Alex is Sprintlaw's co-founder and principal lawyer. Alex previously worked at a top-tier firm as a lawyer specialising in technology and media contracts, and founded a digital agency which he sold in 2015.
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Running a raffle or lottery can be a great way to raise funds, build brand awareness, or drive foot traffic to your business. But before you start printing tickets or promoting a prize draw on social media, it’s important to understand the raffle or lottery New Zealand legal requirements that apply. (This article is general information only, not legal advice.)
In New Zealand, raffles and lotteries are regulated under the Gambling Act 2003. The law doesn’t just apply to casinos and gaming machines - it can also apply to “simple” promotions, community fundraisers and business-led prize draws, depending on how they’re structured.
The good news is that many raffles and lotteries can be run legally - you just need to set them up the right way from day one. Below, we’ll break down the key compliance points and when you may need to notify a regulator or apply for a licence to run your raffle or lottery in New Zealand.
What Counts As a “Raffle” or “Lottery” Under New Zealand Law?
Everyday language (raffle, lottery, sweepstake, prize draw) doesn’t always match the legal definitions. Under the Gambling Act 2003, the key question is whether your activity is “gambling”.
Generally, something will look like gambling (and may be regulated) if it involves:
- Payment (someone pays money or gives something of value to enter)
- Chance (the winner is selected randomly, not by skill)
- A prize (money, goods, services, vouchers, experiences, etc.)
A typical raffle (paid ticket + random draw + prize) usually falls within the Gambling Act framework.
Raffle vs Prize Promotion (Sales Promotion Scheme)
Many small businesses want to run a promotion like: “Buy a coffee and go in the draw to win an iPad.” Whether that is regulated as gambling depends on the structure.
In New Zealand, a common lawful pathway for businesses is a sales promotion scheme (sometimes called a trade promotion). These are still treated as a form of gambling under the Gambling Act, but they can usually be run without a gambling licence where (among other things) entry is genuinely linked to buying the promoted goods or services at the normal price, and participants aren’t paying an extra amount (or separate fee) just to enter.
This is one of the most important points for business owners trying to meet raffle or lottery New Zealand legal requirements: changing how entry works (even slightly) can change whether your promotion is treated as a sales promotion scheme or becomes a different kind of regulated gambling with additional compliance steps.
If you’re unsure whether your promotion fits within the sales promotion scheme rules (or crosses the line into a different class of gambling), it’s worth getting advice upfront. Fixing it after you’ve already taken payments or promoted the draw can be messy (and risky).
Do You Need a Licence? Understanding Gambling “Classes” (Class 1 to Class 4)
The Gambling Act sorts many raffles and fundraising lotteries into different “classes”. The class can affect whether you need to do anything formal (like notifying the regulator), and whether you need a licence and what rules you must follow.
While the detail can get technical, the practical takeaway is:
- Smaller, one-off raffles may be lawful with minimal formalities (but you still need fair rules and proper handling of funds).
- Mid-sized fundraising raffles may require you to notify the Department of Internal Affairs (DIA) before you run them (even if you don’t need a licence).
- Larger raffles and ongoing fundraising lotteries often require a licence and stricter reporting/operational requirements.
- Commercial profit-making gambling is heavily restricted - you generally can’t just run a “for-profit raffle business” unless it fits within a permitted category and complies with the Act.
Who Issues Licences and Oversees Compliance?
For most raffles, fundraising lotteries and sales promotion schemes, the key regulator is the Department of Internal Affairs (DIA).
Local councils are not usually the “licensing body” for raffles/lotteries, but they can be involved in some gambling settings (for example, venue-related requirements for gaming machines). If you’re operating at a scale where a licence is required, you’ll want to treat this like a proper compliance project - timelines, criteria, record-keeping and ongoing obligations can apply.
Common Triggers That Increase Your Licensing Risk
If any of these apply, you should pause and check your position carefully:
- You’re planning to sell a large volume of tickets (or generate high total ticket revenue)
- You’re offering a high-value prize that will drive significant ticket sales
- You’re running the raffle/lottery repeatedly (for example, weekly or monthly)
- You’re running it online (especially if entries and payments are taken remotely and it can scale quickly)
- You’re raising money for an “authorised purpose” (common for charities and community groups) and need to show where proceeds go
- You want to outsource sales/marketing/hosting to a third-party platform (you still remain responsible for compliance)
Because the steps you need to take can depend on structure and facts (including whether notification or licensing applies), the safest approach is to confirm your classification early - especially before you take any money.
Key Gambling Act Compliance Rules You Should Build Into Your Raffle From Day One
Even where you don’t need a formal licence, you should still treat your raffle or lottery as a regulated activity. The fastest way to get into trouble is to run a casual draw with unclear rules, messy record-keeping, or misleading advertising.
Here are the practical compliance steps we recommend you build into your process.
1) Write Clear Rules (And Make Them Easy To Access)
Your rules are your “operating system”. They reduce disputes, show fairness, and help you prove what you promised.
At a minimum, your rules should cover:
- Who can enter (including any age limits and geographic restrictions)
- Start and end dates/times for ticket sales or entries
- Entry method (ticket purchase, purchase-plus-entry, free entry option if offered, etc.)
- Prize details (what it is, any restrictions, and whether it can be substituted)
- How and when the draw will happen
- How winners are notified, and how long they have to claim
- What happens if a prize becomes unavailable
- Refund approach (if any) if the raffle is cancelled
For many businesses and organisations, having properly drafted Competition Terms and Conditions is a straightforward way to reduce legal risk and avoid misunderstandings with entrants.
2) Don’t Mislead People When Advertising the Draw
If you promote your raffle or lottery through ads, posters, email, or social media, your marketing needs to be accurate. In practice, this often brings in obligations under the Fair Trading Act 1986.
That means you should avoid:
- Overstating prize value or availability
- Hiding key conditions (like “must be present to win”) in fine print
- Suggesting “everyone wins” or implying guaranteed outcomes
- Changing the rules mid-way unless your rules clearly allow it (and even then, it’s risky)
It can be tempting to move fast with promo content - but a quick legal check before you launch can save you a lot of headache later.
3) Handle Ticket Money and Proceeds Properly
One of the most sensitive compliance areas is money handling - especially where the raffle is connected to fundraising or an authorised purpose.
At a practical level, make sure you can clearly show:
- How much money came in (ticket sales/entry fees)
- What costs were deducted (printing, platform fees, payment processing, marketing costs, etc.)
- Where the net proceeds went (and that it matched what you said would happen)
For charities and community groups, this is often where licence conditions and record-keeping expectations become more formal. For businesses running promotions, good records still matter - particularly if anyone disputes your draw or alleges unfairness.
4) Run the Draw Fairly (And Be Able To Prove It)
A “fair draw” isn’t just good practice - it’s part of demonstrating that your raffle/lottery was legitimate.
Consider:
- Using a transparent random method (and documenting it)
- Keeping a dated record of the draw process (even a simple internal record can help)
- Having an independent person witness or supervise the draw for higher-value prizes
If you’re using a third-party platform or randomisation tool, make sure you can still explain (and evidence) how entries were counted, how the draw was run, and why the result was valid.
Running Online Raffles and Digital Promotions: Extra Legal Traps To Watch For
Online raffles are popular because they’re easy to promote and can scale quickly. But “easy to launch” doesn’t mean “low risk”. In fact, moving online can create extra compliance issues around advertising, privacy, and proof of fairness.
Privacy Act 2020: If You Collect Personal Information, Treat It Seriously
Most online raffles involve collecting personal information like names, phone numbers, email addresses, and delivery addresses. That can trigger obligations under the Privacy Act 2020.
From a business owner’s perspective, you should be thinking about:
- What information you collect (only collect what you actually need)
- Why you’re collecting it (draw administration vs marketing)
- Where you store it and who can access it
- How long you keep it and when you delete it
Having a fit-for-purpose Privacy Policy is a simple way to set expectations and reduce complaints - especially if people are entering through your website or a form link.
Email and SMS Marketing: Don’t Accidentally Breach Spam Rules
A common mistake we see is businesses using a raffle entry list as a marketing list. You might think, “They gave me their email, so I can send promos.” Not always.
If you plan to market to entrants, you should consider your obligations under the Unsolicited Electronic Messages Act 2007 (spam law), and make sure your signup process and consent wording is right. This is particularly important if you’re collecting entries via online forms or checkout pages.
This is also why it helps to get your wording and consent settings right from the start, especially if you’re building ongoing campaigns around entrants and customers in line with email marketing laws.
Website and Checkout Terms Still Matter
If people are buying raffle tickets or entering a prize draw through your website, your wider online legal documents should match what you’re doing - including payment terms, refunds (if any), and disclaimers about how the draw is run.
Depending on your setup, it may be appropriate to have Website Terms and Conditions that support your competition rules and reduce arguments about what was promised.
What Legal Documents Should You Have In Place Before You Launch?
When you’re focused on the prize, the artwork, and the marketing plan, legal documents can feel like an admin burden. But in reality, your paperwork is a big part of how you protect your business (or organisation) from disputes and compliance problems.
Depending on how you’re running the raffle/lottery, consider the following.
Competition Terms and Conditions
This is the core document for most raffles and promotions. It sets the rules, eligibility, draw mechanics, and what happens if something goes wrong.
As mentioned earlier, properly drafted Competition Terms and Conditions are particularly useful where you’re promoting publicly, selling tickets, or using social media to drive high entry volumes.
Privacy Policy and Collection Notices
If you collect personal data (online or offline), you should clearly explain how you handle it, and what entrants can expect.
A clear Privacy Policy is especially important if you:
- Collect entries online
- Use third-party tools (mailing lists, form tools, payment platforms)
- Want to market to entrants in future
Disclaimers (Where Appropriate)
Disclaimers won’t “magically” protect you from everything, and you can’t contract out of certain legal obligations. But a well-drafted disclaimer can still help manage expectations and reduce misunderstandings - for example, around prize availability, delivery timeframes, or technology errors.
If disclaimers are relevant to your setup (especially online promotions), having a tailored Disclaimer can be a helpful layer of protection.
Agreements With Partners or Prize Sponsors
If another business is donating the prize, co-hosting the promotion, or sharing the marketing list, you’ll want clarity on:
- Who is responsible for which costs
- Who owns the entrant data and who can market to entrants
- Who fulfils and pays for prize delivery
- What happens if the prize is unavailable
- Who is liable if complaints come in
This can be documented through a tailored collaboration or services arrangement (the right document depends on the relationship and the risk profile).
Key Takeaways
- Raffles and lotteries in New Zealand can be regulated under the Gambling Act 2003, so it’s important to confirm whether your promotion is “gambling”, and if so, what type (including whether it fits the rules for a sales promotion scheme).
- Licensing and notification requirements can vary depending on the type and scale of the raffle/lottery, whether it’s repeated, and how proceeds are handled, so it’s worth checking classification early (before you take payments).
- Clear written rules, accurate advertising, proper money handling, and a provably fair draw process are key parts of meeting raffle or lottery New Zealand legal requirements.
- Online raffles often trigger extra obligations under the Privacy Act 2020 and the Unsolicited Electronic Messages Act 2007, especially if you collect personal information and want to market to entrants later.
- Having the right legal documents in place - like competition terms, a privacy policy, and relevant disclaimers - helps protect you from day one and reduces the chance of disputes or complaints.
- If your raffle involves third parties (sponsors, partners, platforms), put the responsibilities in writing so you don’t get left holding the risk if something goes wrong.
If you’d like help setting up your raffle or lottery in a way that aligns with New Zealand’s legal requirements (including Gambling Act classification, drafting competition terms, and privacy documents), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.
