20 Feb The Rules for Running Online Competitions
Running online competitions? Make sure you have the right permits in place and follow the gaming regulations for your state.
We all know that running online competitions (for example on Facebook or drawing a winner from a prize draw) can be a great way to promote your business. But did you know that there are regulations around running online competitions and there are offences under Australian Consumer Law if you don’t follow them?
First check with the gaming regulations for your state
Competitions are called ‘Trade Promotions’ in the legal world. Regulations for Trade Promotions vary from state to state in Australia so it’s important to check with the relevant gaming body that regulates competitions, or us, before publishing your Trade Promotion or online competitions…
Games of skill vs game of chance
Australia wide, gaming regulators distinguish between:
- Game of skill – where an element of skill is required to win eg ‘tell us in 25 words or less’ or ‘post a photograph’; and
- Games of chance – like a lottery where someone wins purely by chance.
Permits are usually required for games of chance.
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The general rule for online competitions is that games of skill do not require a permit, irrespective of the jurisdiction within which the competition is run. You need to make sure you comply with various items to make sure that it is truly a game of skill though.
What are your obligations?
Special terms and conditions of the award or prize ALWAYS need to be disclosed.
You MUST NOT disguise the cost of a free gift or prize by including it in the selling price of the advertised goods.
You MUST supply prizes the same as those offered in the Trade Promotion.
We recommend that you seek legal advice and get clear, tailored terms and conditions that comply with Australian Consumer Laws for online competitions and Trade Promotions.
(c) Progressive Legal Pty Ltd – All legal rights reserved (2019)
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Ian Aldridge is the Founder and Principal Lawyer Director at Progressive Legal. He has over 15 years experience in advising businesses in Australia and the UK. After practising in commercial litigation for 12 years in major Australian and International Law Firms, he decided to set up a NewLaw law firm in Australia and assist growing Australian businesses. Since then, he has advised over 2,500 small businesses over the past 6 years alone in relation to Intellectual Property Law, Commercial, Dispute Resolution, Workplace and Privacy Law. He has strived to build a law firm that takes a different approach to providing legal services. A truly client-focused law firm, Ian has built Progressive Legal that strives to deliver on predictable costs, excellent communication and care for his clients. As a legal pioneer, Ian has truly changed the way legal services are being provided in Australia, by building Legal Shield™, a legal subscription to obtain tailored legal documents and advice in a front-loaded retainer package, a world-first. He has a double degree in Law (Hons) and Economics (with a marketing major). He was admitted to the Supreme Court of NSW in 2005.
