eg the winner is determined by random selection); and
  • competitions of ‘skill’ (eg winning entry is determined based on the most skilful or creative response to the competition question).

Generally, competitions of skill do not require permits in Australia. Whether a competition of chance requires a permit will depend on factors, such as:

  • the state or territory in which the competition is running; and
  • the total prize pool value.

Keep it clean.

Lottery laws prohibit, or restrict the award of, certain types of prizes (eg tobacco products, firearms or ammunition, weapons, cosmetic surgery and alcohol).

In addition, lotteries laws prohibit advertising that:

  • encourages a breach of the law;
  • depicts children participating in a competition activity;
  • suggests that entering or participating in a competition will improve a person’s financial prospects; and
  • is offensive or against public interest.

Failing to comply with lottery laws, including failing to obtain a permit if required, may attract fines of varying amounts in each state and territory.

The fun stops here.

It won’t be all fun and games if your organisation falls foul of the law. Contact a trade promotions lawyer at Bespoke to review your competition terms to avoid losing more than just the competition.