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Competitions are a great way for many businesses to promote the goods and services they provide.
They can also help to get traction and lead to growth for your business.
At first glance, it may seem simple to get one up and running.
However, there are strict rules and regulations when it comes to trade promotions and competitions.
If you’re unsure about whether you need a permit for the competition you want to run, don’t fret.
Here are the need-to-knows when it comes to running a competition.
What Are The Types Of Competitions?
There are two types of competitions a business can run:
- A game of chance
- A game of skill
What’s the difference?
A game of skill tends to require more effort from the entrants.
Most of the time, people who enter games of skill need to create an original piece of work as their entry.
You don’t need to provide the reasons as to why the entrants did or didn’t win but it’s a good idea to keep a record of your judging process.
The winner of the competition is chosen for their skill.
An example of a game of skill is a competition which asks its entrants to answer a question in “25 words or less” or submit a unique piece of work like a photo or video.
On the other hand, the winner of a game of chance is based on pure luck.
Entrants don’t need to demonstrate any skill in a game of chance.
Examples include entering your email address or tagging a friend in a facebook post, in exchange for an entry.
I Am Running A Game Of Chance – Do I Need A Permit?
Depending on where you’re based in, you might need to purchase a permit to run a game of chance, whether it be offline or online.
For games of skill, you generally don’t need a permit.
Do I Need Anything Else For A Competition?
Once you’ve got the relevant permit, you have to consider the legal docs you might need before opening your competition to the public.
It’s important to know that, regardless of whether you’re running a game of chance or a game of skill, you will need well-drafted competition terms and conditions and a privacy policy that complies with the consumer protection and data privacy laws.
These terms & conditions will outline the essential provisions that need to be made clear between you and the entrants.
These provisions include the eligibility criteria of the participants, competition duration, how the prize can be claimed and what happens if the winner is unable to claim their prize.
What To Take Away…
Running a trade promotion or competition is a great way to boost the visibility of your business.
A permit may be necessary to ensure that your competition is fair and reasonable, along with competition terms and conditions.
If you’re unsure about where to start when it comes to the legals of running a competition for your business, feel free to send us an email at [email protected] – we are here to help!
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