Welcome to the fourth installment on Facebook competitions. I hope you have enjoyed the series so far. If you have not been keeping up to date, click here to go back to the first blog in the series.
So far we have covered:
- Why you might want to run a competition.
- When is a good time to consider a competition.
- Great prize ideas for your competition.
- How long to run a competition for
In this blog, we are going to consider some of the legalities associated with running competitions. Online competitions must comply with the law from the country in which the business running that competition is registered in. This means if your business has a registered ABN, then you must comply with Australian law. Further, if your business is registered in other countries, you will need to check compliance with local law.
In Australia, there is no single federal legislation for running competitions. All States have laws that must be adhered to. If your business is registered in WA, you need to comply with the state legislation.
Here in Western Australia, all competitions fall under the Gaming and Wagering Commission Act 1987 (WA). Here are some of the highlights of this Act:
- For online competitions, you cannot charge for entry.
- No prize may consist of or include cosmetic surgical and medical procedures.
- The lottery may be conducted for a maximum of 12 months.
- The draw must be conducted within one month of the closure.
Most importantly in WA you do not need to apply for a permit but be sure to check state law as you may require a permit depending on the value of the prize and also depending on whether or not you are running a game of skill or a game of chance. When in doubt, be sure to consult a legal professional who can give you up-to-date and accurate advice.
Almost all laws differentiate between a game of skill and a game of chance. It is important that you understand these terms.
A Game of Skill is classified as a competition that requires the entrant to answer a question or submit something (showing ‘skill). As a rule of thumb, a Game of Skill competition does not require a permit anywhere in Australia.
A Game of Chance is where the entrant has a chance of winning simply by entering.
Once you have decided if your competition is a game of skill or a game of chance, you then need to comply with the respective legislation.
Now I know I have probably not given you all the answers as this is extremely difficult when the laws vary not only from country to country but also from state to state. A few tips to ensure you comply with the correct legislation are as follows:
- Use Google to search up the correct legislation.
- Ensure you are using a government website as your point of reference (these usually have .gov in their URL)
- If in doubt, speak to someone – most government departments are quite helpful. Their role is to ensure you comply with legislation so don’t be afraid to ask for help or clarification.
A final word on the law – if you fail to comply with the law, this can have serious ramifications for you and your business. Do not let the fear of not understanding current legislation put you off running a competition. It may only take a phone call to understand your local law and how you can comply.
Remember, demonstrating that you understand and comply with the law reflects on your business and your professionalism so be sure to get it right and you will stand out from the crowd.
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