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 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:
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.
In Australia, competitions are split into 2 categories:
Generally, competitions of skill do not require permits in Australia. Whether a competition of chance requires a permit will depend on factors, such as:
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:
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.
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.
Posted on: 20 December 2017