UPDATED JULY 2020
The rules have now officially changed. As of 1 July 2020, you will only need to apply for a permit (or authority) to run a trade promotion competition open to NSW if your prize or total prize pool is valued at $10,000 or more.
Let’s face it, competition permits, or licences, are confusing. The government websites are difficult to navigate, advice on google is contradictory and the cost of the permit can be prohibitive to some small businesses. But that could be about to change. In a very exciting announcement from Liquor and Gaming NSW, they are considering a significant review of the Lotteries and Art Unions Act 1901.
How many times have you decided against running a game of chance competition you really want to run to get those valuable email addresses and instead end up changing your entry method to a game of skill which can significantly reduce your entries, simply because you didn’t understand the process or wanted to avoid paying the fees?
This review could be just what you’ve been waiting for.
What does the review mean for competition permits?
Woo hoo! Break out the champagne, finally the New South Wales government are in the process of modernising out-dated laws to come in line with the rest of Australia.
“The review will consider whether community gaming, trade promotions and lottery activities should continue to be regulated and if so, determine the best approach for these activities.”
In the discussion paper, Queensland, New Zealand and Victoria’s competition permit rules and regulations are cited as examples to be followed, as they are
“comparatively easy to understand and have straightforward requirements”.
Specifically, the change to trade promotions (or competitions to you and I) will mean that trade promotions with a prize value less than $10,000 will no longer require a permit, once the Act is passed.
This means that if you are running a competition and giving away a prize worth $50, once the law is passed, you’ll potentially no longer have to fork out $80+ for the licence. It’s also a huge win for those of us who wish to conduct multiple competitions within a 12 month period too, as we’ll no longer have to apply for a multiple draw licence – as long as the total prize pool within that 12 month period doesn’t exceed $10,000.
So when do the changes take effect?
Before you go launching your next competition without applying for the relevant competition permits, just remember that the review to the Act is still in discussion stage.
There are a number of issues that need to be considered before any changes are made to the Act which actually affect us as competition creators:
- If the government pulls out of the permits process completely, who will fill the hole in terms of ensuring that regulations are enforced?
In the last year, 99 complaints have been received about community lotteries and trade promotions. After the review, if someone has a complaint or concern about a fraudulent competition, where would they report it to? Dodgy competitions affect us all and if there’s no one to look out for the entrant, our entry rates will drop as people become wary of unregulated competitions.
- With over 27,000 applications and renewals in the last 2 years, the government stands to lose a significant chunk of income from these licences, so “the impact on revenue requires further consideration by government”. It may mean that those of us giving away a prize valued over $10,000 will see huge price hikes to cover the loss of revenue.
- There is also concern that both competition creators and the public alike will lose their ‘one stop shop’ for everything lottery-related, with the reviews meaning the government wouldn’t be involved in this space, who would be the body that steps in to maintain the information and continue the services?
With any review of legislation there will be a considerable amount of to-ing and fro-ing before any decision is made and changes are put into effect, so we’re not likely to see any significant changes any time soon, but it’s definitely a step in the right direction for small businesses.
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The team at OrigamiGlobe think that the proposed changes to remove the necessity for competition permits when the prize is valued at less than $10,000 would be a fantastic change. It would significantly simplify and reduce the barriers and red tape for small businesses and start-ups who want to use competitions and giveaways to help market their companies.
Sadly, it looks like our 2016 predictions on the slow-moving changes were spot on. As we update this article in July 2019, the new legislation still hasn’t come into effect, so make sure you still apply for those licences, or get in touch with us if you need a hand.