Gambling Fact Sheet #9 - Sales Promotions

A sales promotion must be run for the purpose of promoting particular goods and services. The main restrictions are around the prizes that are allowed, the entry conditions, and collecting money online.

On this page

Criteria for a lawful sales promotion

Prizes

Digital promotions

Overseas promotions

Check if you are still not sure

Criteria for a lawful sales promotion

Conditions cannot be changed once the competition has started.

Be aware of any other New Zealand legislation, such as the Fair Trading Act, that may also affect your sales promotion scheme.

Promoter conditions

Businesses can not make any commercial gain from the sales promotion, other than through the normal trading of goods and services. For example items can’t be sold for more than their usual value.

The goods and services being promoted under the sales promotion are normally sold, created or distributed by the retailer.

All conditions, including the period of the promotion, must be made clear in promotional material before the event is run.

Entry conditions

It must not cost the person anything extra to enter the competition, other than the normal price of the goods and services.

The customer may be asked to pay the cost of sending their entry in, however:

  • the cost of sending the entry must be at the standard rate – for example the standard rate for posting a letter or for sending a text message via a mobile phone.
  • if it is necessary to download an app to enter the promotion, the app must be free to download.

Determining the winner

Promotional material must clearly explain:

  • the method of determining the winner
  • how/when the winner will be notified.

The winner of the competition can be determined either:

  • totally by chance, or
  • partly by chance and partly by skill or knowledge. This might include answering a question.

The winner may be decided in different ways.

  • If the products and services are purchased in-store you may declare the winner via an instant win, or a lottery, or a prize competition. 
  • If the products and services are purchased online or over the phone only lotteries are permitted.

Find descriptions of each type of game, and the game rules:

Rules for running a gambling activity: https://www.dia.govt.nz/Services-Casino-and-Non-Casino-Gaming-The-Rules-for-Running-a-Gambling-Activity

Prizes

The prize must not be prohibited under the Act.

Prohibited prizes include:

  • firearms, explosives, restricted weapons, alcohol, tobacco products
  • vouchers for commercial sexual services, or any of the items listed above
  • Taonga tūturu (an object more than 50 years old that relates to Māori culture, history or society, and was manufactured, modified, used or brought into New Zealand by Māori).

Full list of prohibited prizes https://www.dia.govt.nz/diawebsite.nsf/wpg_URL/Services-Casino-and-Non-Casino-Gaming-The-Rules-for-Running-a-Gambling-Activity#eight

There is no restriction on the products that can be featured as part of a sales promotion.
For example a bottleshop could use a sales promotion to encourage the sale of a brand of alcohol, but the prize must not include any alcohol.

Digital promotions

You may not collect money online, unless the sales promotion is being run as a lottery.

That is considered online (remote interactive) gambling and is prohibited under the Act.

You may:

  • promote your goods online, for example on facebook.
  • accept entries via text, or online apps
  • accept online or phone payment for a product, as long as the associated sales promotion:
    • is a lottery (where the winner is drawn after all the tickets have been entered)
    • is conducted mainly in New Zealand.  Read more about overseas promotions below.

This ban on digital payment extends to 3rd party ‘suppliers’ who may deliver your product, if they collect any money via digital channels on your behalf. 

Remote interactive gambling

Example:
Online food delivery services that accept payment via online apps cannot deliver items that are being sold as part of an instant prize promotion, even though you can sell the same item over the counter in your store.

Overseas promotions

Overseas or international sales promotions can be run in New Zealand.

New Zealand participants must get the same opportunity to participate and win as overseas participants, with no extra costs or other barriers. 

Key requirements:

  • the opportunities to enter and the chances of winning the competition are equal for all participants regardless of where the sales promotion originates
  • the qualifying product or service must be sold in New Zealand, and not just be a sales promotion scheme offered in New Zealand
  • the business must have an address in New Zealand for enquiries. This would demonstrate that they are conducting their business in New Zealand – and not just selling online to New Zealanders.
  • New Zealand winners do not face extra costs to collect their prize.
  • All other criteria for a lawful sales promotion must also be met.

If the sales promotion scheme is being run in other countries as well as in New Zealand, the business may not advertise the overseas component of the gambling activity or promotion in New Zealand. 

Check if you are still not sure

If your sales promotion meets all the criteria outlined on this page, it is likely to be lawful.

Conducting illegal gambling is an offence and on conviction, can result in a fine of up to $20, 000 for an individual and $50,000 for a body corporate (section 19 of the Gambling Act).

Each sales promotion is unique, and lawfulness will depend on the nature of each promotion.

If you are still not sure that your sales promotion scheme is legal you should contact your solicitor.

You can contact the gambling group for more information, but note the Department cannot provide legal advice.

 

Return to: Fact Sheets (Gambling Act 2003)