New trade promotions regulation in South Australia

South Australia is introducing a new regulation governing trade promotions. Here’s how it will affect you.

The new Regulation

The Lotteries Regulation 2021 (SA) (Regulation) will take effect on 10 December 2021. The South Australian government consulted with stakeholders on a draft of the Regulation (see our recent update) but minimal changes have been made in the final version.

The Regulation implements a number of significant changes to how game of chance trade promotions must be run in South Australia. It is also important to be mindful of other State/Territory requirements that may still apply if your promotion will extend beyond South Australia.

We summarise the key changes below.

Requirement for a licence

The Regulation will maintain South Australia’s current categories of ‘game of chance’ trade promotion, namely:

• A minor trade promotion lottery, which has a prize value of $5,000 or below. These can be run without a licence. This type of trade promotion must not include any instant prizes.
• A major trade promotion lottery. This is a trade promotion (other than a trade promotion (instant prize) lottery) where the total prize value exceeds $5,000, or the prizes include both instant prizes and drawn prizes. These will still require a licence.
• A trade promotion (instant prize) lottery means a trade promotion in which all the prizes are instant prizes. These promotions will also still require a licence. Instant prizes would include, for example, a unique code printed on product packaging that can be used to claim a prize online, or a prize that is revealed when the user clicks a button in an app.

Prohibition on management entering a trade promotion

Under the Regulation a member of the management committee of an organisation will not be permitted to enter a trade promotion conducted by the organisation. For a company, this would presumably include board members and perhaps, members of any executive management committee.

Further under the Regulation, a person who is involved in the conduct or promotion of a trade promotion (whether as a principal, agent or employee) must not enter it.

Any company that conducts internal trade promotions, or trade promotions that aim to boost the company’s sales to ‘friends and family’, will need to take care with these restrictions and will likely need to exclude certain board members and staff from participating.

Electronic draw systems

The requirement that your electronic drawing system be approved by the SA regulator will be removed. However, you must use a system which draws a winner at random and you must be able to provide information about the system upon request of the SA regulator.

There remains a requirement in Queensland to get an electronic draw system approved by the relevant regulator before you can use it to draw winners in a trade promotion.

Scrutineers for prize draws

The Regulation will require that an independent scrutineer scrutinises any major trade promotion lottery draw where the total prize value in the draw is $30,000 or more, or another amount the Liquor and Gambling Commissioner directs.

While this threshold is being raised from the current $20,000 to $30,000, you should be mindful of the requirements of the NSW regulations in relation to independent scrutineers which are more restrictive.

Notification of winners

The current time period within which a winner must be notified that they have won a prize is 14 days. This requirement will be reduced to seven days under the Regulation, and the notification must be in writing.

You will no longer be required to forward the name and address of each winner of an instant win prize valued over $250 or any drawn prize (where a licence is obtained) to the SA regulator.

You will be required to publish the first initial, surname and postcode of each winner of any prize over the value of $250 where a licence is obtained (i.e. an instant win promotion or a major trade promotion lottery), unless the winner requests that these details not be published. Currently the regulations require winners’ names and addresses to be published unless the winner requests that they not be published.

Prize claim period

Our reading of the new Regulation is that the promoter will have considerable flexibility in its terms and conditions for a promotion, to stipulate claim periods for prizes and what will happen to unclaimed prizes. This should become clearer when promoters start to apply for trade promotion licences in South Australia after the Regulation takes effect.

Advertising requirements

Promoters will no longer be required to include their draw details (i.e. time, date and location of the draw), winner publication details and address on advertising materials in South Australia for non-instant win promotions, which may help make your ‘minimal Ts&Cs’ (the ‘legal copy’ you must include in each advertisement for your promotion) slightly shorter!

For instant win promotions, promoters will still be required to include their address on most advertising materials in South Australia, however will no longer be required to include any winner publication details.

Promotions open to children

You must not publish any advertising for a game of chance trade promotion that depicts children participating in such a trade promotion – even a promotion that is directed to children. Marketers of products to children will need to take great care not to breach this requirement.

Advertising must not suggest that the promotion is a means of improving your financial position

Under the Regulation, any advertising or promotion for a game of chance trade promotion must not be such as to appear to a reasonable observer to imply that the trade promotion is a means of improving a person’s financial position.

On the face of it, a trade promotion with the tagline, ‘Become a millionaire!’ which offered a $1 million cash prize to be won by random draw, may contravene this requirement.

Questions?

As always, our trade promotions team is here to help! Get in touch if you have any queries.

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Authored by:

David Smith, Partner

Jessica Bell, Paralegal
+61 3 9252 7701 | jessica.bell@gadens.com 

Sonja Muzoska, Paralegal
+61 3 9252 2529 | sonja.muzoska@gadens.com

Jade Lamb, Paralegal
+61 3 9612 8215 | jade.lamb@gadens.com