Trade promotion lotteries frequently asked questions (FAQs)

A trade promotion lottery is a lottery designed to promote a trade or business. This includes any scheme that gives away prizes by any means, which include an element of chance at any stage of the scheme. Even if a part of the scheme is skills-based, the scheme will still have to be conducted in accordance with the regulations if any part of the scheme process includes an element of chance.

Trade promotion lotteries are free lotteries that may require a person to purchase a product or undertake certain actions to be eligible to participate. An entry fee must not be charged, and any ancillary cost (that is, cost of telephone call, SMS or postage) must not exceed $1 (including GST).

A business that produces or sells a product or service other than a lottery may conduct a trade promotion lottery to promote their products or services.

Community and charitable organisations can conduct trade promotion lotteries to promote the purpose of their organisation. To be able to carry out this activity the organisation must be declared by the Victorian Gambling and Casino Control Commission  (VGCCC). All requirements for a trade promotion lottery also apply to community or charitable organisations running this type of lottery.

For more information about how to become a declared organisation, please go to Community and charitable gaming.

Please note: All other requirements for a trade promotion lottery also apply to community or charitable organisations running this type of lottery.

A members’ draw is considered a trade promotion lottery, and is usually conducted by clubs. It involves the drawing of a member’s number from a pool of numbers.

Terms and conditions should be available at the place of entry and to all members. The conditions of entry only require the member to be present at the draw if the entry and draw are to occur on the same day. If a member enters the draw through buying goods or services throughout the week, then the member does not need to be present at the time of the members’ draw.

A ‘game of skill’ is when there is no element of chance at any point in the competition. If the game contains a random selection of entrants at any point in the activity, then it is considered a lottery and will need to satisfy the requirements under the Gambling Regulation Act 2003 and related regulations.

A 1900 number or SMS can be used in a trade promotion lottery, but the telephone call or SMS cannot cost more than $1 per entry (including GST). This restriction must be considered for any trade promotion lottery that might require a participant to call more than once.

An entry fee cannot be charged for a trade promotion lottery. This does not prevent a person from being required to purchase a genuine product or service to be eligible to enter.

In addition, any ancillary costs (for example, telephone call, SMS or postage) must not exceed $1. This restriction must be considered for any trade promotion lottery that might require a participant to call more than once.

As of 20 June 2015, you no longer are required to submit an application for a permit to conduct a trade promotion lottery in Victoria. If your trade promotion lottery will be conducted in other jurisdictions, it is best to check directly with the relevant regulatory authorities to ensure you continue to meet their conditions.

Even though the requirement to obtain a permit to conduct a trade promotion lottery was abolished on 20 June 2015, there are transitional arrangements in the Gambling Regulation Act 2003 that apply to persons who held a permit immediately before that date.

If you held a permit to conduct a trade promotion lottery immediately prior to 20 June 2015, and the trade promotion lottery will run on or after that date, the conduct of the trade promotion lottery must continue to comply with the conditions that were in force immediately before 20 June 2015.

The conditions of a trade promotion lottery are set out in the Gambling Regulation Act 2003 and Gambling Regulations 2015.

As at 20 June 2015, the conditions for the conduct of trade promotion lotteries are as follows:

• The expense per entry must not exceed the gazetted amount (currently $1)
• It must not be a precondition for entry that an entrant has played a gaming machine, or participated in a loyalty scheme that requires an entrant to play a gaming machine
• Written consent must be obtained from the person whose trade or business is to be promoted by the lottery
• The lottery must be conducted so as to benefit primarily the trade or business being promoted
• Information used to promote the lottery and any scratch and win cards must include:
  1. the closing date of the lottery
  2. if applicable, where and when the lottery will be drawn
  3. the name and date of the publication in which winners’ names will be published
  4. the entry requirements, if any.

• The names of winners of all prizes over $1000 must be published by one of the following methods:
  1. in a newspaper circulating generally in Victoria
  2. on the internet, for a minimum period of 28 days
  3. if the lottery was advertised solely through a trade journal, promotional magazine or similar publication, in that publication.

• Certain records must be kept for a period of three years after finalisation of the lottery that provide:
  1. an accurate financial accounting of the lottery
  2. an accurate accounting for all entries 
  3. an accurate report of the distribution of prizes. 
      
• The winners of prizes must be advised in writing of the prize
• If the trade promotion lottery is to be drawn, the method of the draw must allow each ticket in the draw a random and equal chance of being drawn
• The winner of a prize must not incur a cost to accept a prize (other than a trivial cost)
• If information about entrants is to be used for a purpose other than the conduct of the lottery, this must be stated in the conditions of entry
• A person who conducts a trade promotion must not use entrants' information except in accordance with the purposes stated in the condition of entry
• A person who conducts a trade promotion lottery must obtain written agreement from the business, that the business will not use the entrants' information except in accordance with the purposes stated in the conditions of entry
• An entrant is not required to be present at the drawing of the lottery in order to be eligible to win a prize (unless the entry and draw are to occur on the same day and in the same place)
• The prize must be paid or transferred to the winner within 28 days after the draw
• The winner of a prize may only be substituted via a second draw, and only if the conditions of entry allow it and if reasonable efforts were made to identify the winner that were unsuccessful
• If a trade promotion lottery is conducted with scratch and win cards, the conditions of entry must disclose the maximum number of scratch and win cards to be distributed and the total number and individual value of the prizes. There must also be a condition that printing errors and other quality control matters are not to be used as a reason for refusing payment of prizes
• A trade promotion lottery must be conducted in a manner that is not offensive and that is not contrary to the public interest
• A prize may only be substituted if the substituted prize is of the same or greater value than the original prize and the winner either agrees in writing, or the original prize is unavailable due to circumstances beyond the control of the person conducting the trade promotion lottery and reasonable attempts are made to reach agreement with the winner that are unsuccessful.