Games of Skill vs. Games of Chance

A game of skill is one in which the distribution of prizes is not dependent on chance. Every entry in a game of skill must be individually judged according to the criteria set out in the terms and conditions and advertising for the competition such as creativity, literary merit and artistic merit. A game of skill does not require lottery permits nor need it comply with the other requirements relating to trade promotion lotteries as set out in the lottery legislation.

Although games of skill are not regulated by the lottery legislation, games of skill must comply with the Competition and Consumer Act and relevant State fair trading legislation. In particular, care must be taken to ensure that promotional material relevant to the game of skill is not misleading or deceptive. Games of skill still also require adequate terms and conditions (often similar in form and content to those used for trade promotion lotteries) to ensure that entrants are informed of all relevant information and limitations.

Examples of a game of skill:

  • “Describe in 25 words or less why you like our new product. The entry judged to be the best will win a holiday to Fiji.” “Send us your funniest holiday photograph. The funniest photo, as determined by the judges, will win a holiday to Fiji.” This criteria allows the judges to subjectively determine the winner with no possibility of more than one determined to be the “best”. Important: It is not enough that the entry criteria allow the judges to subjectively determine the winner, this must in fact occur ie if a promoter asks a question as set out above but then puts all entries into a draw then it is not a game of skill.

Example of what is not a game of skill:

  • “Who won this year’s Best Actress award in the Oscar’s?” or “Fill in the blanks: R_GBY L_ _GUE” The above are not games of skill, as it is possible (if not likely) that more than one entry will contain the correct answer. The question does not allow the promoter to distinguish entries and therefore determine a winner without resorting to a draw or chance element. Even if the terms and conditions say that it is the first correct entry drawn that wins the prize – it is still not a game of skill, it is a game of chance.

General Tip:

When setting up a game of skill, promoters should ensure that enough scope is given to entrants to guarantee (as much as possible) that all entries received are different and provide enough material so that judging can in fact take place. For example if a promotion centred around a new beer asks entrants to describe that beer in one word it would be likely that a number of entrants would submit “refreshing” or “cold” and therefore all identical entries would become indistinguishable. Further, if challenged it may be difficult for the promoter to justify how a one word entry is the “best” or the “funniest”.