The Gambling Act is under review and the Department of Internal Affairs fact sheet has been updated! Don't think it affects you? If your sales promotions include something along the lines of "Purchase X and go in the draw to win Y" it definitely does. Because as far as the Act is concerned, your promotion is considered gambling.

It has always seemed remarkable and surprising that the simple world of marketing is partly controlled by the Gambling Act! Yet since 2003 when the Gambling Act was re-written, we have laboured under some archaic restrictions which govern the way we can run sales promotions and consumer competitions.

I’m talking about marketers offering the consumer a random chance of winning a prize as a reward for buying one of their products or services. For example, your customer buys their groceries and gets the chance to win a holiday in Hawaii. Just send in an entry to win. Simple right? Well, it hasn’t been, because there is any number of restrictions, such as; the goods must be sold at their normal price, the entry cost must not be inflated, you must state the value of the prize and all entries must have an equal chance of winning. In other words, a lottery, which means no tempting instant prizes, no scratch and wins, no modern digital initiatives, just a straight lottery over a set period.

And what if you wanted to appeal to the busy modern consumer who buys online? Here is the advice which was formerly published on the Dep’t of Internal Affairs fact sheet:

“A sales promotion scheme may not be legal if: It is operated via remote interactive gambling (e.g. over the Internet, by phone/text message), the exception is a lottery run as a sales promotion.”

But finally, we have some change!

The Gambling Act is under review and the DIA fact sheet has been updated. It now says:

What about sales promotions where products or services are purchased in-store?

Where the goods are purchased in store, the winner of the sales promotion can be determined a number of ways, including via an instant win, or a lottery, or a prize competition.

The customer can enter into the draw either by sending an entry in the post or by using a computer, phone or similar device.”

So, what does this mean?

It means if your customer buys in-store you can now run a wide and tempting range of promotions and they can enter your competition via any medium.

It also means the poor GenX and Millennials who like to buy online are still left out of instant wins and scratchies. But, as I suggested earlier, the Gambling Act is under review and the Marketing Association will be working to get our laws modernised to recognise the needs of marketers and the modern consumer.

NZ Sales Promotion rules in plain English:

  • Does your sales promotion have a price to enter and a random chance of winning a prize? …. Then it’s Gambling!
  • Is the product/service bought online, by text or ‘phone? Then you can only run the promotion as a lottery!
  • Is the product/service bought instore? Then you can run Instant Win, Scratchy, Prize or Lottery competitions!

For more information on The Gambling Act and how it affects your sales promotions, check out Fact Sheet 9 on Gambling on The Department of Internal Affairs website.

Please Note: This does not constitute formal legal advice. It is intended to convey what the Marketing Association considers best practice. If you are in any doubt, we recommend you seek specialist legal advice.