Red tape to be cut for competitions and trade promotions

19 Sep 2017

  • Governance

On 12 September 2017, the NSW Department of Industry – Gaming and Lotteries (NSW Department of Industry) announced that new laws for competitions will go before Parliament later this year.  The proposed new laws are said to cut red tape for trade promotions and community gaming activities, while maintaining fairness, integrity and public confidence in the ways in which these are conducted.

The key changes are:
• Significantly less activities requiring a permit by imposing a minimum threshold prize value;
• A more flexible enforcement regime, including the implementation of civil penalties;
• Improved transparency of operator obligations; and
• New guidance material to support compliance.
The proposed new laws follow a review conducted by the NSW Department of Industry.  The NSW Department of Industry concluded that the existing regulatory framework was too rigid and rules-focussed, and could meet the purpose of regulation in a more efficient manner.

For instance, while trade promotion activities and community gaming activities were generally low-risk with relatively few compliance concerns, businesses had to face significant regulatory obligations.

Under the proposed new laws, a permit or licence will only be required if the total retail prize value for a trade promotion is $10,000 or more in any one promotion, or $30,000 or more per session or draw for community gaming activities. Community gaming activities include for example promotional raffles, fundraising raffles, guessing competitions and gaming nights.

The proposed new reporting will require that businesses provide a website address to their Terms & Conditions in their marketing material, however businesses will no longer need to report the draw results and proceeds to the regulator at the end of the promotion. Businesses will be subject to spot audits. 

In addition, civil penalties or fines will be introduced to provide the regulator with flexibility to actively ensure businesses comply with the trade promotions and community gaming laws.  The introduction of these fines were recommended because the current laws only allow the regulator to pursue criminal penalties for non-compliance.  This presents a barrier to take action against businesses that commit less serious offences, and results in pursuing penalties for more serious offences only.

The sole purpose of trade promotion and community gaming laws is to ensure that the State and community as a whole benefit from these activities.  The laws achieve this through a range of measures, including restricting who may conduct and benefit from such activities, ensuring the integrity and fairness, and the honesty of those undertaking the activities, and minimising the potential for harm. 

The recommended new regulatory framework is based on a set of guiding principles that aim to facilitate trade promotions and community gaming activities without compromising their integrity. 

These principles include:
• requiring permits for high-risk activities only,
• community gaming activities are conducted in the public interest and are operated with fairness and integrity, and
• individuals conducting the competitions and community gaming activities cannot receive any personal benefit from these.

Planning on running a competition? Chech out our guide on What you need to know about Running a Competition.

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CATEGORY Governance

TYPE Article