Australian states vary in how they regulate competitions. The rules relating to permits depend on whether the competition is a game of chance or a game of skills.
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Game of Chance v Game of Skill
Game of Chance
A game of chance refers to a competition that does not involve skill. A winner is selected randomly. An example of a game of chance is a raffle competition with giveaways. A Facebook ‘Share to Win’ competition would also be a game of chance. Further information on games of chance can be found here.
Some states regulate a game of chance by requiring permits from the organiser. A national game of chance would have to comply with each state’s requirements. A requirement of a permit is dependent upon a variety of factors. This includes the prize value and the manner of the game of chance.
Game of Skill
In a game of skills, the basis of a competition is the individuals skills. A panel of judges applying a specific criteria chooses a winner. For example, competitions involving ‘25 words or less’ descriptions for entry into the competition are games of skill. Another example is a competitions requiring the submission of photos or written works.
An organiser of a game of skill does not need a permit in Australia. However, promoters of a game of skill still need adequate terms and conditions for the competition. A guide on formulating the terms and conditions for a competition can be found here.
Games of Chance – Competition Permits
States requiring no competition permits
There are some states in Australia that do not require a competition permit even for a game of chance. This includes Victoria, Queensland, Western Australia and Tasmania. But the competition must follow the prescribed conditions of the state. Trade promotion lotteries are subject to condition even though they require no competition permits in Victoria, Queensland, Western Australia and Tasmania.
A trade promotion lottery refers to raffles, competitions, or giveaway 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.
States requiring 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
Previously, NSW required a competition permit for any game of chance regardless of the prize value. Now, NSW Fair Trading only requires a permit if the prize value exceeds $10,000. An organiser must obtain a NSW Trade Promotion Lottery Permit where the prize value exceeds $10,000.
NSW is the only state that allows the permit to apply for more than one competition. The permit can apply for multiple competitions across a period of 1-5 years.
South Australia
South Australia does not require a permit for a prize valued under $5000. An organiser must obtain a Major Trades Promotion Licence for prizes valued above $5000.
However, an organiser must obtain an Instant Prize Trade Promotion Licence if the competition uses instant scratch or break open tickets. This refers to tickets where the number, letter or symbol is hidden. The 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
An organiser is not required to obtain a permit in the ACT where the prize is valued at under $3000. A prize over $3000 requires a Permit for Trade Promotion Lottery.
Northern Territory
Northern Territory requires a permit only if the prize exceeds $5000. For an intrastate competition, an organiser is not required to obtain a permit in Northern Territory if it has already been granted by another state.
Conclusion
A competition that is a game of skill does not require a permit in any state. Games of chance usually require a permit except in some states. Those states include Victoria, Queensland, Western Australia, and Tasmania. However, organisers must still comply with other conditions placed by the state. NSW, South Australia, ACT and Northern Territory require a permit for a game of chance. However, a prize valued below $3000 in ACT, $5000 in NT and SA, and $10,000 in NSW requires no permit. Organisers should check the state requirements for competition prizes and the process of running a competition prior to conducting a competition.
