Running a game of chance promotion can be a great way to build excitement around your brand, grow your email list, and increase sales - especially if you’re launching a new product, opening a new location, or trying to boost a quiet season.
But in Australia, “fun” promotions can quickly become a compliance headache if you don’t set them up properly. Depending on how your promotion works (and where your customers are), you may need a permit, specific terms, and a clear process to keep everything fair and legal.
In this guide, we’ll walk you through what small businesses need to know about game of chance promotions in Australia, including permit basics, key legal risks, and practical best practices to run your promotion confidently.
In simple terms, a game of chance promotion is a promotion where the winner is decided by luck rather than skill.
Typical examples include:
- “Enter your email for a chance to win” giveaways
- Spin-the-wheel discounts where prizes are random
- Random prize draws for customers who purchase during a promotion period
- Lucky dip prizes at an event
- Social media giveaways where winners are chosen randomly
These promotions are commonly treated as trade promotions (sometimes referred to as “trade promotion lotteries”), because they’re used to promote a business, product, or service.
Game Of Chance Vs Game Of Skill
This distinction matters because games of skill are usually regulated differently (and sometimes more lightly).
- Game of chance: Winner is random (e.g. random draw, spinning wheel, lucky dip).
- Game of skill: Winner is based on skill or merit (e.g. judged competition, best photo, best slogan).
If you’re planning something like “best caption wins,” be careful - if the “judging” is actually random, automated, or not genuinely based on skill, regulators may treat it as a game of chance anyway.
Why It Matters For Small Businesses
When you run a game of chance promotion, you’re often touching multiple legal areas at once:
- State and territory gaming/lotteries rules (and in some places, permit requirements)
- Australian Consumer Law (ACL) rules around advertising and fairness
- Privacy, spam and direct marketing compliance (especially if you’re collecting email addresses or phone numbers)
- Platform rules (if you’re running it on Instagram, Facebook, TikTok etc.)
Getting the foundations right upfront is usually much easier than trying to fix issues after the promotion is already live.
Sometimes you do - and sometimes you don’t. The tricky part is that permit requirements are largely driven by state and territory rules, and they can vary depending on:
- where the promotion is run
- where entrants live
- the total prize pool value
- how winners are selected
- whether there’s an entry fee (including indirect fees)
So even if you’re a small online business, you may still need to think nationally, because entrants could be located across Australia.
There isn’t one single “Australia-wide trade promotion permit” system. Instead, your obligations may change depending on which jurisdictions your promotion touches.
It’s also important to know that these settings can change over time (and regulators can update guidance), so you should check the current position before launch - particularly if the prize pool is high-value or the promotion is heavily advertised.
As a practical starting point, at the time of writing:
- many standard free-to-enter trade promotions can be run in NSW, VIC, QLD, WA, TAS, and NT without a trade promotion permit (provided you comply with that jurisdiction’s conditions and general consumer law requirements); and
- ACT and SA are jurisdictions where a permit is more commonly required for trade promotion lotteries (and there are often specific rules about how the draw is conducted and how results are published).
However, the permit question is always fact-specific, because “trade promotion” rules can depend on the exact mechanics (including how entry works, who is eligible, and what you are requiring entrants to do).
That’s why it’s a good idea to decide early:
- Is your promotion open to entrants in all of Australia, or only certain states?
- What is your prize pool value?
- Is it a true random draw, or is it judged?
If your promotion looks more like a raffle, you should also be careful - raffles can have their own rules, particularly where they resemble fundraising activities. If you’re unsure whether what you’re doing is a trade promotion or a raffle-style lottery, it helps to start with the general principles in raffle laws.
Practical Tip: Avoid “Hidden Entry Fees”
Many businesses assume “no entry fee” means “no legal issues.” But regulators can look beyond the label.
For example, depending on the structure, requiring entrants to:
- purchase a product,
- pay for shipping to enter,
- call a premium-rate number, or
- pay to attend an event to get entry
may create compliance issues, because the entry is no longer truly “free.”
State-Based Rules Still Matter (Even If You’re Online)
If you’re promoting to customers in multiple states, you may need to comply with the requirements of each relevant state/territory. As an example, if your promotion is open to Queensland residents, it’s worth checking the Queensland approach to trade promotions and related lotteries, and also understanding how it overlaps with raffle laws in Queensland if your promotion has raffle-like features.
Because the rules can be fact-specific (and because permit settings and thresholds can change), many businesses choose to get legal help to confirm whether a permit is required before launch (especially if the prize pool is valuable or the campaign will be heavily advertised).
Even where no permit is required, you still need to run your game of chance promotion fairly and transparently. From a practical business perspective, the biggest legal risks usually come from:
- unclear or unfair promotional terms
- misleading advertising
- privacy and marketing issues
- poor winner selection and record-keeping
Australian Consumer Law: Don’t Mislead Or Overpromise
The Australian Consumer Law (ACL) applies to most promotions because you’re marketing to consumers. This means your promotion advertising needs to be accurate and not misleading - including what the prize is, how to enter, and when the winner will be drawn.
Problems often happen when a business:
- advertises a prize that isn’t actually available in the advertised form
- changes the promotion dates after people have entered, without proper terms allowing it
- doesn’t disclose important conditions (like location restrictions, age restrictions, or winner notification requirements)
If you want a useful benchmark for what regulators look at, the key concept is whether conduct could be misleading or deceptive in context - which is why businesses should be familiar with the elements of misleading or deceptive conduct.
Pricing And “Free” Claims Need Care
If your promotion uses price messaging (for example, “buy one get one free” or “free gift with purchase”), you also need to ensure you’re not accidentally breaching pricing rules.
Make sure your advertising is clear about what customers must do to qualify and what is actually included. This becomes even more important if you’re bundling products, including shipping, or offering discounts by chance (like spinning a wheel).
It’s worth keeping your pricing and promotion messaging aligned with advertised price laws to reduce the risk of complaints.
Privacy And Marketing Compliance (Email Lists, SMS, And Retargeting)
Game of chance promotions are often used to collect personal information - names, emails, phone numbers, addresses, and sometimes demographic details.
If you’re collecting personal information, you should consider:
- how you’ll store the information
- who you’ll share it with (for example, fulfilment partners)
- how long you’ll keep it
- whether you’ll add entrants to your marketing list
Many businesses need a properly drafted Privacy Policy and a short collection notice at the point of entry so entrants understand what you’re doing with their data. Depending on your business size and activities, the Privacy Act 1988 (Cth) and the Australian Privacy Principles may apply - and even where they don’t strictly apply, a clear privacy framework is still best practice and often expected by customers and platforms.
If you’re planning to send marketing emails or SMS to entrants after the promotion, you also need to think about consent and unsubscribe requirements. In Australia, the Spam Act 2003 (Cth) generally requires (among other things) consent (which can be express or inferred in limited scenarios), clear sender identification, and a functional unsubscribe facility for commercial electronic messages. This is an area where a “quick giveaway” can accidentally become a compliance risk.
When you’re setting up a game of chance promotion, your structure matters. Two promotions can look similar on the surface, but have very different legal consequences depending on the details.
1. Be Clear On The Entry Mechanism
Start with the basics:
- Is entry free, or connected to a purchase?
- Can people enter multiple times?
- Is there a limit on entries per person?
- Are employees, contractors, and family members excluded?
Write this down before you create marketing assets, because changing the mechanics after launch is where disputes often start.
2. Define The Prize Properly (And Make It Deliverable)
Be very specific about the prize. For example:
- If it’s a product prize, specify model/colour and any alternatives.
- If it’s a service prize, specify what is included (and what isn’t).
- If it’s a voucher, specify expiry dates, transferability, and any blackout periods.
Also think through practical fulfilment. A common small business issue is offering a high-value prize (great marketing!) but not having a clean process to deliver it (risk of reputational damage, and potential complaints).
3. Choose A Transparent Winner Selection Process
For a game of chance, your selection method should be genuinely random and documented.
Best practice steps include:
- set the draw date/time in advance
- record the method of draw (software, spreadsheet randomiser, physical draw, etc.)
- keep a record of entries and the winning entry
- have a clear re-draw process if the winner can’t be contacted
Even if the law doesn’t require you to film the draw, you should assume you may need to justify the process if someone challenges the result.
If you’re running your promotion on social media, also pay attention to platform terms. Many platforms require you to include statements like:
- the platform is not associated with your promotion
- entries are collected by your business, not the platform
These aren’t “Australian laws” as such, but ignoring them can lead to your post being removed or your account being restricted - which is a commercial risk you don’t want mid-campaign.
Most compliance problems with a game of chance promotion come down to one thing: the rules weren’t clear (or didn’t exist at all).
Depending on your promotion, here are the documents you should consider:
- Promotion Terms And Conditions: These set out the rules of entry, eligibility, draw details, prize description, notification process, and what happens if something goes wrong. For many businesses, a tailored set of Competition Terms & Conditions is the core document that holds everything together.
- Website Terms: If entries are collected through your site (or you’re driving traffic to a landing page), your broader Website Terms and Conditions help set rules for site use and reduce disputes about online activity.
- Privacy Documentation: If you’re collecting names, emails, phone numbers, or addresses, your Privacy Policy and a short collection notice are important for transparency and trust. If you plan to use entrants’ details for marketing, your wording and consent approach should also be aligned with the Spam Act requirements.
- Supplier Or Fulfilment Agreements: If someone else is providing the prize (or you’re using a third party to ship it), your contract should clearly cover responsibilities, timing, and what happens if stock is unavailable.
- Influencer Or Partner Agreement: If a collaborator is promoting the giveaway, put expectations in writing - including approval rights, posting schedule, and who is responsible for the prize.
Not every business will need all of these, but most businesses running a serious promotion will need at least the promotion terms and a privacy framework.
A Note On “Template Terms”
Online templates can be a tempting shortcut, but they often don’t match your promotion mechanics, your state-based requirements, or your actual marketing. That mismatch is where problems start - especially if someone complains that your promotion wasn’t run the way you advertised it.
If you’re investing money into ads (or offering a valuable prize), it’s often worth making sure the legal foundations are as strong as the marketing.
Once you’ve got the legal framework in place, these practical steps help you run a smoother promotion and reduce the risk of disputes.
Keep The Entry Process Simple
Complex entry rules can create accidental non-compliance, especially if your marketing doesn’t match your back-end process.
A simple “enter via form, confirm email, winner drawn on X date” approach is easier to explain, administer, and defend if challenged.
Use Plain-English Disclosures In Your Marketing
Your Terms and Conditions are important, but your ad copy and social captions matter too.
Include key details in the promotional post itself, such as:
- who can enter (age/location)
- when entries close
- how the winner is chosen (random draw)
- when and how the winner will be contacted
This reduces the risk of someone arguing they weren’t properly informed before entering.
Don’t Change The Rules Midway (Unless Your Terms Allow It)
Sometimes things happen - stock sells out, a venue cancels, a partner pulls out.
If your terms don’t clearly allow you to vary, suspend, or cancel the promotion in certain circumstances, you may be stuck with a messy situation that creates customer backlash.
Good terms can include a limited right to vary the promotion where reasonably necessary, but it needs to be drafted carefully so it doesn’t create unfairness or ACL issues.
Document The Draw And Winner Notification
Keep a file (even a simple one) containing:
- a copy of the promotion post/landing page
- a copy of the final Terms and Conditions
- the entry list
- the draw method and date/time
- winner contact attempts and delivery confirmation
This is particularly important if your promotion runs across multiple states, has a high-value prize pool, or attracts a large number of entrants.
Build Trust By Actually Awarding The Prize (And Proving It)
From a brand perspective, one of the best things you can do is show that your promotion is real and genuinely awarded.
Where appropriate (and with the winner’s consent), you might:
- announce the winner publicly
- share a photo of the prize being shipped or handed over
- publish initials/suburb only (instead of full name) for privacy
Done properly, this not only reduces legal risk (fewer complaints), it also improves your conversion rate for future promotions.
Key Takeaways
- A game of chance promotion is one where the winner is chosen randomly - and it can trigger state-based rules, including permit requirements in some jurisdictions and scenarios.
- Permit requirements are not uniform across Australia and can change over time. Many common trade promotions can be run without a permit in several states and territories, but ACT and SA are jurisdictions where a permit is more commonly required, so you should check your specific setup before launch.
- Even if you don’t need a permit, your promotion still needs to comply with Australian Consumer Law, especially around clear advertising and avoiding misleading conduct.
- If you’re collecting personal information (like emails and phone numbers), you should have a clear privacy framework and be careful about marketing consent, including Spam Act compliance for emails and SMS.
- Strong, tailored promotion rules (Terms and Conditions) are one of the best ways to reduce disputes and protect your business if something goes wrong.
- Best practice includes a transparent draw process, solid record-keeping, and making sure your marketing matches how the promotion actually works.
If you’d like a consultation on setting up a compliant game of chance promotion for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
