Running a business

Trade promotions for businesses

A trade promotion is a lottery to promote the sale of goods or services. The winners must be determined by a drawing or by chance.

  • If the winners are determined by skill it is not considered a lottery and does not require a trade promotion lottery licence, for example any tipping competitions.
  • A competition where a person can only enter by completing a minor test of skill, like answering a simple question, is still a trade promotion if the winner is determined by a draw.

Entry must be free for all trade promotions, but:

  • participants may have to buy goods or services, which are the subject of the promotion
  • the cost of entry by phone can't be more than 55 cents including GST for landlines and 50 cents for mobile phones (plus mobile charges)
  • the cost of entry by post can't be more than the normal cost of postage.

The winner or winners can be drawn or win instantly depending on the type of promotion.

A trade promotion lottery licence can only be granted for a maximum period of 12 months. This period is from the commencement date to the final closing date for entries into the lottery. A licence can't be granted to conduct multiple lotteries within a specified period.

Types of trade promotion

Some trade promotions require a licence, and if prizes are drawn electronically then the drawing system must also be approved. There are also different rules for licensed gaming operators.

Before you begin

You will need to determine which promotion type you need to apply for.

Prizes over $5,000

If the total prize amount is over $5,000 and you are not using instant scratch or break open tickets, it's a major trade promotion.

Entry must be free but:

  • participants may have to buy goods or services, which are the subject of the promotion
  • winners must be determined by lot, drawing or chance
  • the cost of entry by phone can’t be more than 55 cents including GST for landlines and 50 cents for mobile phones (plus mobile charges)
  • the cost of entry by post can't be more than the normal cost of postage.

Winners can be drawn or win instantly depending on the type of promotion.

You must apply for a major trade promotions licence .

If the prize is drawn electronically, you will also need an electronic drawing system approval number.

Standard applications will take at least 14 business days from when CBS receive your application.

If you need the licence within five business days from when CBS receive your application, you must pay a premium fee.

Prizes under $5,000

If the total prize amount is under $5,000 and you are not using instant scratch or break open tickets, it's a minor trade promotion.

Entry must be free but:

  • participants may have to buy goods or services, which are the subject of the promotion
  • winners must be determined by lot, drawing or chance
  • the cost of entry by phone can’t be more than 55 cents including GST for landlines and 50 cents for mobile phones (plus mobile charges)
  • the cost of entry by post can't be more than the normal cost of postage.

Winners can be drawn or win instantly depending on the type of promotion.

You don’t need a licence for minor trade promotions but may need an electronic drawing system approval number if the prize is drawn electronically.

Instant tickets

If you are using instant scratch or break open tickets where the number, letter or symbol is hidden, it's an instant prize trade promotion lottery.

Instant prize lotteries have instant prizes only and may also have:

  • an unclaimed prize draw
  • a second chance or major draw in the terms and conditions.

Regardless of the prize amount, you must apply for an instant prize trade promotion licence.

If the prize is drawn electronically, you will also need an electronic drawing system approval number.

Standard applications will take at least 14 business days from when CBS receive your application.

If you need the licence within five business days from when CBS receive your application, you must pay a premium fee.

What you'll need

Your application must include:

  • the title of the lottery, which must be unique
  • your contact details
  • if the promotion involves multiple traders, all the traders contact details
  • a copy of the terms and conditions of entry
  • the proposed entry form
  • any proposed advertisement
  • details of any incentive to enter or participate in the lottery
  • the licence fee.

If the trade promotion lottery includes instant prizes:

  • details of the manufacture, packaging or storage of instant prize tickets
  • a statement that the prizes, number, letters or symbols on a ticket are hidden.

If the trade promotion lottery is drawn by an electronic drawing system:

  • that has been approved, the approval number provided by Consumer and Business Services (CBS) must be included, along with a letter stating that the electronic drawing system has not changed since approval was granted
  • that has not been approved, an application for approval of an electronic drawing system must be lodged with CBS.

Apply for approval of an electronic drawing system

If the lottery will also run in another state or territory, contact them about their licensing requirements.

Fees

* If you need the licence within five business days from when CBS receive your application, you must pay the premium fee.

Value of prize

Standard fee

Premium fee*

Instant prize only - $0 to $10,000

$195.00

$391.00

Major trade promotion only - $5,001 to $10,000

$195.00

$391.00

Both instant and major trade promotions - $10,000 to $50,000

$716.00

$1,434.00

$50,000 to $100,000

$1,252.00

$2,500.00

$100,000 to $200,000

$2,147.00

$4,294.00

More than $200,000

$3,938.00

$7,867.00

Application for amendment of a major or instant prize trade promotion

$64.00

 

Application fees are not refundable.

How to apply

Apply online for a major or instant prize trade promotion licence.

Apply now

What happens next

Standard applications will take at least 14 business days from when CBS receive your application.

CBS will contact you when your licence is approved. Lodging an application does not mean it is granted.

An application can be refused if:

  • the prizes or incentives include prohibited goods or services
  • the terms and conditions for an unclaimed prize don’t give the winner a reasonable chance to claim it.

Prizes and promotions

The goods and services being promoted must be your normal business products.

Trade promotion lotteries cannot promote or have as prizes :

  • tobacco products
  • firearms, antique firearms and ammunition
  • dangerous articles and prohibited weapons
  • cosmetic surgery or other similar medical or surgical procedures where the main purpose is improving personal appearance
  • goods or services that are illegal to sell in South Australia.

The value of the prize advertised must be the retail value. If the item is an antique or a piece of artwork, craftwork, collectable bric-a-brac or is second-hand, the value must be whatever the price is likely to be paid for the item if sold at auction

Conduct and conditions

Allow enough time for each phase of the lottery, including:

  • printing tickets
  • advertising
  • drawing
  • notifying winners
  • publishing the results.

If the terms and conditions include unclaimed prizes, there is no minimum requirement on how long the prizes must be kept after the draw, otherwise, they must be kept for at least three months.

Advertising

Anyone can enter a trade promotion lottery, subject to the terms and conditions unless the product or prize is not available to a person because of their age.

All advertisements of a major trade promotion lottery - other than television, radio or at the cinema - must contain:

  • the name and address of the trader
  • the licence number
  • the duration of the lottery
  • the nature and value of the prizes
  • the number of draws and the date, place and time for the drawing
  • the date the results will be available and how participants will be notified.

All advertisements of a major trade promotion lottery on television, radio or at the cinema must contain:

  • the licence number
  • how a person can enter
  • the nature and value of the prizes
  • how and where to get a copy of the lottery's full terms and conditions.

All advertisements of an instant prize lottery must contain:

  • the name and address of the trader
  • the licence number
  • the duration of the lottery
  • the nature and value of the prizes
  • how and where the full terms and conditions can be accessed if they aren’t included in the advertisement.

Advertising or promoting of any lottery must not:

  • suggest that the lottery can fix personal or financial problems or cover expenses
  • imply that the lottery can increase social, sexual or employment opportunities
  • exaggerate the prizes or suggest the chance of winning is better than it really is
  • suggest that someone’s skill means a better chance of winning
  • link the lottery with drinking too much alcohol
  • exaggerate the connection between the lottery and how the proceeds will be used.

Advertising or promoting must include enough information for people to understand the chances of winning or the overall return when the advertising:

  • encourages people to enter within a certain time frame
  • refers to how often a prize or prizes can be won.

A major trade promotion lottery can't begin until a licence has been granted. The licence number must appear on all advertising.

Drawing

The drawing must take place:

  • on the day, time and place stated
  • under the supervision of the promoter or trader
  • in front of any ticket holders who want to be there
  • in front of an independent scrutineer, if the total prize value is over $20,000.

Participants don't have to be present when the lottery is drawn to win a prize. A prize can't 'jackpot' or a new ticket drawn if the winner isn't there.

If the winner is not present when the lottery is drawn, notify them in writing within 14 days and tell them how the prize can be delivered or collected.

A trade promotion lottery must not be drawn electronically unless the system has been approved by the minister.

Results

For each prize valued at over $250, the name and address of each winner must be published in a newspaper circulating throughout the state within 30 days of the draw.

If the lottery has only been advertised in a particular publication or website, or if an entry is only permitted on a particular website, results must be published in that publication or website.

The name and address of each winner of an instant win prize valued at over $250 or any drawn prize, regardless of the value, must be forwarded to Consumer and Business Services within 14 days of the draw.

Scrutineer

A scrutineer must be either:

Record keeping

Ticket butts, entry forms and other records relating to the lottery must be kept for at least three months after the draw.

Penalties

Anyone who acts dishonestly in connection with the lottery is guilty of an offence. The maximum penalty is $50,000 or two years imprisonment.

If the trader or promoter is guilty of an offence and receives a penalty, the same applies to:

  • each member of the management committee
  • board of directors
  • chief executive officer
  • any employee responsible for the conduct of the lottery.

Approvals

Consumer and Business Services will contact you when your licence is approved. Lodging an application does not mean it is granted.

An application can be refused if:

  • the prizes or incentives include prohibited goods or services
  • the terms and conditions for an unclaimed prize don’t give the winner a reasonable chance to claim it.

Changing a licence

Consumer and Business Services must approve any changes to a lottery licence. You must complete the Application to amend a trade promotion lottery licence form with the reasons for the change.

A licence will not be amended if the promotion has started or if the change is unfair.

In special circumstances, you can ask that a lottery rule be left out. It will only be allowed if it's fair to all participants.

Extra conditions may need to be added to your licence.

Cancelling a licence

A licence can be cancelled or suspended if:

  • information given was not accurate
  • legislation is not followed
  • licence conditions were/are not met
  • the prizes or incentives include banned goods or services.

Contact Consumer and Business Services

Phone

In person

91 Grenfell Street
Adelaide

Post

GPO Box 1719
Adelaide SA 5001


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Page last updated 27 August 2018

Provided by:
Attorney-General's Department
URL:
https://www.sa.gov.au/topics/business-and-trade/running-a-business/trade-promotions
Last Updated:
27/08/18
Printed on:
20/09/18
Copyright statement:
SA.GOV.AU is licensed under a Creative Commons Attribution 4.0 Licence. © Copyright 2018