From the AFL grand finals to the Olympic gold medal tally, office tipping competitions are common. The basic premise is participants predict a winner and contribute money to a prize pool. Points are awarded for successful predictions, and at the end of the game or the season, prizes are awarded to those with the most correct predictions. If you intend to run a tipping competition in NSW, you should familiarise yourself with the legal requirements.
NSW Framework for Tipping Competitions
In NSW, any person or business can run a tipping competition, provided they comply with the state’s legal requirements, namely:
- Lotteries and Art Unions Act 1901 (NSW) (the Act); and
- Lotteries and Art Unions Regulation 2014 (NSW) (the Regulations).
Under the Act, tipping competitions are considered a type of ‘progressive lottery’, where participants predict the outcome or results of a sporting event and receive points for successful predictions. The participant who accumulates the most points wins the prize pool.
If the total entry fees exceeds $25,000 from the players that participate in the tipping competition, the organiser must take out an authorising permit.
When running a tipping competition, the promoter (i.e. the business or individual running the tipping competition) must comply with certain obligations.
|Selling tickets to the tipping competition||
|Restrictions on advertisements and promotions for the competition||
|Information a promoter must provide to participants||A promoter may choose to print these on the back of their tickets or on their website:
|Tipping competition rules||The promoter must create rules that clearly set out how people can participate in the competition. The rules must include the following information:
The promoter must clearly display the rules at the place where you are holding the tipping competition.
Giving Out Prizes
All money participants pay in a tipping competition must be put either towards prizes or returned to the participants. Any prize money the promoter awards must not exceed $7,000. However, you can use shopping vouchers or store credit from a major department store that exceeds $7,000.
The promoter must pay any prize money more than $2,000 using either a crossed cheque or if the winner requests, by electronic funds transfer into the winner’s nominated bank account.
Determining The Winner
The promoter must use its best endeavours when determining a winner to ensure that it takes place in accordance with the competition rules.
Notification Of Prize Winners And Publication Requirements
When awarding prizes to winners, the promoter must use its best efforts to notify each prize winner within two days of the determination. Promoters should also know how to deal with unclaimed prizes.
If the total value of prizes exceeds $10,000, the promoter must publish, within seven days, details of the win in either:
- a newspaper (or other publication generally circulating in the region where the competition is run); or
- the promoter’s website.
A promoter must provide the winner three months to claim their prize.
Financial Reporting Obligations
The reporting obligations for promoters depends on how much money they raised from selling tickets. In circumstances where the promoter receives less than $10,000, they must retain records of the total amount of money received as well as the details of the competition prizes for at least three months after the competition closes.
Where the promoter receives money equal to or greater than $10,000, they must retain the following records for at least three months after the competition closes:
- total amount of money received;
- details of the prizes;
- any costs and expenses (itemised by the person, amount and date of payment as well as receipts and invoices);
- number of participatory rights for sale,
- number of participatory rights the promoter didn’t sell,
- names and contact details of all individuals who bought a participatory right; and
- names and contact details of all prize winners, together with the details of their prizes.
The rules for running a tipping competition can be complicated and it’s important promoters familarise themselves with the obligations. If you have any questions or needs assistance drafting your tipping competition’s terms and conditions, get in touch with our commercial lawyers on 1300 544 755.