Fundraising – Things you need to know about running online competitions or promotional lotteries

So, your NFP organisation has obtained an Authority to Fundraise in each state/territory and now wants to take the next step to expand its online fundraising activities by conducting competitions and/or promotional lotteries online.

Why run online competitions or promotional lotteries? 

This is a good way to give back to your donors, whilst receiving funds for your NFP organisation to advance its purposes. The main benefit of carrying out this type of fundraising is that your NFP organisation is giving participating donors (ie players/entrants) the chance to win a prize in exchange for entering a competition or promotion. This adds a level of interest, fun and excitement for players/entrants. It is a win-win situation (especially for players/entrants who win prizes).

Five things you need to know (to start with) 

  1. You need to obtain a licence/permit or authority from the regulators to conduct lotteries in all states/territories;
  2. You need terms and conditions for every competition/promotion that your NFP organisation conducts through your website;
  3. Every lottery needs to have a percentage of funds raised by ticket sales returned to players/entrants;
  4. Any advertisements for promotional lotteries must include specific information about the lottery such as the closing and drawing dates and licence number (where applicable); and
  5. Your NFP organisation will need to implement responsible gambling practices to promote responsible and ethical gambling practices.

What does your NFP organisation needs to do in each state/territory? 

Queensland

In Queensland, lotteries are classified into different categories depending on the proposed amount of the lottery proceeds.

  • Category 1 games – gross proceeds from raffles, lucky door prizes, bingo but are not more than $2,000. No licence is required;
  • Category 2 games – gross proceeds from gaming activities is more than $2,000 but not more than $50,000. No licence required but can only be conducted by eligible non-profit associations.
  • Category 3 games – includes raffles or art unions (not bingo) where gross proceeds are more than $50,000 and a category 3 gaming licence is required. This type of game can only be conducted by an “eligible incorporated non-profit association” and to seek approval you will need to lodge a Form 2A – Category 3 gaming licence application/renewal with the Office of Liquor and Gaming.

You will need to attach to the application form a copy of the last audited balance sheet or financial affairs of your NFP organisation together with a certified copy of the NFP organisation’s constitution.

The fees payable for the licence depend on the amount your NFP organisation wishes to raise as gross proceeds.

The licence remains in effect for 1 year and the details of the licence must be included on all advertising material and your NFP organisation’s website.

Note: Cash prizes cannot be for a value greater than $100,000.

  • Category 4 games – These types of games can be conducted by anyone and no licence is required, however, the purpose is for the benefit of promoting goods or services (which is not likely to be suitable for a not for profit organisation that is raising funds for a charity or sporting association.

New South Wales 

In New South Wales your NFP organisation must apply for an art union permit under the Lotteries and Art Unions Act 1901 (Act) to conduct online competitions or promotions where the prize value exceeds $30,000. You will need to complete your application online with the NSW Fair Trading if you wish to conduct a game of chance – art union. The application must be signed by a nominee (director, member of the management committee, or an employee) of your NFP organisation.

Your NFP organisation does not need a permit to conduct a raffle (or a guessing game) where the prize value is less than $30,000. However, you will still need to comply with the Act.

Your application needs to include details about the promoter, prize details, entry details and draw details how to enter the competition, any conditions of entry (must be over 18 years of age), dates, process for notifying winners, claiming of prizes, tickets that will be available and advertising material.

Generally, a permit is issued for a period of up to 12 months for each competition or promotion.

Note: Cash prizes cannot be for a value greater than $30,000.

Victoria 

In Victoria, your NFP organisation will require a permit to run online competitions which are considered raffles. Your NFP organisation will need to:

  1. comply with the conditions in the Gambling Regulation Act 2003 and Gambling Regulations 2015; and
  2. register as a community or charitable organisation by completing a Declaration as a community or charitable organisation and lodging it with the Victorian Commission for Gambling and Liquor Regulation.

Your NFP organisation must be a charitable organisation conducting the raffles or lotteries for a charitable, sporting or recreational purpose.

The next step is to apply for a minor gaming permit (where the retail value of prizes is more than $5,000) by completing a Gambling Application – Minor gaming permit – raffles, lucky envelopes, fundraising events and pay a fee for each event you wish to conduct.

The permit will be issued for a period not exceeding 2 years and will need to be renewed if you are conducting ongoing promotions.

Note: Cash cannot be given as a prize unless the cash is part of a travel and/or accommodation prize, in which case only 10% of the total travel prize can be cash.

Australian Capital Territory 

In the ACT any lottery which includes an element of chance or a mixture of chance and skill requires a permit under the Lotteries Act 1964 where the total prize value exceeds $2,500. A permit is not required where the competition is a game of skill.

Your NFP organisation will need to complete an Application for Permit to conduct a Raffle with the Gambling and Racing Commission – Access Canberra and pay the applicable fee (which varies depending on the value of the prizes that ACT residents may be eligible to win).

Note: There is no restriction of cash prizes in ACT.

South Australia 

In SA, lotteries can only be conducted by an “association” not formed for private gain and must have at least 10 members, an elected management committee and a constitution. So, provided that your NFP organisation satisfies this requirement then you can conduct lotteries in South Australia. However, your NFP organisation will need a major lottery licence where the total prize value for the promotion is $5,000 or more. You do not need a minor lottery licence where the total prize value is $5,000 or less.

For a major lottery, your NFP will need to lodge an Application for a Major Lottery Licence under the Lottery and Gaming Act 1936 with Consumer and Business Services in South Australia with the appropriate fee. Any funds raised through a lottery can only be used for religious, educations, charitable or benevolent purposes. Importantly, in South Australia any draws need to be conducted in front of an independent scrutineer (which is an additional requirement not often necessary in other jurisdictions).

Note: There is no restriction on cash prizes in South Australia.

Tasmania

In Tasmania, your NFP organisation will need to obtain a permit for a promotion where the total retail value of the prizes is $5,000 or more. You will need to lodge an Application for a Minor Gaming Permit under the Gaming Control Act 1993 with the Tasmanian Liquor and Gaming Commission together with the applicable fee. Minor Gaming Permits are issued for a period of either one or two years and may be subject to conditions.

Once a permit is held then each activity conducted under it must be separately approved using an Individual Activity Notification for Raffles Form 7 days prior to conducting the raffle. This is an additional obligation that is over and above the requirements in other states/territories.

A minor gaming permit may be granted for a period of one or two years (unless a shorter period is specified in the permit).

Note: Cash prizes cannot be for a value greater than $5,000.

Western Australia 

In WA, your NFP organisation will need to obtain a standard lottery licence to sell lottery tickets in a game of chance.  The purpose for raising funds must be for the support or conduct of sporting, social, political, literary, artistic, scientific, benevolent, charitable or other like activity (and not for private gain or any commercial undertaking).

Your NFP organisation will need to obtain a standard lottery permit under the Gaming and Wagering Commission Act 1987 from the Department of Racing, Gaming and Liquor. A permit authorising a standard lottery shall be issued for a period not exceeding 12 months.

Note: No restriction on cash prizes in WA. However, where the total prize value exceeds $20,000 then your organisation would need to provide a bank guarantee or security deposit.

Northern Territory 

In the Northern Territory, your NFP will need to be considered an “approved association” under the Gaming Control Act to conduct lotteries online. If your organisation is a community organisation (with a religious, educational, benevolent or charitable purpose) and has at least 10 members then you can apply to become an approved association by completing the relevant form. Where applicable you will need to lodge an Application to become an Approved Association with the Department of the Attorney-General and Justice (NT) together with your organisation’s constitution and various other documents.

If your NFP organisation is conducting games of skill, then you do not require a permit. However, for games of chance where the total prize value for the promotion is:

  1. more than $5,000 and less than $20,000 then a minor lottery permit is required;
  2. more than $20,000 then a major lottery permit is required.

There are numerous requirements in the Northern Territory that need to be complied with such as the value of prizes must be at least one third of the total value of tickets sold.

Note: Liquor must not be a principal prize in a lottery (this includes prizes consisting solely of money and liquor).

What are the next steps for your NFP organisation?

After obtaining the necessary permits the next stage involves drafting terms and conditions and setting up the promotion online, entry forms, tickets, prizes and other details so that all aspects of the competition or promotion complies with the regulatory requirements in all states/territories. See schedule of regulatory requirements below.

If you have any questions or wish to seek legal advice on any aspects of running online competitions or promotions, please contact us. We can also assist by conducting a workshop for your NFP organisation to work through the processes involved in obtaining the necessary permits.

Fundraising – Regulatory Requirements for Permits in all states/territories

Jurisdiction Regulator Permit required Eligibility (other than being NFP organisation) Prize Value/Gross Proceeds
Queensland Office of Fair Trading, Queensland and Office of Liquor and Gambling Regulation Yes – Category 3 game permit under the Charitable and Non-profit Gaming Act 1999 Eligible Association (defined in Section 10 of the CNPG Act) Gross proceeds

>$50,000

New South Wales Office of Liquor, Gaming and Racing Yes – Art Union Permit under the Lotteries and Art Unions Act 1901 Not for profit organisation Prize value

> $30,000

Victoria Victorian Commission of Gambling and Liquor Regulation Yes – Minor Gaming Permit under the Gambling Regulation Act 1993 Community and Charitable organisation Prize value

>$5,000

Australia Capital Territory ACT Gambling and Racing Commission and Access Canberra Yes – Permit to conduct a raffle under the Lotteries Act 1964 Not for profit Prize value

>$2,500

South Australia Consumer and Business Services Yes – Major Lottery Licence under the Lottery and Gaming Act 1936 Association as defined in S 121 of the Regulation (at least 10 members etc) Prize value

>$5,000

Tasmania Liquor and Gaming Branch, representing the Tasmanian Liquor and Gaming Commission and Consumer Affairs and Fair Trading Yes – Minor Gaming Permit under the Gaming Control Act 1993 Not for profit organisation Prize value

>$5,000

Western Australia Department of Commerce (Consumer Protection Division) and the Gaming and Wagering Commission of WA Yes – Standard lottery licence under the Gaming and Wagering Commission Act 1987 Not for profit organisation Any value unless raffle is for member etc, employees, prizes less than $200.
Northern Territory Licensing, Regulation and Alcohol Strategy Division, NT Department of Business Yes – Minor lottery permit under the Gaming Control Act

Yes – Major lottery permit under the Gaming Control Act

Approved association as defined in the Gaming
Control Act (must have at least 10 members etc)
Prize value

>$5,000 to $20,000

Prize value

>$20,000