How to Run a Competition or Trade Promotion in Australia

Last updated: 17 October 2024

How to Run a Competition or Trade Promotion in Australia – Competitions (also known as trade promotions, lotteries, sweepstakes or giveaways) can be a great way to promote your business. A well-designed competition can create a buzz around your business, increasing brand awareness through social media, word of mouth and, in some cases, even mainstream media attention.

However, competitions and trade promotions are regulated in Australia and the laws vary between different competition types, prizes and dollar values as well as between the States and Territories. This competition guide explains these regulations and your legal requirements – but we always recommend you check the current requirements in your State or Territory before you launch your competition. Links to the relevant authorities are provided at the end of this article.

Click on any of the questions below to jump to that section of this competition guide.

If after reading this guide you still have a question, get in touch as we’d love to keep adding your questions to this comprehensive legal guide.

Competition and Trade Promotion Basics

Why run a competition or trade promotion?

Competitions are a great way to boost exposure for your business, advertise and gain interest in your products and services. People love to win things and it can also be a great way to have something done for your business. Think of it: you may need a logo for your coaching business, so you run a competition and in return, offer your coaching services as a prize.

Some of the common benefits that businesses experience through running a competition include:

• Increasing brand awareness
• Attracting new visitors to your website or social media page
• Building a mailing list or social media following
• Obtaining user-generated content (e.g. logo or tagline ideas)
• Engaging and building connections with customers
• Rewarding customers and inspiring more customer loyalty
• Generating free or low-cost publicity in the form of word of mouth, social media or even mainstream media attention, etc.

Game of Chance vs Game of Skill

As far as Australian law is concerned, there are two main competition types:

• Game of Chance – where everyone has the same chance of winning (e.g. a trade promotion lottery or drawing a name from a hat)
• Game of Skill – where the winner is chosen against set criteria (e.g. a contest to create the best logo with judges choosing the winner)

There are certain laws that apply to all competitions. But there are also additional laws that apply to Games of Chance specifically.

Keep in mind though, a competition that is presented as a Game of Skill may still have elements of chance in it, and if so, will need to comply with the laws relevant to Games of Chance. For example, you run a competition in which entrants need to answer a question, with all correct answers going into a draw for the prize. This would be a Game of Chance (even though there is skill involved) because the final winner is chosen by chance.

Competition Permits and Trade Promotion Permits

Do I need a permit to run a competition or contest?

If your competition is a Game of Skill, you most likely will NOT require a permit or licence. However, if your competition is a Game of Chance, you may need a permit and it depends on the total prize value offered, the type of prize offered and the States and Territories you’re running the competition in.

In both cases, you will need to ensure the competition is run professionally, entrants are judged fairly and there is transparency in the process and the criteria applied. These factors are discussed later in this article.

Summary of Competition Permit Requirements by Australian State:

Australian State or Territory	Game of Skill Permit Required?	Game of Chance Permit Required?	Regulator
NSW	No	Yes, if total prize value > $10,000	NSW Fair Trading
VIC	No	No	VGCCC
QLD	No	No	Business Queensland
SA	No	Yes, if total prize value > $5,000	Consumer & Business Services SA
WA	No	No	DLGSC
TAS	No	No	Treasury & Finance TAS
ACT	No	Yes, if total prize value > $3,000	ACT Gambling & Racing Commission
NT	No	Yes, if total prize value > $5,000 (and without permit from another State)	Licensing NT

Do I need a permit to run an online competition or contest?

The need for a permit does not depend on whether the competition is held online or not. The same rules apply to online competitions as well as traditional (i.e. non-online) competitions. See the section above to check if you need a permit or not.

How much do competition permits cost?

The cost of permits varies depending on the total size of the prize money, the State or Territory where the competition is taking place and even whether you apply online or not. Permit costs can range from free to several thousands of dollars. Permit fees are frequently updated, so check with your relevant State or Territory authority for up-to-date information (see the last section of this article).

How do I apply for a trade promotion permit?

You will need to apply to the relevant authority in your State or Territory. Applications are either online or in PDF forms that need to be sent or emailed to the relevant department. Links to the relevant authorities are provided at the end of this article.

How long does it take to get a permit and how long do they last?

From the time that you submit your application, allow up to 28 days to receive your permit. Permits usually last for 12 months – but this can also vary between States and Territories, so check with your relevant authority.

Where do I need to display my permit number?

You must display the permit number in any printed material which is used for promoting or advertising the competition. In addition, you should display the permit number in the competition terms and conditions.

Do I need a permit for every competition I run?

No. As discussed above, you may require a permit for a Game of Chance, but not for a Game of Skill (and depending on the value of the prize and the State or Territory where the competition is taking place).

In most States and Territories, you will also need a new permit for each competition.

Competition Regulations

Are the laws for running a competition different in each Australian State?

Yes. Each State and Territory of Australia has different rules regarding running competitions and the types of permits that are required. These rules also change from time to time, so please check the website of the relevant State or Territory authority for up-to-date information (see the last section of this article).

What are the rules for running a national competition?

If you are running a nationwide competition, then you will need to comply with the relevant laws in each State and Territory of Australia in which your competition runs.

Can I make people pay or buy a product or service to participate?

Generally, you can require people to buy a product (at a normal retail price) in order to enter the competition. However, you will not be able to make people pay to participate in the competition itself. This requirement is similar from one State or Territory to the next but there are small differences, for example, restrictions on telephone costs that participants may incur in order to participate.

Make sure you check to ensure you comply with the laws of each State and Territory in which you are offering your competition.

Do I need an ABN to run a competition or contest?

Generally, yes, you will need an ABN to run a competition. Again, this can vary between States and Territories, so check with your relevant authority.

Are there any prizes that are not allowed?

In general, the following types of prizes are prohibited or discouraged:

• Firearms (including imitation) and ammunition
• Tobacco and vaping products
• Cosmetic surgery, and
• Large amounts of alcohol (more than 20 litres with an alcohol content less than 20% by volume or more than 5 litres with an alcohol content greater than 20% by volume)

These rules vary from one State or Territory to the next and are subject to change, so check the rules with the relevant authority in your State or Territory.

What are the Facebook competition rules?

If you run a competition on a social media platform such as Facebook or Instagram, then you will be subject to the relevant platform’s terms and conditions. You will still be subject to the laws of the relevant State or Territory, but the social media platform’s terms and conditions will apply in addition to those laws.

At the time of writing, promotions on Facebook and Instagram must include the following:

• A complete release of Facebook/Instagram by each competition participant, and
• An acknowledgement that the promotion is in no way sponsored, endorsed, administered by or associated with Facebook/Instagram

In addition, Facebook and Instagram prohibit you from requiring participants to use their personal friend connections and/or timelines to promote the competition. For example, “Like and Share on your Timeline to enter”, “Share on your friend’s Timeline to get additional entries” or “Tag your friends in this post to enter” are not permitted. However, requirements such as “Like our page to enter”, “Comment on our post to enter” or “Message our business page to enter” are permitted.

My Responsibilities

What else do I need to comply with when running a competition?

All competitions (whether Games of Chance or Games of Skill) must comply with Australia’s various consumer protection and privacy laws. Businesses must run competitions ethically and in a manner that is fair to consumers, or they will face stiff fines. Some of the requirements include:

• The competition must be free to enter (or participants may be required to purchase a good/service in order to enter)
• You must state clearly both the start date and end date for the competition
• You must explain how and when you will announce and notify the winner of the competition
• Any promotional activity must not be misleading or deceptive
• You must not make misrepresentations in relation to the competition. For example, you should not suggest that participants have a greater chance of winning than they actually do
• You must actually give away the advertised prizes and you cannot substitute prizes
• The prize for winning the competition must not simply be the chance to enter another competition.

Do I need to post my Competition Terms and Conditions?

It is important that the rules of your competition are clearly set out for your participants. Your terms of entry must comply with Australian consumer protection laws and should include information about:

• Duration of the competition, closing time and dates when prizes will be drawn
• The prize itself
• Who is eligible to participate and how participants may enter
• How winners will be chosen
• How winners can claim the prize, and
• What happens if a winner does not claim their prize within a certain period of time.

Do I need to post a Privacy Policy?

If you are collecting and using personal information from participants (such as emails, phone numbers, names, dates of birth, addresses or other personal information) they should be given a copy of your Privacy Policy. The Policy should provide details about what information is collected and how it is used and shared.

What are my responsibilities for advising winning competition entrants?

There are legal requirements for advising your winning entrants. In particular, you need to:

• Notify winners in writing
• Post the winner on your site and anywhere you advertised your competition (e.g. social media)
• Leave the winner notification up on your website and social media for 30 days

How do I contact the relevant authority in my State or Territory?

Use the links below to contact the regulator dealing with contests and competitions in your State or Territory:

• NSW: NSW Fair Trading
• VIC: VGCCC
• QLD: Business Queensland
• SA: Consumer & Business Services SA
• WA: DLGSC
• TAS: Treasury & Finance TAS
• ACT: ACT Gambling & Racing Commission
• NT: Licensing NT

Search your State or Territory website for “trade promotion” to find out more details and the current regulations.

We hope you found this legal guide to Running a Competition or Trade Promotion in Australia helpful.

About the Author: Vanessa Emilio

Vanessa Emilio (BA Hons, LLB, ACIS, AGIA) is the Founder and CEO of Legal123.com.au and Practice Director of Legal123 Pty Ltd. Vanessa is a qualified Australian lawyer with 20+ years experience in corporate, banking and trust law. Click for full bio of Vanessa Emilio or follow on LinkedIn.

Disclaimer: We hope you found this article helpful, but please be aware that any information, comments or recommendations are general in nature, do not constitute legal advice and may not be suitable for your specific circumstances. Whilst we try our best to ensure that the information is accurate, sometimes there may be errors or new information that has yet to be included. Any decisions you take based on information on this website are made at your own risk and we cannot be held liable for any losses you suffer. Contact us directly before relying on any of this information.