Trade promotion lotteries are a game of chance or mixed chance and skill promotional activity, which businesses can use to promote their goods and services. An example would be a promotion where a person must purchase a product to go in the draw for the chance to win a prize. These are generally the only type of lottery that businesses can legally conduct in Australia. There are raffles and art unions, which charities and other not-for-profit organisations can only undertake, and State licensed lotteries (i.e., lotteries conducted by licensed businesses that can sell lotto tickets and scratch cards to the public). Still, trade promotion lotteries are the only type your regular everyday business can conduct.
Note that a promotion whereby the person must be one of the first to submit a claim can also be deemed a trade promotion lottery, such as purchasing a good and being one of the first 500 claimants to receive the gift. This is considered a trade promotion lottery in some States, as there is an element of chance as to whether, for example, you will be one of the first 500 to claim the gift. Whether it will require trade promotion lottery permits will hinge on how the offer is advertised, and the gift is redeemed. The rules around limited gift-with-purchase offers vary significantly between States.
Trade promotion lotteries are governed by laws in each State and Territory of Australia. Some jurisdictions, such as South Australia (SA), the A.C.T. (the ACT), the Northern Territory (NT) and New South Wales (NSW), require the trade promotion lottery to be authorised in certain instances. In SA, a trade promotion lottery permit is needed if it has any instant win component, regardless of the value of the prize pool, and otherwise, if the total national prize pool exceeds $5,000. In the ACT, a trade promotion lottery permit is required if the prize pool in the ACT exceeds $3,000. In NT, a trade promotion lottery permit is needed if you do not obtain a license in another jurisdiction and the NT prize pool exceeds $5,000. In NSW, they have an authorisation system, an authority is required if the total NSW prize pool exceeds $10,000 and the promoter does not already have a valid authority. An NSW trade promotion lottery authority can last 1,3, or 5 years, depending upon the initial application for the authority. Sometimes, you can slightly alter the promotion to reduce when permits are required or eliminate the need for a permit/authority.
Each State and Territory has unique trade promotion lottery laws regarding requirements around the notification and publication of winners, draw and unclaimed prize draw requirements, prize restrictions and advertising requirements which can vary from State to State. These requirements can often be very complex and require specialist advice to ensure you comply with the laws in each jurisdiction.
On top of the trade promotion lottery laws, trade promotion lotteries inevitably involve various other laws, including laws relating to trade practices, contracts, intellectual property, passing off, negligence, privacy, spam, and other specific laws pertaining to various industries. Some people have the misguided notion that you can insert some dates and details into a set of terms and conditions, and the promotion will be legally acceptable, which is often far from the case.
James Barker, the Principal, has over 20 years of advising on trade promotion lotteries. Barker & Co can assist you with your legal requirements, including drafting the terms and conditions, reviewing the artwork (ensuring it contains the necessary disclosures), and obtaining the required lottery permits and authorities. Barker & Co can also assist with conducting the draws in most cases and provide scrutineer services when legally required.