Keeping it legal: a short guide to writing contest rules

When creating and organising an online contest or competition, it is important to ensure that everything is perfectly legal and regulated, even if it is just a competition to boost your following on TikTok or Instagram. In particular, you need to write clear and concise rules for participants. These rules should be set out in the terms and conditions, which the organiser should draw up with great care.

If you do not provide the necessary information, your competition could look suspicious, and the draw could be susceptible to scrutiny, both reputational and possibly even legal. In this article, we will review the essential points you need to know when writing the rules for your next online contest, with brief overviews for running contests in the UK, the US, Canada, and Australia.

It’s important to note, this article is not meant to be exhaustive, merely a starting point. You will need to check the exact rules in your state or province when creating your contest, and you are highly advised to have professional legal help.

Writing and submitting competition rules

The behind-the-scenes process of writing and submitting contest rules can be a daunting one. Even for a simple instant win contest on social networks, it is necessary to set out the rules of the game pertaining to all eventualities in case they should come to pass.

In the UK, if you’re running a paid online contest, things get more complicated, as your competition then “could” be considered a lottery, or a form of gambling, and you will require a licence unless your contest can pass the “skills test” in a court of law – that is to say, contestants win by demonstrating superior skills or abilities. In the US, state laws around competitions will vary, so depending on where you’re based will have an impact in how you lay out your terms and conditions, and whether you need a specific licence.

When drafting the rules themselves, there are many rules that must be followed depending on the country where your competition takes place. You can ask a sworn professional for detailed information on the rules in your state, province, or country. These include specifying the deadline for participation, and the eligibility criteria for players, such as age restrictions. Each prize on offer as part of your contest must also be described accurately and in detail, including their value and any applicable taxes. It may also be necessary to state the right of the organiser to change the prize to one of equivalent value at their discretion, incase of parts shortages or other supply chain issues

Things to be mindful of if running a competition in the UK

In the UK, everything pertaining to the governing of online contests will be covered in the Gambling Act (2005). The Gambling Act allows “free draws” and “prize competitions” to promote products and award high value items to entrants so long as they are within the scope of the law.

Free draws

“Free draws” can constitute free entry into competitions, or competitions which include a free entry, and a paid entry. In the latter case, there are numerous conditions to meet, including but not limited to:

• The free entry route must be no less inconvenient than the paid entry route
• The free entry route must be displayed at the same level as the paid routes
• The system determining prizes should not recognise the two routes as being different

Prize competitions

The Gambling Act defines a prize competition as one that is determined by the participant’s skill, judgement, or knowledge. Organisers of a prize competition must be able to demonstrate that the skills, knowledge and judgement necessary to win will discourage entry due to perceived difficulty, and prevent a significant portion of entrants from being able to win the prize.

So long as your “free draw” or “skills competition” meets the requirements of the Gambling Act (2005), which can be viewed on the Gambling commission’s website, you do not need a licence or permission to run it. If your contest is free to enter, you don’t need a licence or permission either, and your online contest is not required to pass the “skills test,” even if it requires some skills or involves acquiring points to win a prize.

Things to be mindful of if running a competition in the US

The USA is an enormous and complicated country, full of nuance, in large part due to different states having different laws, and the requirements regarding running online contests are no exception to this.

For example: private businesses are unable to offer “lotteries.” Remove the requirement to pay to enter, and the lottery becomes a “legal sweepstakes.” Remove chance from the picking of the winners, and it becomes a “legal contest.” Individual states can have very specific guidelines and laws regulating contests and sweepstakes.

If you do not have a legal team to take care of the specifics for your online contest rules, you might be better served to contact an attorney who specialises in sweepstake and contest laws.

Things to be mindful of if running an online contest in Canada

In Canada, if you’re running an online contest, you’ll need to consult the Competition Act for the full legal requirements of running online contests.

You need to include “skill-testing questions” for any prize giveaway involving a purchase – whether that’s a paid online contest or a play of an instant win contest for purchasing a promoted product.

Your online contest should also include a free entry method, so you can claim there is no quid pro quo required to enter the contest.

If promoting in Quebec

Quebec has its own set of rules and regulations, including, among others, using both French and English in all of the contest’s promotional materials.

Things to be mindful of if running a contest in Australia

In Australia if your contest constitutes a game of skill, you will most likely not require any type of permit to run your game.

If your contest is a game of chance, then you will most likely need a permit, although this will be dependent on both the prize value, and which state (or states) you’re running your contest in.

Best practice for legal compliance with your online competitions

The rules are not half as scary as they might look. The odds are, you’re only having to promote your contest in one country, so once you’ve got your head around them for your first competition, you know it’ll be easier the second time around (although do look out for updates).

In general, however, if you have a legal team, either inhouse or on retainer, this is something to run through with them to ensure maximum compliance.

Be sure to comply with community standards on social networks

While creating and managing your online competitions on a games creation platform Drimify makes running and organising your contest far easier, you’ll still need to promote your marketing games across all your social media platforms, and it’s imperative that you respect the various platforms’ community standards when doing so.

When promoting your contest on Facebook, you’ll need to respect Facebook’s various policies for running promotions, including promoting online contests. These rules will be slightly different for Facebook, TikTok, Instagram, Twitter, LinkedIn, and so on and so forth.

Beyond legalities and community standards, think about the UX

The user experience (UX) of a contest or competition is something that can be helped by your terms and conditions, and how clearly you write them, and how effectively you incorporate key takeaways into the promotions of your contest.

You want to write your rules in plain English, and include excerpts of key restrictions or points of interest in your promotional materials. If your contest rules are written in dense, indecipherable prose that’s impenetrable to all save the most gifted PhD literature candidates, people just won’t enter. If they can’t understand their chances of winning, or the value of the prizes, and quickly at that, their incentive to enter is pretty much removed.

Organise a successful competition by ensuring it complies with relevant laws and guidelines

Running a successful online contest starts with running a contest that’s legally compliant, and promoting it on social media platforms while respecting and honouring the appropriate guidelines of those platforms.

Whether you have a legal team or not, it’s highly advisable to seek legal advice in setting up your rules while creating your online contest. Particularly if it’s your first foray into running online competitions.

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