Regulation of online trade promotions

Trade promotions (such as the giving of prizes to promote a business) are currently regulated by each State and Territory in which they are conducted. Online trade promotions need to comply with the laws of all States and Territories in which they are open to entries and multiple permits may be required.

State laws generally distinguish between promotions based on skill (eg “in 25 words or less”) and games of chance (eg lucky number) in determining whether a permit is required and the rules that apply.

A new Commonwealth Bill adds a new layer of regulation for trade promotions conducted online.

The Government has introduced the Interactive Gambling Amendment Bill 2016 into the House of Representatives.

If passed, the amendments will clarify the law regarding illegal offshore gambling and empower the Australian Communications and Media Authority (ACMA) by strengthening the enforcement mechanisms under the Interactive Gambling Act (IGA).

The IGA currently contains an offence for providing an interactive gambling service to customers in Australia.
The Bill will:

  • clarify the IGA by recognising two types of interactive gambling services – prohibited interactive gambling services (“illegal services”) and regulated interactive gambling services (“excluded services”) – and include new provisions prohibiting a person providing regulated interactive gambling services to Australians unless the person holds a licence under the law of an Australian State or Territory (‘unlicensed regulated interactive gambling services’)
  • introduce a civil penalty regime to be enforced by the ACMA. Enforcement tools will include formal warnings, infringement notices, civil penalties and injunctions.

A trade promotion gambling service would be an excluded service and therefore not prohibited under the IGA.

Proposed subsection 8BB(1) would define a “trade promotion gambling service” for the purposes of the IGA as a service (whether on the internet or any other broadcasting or content service) for the conduct of a lottery, or a game of chance or mixed chance and skill, in connection with a competition for the promotion of trade.

The insertion of section 8BB is intended to clarify that trade promotions, for example, online draws conducted by retailers which consumers may enter online to win a prize, and which are unlikely to pose any threat to problem gamblers, are not prohibited.

Proposed subsection 8BB(2) would allow the Minister to determine, by legislative instrument, one or more conditions for the purposes of subsection 8BB(1). Proposed subsection 8BB(1) would specify that any conditions determined under subsection 8BB(2) would also have to be satisfied in order for a service to be a trade promotion gambling service under section 8BB(1).

Proposed subsection 8BB(3) would provide that for the purposes of new section 8BB, trade does not include the provision of a gambling service. This is intended to ensure that a service for the conduct of a lottery or game in connection with a competition for the promotion of a gambling service would not be an excluded service.

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