Trade promotion lotteries (Vic)

Legal information for Victorian community organisations

This fact sheet covers:

► overview of the lottery laws in Victoria

► games of chance vs games of skill

► what is a trade promotion lottery? ► declaration as a community or charitable organisation to conduct trade promotion lotteries

► online games of chance

► national games of chance, and

► trade promotion lotteries checklist

This fact sheet summarises some of the legal issues to be aware of when conducting 'trade promotion lotteries' in Victoria.

This fact sheet doesn’t cover in detail other community gaming activities such as bingo, keno and raffles. For information on these types of community gaming, see our fact sheets on raffles or the Victorian Commission for Gambling and Liquor Regulation.

In this fact sheet, further detail of any Victorian Government requirements referred to can be found on the Victorian Commission for Gambling and Liquor Regulation’s website. If your organisation wants to conduct a lottery or game of chance in another state or territory, you must comply with the laws of that jurisdiction. This information is intended as a guide only and is not legal advice. If your organisation has a legal problem, you should talk to a lawyer before making a decision about what to do. Overview of the lottery laws in Victoria The Gambling Regulation Act 2003 (Vic) and the Gambling Regulations 2015 (Vic) govern the running of community gaming. The laws are overseen by the Victorian Commission for Gambling and Liquor Regulation (VCGLR).

These laws govern the conduct of: • trade promotion lotteries • keno • public lotteries • raffles • bingo

© 2021 Justice Connect. This information was last updated in April 2021 and is not legal advice; full disclaimer and copyright notice at www.nfplaw.org.au/disclaimer. Trade promotion lotteries (Vic) | 2021 2

The table below provides a brief description of the different games governed by these laws:

Public lottery The VCGLR regulates public lotteries operated by Tattersall's Sweeps. These public lotteries include Tattslotto, Oz Lotto, Powerball, Super 66, Monday and Wednesday Lotto and Instant Scratch-Its.

Bingo Bingo involves players marking off numbers on pre-printed cards as numbers are drawn randomly by a caller. The player who marks of all their numbers first and calls out ‘bingo’ is the winner.

Keno Keno is a rapid-draw game whereby sets of numbers are drawn through a random number generator from a pool of numbers. These drawn numbers are then posted electronically in venues.

Raffles A raffle is a lottery where entrants purchase tickets for the chance to win prizes. They can be only conducted to raise funds for ‘declared’ organisations.

Related Not-for-profit Law resources This fact sheet covers trade promotion lotteries only. Please refer to our fundraising and raffles and minor gaming webpages for further information relating to those activities and requirements in Victoria.

Games of chance vs games of skill If a game contains a random selection of entrants at any point in the activity, it’s considered to have an element of chance and is considered a 'lottery'.

A 'game of skill' is one in which there is no element of chance at any point in the game or competition.

As a general guide, 'games of skill' are competitions or processes that determine a winner by requiring a participant to submit something or answer a question in order to win or be selected for a prize. The winner is usually selected by a judge or panel of judges. These are not considered to be trade lottery promotions.

Example An example of a ‘game of skill’ is an essay writing competition such as 'In 100 words or less, tell us why you consider...'. Other examples of ‘games of skill’ are trivia nights and skills-based competitions, such as art or talent competitions.

While an organisation doesn’t need to obtain a permit to conduct a promotion that is a 'game of skill', the organisation still needs to take care that all entries are judged individually on their merit and the winner is selected based on merit. Trade promotion lotteries (Vic) | 2021 3

Caution Care should be taken to ensure that the 'game' or test of 'skill' for the promotion is one that is a true test of skill so that participants can’t potentially enter the same answer. For example – a question that participants could give the same answer to is a factual question such as ‘Who is the prime minister of Australia?’ If any prize is given after a draw from the participants who had provided the correct answer to the factual question, that would be a game of chance and therefore subject to the laws applying to games of chance

Each Australian state and territory has its own rules relating to trade promotion lotteries and other gambling activities and there are differences across jurisdictions. If you plan to conduct trade promotion lotteries where entrants can enter from different states or territories (for example, an online trade promotion lottery), you will need to comply with the relevant laws for each state and territory. What is a trade promotion lottery?

What is a trade promotion lottery? A trade promotion lottery occurs when an organisation, whether it’s a business, community or charitable organisation, promotes its products or services or purpose by offering prizes to winners selected by an element of chance (like a random draw).

A trade promotion lottery is a lottery run by a business, community or charitable organisation where they:

• offer prizes to promote their product, services or community or charitable purpose, and • include an element of chance at any stage Prior written consent must be obtained from the person whose trade or business is to be promoted by the lottery. The information that is used to promote the trade promotion lottery must include:

• the closing date • where and when the lottery will be drawn, if applicable • the name and date of the publication in which winners' names will be published, and • the entry requirements, if any

Examples of trade promotion lotteries include: • drawing a winner from a barrel or 'instant win' competitions • spinning wheels • purchase-to-enter competitions • 'scratch and win' cards • prize pool sweepstakes • 1900 telephone calls, and • footy tipping competitions

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Note – record keeping requirement You must keep records for three years after the lottery is finalised. The records must provide an accurate: • financial accounting of the lottery • accounting for all entries, and • reporting of the distribution of the prizes

Tip If you are running a trade promotion lottery in Victoria, to help you work out what legal obligations you need to meet: • read this fact sheet, and • complete the checklist at the end of it

Can our organisation sell a product or require purchase to enter? There must not be an entry fee charged to the public to participate. However, this doesn’t prevent a person from being required to purchase a product or service to be eligible to enter a trade promotion lottery. In Victoria, ancillary costs to enter or participate in a trade promotion lottery (for example, by telephone call, SMS or postage), must not exceed $1 per entry. What about members’ draws? Members' draws are considered to be trade promotion lotteries in Victoria.

Members' draws are usually conducted by community organisations and clubs and involve the drawing of a member’s number from a pool of numbers. An organisation or club conducting a members’ draw will need to comply with the terms and conditions for conducting a trade promotions lottery, which should be available at the place of entry and to all members.

The conditions of entry can only require the member to be present at the draw if:

• entry to the lottery is only available in the premises in which the draw is to take place, and • the entry and draw are to occur on the same day If members enter by buying goods or services throughout the week, it can’t be a requirement for the member to be present at the time of the members’ draw. Do I need a permit to conduct a trade promotion lottery? Businesses, charities and community organisations do not need to apply to the VCGLR for a permit to conduct a trade promotion lottery.

However, community and charitable organisations can only conduct trade promotion lotteries to promote the purpose of their organisation where the organisation has been ‘declared’ by the VCGLR (see details below). All general requirements for a trade promotion lottery also apply to community or charitable organisations running this type of promotion. Trade promotion lotteries (Vic) | 2021 5

Tip All trade promotions lotteries must be conducted in accordance with the 'terms and conditions'. These must, at least, contain:

• the closing date of the lottery • if applicable, details of where and when the lottery will be drawn • the name and date of the publication in which the names of the winners will be published, and • the requirements (if any) that must be met to be eligible to enter the lottery See section 59 of the Gambling Regulations 2015 (Vic) for the full list of terms and conditions.

Declaration as a community or charitable organisation to conduct trade promotion lotteries Community and charitable organisations may conduct trade promotion lotteries to promote the purpose of their organisation – but to do so – the organisation must be 'declared' by the VCGLR to be a community or charitable organisation.

Note This fact sheet only covers trade promotions lotteries. Once your organisation has been declared, you may require additional permits if you intend to conduct certain ‘minor gaming’ activities. For more information see our webpage on raffles and minor gaming.

What kinds of organisations can be declared? To be eligible as a 'declared' community or charitable organisation, an organisation must be:

• conducted in good faith • established as a not for profit organisation, and • be a community or charitable organisation, a sporting or recreational club, or an organisation conducting the activity for the purposes of a political party An organisation may be declared as a 'community or charitable organisation' if it is conducted for any philanthropic or benevolent purpose, including the promotion of art, culture, science, religion, education or charity.

Types of organisations that may be declared as a 'sporting or recreational club or organisation' include Apex, Lions, Rotary or other types of special interest social or recreational clubs (for example, vintage car clubs).

The application for declaration can take up to 28 days to process. Once the organisation has been declared a community or charitable organisation by VCGLR, the declaration will last for 10 years from the date of approval (unless earlier revoked by VCGLR or renounced by the organisation). How do I become a declared organisation? To become declared or renew an existing declaration, complete the declaration as a community or charitable organisation online application form. Trade promotion lotteries (Vic) | 2021 6

Details of the information that must accompany your application are located in the category section of the application form. Each category of organisation has different information that it must submit.

If you are a recognised service club or association (for example, Apex, Kiwanis, Lions, Rotary or Zonta club), your application for declaration must include a letter of request from the President (or equivalent) on club letterhead. If you are not a recognised service club or association, your application will need to be accompanied by the documents listed below.

Organisations having a philanthropic or benevolent purpose falling outside of the designated categories on the application form, (that is, the drop-down classification ‘all other organisations having a philanthropic or benevolent purpose’) must provide supporting documentation that includes:

• a copy of the organisation’s constitution, memorandum and articles of association, or rules under which the organisation operates. These must demonstrate that the organisation is not run for profit and prohibits distribution of profits (and assets and property on winding up) to members • a copy of the purposes or objects of the organisation (for example, the relief of poverty, advancement of education, advancement of religion or other purposes beneficial to the community) • a list of members for the past two years • copies of statements of income and expenditure, balance sheets for the past two years • copies of the minutes of meetings from the past two Annual General Meetings • copy of the Certificate of Incorporation (if applicable), and • evidence of endorsement by the Australian Tax Office as an income exempt charity, an income tax exempt fund or a deductible gift recipient (if applicable) Online games of chance If you plan to conduct a trade promotion lottery or other game of chance online using social media (such as Facebook, Twitter, YouTube), you must comply with the social media website’s promotions guidelines in addition to the relevant state and territory authority requirements (see below).

You will need to carefully check the social media website’s promotions guidelines as they may contain specific requirements on:

• how you can conduct your trade promotion lottery • how your trade promotion lottery is associated with the social media organisation, or • disclosing certain information to, or obtaining information from, entrants

Note Websites such as social media platforms sometimes have their own guidelines for trade promotions and other games of chance. Remember to consider them before conducting a game of chance using their site. For more information go to our webpage on social media.

Facebook has guidelines that must be followed if conducting a trade promotion lottery or other game of chance using its website.

When using Facebook as a promotional tool, you must:

• ensure your trade promotion lottery is lawful • include an acknowledgement that the promotion is not sponsored, endorsed or administered by, or associated with, Facebook • include a release of liability for Facebook for each entrant or participant, and • let entrants or participants know that they are disclosing information to you and not to Facebook Trade promotion lotteries (Vic) | 2021 7

The Facebook promotions guidelines also prohibit certain activities in conducting your promotion. You must not:

• make entry or registration to the promotion conditional on taking any action other than liking a Page, checking in to a Place, or connecting to the app (for example, you can’t require a person to post a photo on the Page wall) • use Facebook’s features or functionality as a registration or entry mechanism. For example, the act of liking a Page or checking in to a Place can’t automatically register or enter a promotion participant, or • use Facebook’s trade marks, trade names, copyrights or other intellectual property in connection with the promotion Unless you follow Facebook’s guidelines, you run the risk of Facebook removing your advertisement, disabling your account, or both. For a full list see Facebook’s Pages, Groups and Events Policies. Nationwide games of chance This fact sheet focuses on the laws in Victoria, but it’s important to remember that each state and territory has different laws and different bodies that control trade promotion lotteries.

If you plan to conduct a trade promotion lottery or other game of chance where entrants can enter from different states or territories (for example, an online trade promotion lottery), you will need to conduct that trade promotion lottery in accordance with the relevant laws for each state and territory. Trade promotion lottery checklist The following list an initial checklist to consider when contemplating conducting a trade promotion lottery.

It’s not an exhaustive list, but can be used by a not-for-profit organisation as a guide to the key considerations when conducting a trade promotion lottery.

Checklist

 Does the allocation of prizes involve an element of chance? Is it a free entry lottery conducted to promote goods or services supplied by a business?  Does your organisation need to be declared as a community or charitable organisation? Note – this requires the provision of relevant documentation and may take up to 28 days from submission of the application.  Is the promotion to be conducted wholly in Victoria or could it involve participants entering from outside Victoria? If it involves participants from outside Victoria, other state and territory gambling laws may apply and you should consider if permits or authorities are required.  Will the promotion be advertised or run online or via a social media website? Gambling laws of all states and territories may apply if anyone in Australia can participate. Also consider whether any specific rules of the relevant website might apply to your promotion.  Have you included the minimum details in the terms and conditions?

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Resources

Not-for-profit Law resources The Not-for-profit Law website has further resources on the following topics

► Raffles and minor gaming This page provides information on conducting raffles and minor gaming activities.

► Fundraising This section of the Information Hub features resources on how to navigate Australia’s complex fundraising laws.

► Events This page covers legal issues to consider when holding an event.

► Communications and advertising Communications, including advertising and promotions, are essential tools for not-for-profits. This section features information on intellectual property, setting up a website and social media.

► Tax Learn more about Deductible Gift Recipient Endorsements, Fringe Benefits Concessions, Goods and Services Tax, income tax exemptions and state tax laws. Victorian Commission for Gambling and Liquor Regulation

► Trade promotion lotteries frequently asked questions ► Application form for declaration as a community or charitable organisation Other related resources

► Australian Tax Office: State, Territory and local government requirements Each State, territory and local government area has its own laws regulating the fundraising activities of NFP organisations. The information provided at the ATO’ site has been provided by the relevant regulator. However, you should check with the regulator to make sure information is current.

► The Australian Charities and Not-for-profits Commission: Charities and Fundraising The Australian Charities and Not-for-profits Commission has important information for charities to consider when fundraising. You should check to make sure information is current.

Legislation

► Gambling Regulation Act 2003 (Vic) ► Gambling Regulations 2015 (Vic)