Demystify “Skill vs Chance” Live Webinar Guest Speaker Matt Hansen Senior Associate, Sydney

Topics we will touch on today Different Types of Promotions When Are Permits Required? Terms and Conditions Prize Considerations

1st Rule – Plan Ahead What kind of promotion do I have? Do I need permits? Does my promotion make sense? What prizes am I giving away?

Types of Promotions There are 3 main types of promotion: CHANCE SKILL GAME OF CHANCE GAME OF SKILL CONDITIONAL OFFER

Game of Chance Any promotion that involves an element of chance is considered a game of chance. This includes: A draw – “1st entry drawn wins…” Instant win or randomly awarded prizes Contingency games (i.e. insured promotions – the chance to pick from 1 in 100 envelopes etc.) “First entries received” promotions – “First 10 entries received will win…” IN SOME CASES Games of chance require lottery permits in NSW, SA, and ACT.

Examples of Game of Chance

Game of Skill A promotion that involves an entrant having to submit something creative to be judged on its merits and does NOT involve an element of chance is a game of skill. Not regulated. Does NOT require permits. However, Ts & Cs are VITAL. Examples include written responses (25-words-or-less), photos, videos, drawing, highest scores, highest sales figures, collect the most items. Where it is possible to have a tie, a tie breaker must be included, and must not involve an element of chance (e.g. a draw)

Example of Game of Skill

Offers A conditional offer is a promotion where a consumer must satisfy a condition in order to receive a gift. Generally does not require permits unless an element of chance in involved e.g. a GWP with a 2 step process where successful outcome is not guaranteed, especially if a purchase is involved at step 1. Examples include BOGOF, 2 for 1, % off discounts and GWP (unlimited). Needs Ts & Cs but normally only a smaller set - not as comprehensive as games of chance and skill.

Example of Offer

Permits NSW, ACT and SA have permit systems. VIC, WA, QLD, TAS do not. NT has a system but only for local, NT-only promotions. The purpose of a permit is to license the promotion as games of chance are a form of gambling. Every state has different rules and regulations regarding what the terms and conditions of a promotion should contain.

Permit Watch-Outs Prize pool – under $5K can avoid permit in SA (if no instant win element included), under $3K can avoid in ACT. Limited to 12 months – promotional period can only go for that long from start to draw. Publication of winner names required for each winner in ACT, winners of prizes over $250 in SA and winners of prizes over $500 in NSW. Unclaimed prize draws required (3 months after original draw – exceptions apply to event-based prizes). Independent scrutiny of draws required for draws over $10K (in NSW) or $20K (in SA). Certain prizes restricted or prohibited (e.g. alcohol). Instant prize guarantees. Timings – each lottery department has its own internal timings. Formal amendments required for changes to terms and conditions once permits are issued.

Terms and Conditions Terms and Conditions have 3 purposes: Establish an agreement between the promoter and consumer as to the parameters of the promotion. Advise the consumer of their rights and obligations. Give promoter recourse in event of a dispute.

Ts & Cs Basics Acceptance of terms – acceptance by entry. Entry details - who can enter, who cannot, how to enter. How many times etc. Right to verify entries and entrants. Promotional Period dates. Draw details – where and when, how many draws etc. Prize details/value and conditions related to prizes Rights of publicity and IP rights in entries. Termination rights. Liability limitation. Privacy compliance. Promoter details.

Common Mistakes To Avoid Wrong dates Wrong prizes Miscalculations in prize values Entry instructions unclear or missing Onerous obligations on consumers Changing Ts & Cs after promo has begun, or been advertised. Not getting legal advice

Prize Considerations Certain terms and conditions may be required to cover off certain prize elements, especially motor vehicles and holidays, where elements carry their own Ts & Cs. Note that liquor cannot be awarded as a principle prize in NT. Restrictions apply in NSW. Certain prizes are prohibited, including tobacco, gambling products, firearms and surgical procedures.

What Can Go Wrong? Not including an important condition on advertising material. Wrong image of the prize used. Using an “exaggerated” claim then trying to disclaim it in the fine print. Asking for third party approval when not necessary Over-redemption of an offer. Printing errors leading to additional winners in excess of available prizes or fraudulent claims, e.g McDonalds Monopoly promotion. Client changing details at the last minute. Advising provisional winners that they have won prior to verification. Receiving a complaint from a third party e.g IP infringement.

How Can I Fix It? When dealing with service providers always check everything carefully – they will usually exclude liability for printing material you provide them with. Get legal advice first. Failing that, get legal advice ASAP. Consumer comes first, always try to ensure the best outcome for your client that makes the consumer the happiest – avoid inflaming consumer complaints.

Questions? www.anisimoff.com.au @anisimofflegal www.linkedin.com/company/anisimoff-legal www.facebook.com/AnisimoffLegal

Donna Adam 0408 292 524 donna@hachiko.com.au Contact