What is a Game of Chance?

A game of chance is a game whose outcome is determined purely by chance. For example, it would be considered a game of chance if winners are determined by a random competition draw or a scratch and win mechanic, where no skill is involved in determining a winner.

A trade promotion competition that involves a degree of chance in determining the winners is called a Trade Promotion Lottery in Australia. Also called a “game of luck”, no skill needs to be demonstrated and no judgement is passed for the winner to be determined. This type of promotion has a lower barrier to enter and works well for both attracting new customers and engaging with existing customers.

Do I need a permit to run a game of chance promotion?

To run a game of chance trade promotion, you may need a permit in ACT, SA and the NT, and an authority in NSW. However other regions, like VIC, QLD and SA, may have other legal requirements to keep in mind.

See our article; When do I need a trade promotion permit? for more information on when you may need a game of chance permit for your promotion.

Some common examples of games of chance include:

• random prize draws;
• instant win competitions;
• spin to win competitions;
• contingency games; and
• limited gift with purchase offers, in some instances.

Games of chance competitions require a winner to be drawn at random, which can be done manually or electronically.

What is the difference between a game of skill and a game of chance?

Games of chance and games of skill can be utilised by businesses to create incentives for customers, to drive purchases and increase brand loyalty. There are benefits to both kinds of trade promotions, and both will require full competition terms and conditions. However, there are key differences to the structure and requirements of each.

It is important to note that introducing any element of chance into a trade promotion entry mechanic will categorise the promotion as a game of chance. For example, if an entrant is invited to provide an answer to a question, and judged on creativity, it would be considered a game of skill, with no element of chance. However, if the most creative entries are then entered into a random prize draw, the activity would be considered a game of chance, and in turn may require competition permits.

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