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What is a Game of Skill?

A game of skill is a competition which requires an entrant to apply a level of thought and skill to their entry, and where the winner/s are determined based on qualitative methods rather than chance. As a precondition to enter a game of skill trade promotion entrants must perform a skill-based activity. A game of skill trade promotion does not use a random draw in selecting the winner unlike games of chance, instead typically choosing a winner based on merit by assessing their entry against a set criteria.

In a game of skill there is an application of judgement involved in determining the winner. For example, requiring an entrant to answer a judgeable question or post a photo, and assessing answers/photo on creative merit to determine the winner. This judgement could take the form of a sole judge, a panel of judges, or having the public vote on the entries to determine a winner.

What are examples of games of skill competitions?

Looking for some game of skill competition ideas? Here are some of the most common examples of game of skill competitions for trade promotions outlined below:

  • Answer Judgeable Question: Answer a question in 25 words or less, and entries are judged e.g. based on creative merit, to determine the winner.

  • Post/Submit a Photo: Post a photo which meets certain requirements and photos are judged to determine the winner. E.g. take a photo of yourself at the Melbourne Show and post to your Instagram account

  • Trivia: Asking entrants trivia questions and awarding prize to person who obtains most correct answers

  • Highest Sales: Encourage sales of your products by awarding a prize to the salesperson who sells the highest volume or dollar value in your product during the promotional period.

Is poker a game of skill?

Depending on the jurisdiction poker can be considered either a game of skill or of chance. For example, in Germany poker is considered a game of chance and in New York it is considered a game of skill. In Australia poker is generally considered a game of skill, not merely a game of chance although there is an element of chance. This is because despite an element of chance existing in which cards are dealt, individual aptitude and skill was a determining element in the outcome in the game over time. For example, in the South Australian Magistrates Court case of Police v Jones, Police v Ravesi [2008] SAMC 62 the court found that poker could not be found to be wholly a game of chance.

Benefits of game of skill competitions:

There are many benefits to running games of skill competitions, including the following:

  • Games of skill are generally more cost effective, as permits are not required, prize draws do not need to be conducted and advertising winners is not required;

  • The state and territory requirements are less arduous for games of skill, and therefore the competition terms are much simpler;

  • Games of skill competitions are a great way to engage customers with a brand, due to the creative and challenging nature of the entry mechanics;

  • Entrant’s responses can be used to promote the brand, for example a creative image submitted for entry could be featured in an advertising campaign;

  • Entries are generally of a high quality, given the requirements the entrant must go through for an entry;

  • Games of skill are a great way to incentivise staff to achieve sales targets.

Use Promotion Wizard to get more information on running a compliant game of skill.

Do I need a competition permit for running a game of skill promotion?

In Australia games of skill competitions do not require competition trade permits and therefore they are generally quick to set up. However, those running games of skill competitions still need suitable terms and conditions for their competitions to ensure they are protected and complying with Australian legislation. To learn more about competition permits, read our article dedicated to Competition Permits here.

Terms and conditions

Terms and conditions are an important part of any trade promotion. Australian legislation requires all trade promotions to have accurate terms and conditions attached and readily available. Although trade promotions are a great way to engage with customers and build brand loyalty, if your terms and conditions are not correctly written and shared it could also cause complications and lead to penalties.

Games of skill competition terms and conditions will often include:

  • Judging criteria and process;

  • Ownership and use of intellectual property;

  • Allocation of prizes and how they can be redeemed;

  • Dates competition is running;

  • Entry eligibility and requirements.

Competition terms and conditions in effect create a contract between the Promoter (you) and the consumers/entrants of the competition. Therefore, non-compliance with the competitions can amount to a breach of contract. Trade promotion competition terms and conditions should lay out each parties’ obligations and limitations to help protect your business and minimise the chance of disputes arising at a later stage. For example, the competition terms and conditions must include the judging criteria. For help creating terms and conditions you can visit our Competition Terms and Conditions template, or you can try our terms and conditions generator which allows you to generate compliant terms and conditions (reviewed by a promotional law expert) within 24 hours.

Intellectual property

When running a game of skill, if the competition requires entrants to submit photos, videos, or any creative work, you will want to ensure that your terms and conditions suitably address the ownership/use of intellectual property. The terms and conditions should address the use of participant’s intellectual property, as well as liability for improper use of third party intellectual property. For example, your terms and conditions could require that participants grant a licence to use their intellectual property associated with the entry, and that you have the right to use the creative work for advertising and promotional purposes. Additionally, if you are running the competition through a third-party platform, you should also ensure that participants are aware that they are uploading their creative work online on a third-party platform which has its own terms and conditions.

Picking a winner

A game of skill trade promotion does not use a random draw in selecting the winner unlike games of chance, instead typically choosing a winner based on merit or skill by assessing their entry against a set criteria.

In a game of skill there is an application of judgement involved in determining the winner. For example, requiring an entrant to answer a judgeable question or post a photo, and assessing answers/photo on creative merit to determine the winner. This judgement could take the form of a sole judge, a panel of judges, or having the public vote on the entries to determine a winner.

Prizes

Prizes are a key element of any trade promotion and are anything that is of value or benefit. When offering a prize you should ensure that you are complying with all regulations, for example not offering prizes with alcohol to someone under 18. You will want to pick a prize that is suitable and desirable for your entrants. To learn more about how to pick good prizes read here. You must give information about the prize, in some states this could just be about the nature of the prize, while in others it you may need to include the value of the prize.

You should consider how prizes can be redeemed, and make sure that your prizes are available for collection or delivery at the conclusion of your promotion. If the prize is not available, you will need to make sure there is a reasonable replacement prize of equal value available. You could be held liable for misleading and deceptive conduct under the Australian Consumer Law if you advertised a prize that you did not then make available or provided a significantly different prize.

Penalties

Even though a promotion permit usually isn’t required, there are still compliance requirements in force around how you run a game of skill competition, with penalties for breaches. If your game of skill trade promotion does not comply with the relevant legislation and regulations in which it takes place, there is a risk you may face significant fines or other penalties. When it comes to games of skill in particular, properly prepared terms and conditions are an important element to ensure your competition is legally compliant as well as providing yourself with legal protection.

If you are found to be engaging in misleading or deceptive conduct when running your trade promotion, you may receive penalties under the Australian Consumer Law. For example, if you are giving a prize as a part of your competition you must not mislead the audience about the items on offer or the chances of receiving these items. The laws against misleading or deceptive conduct apply regardless of any intention to mislead or deceive others, or if no one has suffered a loss or damage.

Over to you

A game of skill trade promotion is a great way to promote your business without the stress of permits and allows consumers to creatively engage with a brand. But it is still important to ensure your competition is still compliant with legal requirements and provide suitable terms and conditions to participants.

Want guaranteed compliance end-to-end legal support for your competitions and promotions? Promotion Wizard is 90% faster and half the cost of traditional legal firms. For more information on trade promotion strategies, get in contact with Plexus today.

Guaranteed compliance for your next competition, sorted.

Plexus Promotion Wizard offers end to end legal support for competitions & promotions. Custom T&Cs and the right competition permits without the hassles. 90% faster and half the cost of traditional legal firms.

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