'Winner, Winner, Chicken Dinner!' - the Law on incentive prize draws
Are you looking to entice more people to participate in your survey, research study, event or new initiative by offering them a chance to win a prize?
If the prize will be drawn randomly (rather than being awarded on skill or merit), this will constitute a lottery and will be subject to legal requirements.
“A lottery is any competition involving the award of a prize to be determined by a draw where:
- entry into the draw depends on the participant providing or doing something of value to the University; and
- the selection of the prizewinner involves some element of chance”
Do you need a licence for this?
In South Australia, any lottery is unlawful as a common nuisance unless it is exempted or licensed under the Lottery and Gaming Act.
The good news is that your incentive prize draw will be exempted as a minor trade promotion lottery if it meets the following criteria:
- the prize draw is offered for the purpose of promoting the University or University activities
- it is free to enter (or free if goods or services are purchased)
- prizes do not include prohibited goods or services (tobacco, weapons, cosmetic surgery)
- total retail value of the prizes is <$5000
However, if your lottery does not satisfy all the above criteria, you will likely require a licence.
Although a licence is not required for a minor trade promotion lottery, there are other regulatory requirements that must be met. These include:
- all advertisements must contain the University name and address; terms and conditions of entry; details about the prizes and prize draw;
- winners must be determined by random draw, and not using an electronic system
- a list of the drawn prizes and winners must be displayed in a prominent place (e.g. a University webpage or noticeboard)
- records of the lottery must be retained for 3 months following the prize draw
If you would like assistance with drafting the terms and conditions of entry, please contact the Legal and Risk Branch via email@example.com.