A compliance guide by Plexus | plexus.co/trade-promotions

This guide explains what qualifies as a game of skill in Australia, why it matters, how to structure your competition correctly, and how to avoid the common mistakes that accidentally turn a skill competition into an unlicensed game of chance.

Key takeaway: A game of skill competition does not require a trade promotion permit in any Australian state or territory. However, the skill element must be genuine and judges must apply real judgement to determine the winner.

What is a game of skill competition?

A game of skill is a trade promotion where the winner is determined by the application of human judgement, not by chance. A judge or panel assesses entries against defined criteria and selects the best one. There is no random draw involved at any stage.

Under Australian trade promotion law, a competition qualifies as a game of skill when:

• The winner is selected based on merit, creativity, or quality of their entry

• A person or panel applies genuine judging criteria to determine the best entry

• Chance plays no role in determining the winner, including as a tiebreaker

Game of skill vs. game of chance

The distinction between skill and chance is the single most important compliance question in trade promotions. Getting it wrong means running an unlicensed lottery.

Watch out: If you use a random draw at any point, including to break a tie between equally judged entries, your promotion may be reclassified as a game of chance. Permit requirements will then apply in NSW, ACT, SA, and NT depending on prize value. See the competition permits guide for details.

Why the skill vs. chance distinction matters 

No permit required

A genuine game of skill competition does not require a trade promotion permit in any Australian state or territory, including NSW, ACT, SA, and NT, which all require permits for games of chance above certain prize value thresholds.

This means you can run a skill competition with any prize value, in any state, without obtaining a permit before launch.

Faster to launch

Permit applications, particularly in NSW and ACT, take time and involve fees. Structuring your promotion as a genuine game of skill removes this step entirely. See the state-specific guides for permit timelines: NSW, ACT, VIC, QLD.

No prize pool restrictions

Games of chance trigger permit requirements based on prize pool thresholds (for example, ACT requires a permit when the prize pool exceeds $3,000). Games of skill have no such thresholds and you can offer any prize value without permit obligations.

T&Cs are still required

Removing the permit requirement does not remove the need for proper terms and conditions. Your competition must still comply with the Australian Consumer Law, privacy regulations, and platform-specific rules for social media competitions. See the giveaway rules and regulations guide for a full T&Cs checklist.

How to structure a valid game of skill competition

To ensure your competition qualifies as a game of skill and avoids any reclassification risk, follow these principles when designing it.

Define clear judging criteria

Your terms and conditions must specify the criteria judges will use to assess entries. Vague criteria like 'best entry' are insufficient. Use specific, measurable language such as:

• Creativity and originality (40%)

• Relevance to the competition theme (30%)

• Quality of presentation or execution (30%)

• Asking tied entrants to submit a further answer judged on creativity

• Awarding the prize to the entry received earliest

• Applying an additional judging criterion to break the tie

Publishing the judging criteria upfront protects you legally and gives participants a fair basis to compete.

Appoint a genuine judge or panel

The judging must be carried out by a real person or panel who reads or reviews each entry and applies the criteria. A single person from your marketing or legal team is sufficient. It does not need to be an independent third party, though independence strengthens the process.

Never use a random draw, including for tiebreakers

This is the most common mistake. If two entries are judged to be equal, you cannot resolve the tie with a random draw. You must use a non-chance tiebreaker, such as:

Document the judging process

Keep records of how entries were assessed and why the winner was selected. If your promotion is ever questioned, documented judging notes demonstrate that the skill element was genuine and applied consistently.

Set a meaningful entry requirement

The entry task must require genuine effort or creativity from the participant. A competition where entrants only need to submit their name and email address is unlikely to qualify as a genuine game of skill, regardless of how the winner is described as being chosen.

Answer a question about your brand in 25 words or less (judged on insight and creativity). Submit a photo using our product (judged on composition and theme). Design a logo concept (judged on originality and fit).

Common promotion types: skill or chance?

The following table shows how common promotion types are classified, and what tips them from skill into chance.

Tipping competitions: a special case

A tipping competition, where entrants predict results for each round of a sporting season and the most correct tips wins, is generally treated as a game of skill in most states because winning requires knowledge and accuracy across the season.

However, NSW and ACT have historically considered tipping competitions to involve an element of chance because sporting outcomes are uncertain, and may require permits. If you are running a tipping competition open to NSW or ACT residents, check current permit requirements in those jurisdictions.

Terms and conditions for a game of skill

Even without a permit requirement, your game of skill competition must have clear, compliant terms and conditions. At minimum, your T&Cs must include:

Faster T&Cs: The Plexus Promotion Wizard generates compliant terms and conditions for game of skill competitions in minutes. Visit plexus.co/promotion-compliance-software.

Running a game of skill on social media

Social media is the most common channel for game of skill competitions in Australia. Photo contests, caption competitions, and creative challenges all run regularly on Instagram, Facebook, TikTok, and LinkedIn. Each platform has additional rules that apply on top of Australian law.

^{Key platform rules to know}

• Facebook and Instagram: promotions must include a release of the platform from liability. You cannot use likes, shares, or tags as the primary entry mechanism. You must acknowledge that the promotion is not sponsored or endorsed by Meta.

• TikTok: competitions must comply with TikTok's Branded Content Policy. You cannot ask users to create content that violates TikTok's Community Guidelines.

• LinkedIn: commercial promotions must comply with LinkedIn's User Agreement. Using LinkedIn's platform for competitions involving prizes requires care around their anti-spam policies.

• A grant of rights allowing you to repost, share, or use entries in marketing

• A representation by the entrant that they own the content they submit

• A process for entries submitted privately via direct message if public posting is not required

Judging user-generated content

When your competition requires participants to post content publicly (for example, a photo with a hashtag), ensure your T&Cs include:

• A grant of rights allowing you to repost, share, or use entries in marketing

• A representation by the entrant that they own the content they submit

• A process for entries submitted privately via direct message if public posting is not required

Related guides

-> Trade promotions: complete guide

-> When is a competition permit required?

-> NSW trade promotion authority guide 2026

-> ACT trade promotion permit guide 2026

-> VIC trade promotion authority guide 2026

-> QLD trade promotion authority guide 2026

-> Giveaway rules and regulations in Australia