Disclaimer: This article is intended to provide general information only. The information provided is not, and is not intended to be, legal advice.
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So you want to run a Facebook competition to build your fan base?
If you decide just go ahead and run a competition without adhering to Facebook Page Terms – Promotions you may find yourself in deep & very hot water!
Make no mistake all it takes is for a competitor, ex-employee or disgruntled customer to report you.
Facebook Promotion Guidelines are not the only factor to consider though when running a Facebook competition. The other is considerably more complex and more pressing. In Australia, you generally need to have a permit to run a competition.
If you run foul of Facebook, you risk losing your Facebook Page.
If however, you run foul of the law, you may risk a fine and possibly criminal proceedings.
So how do you run a successful competition (legally) on Facebook?
Don’t worry – it really isn’t that difficult. Just read through the below and it will all start to make sense.
Contest vs. Sweepstakes
The first step is to understand the terminology ~ Contest vs Sweepstake.
In a contest, the winner is judged and chosen based on some sort of qualification, be it a skill ~ the best photo, the best answer, the best painting or some sort of merit. This is also known as a ‘game of skill’.
In a sweepstakes, the winner is chosen completely at random, without any sort of qualification or decision structure. This is also known as a ‘game of chance”.
For the purposes of this post, I will be using the word ‘promotion‘ generically, just so we’re all on the same page.
Facebook Promotion Guidelines
The next step in running a successful and legal Facebook promotion is to really get a handle on Facebook Promotion Guidelines.
Australian State Government Trade Promotion Rules
[sws_blockquote align=”” alignment=”alignleft” cite=”Facebook” quotestyles=”style01″] you are responsible for the lawful operation of that promotion, including the official rules, offer terms and eligibility requirements (e.g., age and residency restrictions), and compliance with regulations governing the promotion and all prizes offered in connection with the promotion (e.g., registration and obtaining necessary regulatory approvals) [/sws_blockquote]
Each State has its own rules regarding trade promotions covering monetary value, disclosure, notification and awarding of prizes.
Some Australian States require you to apply for a permit even though your business is not even in that are and others require a permit if you run a sweepstakes or have a prize value over a certain amount.
As with most things legal, it’s not simple: the rules vary from State to State and will influence the type of Facebook promotion you run and where you run it.
A point to remember is the term trade promotion comprises online & Facebook promotions. So this information will assist you with any online competition or promotion you wish to run in the future.
Here is a general overview of the rules for running online competitions in each State:
South Australia
- ‘Game of chance’ – if the prize value is less than $5,000 Australian dollars no permit is required.
- ‘Game of skill’ – no permit is required regardless of the prize value. If however, there is any random element to the prize draw (e.g. where the entrant has entered by answering a game of skill, but the final winner is then drawn randomly from all the entrants), a permit is required.
- More information & permits available here: South Australian Office of the Liquor and Gambling Commissioner
New South Wales
- ‘Game of chance’ – you require a permit regardless of the prize value.
- ‘Game of skill’ – no permit is required.
- More information & permits available here: NSW Office of Liquor, Gaming and Racing
Victoria
- A permit is not needed if the competition prize value is less than $5,000 Australian dollars regardless of whether it’s a ‘Game of Chance’ or a ‘Game of Skill’.
- For more information: Victorian Commission for Gambling and Liquor Regulation website
Western Australia
- Permits are not required to run an online competition in Western Australia as long as entry is free for the contestant.
- More information here: Gaming and Wagering Commission of Western Australia
Queensland
- No permit is required to run an online promotion or competition regardless of the prize value.
- More information here: Queensland Government Office of Liquor and Gaming Regulation
Tasmania
- Permits are not required to run promotion in Tasmania regardless of the prize value.
- More information here: Tasmanian Gaming Commission
ACT
- Permits are required for all online promotions run in ACT. The cost of the permit depends on the value of the prize
- More information here: ACT Gambling and Racing Commission website.
Northern Territory
- A permit is required if the prize value is over $5,000 Australian dollars.
- More information here: Department of Business Northern Territory
To recap, what we’ve learnt so far in the Facebook Promotion series:
- Understand the terminology – Sweepstakes/Game of Chance vs Contest/Game of skill
- Check State Government promotion guidelines
- Apply for competition permits if relevant keeping in mind the entry mechanism and the value of your prize
- Draft terms and conditions that comply with Facebook regulations (include the Facebook Disclaimer) as well as each State’s regulations
- Run your Facebook competition through a third party app.
If you have any questions, or need clarification on something, ask away below!
Until next time…..
