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NSW Trade Promotion Regulation Changes

By Sharmila Pamamull, Senior Counsel

02 July 2020

By Meagan Boschetti,

02 July 2020

Summary of changes

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):

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:

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

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

New Requirements

Other Standard Requirements

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:

Prohibited Prizes

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

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.

Speak to our marketing compliance Lawyers about your trade promotion today

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