How To Run a Lottery or Trade Promotion in New Zealand Legally

Running a giveaway can be a great way to build your mailing list, increase sales, or get people talking about your brand.

But in New Zealand, promotions that involve prizes and “luck” can cross into regulated gambling territory faster than most business owners expect. The good news is that many trade promotions can be run legally without a licence, as long as you structure them the right way and communicate the rules clearly.

In this guide, we’ll walk you through the trade promotion New Zealand legal requirements you should be thinking about before you hit “launch”, including when you might need a licence, what to put in your T&Cs, and the other laws that can trip up otherwise well-run promotions.

What Counts As A Lottery Or Trade Promotion In New Zealand?

Before you design your campaign, it helps to understand the legal categories New Zealand law uses.

Under the Gambling Act 2003, “gambling” is broadly about three things:

• A prize (something of value is offered)
• Chance (winners are determined by luck, random draw, instant win mechanics, etc)
• Consideration (people have to give something of value to enter, like paying money, paying more than usual for a product, or incurring a real cost to enter)

If your promotion has all three, there’s a real risk it’s regulated gambling (even if it’s dressed up as “just a giveaway”).

In everyday business terms, here’s how common promotion types usually work:

1) A “Lottery-Style” Promotion

This is typically where people buy a ticket (or otherwise pay to enter) and winners are chosen by random draw. This commonly triggers gambling compliance issues.

2) A “Trade Promotion” / “Sales Promotion Scheme”

This is usually a business promotion run to encourage sales, where entry is connected to buying a product or service (or sometimes engaging with the brand), and prizes are awarded by chance.

In New Zealand, many business prize draws are structured as a sales promotion scheme. Importantly, these schemes can still fall within the Gambling Act definition of “gambling” - but they’re commonly run without a gambling licence where the entry conditions fit the Act’s sales-promotion framework (for example, there’s no extra payment to participate beyond a genuine purchase at the usual price).

This is why planning the “entry mechanic” matters so much.

3) A Skill-Based Competition

If winners are determined by skill (for example, a judged answer, a genuine contest of skill, or a task-based competition), it may not be “gambling” in the same way because it isn’t determined by chance.

That said, “skill” needs to be real. If it’s essentially random (or you’re just picking a winner at random anyway), the campaign can still be treated as chance-based.

If you’re ever unsure which category you’re in, it’s worth getting advice early. The legal treatment (and your compliance workload) can change depending on how the promotion is structured.

Do I Need A Licence Or Permit For A Trade Promotion?

This is the question behind most searches about trade promotion New Zealand legal requirements.

In New Zealand, whether you need a licence (and what kind) depends on the exact mechanics of your promotion. The key issue is usually whether it is considered “gambling” under the Gambling Act 2003 - and, if it is, whether it fits within the sales promotion scheme settings that allow it to be run without a gambling licence.

When You’re More Likely To Need Extra Legal Help

You should slow down and get specific advice if your promotion includes any of the following:

• People pay specifically to enter (for example, entry fees, “tickets”, paid SMS entry, or pay-to-enter online forms)
• People must buy something at an inflated price (for example, “buy this item for $20 to enter” when it normally sells for $10)
• Entry requires a cost beyond normal participation (for example, unusually expensive phone charges or paid subscriptions just to enter)
• Large prize pools or promotions run frequently (which can draw more scrutiny and raise operational risk)
• Complex prize mechanics (instant wins, multiple draws, “spin to win”, tiered prizes, or bundling with memberships)

Even if your intentions are good, small details (like whether the price is “usual”, or whether entry truly is optional) can change the legal analysis - and charging for entry (or building in an extra cost to enter) can push a campaign into a regulated (and potentially licensed) form of gambling.

When A Promotion Is Often Structured To Avoid A Gambling Licence

Many trade promotions are designed so that entry is linked to a genuine purchase at the usual retail price, with no additional payment required to participate.

Practically, that often looks like:

• “Buy any [product] during the promotional period and go in the draw”
• “Every purchase receives one entry”
• “Spend $X on our usual goods/services and be entered to win”

However, the details matter. If you’re offering “bonus entries” for extra payment, adding a “competition fee”, or raising prices during the promo, you can accidentally create “consideration” beyond a normal purchase - which is the kind of change that may take the promotion out of the usual sales promotion scheme approach.

If you want a deeper overview of when promotions need approvals and how regulators tend to look at these schemes, permit requirements are a good place to start (and it’s still wise to get tailored advice for your exact campaign).

What About “No Purchase Necessary” Entry Options?

Some businesses choose to offer a free alternative entry method (for example, “email us to enter without purchase”). This can help reduce the risk that the promotion involves “consideration”.

But it can also create extra admin and fraud risk (duplicate entries, unverifiable participants, etc), and it needs to be set out carefully in your rules so the process is fair and consistent.

There isn’t a single “one size fits all” approach here. The right structure depends on your audience, your marketing channel, and how comfortable you are operationally managing entry integrity.

What Should Your Trade Promotion Terms And Conditions Cover?

Even a simple giveaway needs clear rules. Your terms aren’t just “nice to have” - they’re a big part of staying compliant and protecting your business if a winner dispute pops up.

In most cases, you’ll want proper Competition Terms and Conditions that are tailored to your promotion (not copied from another business, and not pulled from a generic template that doesn’t match what you’re doing).

Key Clauses To Include (In Plain English)

Your trade promotion terms and conditions usually need to cover:

• Promoter details: your legal business name and contact details
• Eligibility: who can enter (age limits, NZ residents only, employee exclusions, etc)
• Promotional period: start/end dates and relevant time zone
• How to enter: the exact entry steps (including limits like “one entry per person per day”)
• Entry conditions: what counts as a valid entry and what will be disqualified
• Prize details: what the prize is, what it’s worth, and any limitations (for example, dates, availability, exclusions)
• Winner selection method: random draw, instant win, judged criteria, etc
• Draw details: where/when the draw occurs and how winners are contacted
• Redraw rules: what happens if you can’t contact a winner
• Publicity: whether you can publish the winner’s name/location (and how you’ll handle consent)
• Liability limits: reasonable protections for your business (while staying within consumer law)
• Fraud and tampering: your right to disqualify entries where there’s abuse or manipulation
• Changes/cancellation: how you’ll handle events outside your control (and when you can cancel)

A Quick Word On “We Can Change The Rules Anytime”

This is one of the most common mistakes we see.

A term that lets you change the rules whenever you want can be risky under the Fair Trading Act 1986 (because it may mislead participants about the real conditions of entry). If you genuinely need flexibility, the clause needs to be drafted carefully and used responsibly.

If you also use broad exclusions and disclaimers in your marketing, you should make sure your Disclaimer wording is consistent with your promotion terms (and that it doesn’t overpromise or undercut what you’re advertising).

What Other Laws Apply (Beyond “Gambling” Rules)?

Even when your trade promotion is structured so you don’t need a gambling licence, you still have legal obligations around advertising, consumer rights, and personal information.

This is where many promotions go wrong - not because the prize draw itself is illegal, but because the marketing and administration aren’t compliant.

Fair Trading Act 1986: Don’t Mislead People

The Fair Trading Act 1986 is a big one for trade promotions. It broadly prohibits misleading or deceptive conduct in trade.

Common risk areas include:

• Advertising a prize that you can’t actually supply (or only supplying a reduced substitute without clear disclosure)
• Hiding key conditions in fine print (for example, “winner must pay shipping” or “voucher expires in 7 days”)
• Implying everyone wins (when only a small number of prizes exist)
• Failing to disclose the real entry requirements

A good practical rule: if a condition would affect someone’s decision to enter (or buy), it should be disclosed clearly upfront.

Consumer Guarantees Act 1993: Be Careful With Prize “Goods”

If your prize includes goods or services that you supply, the Consumer Guarantees Act 1993 may also be relevant. You generally can’t contract out of core consumer guarantees for consumers.

This doesn’t mean you can’t set sensible prize conditions (like booking requirements or expiry dates). It just means you should avoid overly aggressive “no responsibility at all” language, especially if you’re the one providing the product/service prize.

Privacy Act 2020: Handling Entrant Data Properly

Trade promotions often involve collecting personal information (names, emails, phone numbers, addresses, social media handles, purchase receipts).

Under the Privacy Act 2020, you should take reasonable steps to:

• Only collect what you actually need
• Tell people what you’re collecting and why
• Store information securely
• Only use the information for the purpose you disclosed (unless you have consent or another lawful basis)

If you’re collecting email addresses for marketing at the same time as running the promotion, make sure you’re transparent about it and get proper consent. Having a clear Privacy Policy is a practical way to show entrants how you manage their information.

Spam And Direct Marketing Rules

If your trade promotion is designed to build a mailing list, you also need to consider rules around electronic marketing (for example, emails and texts). This usually means ensuring you have consent and offering an easy unsubscribe option.

If email marketing is part of your campaign, it’s worth checking your approach against email marketing laws so you’re not accidentally turning a fun giveaway into a compliance headache.

Platform Rules Still Matter

If you run the promotion on a social media platform, the platform’s promotional guidelines may also apply (for example, rules about tagging friends, sharing, or using personal timelines). These aren’t “laws”, but ignoring them can still get your campaign pulled down - which is a very real business risk.

Your terms should also be drafted so they don’t contradict platform requirements (and so participants can’t argue they were misled about how to enter).

A Practical Checklist For Running Your Promotion Smoothly

Once you’re comfortable with the legal structure, your next goal is to run the campaign in a way that’s clean, provable, and fair.

Here’s a practical checklist you can work through.

1) Choose The Safest Entry Mechanic For Your Business Model

• Will it be purchase-linked entry, free entry, or skill-based?
• Are you offering “bonus entries”, and if so, could that create extra “consideration”?
• Is the pricing clearly the normal, usual price during the promotional period?

2) Draft The Rules Before You Start Designing Ads

It’s much easier to build marketing around compliant rules than to try to “fix” the rules after your campaign has already gone live.

If the promotion is a meaningful part of your sales strategy (or you’re investing real money in advertising), get the terms drafted properly from day one.

3) Make Your Advertising Match Your Terms

A common problem is when an Instagram caption says one thing, a landing page says another, and the terms and conditions say something else again.

Try to keep your “headline” marketing simple, and then link to (or clearly reference) the full terms.

4) Plan Your Winner Selection Process (And Document It)

For random draws, consider:

• How you’ll export entrants (and remove duplicates)
• How you’ll randomise the selection (and record the result)
• What you’ll do if a winner is ineligible
• What evidence you’ll keep in case someone disputes the outcome

This is especially important if you’re running a promotion that drives a big spike in sales, because complaints often come from people who really wanted the prize.

5) Think Through Privacy And Consent At Entry

At the point of entry, be clear about:

• What personal information you’re collecting
• Whether entry also signs the person up to marketing (and how they can opt out)
• Whether you’ll publish winners (and what details you’ll disclose)

If your website collects entry data, it’s often helpful to also look at whether you need a privacy policy on your website that specifically covers promotional entries.

6) Deliver The Prize Promptly (And Keep Records)

Delays and vague communication are where promotions often fall apart.

Once a winner is selected, keep a clear record of:

• When and how you contacted them
• Their acceptance of the prize
• Delivery/collection arrangements
• Any special conditions they agreed to (for example, travel dates)

This is good customer service, but it also protects you if someone later claims they should have won, or that you didn’t award the prize as promised.

Key Takeaways

• Running a giveaway can trigger gambling rules if it involves a prize, chance, and consideration, so your entry mechanic matters from day one.
• Many business promotions can be structured as a trade promotion/sales promotion scheme, but you need to be careful about entry fees, inflated prices, and “bonus entry” mechanics (because those details can change whether the promotion can be run without a gambling licence).
• Clear, tailored terms and conditions are essential to reduce disputes and support compliance with the Fair Trading Act 1986.
• The trade promotion New Zealand legal requirements go beyond the Gambling Act - you also need to consider consumer law, advertising accuracy, privacy obligations, and direct marketing rules.
• If you collect entrant data, make sure your privacy approach is transparent and supported by a proper Privacy Policy.
• Planning your draw process and keeping records makes winner disputes much easier to manage.

If you’d like help setting up a compliant trade promotion (including drafting your Competition Terms and Conditions), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.