Prize competitions and free draws. Prize competitions and free draws are not regulated in terms of gambling and therefore you do not need a licence to organise these activities. Prize competitions are those which are not based wholly on chance. To qualify as a prize competition there needs to be a sufficient level of skill involved that will. Yes, prize promotions based on chance (prize draws also known as 'sweepstakes') are allowed, but ensure: Prize draws or sweepstakes should not constitute gambling under the German gambling regulation. Therefore, no payment should be required to enter.
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There are a number of gambling activities that societies (and in very limited circumstances individuals) can run. These include housie (also known as bingo), instant games, game of chance, lottery and prize competitions.
If you want to run one of these games you need to follow the relevant game rules for the type of activity. You will not need a licence from the Department of Internal Affairs unless the total value of the prizes and/or the turnover exceeds certain limits. The value of any-non cash prizes is the retail value.
- Instant games
E.g. scratch and win games run by schools and mystery envelopes.
- Game of chance
E.g. gaming session, filly stakes and parlour derby.
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- Prize competitions
E.g. tagged fishing competitions, sporting competitions where some or all of the entrants go into a draw, rugby tipping-type competitions, and calcuttas.
- Obtain a licence
- What gambling proceeds can be used for
- List of prohibited prizes
Obtain a licence
Where the total value of all prizes (the retail value for any non-cash prizes) for any of the above games (excluding housie) exceeds $5,000 the gambling activity must be conducted by a society and the relevant forms filled in to obtain a licence. These should be sent to the Department's Gambling Group.With the exception of housie, a Class 3 gambling licence is a 'one-off' issued for the duration of that specific activity (e.g. lottery, gaming session, etc). Each subsequent activity requires a separate licence application.
Note: A housie licence can be granted only to a corporate society. A housie licence is valid for one year, and must be renewed each year. If it is not renewed, it expires at the end of the 12-month period for which it was issued.
What gambling proceeds can be used for
Money obtained from gambling must benefit the community, as determined by the Gambling Act 2003.NO commission can be offered or paid to, or received by, a person for conducting gambling, except if a Licensed Promoter is employed. Licensed Promoters can be employed only by a society holding a licence to conduct Class 3 Gambling.
NO remuneration is to be offered or paid to, or received by, a person for conducting gambling, except a caller of housie or an authorised representative of the society conducting the gambling.
With the exception of Class 1 Gambling turnover and/or total prizes (the retail value for any non-cash prizes) for Class 1 gambling are each $500 or less, and the gambling is conducted by individuals (for example, an office sweepstake), net proceeds from gambling must be applied or distributed to Authorised Purposes. Authorised Purposes must be non-commercial. They must also be charitable or of benefit to the community.
Proceeds from Class 1, 2 and 3 gambling (lotteries, housie, instant games etc.) can be also used for electioneering purposes.
Prohibited Prizes
It is illegal to offer the following as prizes:- A firearm, explosive (including ammunition), restricted weapon, or airgun
- Liquor
- Tobacco products
- A taonga tuturu (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)
- Vouchers or entitlements to commercial sexual services
- Vouchers or entitlements to any of the other property listed above.
Game rules require that the nature of gambling prizes must be fully disclosed.
- Prohibited Gambling - certain forms of gambling are specifically prohibited under the Gambling Act 2003.
Overview
- A prize competition is gambling which has an element of chance but also requires participants to exercise some knowledge or skill.
- Tagged fishing competitions, sporting competitions where some or all of the entrants go into a draw, rugby tipping-type competitions, and calcuttas are examples of prize competition games.
- You do not require a licence if total value of prizes (the retail value for any non-cash prizes) is $5,000 or less, and turnover of the gambling is $25,000 or less (these may be run as either Class 1 Gambling or Class 2 Gambling).
- If the total value of all prizes (the retail value for any non-cash prizes) is more than $5,000 you will need to obtain a licence.
- See the rules around what gambling proceeds can be used for and the list of prohibited prizes.
- See Game Rule 10 for information about running calcuttas.
- A competition involving skill may not be subject to the Gambling Act 2003 requirements if there is no gambling involved.
All operators of prize competitions need to comply with the Prize Competition Game Rules.
Exemption for some spot prize competitions
When the value of your spot prizes falls within the definition of Class 3 gambling, provided your spot prize competition meets certain criteria, you do not have to apply for a Class 3 licence and your spot prize competition is exempt from the Gambling Act 2003.The spot prize competition must comply with all of the following:
- the spot prize competition forms part of (or is subsidiary to) a main event. A main event can be a competition (for example, a sporting or fishing competition) or other event that benefits the community in which it is held (or some wider community of which it forms part) such as a home or lifestyle show, food festival, or fashion show;
- the spot prize draw is completed within seven days of the main event;
- no additional consideration (direct or indirect) is required to participate in the spot prize competition (over and above any fee to participate in the main event);
- the determination of its outcome does not involve any gaming machine;
- no prize given out is prohibited property under the Gambling Act 2003; and
- the main event is not itself defined as gambling.
If you have a query you can contact the Gambling Group on 0800 257 887 (Free phone - New Zealand only) or by email to gambling.compliance@dia.govt.nz
Prize Competition Game Rules
Open the PDF* version of Prize Competition Game Rules (PDF, 104K)* or scroll down to read the HTML version.Pursuant to section 367(1) of the Gambling Act 2003, I, Christopher Blake, Secretary for Internal Affairs, make the following game rules:
Gambling Act (Prize Competition) Game Rules 2004
- Title and commencement
- Interpretation
- Application of rules
- Conduct of game – class 1, class 2 and class 3 gambling
- Conduct of game - class 2 and class 3 gambling
- Conduct of game - class 3 gambling
- Percentage return as prizes
- Records and auditing
- Retention of documents
- Calcutta
Title and commencement
(1) These rules are the Gambling Act (Prize Competition) Game Rules 2004(2) These rules shall come into force on the 1st day of July 2004.
Interpretation—
(1) In these rules, unless the context otherwise requires,—Act means the Gambling Act 2003
authorised purpose has the same meaning as authorised purpose in section 4(1) of the Act
jackpot means where unclaimed prizes are carried forward to a subsequent prize competition
licence has the same meaning as class 3 operator’s licence in section 4(1) of the Act
participant in relation to a calcutta, means a participant in the race or event in which calcutta is being conducted on
prize competition means a scheme or a competition -
- (a) for which direct or indirect consideration is paid to participate; and
- (b) that distributes prizes of money or in which participants seek to win money; and
- (c) for which the result is determined partly by chance and partly by the performance by the participant of an activity of a kind that may be performed more readily by a participant possessing or exercising some knowledge or skill, whether or not it may also be performed successfully by chance.
ticket means a document or thing that is evidence of, or signifies participation in, gambling or, if there is no document or thing, includes the right to participate, and for the purposes of these rules includes an entry form
(2) Any term or expression that is defined in the Act and used, but not defined, in these rules has the same meaning as in the Act.
Application of rules
These rules apply to class 1, class 2 or class 3 gambling that is a prize competition.Conduct of game – class 1, class 2 and class 3 gambling
Every organiser and society (or an individual where section 22 of the Act applies) must comply with the following rules when conducting a prize competition that is class 1, class 2 or class 3 gambling -(1) The organiser shall clearly indicate to all participants the rules and requirements by which the prize competition will be played, including the process which by winners will be determined in the event of a tie between participants.
(2) A ticket is the only valid basis for participating in the prize competition.
(3) A ticket is the only valid basis for winning a prize competition.
(4) Where tickets are sold to the general public, the date, time and location of the prize determination shall be publicly notified.
(5) Where tickets are sold to the general public, the determination of the results must be open to the public.
(6) Each ticket sold and no other ticket is included or represented when the result is determined.
(7) Tickets to the prize competition must not be combined with a fee to any other event or entertainment.
(8) Prizes are given only to persons who win.
(9) The authorised purpose(s) to which the net proceeds of the prize competition are applied or distributed must not change once ticket sales have commenced.
(10) Prizes must be given to winners within 3 months after the result is determined, unless the winner cannot be identified or located, or does not wish to accept the prize.
(11) The details of any conditions attached to a prize must be clearly indicated at the point of sale.
(12) Ticket sellers must ensure that information is obtained from ticket purchasers to identify and locate the person to whom the ticket is sold.
(13) Prize winners must not incur costs additional to the cost of participation in the prize competition when claiming their prize.
(14) Prizes offered must not be changed once the prize competition has commenced.
Conduct of game – class 2 and 3 gambling
Every society and organiser must comply with the following additional rules when conducting a prize competition that is class 2 or class 3 gambling:(1) A prize competition cannot jackpot.
(2) Neither the society nor the organiser may hold a ticket.
(3) Any judge determining the skill of participants must be independent of the participants.
Conduct of game – class 3 gambling
Every society and organiser must comply with the following additional rules when conducting a prize competition that is class 3 gambling:
(1) Tickets to the prize competition must not be printed until a licence has been issued by the Secretary, unless the Secretary has given prior approval.
(2) A specimen of the printed ticket and butt must be provided to the Secretary prior to the commencement of ticket sales.
(3) The rules by which the prize competition will be played must be provided to the Secretary prior to the commencement of ticket sales.
(4) Unless entry to the prize competition is restricted to members of a society, organisers must provide each participant with an individually numbered ticket to act as a receipt, showing the following information:
- (i) the name of the society:
- (ii) the name and address of the organiser of the prize competition:
- (iii) the authorised purposes for which the prize competition is conducted:
- (iv) when, where and how the winner(s) will be determined:
- (v) details of where, when and how results will be notified publicly:
- (vi) the value and characteristics of the prize(s) to be won:
- (vii) the cost of entry:
- (viii) the total number of tickets offered in the prize competition:
- (ix) the process for determining the winners, should there be a tie between participants:
- (x) the process for cancelling the prize competition:
- (xi) the following words: By licence issued under section 37 of the Gambling Act 2003:
- (xii) licence approval number issued by the Department of Internal Affairs:
- (xiii) address and phone number of the Department of Internal Affairs.
- (i) the name of the society:
- (ii) the name and address of the organiser:
- (iii) space to enable purchaser to write name and contact details.
- (i) the name of the society;
- (ii) the name and address of the organiser;
- (iii) the authorised purpose for which the prize competition is being conducted,
- (iv) the cost of each ticket; and
- (v) the number of tickets offered for sale.
(8) All prize competitions must be determined on the date specified on the licence or such later date as may be approved by the Secretary.
(9) If the prize competition is ancillary to entertainment, the result must be determined while the entertainment continues.
(10) Unless the prize competition is ancillary to entertainment, the result of the prize competition must be declared within 3 months of tickets first being offered for sale and within 14 days after ticket sales cease.
(11) The result of the prize competition must be notified publicly within 1 week after it is declared.
(12) Results must be published in a newspaper or newspapers circulating in the area(s) in which the tickets have been sold.
(13) Winners must be notified in accordance with the method printed on the tickets.
(14) The value of any prize (excluding cash) shall be the retail value at the time of the application, or the date of purchase if the prizes are purchased prior to the application being lodged.
(15) If the winner cannot be identified or located, after a reasonable effort, and the prize or reward remains unclaimed 3 months after the determination of the result, the society must notify the Secretary for Internal Affairs within 1 month. Prizes must then be disposed of according to the Secretary for Internal Affairs directions. The society must ensure that the prize is retained for 3 months after the draw; or if the prize is livestock or a property of a perishable nature, sell the prize in a way that brings a reasonable price and retain the proceeds (after deducting the reasonable costs of the sale) for 3 months after the draw until directions are received from the Secretary for Internal Affairs.
Percentage returned as prizes
Prizes must be worth at least 20% of the prize competition’s gross potential income.Records and auditing (applicable if the prize competition is class 3 gambling)
(1) The society must provide an independently audited Audit and Prize Statement of the prize competition in the approved manner.(2) The society must forward an Audit and Prize Statement to the Secretary within three months from the date the prize competition result is determined.
(3) Any person completing the Audit and Prize Statement for the society shall be a chartered accountant in public practice who is not associated, directly or indirectly, with the conduct of the prize competition or the society's licensed promoter if one is employed.
(4) Where proceeds are provided to any other society as an authorised purpose:
- (i) The Audit and Prize Statement must include an additional form of verification and consent from the recipient society;
- (ii) The Secretary may require additional information from the recipient society in relation to how the proceeds have been spent;
- (iii) The Secretary may direct the recipient society to carry out an audit of the proceeds received by a chartered accountant.
Retention of documents (applicable if the prize competition is class 3 gambling)
(1) The society must retain all butts, unsold tickets, invoices, statements, and other documentation associated with the prize competition for a period of six months after the date of the results determination. They are to be produced upon request to the Secretary.Calcutta
In addition to adhering to the prize competition rules, calcutta must be played in accordance with the following rules;(1) Where tickets are sold to the general public, the date, time and location of the draw for the sweepstake shall be publicly notified.
(2) The name and date of the event on which the Calcutta is being conducted shall be clearly advertised.
(3) The method of selecting a sweepstake ticket, and allocating the participant in the sporting event to that ticket shall be clearly identified.
(4) The drawer of a participant shall be known as the owner.
(5) At the conclusion of the sweepstake draw, an auction must take place in which all owners of participants in the event must take part.
(6) The owners of participants have the choice either to sell by auction their participant and receive half the sale price or purchase outright the participant at half the sale price. The remaining half of the sale price is to be used for authorised purposes and the prize pool.
Challenge Prizes And Competition
(7) Only sweepstake ticket holders are eligible to participate in the auction.(8) Owners must submit their winning tickets if they choose to bid for and retain their own horses. 50% of the full auction price must be paid for their participant.
(9) Successful purchasers must pay for their participants immediately after the completion of the auction.
(10) If a participant in the sporting event is scratched or fails to start in the event after the auction has been completed, that purchaser shall be allotted any reserve runner that may regain the field. If there is no reserve participant, it must be clearly stated prior to the commencement of the sweepstake draw whether or not a refund will be made for late withdrawals of participants in the event.
11) Prize-winners will be the official placings as declared by officials on raceday and upon which any dividends or prizes are paid. In the event of a tie, the prizes concerned will be combined and divided by the number of participants in the sporting event.
(12) The allocation of the prize pool is to be determined and clearly stated prior to the selling of tickets. It may be expressed as a percentage figure.
(13) The method and timing of payment of prizes is to be clearly shown at the point of sale of tickets.
(14) When conducted at the class 3 gambling level, a calcutta calculation sheet must be supplied to the Department on the required form.
Made in Wellington this _____ day of ______________ 2004.
Christopher Blake, Secretary for Internal Affairs
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