NSW Office of Liquor, Gaming and Racing
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NSW Office of Liquor, Gaming and Racing |
Click here for PDF version (113kb)
Trade promotion lotteries permit conditions
Trade promotion lottery application - PDF (106kb) || MS Word Interactive (803kb)
A trade promotion lottery is a free-entry lottery or game of chance conducted for promoting the sale of goods or services. It is sometimes called a sweepstake, competition, contest, or giveaway.
If the element of chance results in a prize being awarded, the requirements outlined in this guide must be met. Unless qualified or expert judges are used and the decision is judged against some set criteria, a competition cannot be construed as one based on skill.
No. Entry must be free. However, a trade promotion lottery in which entry is gained by the purchase of goods or services at their normal retail value (e.g. where proof of purchase is required) is allowed.
Yes.
1. Complete and lodge the Application for a Permit to Conduct a Trade Promotion Lottery form (PDF (106kb) || MS Word Interactive (803kb)), accompanied by the prescribed fee. Please mail to GPO Box 7060, Sydney 2001, or courier / hand deliver to Level 7, 323 Castlereagh Street, Haymarket.
To avoid processing problems, please do not send the application to our facsimile machine.
2. Go to the Office's web site at https://wwwdb.dgr.nsw.gov.au and complete the online application form.
Before lodging your first online application you will need to register as a client. Your client ID and password, which will allow you to login, will be emailed to you after you complete the online registration.
When you complete your application online you will be requested to provide your credit card details (only Visa, Mastercard and Bankcard are accepted) so that payment may be effected, and to allow the application to be entered on the Office's database for processing. Please follow the directions and ensure you attach any text or graphic files that relate to your application.
Applications must be lodged at least 14 days before the proposed commencement date of the lottery.
If the trade promotion lottery is also being conducted outside NSW, then you should contact the appropriate agency in those jurisdictions for information about their specific requirements. Contact points may be obtained by telephoning the Office or visiting our website.
The fee to be paid is assessed on the total retail value of the prizes that are to be awarded in New South Wales as set out in the following table.
| Total Retail Prize Value |
Fee
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| $0 - $10,001 |
$50
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| $10,001 to $50,000 |
$250
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| $50,001 to $100,000 |
$500
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| $100,001 to $200,000 |
$1,000
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| $200,000 - over |
$2,000
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The payment of the application fee has been determined by the Federal Treasurer under Division 81 of the A New Tax System (Goods and Services Tax) Act 1999 to be not subject to GST. A tax invoice will not be issued in respect of such fees.
It generally takes 5 days if all information is supplied.
Lotteries involving special processing requirements may require up to 14 days and include:
A permit is issued for a specific period not exceeding 12 months. If you want to extend the period, you must first apply in writing to the Office for approval. You must pay an additional fee.
You can obtain a permit authorising the conduct of all lotteries and games of chance during a specific period not exceeding 12 months subject to certain prize restrictions. Click here for more information.
Yes. You must formulate rules under which persons may participate in the proposed lottery. The rules must make provision for the following:
You must provide full particulars relating to the lottery, including its rules (terms and conditions of entry), any limitations, how the results will be decided and the method by which tickets or rights will be distributed. In addition, sample entry forms, coupons etc., and any advertising copy must be submitted.
Your application for a permit must be accompanied by a detailed description of the prizes. This should include the following:
You must tell the Office of any changes to the particulars on or accompanying the application, and those changes cannot take effect until written approval is obtained from the Office. This includes the rules of the lottery (e.g. rules as to the prizes and as to the closing date for entries).
An additional fee is payable if the period of the conduct of the lottery is to be altered, or may be payable if the prize value is increased.
When considering an application to amend the method of conducting the lottery the Office will consider whether the proposed changes disadvantage any persons who may have already entered the lottery.
Prizes may consist of anything except a prohibited prize. (For more information refer What types of prizes are prohibited?)
If you do not propose to offer cash instead of the prize, it is recommended that the conditions of entry should state "Not Redeemable for Cash".
If you do not propose to offer alternative or substitute prizes, or allow the prizewinner to transfer the prize to another person, it is recommended that the conditions of entry should state "Not Transferable".
Note: Where a money prize exceeds $1,000, the organiser must pay to the prizewinner the amount as exceeds $1,000 by means of a crossed cheque payable to the prizewinner, or if the prizewinner so requests, by means of electronic transfer of funds to an account nominated by the prizewinner.
The following are prohibited prizes:
A prize may consist of or include liquor within the meaning of the Liquor Act, 1982. However, the maximum quantity that may be offered as a prize or as part of all the prizes in a draw is 20 litres. Refer to Responsible service for more information. See also Trade promotion lotteries with liquor prizes.
No.
You must allow ample time for each phase of the trade promotion lottery including: the notification of its commencement; the issuing of the rules; the distribution of tickets or coupons; the collection of entries; the period between the end of the lottery, any judging (if necessary), the draw and the announcement of the results.
The trade promotion lottery cannot be terminated before the advertised closing date.
Prizewinners must receive their prizes within 6 weeks after the close of the lottery, unless otherwise stated in the rules of the lottery.
Trade promotion lotteries must be conducted fairly:
If you impose conditions (e.g. who may enter, when the prize must be taken, etc.) these conditions must not be altered during the lottery and they must be specified on all advertising material, entry forms, etc.
It is inappropriate that directors, management and employees and their immediate families, their retailers, suppliers, associated companies and agencies be eligible to participate in a trade promotion lottery, unless it is specifically conducted as an "in house" lottery, say among sales staff. Participation in trade promotion lotteries linked to the promotion of a registered club must be limited to members and their guests.
A child may participate in trade promotion lotteries. However, where appropriate, you should restrict entry by incorporating a condition into the rules of the lottery.
A child should not be eligible to participate in lotteries where the prizes may cause problems between a parent or guardian and the child unless the rules require a parent or guardian to give written permission for the child to participate. Prizes that are unsuitable for children should not be offered.
Tickets or rights for liquor prizes cannot be distributed by or to a person under 18. Also a person under 18 cannot give or collect a liquor prize.
The rules (terms and conditions of entry) must be clearly advertised and readily available to participants. Consumers must be fully and clearly informed of the rules so that they may make informed decisions about entering a trade promotion lottery, thus minimising the prospect of complaints about the integrity of the lottery and the promoter.
It should also avoid the risk of false or misleading advertising under the fair trading laws.
In some cases it may not be possible to publish the rules in an advertisement or on the wrapper of the product. In such cases, any advertisement, notice or information must state where the rules are to be found.
However, any unusual or onerous conditions must be clearly and prominently stated on the outside of the product, without the consumer having to purchase the product or service to discover those details.
An example of promotion that fails the test of adequate disclosure of the conditions of entry is where a simple sticker is placed on the wrapper of a product that advises consumers that they have a chance to win $100,000 by purchasing the product. Although the sticker may advise that the terms and conditions of entry are contained on the game card which is enclosed in the product, there is no information on the outside of the wrapper as to the closing date of the lottery (which may have already passed). Failure to provide this most basic information will breach the permit conditions and may breach the fair trading laws.
The public must be clearly informed of:
The rules (terms and conditions of entry) of the trade promotion lottery, any electronic and/or print media advertising material and any entry forms, coupons, wrappers, labels, tickets or other documents must make provision for disclosing the permit number in the format "NSW Permit No. TPL../.....".
It must not be stated or implied that the lottery is to be conducted for charity or a charitable purpose, or for a not-for-profit organisation, unless approved by the Office. Refer Involvement of charities and not-for-profit organisations for more information.
Yes. You must not publish, or cause to be published, any lottery advertising that:
In this context, publish includes disseminate in any way, whether by oral, visual, written or other means (for example, dissemination by means of cinema, video, radio, television or the Internet).
You must not state or imply in any information or publicity that the lottery is authorised or approved by the Government or by any government agency e.g. Lotto, Scratch lotteries, Keno, etc.
You should be aware that the Public Lotteries Act 1996 contains a number of offences including the unauthorised promotion or marketing of public lotteries (s.43B). Where a proposed trade promotion lottery uses a NSW Government licensed lottery or game of chance product in conjunction with its conduct, the application must be accompanied by a copy of the authorisation granted by the licensee (e.g. NSW Lotteries).
Each participant must have a fair and equal chance of winning.
If more than one prize is being offered, the major prize should be the first drawn and the other prizes should then be drawn in descending order of number and value. If you decide to conduct the draw in another manner, you should make clear in any advertising material the method that will be used to decide the winner.
The draw must take place in Australia.
If there is a chance of unclaimed prizes, especially with instant result games, there must be incorporated in the game structure a second chance draw or similar device to distribute those unclaimed prizes.
You cannot conduct a trade promotion lottery that requires participants to be present at the draw for entitlement to claim a prize (unless full particulars have been provided to and approved by the Office) or any other condition that places participants at a disadvantage.
The outcome of a lottery cannot be determined on the result of a live horse race, greyhound race, or trotting race, unless linked to race clubs. Refer to Winners decided on the outcome of a horse or greyhound race for more information.
In addition, the following devices and methods are not acceptable for deciding winners: roulette wheels, two-up, and other recognised gambling devices.
Results may not be decided by games of chance where those games may have some detrimental effect on the conduct of fundraising games of chance by charities. Those games include housie/bingo, hoi, lucky envelopes, chocolate wheels and similar games.
Prizewinners must receive their prizes within 6 weeks after the close of the lottery, unless clearly published in the terms and conditions of entry. All prizes must be distributed.
You should notify prizewinners within 2 days of the draw. If the prize value:
If, despite every reasonable effort, you cannot contact a prize winner, you must retain the prize for 3 months after the drawing.
However, if a prize is perishable (e.g. a meat tray), the prize may be sold or otherwise disposed of in a way that you consider will bring a reasonable price. The money realised (after deducting the reasonable costs of sale or disposal) must be held in trust by you or the organisation for the winner of the prize.
At the end of 3 months, if the prize remains unclaimed, you should send a letter to the Office setting out full details of the steps that you took to contact the winner and deliver the prize, and seeking permission for a redraw.
All entry forms and other records must be retained for not less than 3 months after the date on which the winners are decided, unless a prize remains unclaimed.
The permit will be granted in the name of the trade or business - the sole proprietor, the partners in the partnership or the body corporate. The sole proprietor, the partners in the partnership, or the directors of the body corporate will be severally liable for the proper conduct of the trade promotion lottery, as the holder of the permit.
Yes, by authorised staff or police.
Yes. There is a range of penalties for conducting a trade promotion lottery contrary to requirements, including:
A person or organisation can be authorised to conduct all lotteries and games of chance during a specific period not exceeding 12 months subject to certain prize restrictions.
This allows electronic and print media, and perhaps other types of trade and business organisations to conduct spontaneous or planned prize giveaways, contests, etc. that involve prizes such as CDs, theatre tickets, weekends for two at a hotel and meals at restaurants.
The restriction on the value of prizes depends on the application fee paid.
To ensure that the total value of prizes does not exceed $50,000 or $100,000, a record must be maintained detailing:
This record must be retained for 3 years.
Your application must be accompanied by an outline of the types of contests, promotions, prize giveaways, etc. that are planned or intended to be conducted under the authority of the permit.
There should also be a general description of the types of prizes to be awarded and their approximate value.
The application must also be accompanied by the standard processing fee for a prize pool that does not exceed $50,000 (i.e., $250) or for a prize pool that does not exceed $100,000 (i.e., $500).
The permit will be issued for a specific period not exceeding 12 months.
The offering of free gifts or prizes in connection with the supply of goods or services is prohibited by the NSW Fair Trading Act if you do not intend to supply those gifts or the prizes differ from those offered, for example:
The NSW Fair Trading Act also states:
"A person shall not, in trade or commerce, engage in conduct that is misleading or is likely to mislead or deceive."
For example, promotional material gives readers the expectation that they were guaranteed to be declared the winner of $20,000 cash by returning an entry form within a set time. However, respondents are advised that they are to be placed in a draw for the money or enticed to order from a mail order catalogue.
The NSW Fair Trading Act mirrors the provisions of the Commonwealth Trade Practices Act.
Lotteries with liquor as a prize are often undertaken to promote trade or business. A control placed on these types of promotions limits the amount of liquor to 20 litres (examples: two cartons of beer; or a case of wine). Minors are also prohibited from participating.
Liquor harm minimisation issues are considered in determining a permit application when liquor is a prize, particularly where the promotion may contravene the principles outlined in the Code of Practice for Responsible Liquor Promotions.
The Code is a harm minimisation condition of most liquor licences and certificates of registration. It distinguishes between acceptable and unacceptable promotions. When the principles of the Code are practised, the potential for intoxication, rapid consumption and other forms of liquor abuse in licensed venues are minimised. Promotions where prizewinners are compelled to consume liquor on the premises will receive special attention.
An unacceptable promotion would be where there is no limit placed on the amount of liquor that a prizewinner could receive at any one time. To comply with harm minimisation requirements, a liquor prize must be redeemable over a reasonable period of time. As a processing requirement we have set a limit of no more than four standard drinks per person per day.
Another potentially unacceptable promotion is conducted on the basis that any person purchasing a drink is eligible to Toss the Boss. A coin is tossed to determine whether the customer pays for the drink.
When considering this type of promotion it must be satisfied that the total amount of liquor to be awarded as prizes does not exceed 20 litres in a session of draws. Example, the total amount of liquor prizes awarded in a particular session of Toss the Boss (e.g. each Friday between 6.00 pm to 7.00 pm) cannot exceed 20 litres.
To ensure the amount of liquor awarded does not exceed 20 litres, bar staff must keep a running record of the amount of liquor awarded as prizes.
The following must be complied with in respect of a trade promotion lottery linked to a 190 premium service telephone facility or the Short Message Service (SMS)/ Multimedia Messaging Service (MMS):
Under section 45 of the Gaming Machines Act 2001, and section 76A of the Casino Control Act 1992, prizes paid as part of a player reward scheme or other gaming machine promotion must not:
Promotional prize means any prize or reward offered to patrons in connection with a player reward scheme or any other marketing or promotional activity that involves gaming machines. An authorising trade promotion lottery permit is required in most cases.
A player reward scheme means a system in which players of gaming machines accumulate bonus or reward points. An authorising trade promotion lottery permit is not required because there is no separate draw.
Cash includes cheques and electronic transfer of funds (EFT), gold bullion, or gold or silver coins.
Raffle or lottery tickets as prizes - an application must be accompanied by written advice which declares the number of entries anticipated in each prize draw.
Gift voucher prizes redeemable at the registered club or hotel - an application must be accompanied by written advice which states that it cannot be exchanged in whole or part for cash. This includes an amount of money that could be given as change (balance between the purchase price and the value of the voucher) to the voucher holder. Gift vouchers redeemable away from the venue (example, Westfield, Coles Myer, David Jones, etc.) do not have to meet this requirement.
Membership prize promotion - if membership relates in any way to the marketing of gaming machines these prize restrictions apply.
Smart card prize promotion - gaming machine win or bonus points cannot be credited to smart card.
The rules must include a reference to these prize restrictions.
Where persons obtain the right to enter a draw for a prize based on the play of a gaming machine, you must apply for a permit to conduct a trade promotion lottery. In such cases, the machine does not determine the winner or the prize, it simply determines that the person playing the machine has the right to receive an entry into the draw.
You do not have to apply for a permit to conduct a promotion where persons obtain a bonus prize based on the play of a gaming machine or where players accumulate bonus or reward points. Such promotions do not involve a draw to determine the prizewinner. These promotions may involve the awarding of vouchers, stamps, tokens, points, or play money. Further information about the conduct of promotions without a draw may be obtained by telephoning the Office on (02) 9995 0333.
If a trade promotion lottery is based on the Olympics or an Olympic theme, you must obtain from the Australian Olympic Committee (AOC) a letter / evidence that the proposed trade competition is acceptable to that body. This must be lodged with your application.
In any draw where the total value of the prizes is over $10,000, the draw and the announcement of the prize winner(s) must be scrutinised by an independent person unless the Office has otherwise granted approval.
This requirement does not apply where the winners are solely decided through a predetermined, instant win, scratch, break-open or bingo-style lottery or game of chance.
The scrutiniser observes the draw process and decides to the best of that person's knowledge and belief whether all entries to the lottery have been treated equally, and that no person has received an unfair advantage or unfair gain. The scrutiniser should take nothing for granted and should look directly at all relevant activities when a draw is undertaken.
If you are of the opinion that the nature of the draw system or process to be used in conjunction with the proposed trade promotion lottery makes this scrutiny requirement unduly onerous, you should attach to your application a request for exemption from the need to comply with this requirement. Your application will be assessed on its merits. However, it should be noted that approval will only be granted in exceptional cases.
An independent person is a person who, except for his or her involvement with the scrutiny of the draw:
In addition, an independent person is a person who does not have any interest or relationship, personal or commercial, with the benefiting business or trade, or any person employed by the benefiting business or trade which might be, or appear to be, incompatible with that person's independence.
The requirement for an independent person to scrutinise the draw is a standard condition, unless the benefiting business has received approval in writing from the Office to say that it does not apply.
Apply to the Office in writing providing full particulars about the draw process including safeguards and controls designed to overcome any person manipulating the draw.
The Office will assess each application on its merits. Approval will be in writing and will remain current until revoked or the particulars upon which it was granted are modified without prior approval.
In any draw where the total value of the prizes is over $10,000, the person who scrutinises the draw must complete and lodge a return form within 21 days. The necessary form is issued with the permit.
The return must include a declaration that he or she is independent (unless otherwise approved), that he or she scrutinised the draw, and that the details of the winners of prizes have been verified.
Where a computerised system is used to decide the winners of prizes (including a device used in connection with a 190-telephone service, a Short Message Service (SMS) telephone facility, a Multmedia Messaging Service (MMS) telephone facility or the Internet) the application must be accompanied by two reports--an Appraisal Report and a Draw Procedure Report.
The Appraisal Report must detail whether the computerised system is random in its selection of winners and has appropriate safeguards and controls in place (e.g. passwords, two or more persons acting independently) to overcome the possibility of any person manipulating the system.
The Draw Procedure Report must detail of the safeguards and controls in place to overcome any possibility of any person manipulating any stage of the draw or announcement of the prize winner processes.
Any costs in producing these reports are to be borne by the applicant / benefiting business or its agent. Each report should include the particulars mentioned below. The Office will assess each application on its merits.
Any decision to grant of approval to the computerised draw process will be in writing and it will state that it would remain current until revoked or the particulars upon which it was granted are modified without prior approval or the particulars upon which we have granted it are not being complied with by the benefiting business or its agent.
This requirement contemplates a once only report - it does not require a new report for each draw using the same system. Once a device or system is approved for use by the benefiting business, it is only necessary to include a photocopy of the Office's approval letter with your application.
However, you must seek reassessment and approval if there are any changes to the system.
If the device or system (in particular a random number generator) has been approved for use by another business, it is only necessary to give the name, model and manufacturer of the device. However, you must still furnish a draw procedure report (refer below).
The appraisal report must be sourced from an independent person with knowledge of computerised devices and programs. That person must satisfy the same criteria expected of a person who scrutinises the draw. For further information refer to Who is an independent person?.
The Appraisal Report must include:
Refer to Part 7.13 of the Check List to the Application for a Permit to Conduct a Trade Promotion Lottery for assistance.
The following requirements apply to trade promotion lotteries involving:
A provision is to be included in the published rules of the lottery that any unclaimed prizes from the advertised prize pool will be distributed. Details must be provided as to how the unclaimed prizes are to be distributed.
Due to the possibility of printing errors, structural faults or similar factors, a situation may arise where claims for prizes are received in excess of those prizes specified in the advertised prize structure.
Accordingly, a provision is to be included in the published rules that at the end of the lottery all existing claims for prizes and entitlements to claims will be met notwithstanding the advertised prize pool has been exceeded.
In addition, a condition is to be included in the published rules of the lottery that printing errors or other quality control matters outside the control of the individual player shall not be used as the sole basis for refusing to award a prize.
In respect of random games (games where the number of possible winners is not known beforehand, being the result of chance or lot)
In respect of controlled games (games where the number of possible winners is known beforehand, based on the number of winning game material printed) the sharing of prizes is not permitted.
In addition to the above requirements, where the value of prizes is high the game material and other advertising must include the words total prize pool in a prominent manner against the prize pool value.
Where possible, the game material comprising tickets or cards must provide:
Where this is impossible, this information must be otherwise given to players.
The following information must be lodged with the application:
In addition to the standard permit conditions the following conditions apply:
Note: No game material is to be marketed or promoted in a manner which may mislead the public into thinking that the game material is a NSW Government licensed lottery or game of chance.
Permits will be issued in the following circumstances
The offer of perishable items such as green groceries, meat, fish as prizes is regulated under the Food Act 1989.
Such prizes must comply with the same requirements that apply to food sold through normal retail outlets. These include:
Contact the local area health service for more information.
The offer of fish prizes must also comply with the Fisheries Management Act 1994 and the Fisheries Act 1935. A special permit is required.
Contact the local fisheries officer or NSW Fisheries for more information.
It is a standard condition on the grant of an authorising permit that no representation can be made that a trade promotion lottery is conducted for, or in conjunction with, an appeal for funds for a not-for-profit organisation. This standard condition may be removed based on the merits of a particular application.
If there is a link to a fundraising appeal for a not-for-profit organisation (including a charity) in connection with an application for a permit to conduct a trade promotion lottery, the following additional information must be provided:
The Office will consider each application on its merits, and may need to seek additional information.
Because charities and other not-for-profit organisations are not in business or trade an application for a permit to conduct a trade promotion lottery from such a body cannot be approved. However, gratuitous (free) lotteries may be conducted without the need for an authorising permit. The total value of prizes is capped at $5,000 and money is not permitted. Refer to the Gratuitous Lotteries fact sheet for more information.
The card jackpot game normally involves a pack of 52 playing cards plus a joker laying face-down on a board. Qualifying participants are provided the opportunity to turn over one of the cards for the chance to win the prize. If the joker card is not drawn, the prize jackpots and the draw is repeated on another occasion.
The two main card jackpot games are called "Jokers Wild" and "Wild Card".
A card jackpot game will only be granted an authorising permit if standard terms and conditions of entry are agreed to by the applicant / promoter / benefiting organisation.
The standard terms and conditions requires the applicant for a permit to conduct a trade promotion lottery to answer specific questions concerning the manner in which the proposed card jackpot game will be conducted.
Free-entry card jackpot games may be linked to participants having to purchase a ticket in a fundraising raffle for a not-for-profit organisation. It should be noted that no part of the proceeds from the sale of tickets in the raffle may be used or applied to the provision of prizes or otherwise in the card jackpot game.
Further information about these types of trade promotion lotteries may be obtained from the Card Jackpot Games fact sheet, which also contains the standard terms and conditions which must be completed and lodged with the accompanying declaration form (if necessary) and the application form.
The following list identifies the most common problem areas:
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NSW Office of Liquor, Gaming and Racing ABN 52 273 723 634 Office of Charities Level 7, 323 Castlereagh Street, Haymarket GPO Box 7060 Sydney 2001 Phone:(02) 9995 0666 Facsimile:(02) 9995 0611 Email lottery.inquiries@olgr.nsw.gov.au Website www.olgr.nsw.gov.au |
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This guide is designed to provide accurate and authoritative information in regard to the subject matter covered, and with the understanding that the NSW Office of Liquor, Gaming and Racing is not passing legal opinion or other professional advice. If you require a more detailed understanding of the legislation, it is recommended that you contact your legal advisor. The law governing the conduct of this lottery or game of chance is the Lotteries and Art Unions Act, 1901 and the Lotteries and Art Unions Regulation, 2002. The Act and Regulation can also be accessed at www.legislation.nsw.gov.au |