NSW Trade Promotion

When running a trade promotion in NSW, there are many different factors to take in account. There are different NSW competition permits and requirements, which we will discuss in this article, and there are also factors such as trade promotion mechanics and strategies to ensure you run a successful promotion.

Summary of changes

• Permits are no longer required to conduct a promotion with a prize pool of $10K or under in NSW.
  • Duration based authorities have replaced trade promotion permits in NSW.
  • A business can apply for a 1, 3 or 5 year authority, which will cover all promotions with a prize pool over $10K. There is no maximum prize pool limit.
  • To run a promotion with a prize pool over $10K under an authority, the promotion terms and conditions must be submitted to NSW Fair Trading via the portal at least 10 days before the start date.
• Amendment fees no longer apply.
  • However, substantial changes, such as change to the prizes or the value of the prizes, need to be reported to NSW Fair Trading by filling out a Changes to Gaming Activity notification form.
  • Minor changes = no notification required.

• National promotions with a prize pool $3K or under will no longer require permits in any state or territory, unless it is a scratch and win promotion in which case a SA permit will also be required.

NSW trade promotion regulation changes detailed

NSW recently introduced significant changes to trade promotion regulations under the Community Gaming Regulations (NSW) 2020, which came into effect on 1 July 2020.

We have summarised the key changes below, and highlighted the significant requirements that have remained the same.

NSW Permits Issued Prior to 1st July

Is my existing NSW permit still valid?

A permit that was issued prior to 1st July 2020 will be honoured up until it’s expiry date.

I want to amend my terms for an existing NSW permit, what do I do?

Normally, you would be required to submit a formal amendment application for any change to your trade promotion terms. However, NSW Fair Trading will no longer accept amendment applications to a permit issued before 1st July 2020.

If you choose to amend your terms, you will be required to apply for a new ‘authority’ instead and the new ‘authority’ number will replace the existing permit.

Authority Requirements

What is an authority?

The idea of a NSW trade promotion ‘permit’ no longer exists, and has been replaced with a requirement for a NSW 'authority’.

Duration of an authority (1, 3 or 5yrs)

There are three (3) authority options only. You have the option to apply for an authority which applies for a period of either: 1 year, 3 years or 5 years.

Where do I apply for an authority?

An online application form must be submitted to request an authority. The form is available at: https://onegov.nsw.gov.au/New/categories/promotion-lotteries-fundraising.

When is an ‘authority’ required?

You no longer require a permit/authority to conduct a promotion with a prize pool of $10,000 or less.

If the prize pool for your promotion is $10,001 or more you will require a NSW ‘authority’ to cover the conduct of your promotion.

Authorities are time based, meaning that Promoters can conduct a number of different promotions under the same authority for its duration.

No Prize Pool Limits

There is NO cap on the total value of prizes you may award under an authority.

Written Approval of Benefiting Business

The person or organisation conducting the trade promotion must have written consent from the business which benefits from the conduct of the trade promotion.

Do I have to submit my competition terms to NSW Fair Trading?

Terms and conditions do not need to be submitted with the application for an ‘authority’.

However, to run a promotion under a current authority, a copy of terms for competition along with the authority number must be provided to NSW Fair Trading at least 10 working days prior to the start date of the competition via the following online form: https://tponline.onegov.nsw.gov.au/ntp-form.

Where should the terms and conditions be published?

The terms and conditions for the promotion must be made available by displaying them on a website or at the place in which the promotion is conducted.

Fees

The fees applicable are outlined below, and depend on the authority duration selected (1, 3 or 5 years):

Application for authority	Total cost*
1 year	$390.72
3 years	$602.64
5 years	$814.56

*Based on online submission. Fees are quoted inclusive of the VISA/Mastercard merchandise fee charged by NSW Fair Trading.

Registrar of Authorities

A register of authorities will be stored online and will be available to access by the public for free.

The database may include the name and address of the promoter, the authority number, date of issue and expiry of the authority, conditions subject to the authority, any enforcement actions taken by NSW Fair Trading against the promoter in relation to gaming activities.

Renewal of an Authority

An application to renew the authority can be made, and generally must be done so within 3 months of the expiry of the current authority. However, NSW Fair Trading has discretion to renew an authority after the 3 month period passes, if failure to renew was due to an oversight by the promoter or if it is just to do so.

Please note the department may deem it in the public interest to renew for a shorter period than you apply for.

If an authority expires after you submit a renewal application, the original authority will continue until a determination is made regarding the extension.

Cancellation of Authority

Once an authority is cancelled it cannot be renewed/restored. A new authority must be applied for in such an instance.

Amendments

Formal amendment applications are no longer required for NSW trade promotions covered by an authority.

However, if there is a ‘substantial change’ to the conduct of the activity under an authority, the holder of the authority must:

1. give written notice of the change to the NSW Department - the notification form is available to download here; and
2. take reasonable steps to notify participants in the promotion of the change.

Under the regulations, ‘substantial changes’ include (but are not limited to):

• a change to the prizes or the value of the prizes;
• a change in the date on which prize winners are to be determined or the method for determining prize winners;
• a change in the details of the authority holder; and
• a significant change in the number of tickets.

It is also important to note that ‘amendments’ can not be made to permits issued under the old scheme, and if changes are required, you will need to apply for an authority under the new regulations.

Timings

NSW Fair Trading has advised of the following current processing times for each of the following:

• Issue of Authority: NSW Fair Trading estimates the processing time for an ‘authority’ to be approximately 5 working days from date of application;
• Approval of Promotion Terms: Must be lodged at least 10 business days prior to the start of the promotion; and NSW Fair Trading is estimating the processing time for approval of the promotion terms to be 5 working days;
• Amendments: For “substantial changes’’ to terms for a promotion where a notice of change is lodged, the processing time for approval is approximately 5 working days.

Please note that due to the new nature of the changes, it is unclear at this point regarding the form of approval for amendments and approvals of terms. We will update this article once we have further information. The above timings are again estimates only and may change depending on the number of applications received by NSW Fair Trading.

Terms and Conditions Requirements

Terms and conditions are a very important part of any trade promotion. Plexus has all the information required for drafting terms and conditions, as well as a terms and conditions template for use in Australia.

Any terms and conditions for a trade promotion must contain the following information:

New Requirements

• The manner in which disputes regarding promotion or claiming a prize will be resolved
• Prohibit persons involved in the conduct of the competition or determining the winner from entering, or any person involved in managing a benefiting business
• If applicable, require that, if there is no prize winner or the prize winner cannot be found, that information must be published

Other Standard Requirements

• Costs of claiming a prize (if any)
• Entry close date
• Entry Limits
• Prize details & values
• Cost to enter via phone/electronic application (cost must not exceed cost for standard local call/standard use of the electronic app)
• Limits on number of prizes permitted per person (if applicable)
• Entry age limits
• Bonus prizes (if applicable)
• Details of the promoted business and any benefiting organisation
• If applicable (including dates and times these take place):
  • How winners are determined
  • Winner notification details
  • Where winners are announced
• Period for claiming a prize
• The circumstances in which a redetermination of prize winners may occur

Advertising Requirements

If an authority number is required, then it must be clearly displayed on the promotional advertising materials.

Winner Notification

The legislative changes do not mandate when or the form in which winners must be notified.

The previous requirement was personally (e.g. phone, email, etc) within 2 days of the draw.

Winner Publication Requirements

Winners are no longer required to be advertised.

Previously winners of any prize valued at $500 or more were required to be published.

Draw Requirements

There is no longer a requirement to obtain independent reports for electronic draw systems.

An independent scrutineer is required for activities in which an authority is required (competitions with prize pools over $10,000). This differs from the previous requirement, which specified a scrutineer is required for any draw in a promotion where the total prize pool for the draw was more than $10,000.

Unclaimed Prize Draw

The period for conducting an unclaimed prize draw may now be specified in the rules of the gaming activity or, if no time is specified, at least 3 months after the prize winner was previously determined. This means that there is no longer a set rule on including a 3 month claim period, however given the 3 month ‘default’ requirement, it would be prudent to include a 3 month period, if possible.

Printing Errors

Printing errors must not invalidate an otherwise valid prize claim. E.g. if you print more winning scratch cards then intended you must still award the respective winners.

Prize Conditions

Monetary Prize

Monetary prizes that exceed $5,000 must be paid by electronic fund transfer (EFT), if the winner requests, or in any other case as agreed between the prize winner and the person paying the prize.

This differs from the previous requirements, which stipulated monetary prizes over $2,000 must be paid by EFT if requested, or otherwise by crossed cheque.

Alcohol Prizes

Alcohol restrictions remain consistent with the previous regulations, with prizes prohibited from exceeding:

• 20 litres of liquor with an alcohol content not exceeding 20% by volume, or
• 5 litres of liquor with an alcohol content exceeding 20% by volume.

Prohibited Prizes

In addition, the following prizes are prohibited under the new regulations (vaping products are a new addition):

• a tobacco, smoking or vaping product;
• the provision of cosmetic surgery (cosmetic surgery means cosmetic surgery within the meaning of the Private Health Facilities Regulation 2017 that is for the purpose of improving a person’s personal appearance);
• a prize involving the administration to a person of a substance to which Division 1A of Part 3 of the Poisons and Therapeutic Goods Act 1966 applies; and
• a prize that, if offered, contravenes a provision of any other law of NSW or the Commonwealth.

Changes to Prizes

Prize substitution is permitted if the prize is not available due to unforeseeable circumstances. Prize substituted must be similar to the original prize AND of equal or greater value.

If the prize is valued at over $100,000 though, a substitute prize cannot be awarded, unless prior to time winners are determined, entrants are notified of the change and are provided with the opportunity to choose to stay in or opt out of the competition.

Record Keeping

There is no longer a requirement to keep records for conducting trade promotion gaming activities.

However, maintaining records is recommended by the Department, as this will help properly manage activities.