Trade Promotions vs Raffles - Don’t Get Caught Out!

What’s the difference between a raffle and a trade promotion in Australia?

They're both competitions, but legally and practically, they’re worlds apart. Mixing them up can lead to fines, cancelled campaigns - or worse.

Here’s a clear-cut breakdown…

TRADE PROMOTION = Promote Your Product

Definition: A competition to boost your business, where entry is free and tied to a purchase or product use.

Key Features:

• Free to enter or linked to a purchase (e.g., “Buy a specially marked product, enter to win!”).
• Can be a game of chance, skill, or both.
• Used for marketing, not fundraising.
• The essence of the promotion is to promote the trade of a product.

Legal Checklist:

• Permits may be required based on:
  • Chance vs. skill
  • Prize value
  • Where you're running it (state/territory)
• Must follow consumer & fair-trading laws.

Example:

• A snack brand offers: “Upload your receipt for a chance to WIN a Toyota Prado 4WD.”
• The entry is tied to a product (an energy drink), and the prize is chance-based.
  > This is a Trade Promotion.
  > Permits required in some states / territories.

RAFFLE = Paid Entry Fundraiser

Definition: A game of chance where people pay to enter - typically to raise funds for a cause. It’s classed as a lottery under law.

Key Features:

• Typically a fundraiser.
• Entry requires payment (e.g., ticket purchase).
• Winner is picked by chance only.
• Usually run by charities or not-for-profits.
• The essence of the promotion is to sell and upsell entries.

Legal Checklist:

• Raffle licences needed in most states.
• Strict rules around:
  • Who can run it (mostly Not For Profits)
  • Ticketing, prize values, transparency, and reporting
• Governed by state/territory gambling laws.

Example:

• Entry is not free.
• A lifestyle club sells a $100 subscription and enters the buyer into a draw to win a luxury Euro holiday. For a $200 subscription, a buyer gets 4 entries. Not all entries are equal. Essentially, this is an odds-based raffle.
• The club/promoter doesn’t offer real value in return - just access to discounts, brand affiliates and other promotions. Typically, a product is not involved.
  > This is a Raffle.
  > You’ll need a raffle licence.

Trying to disguise a raffle as a trade promotion is risky business, and regulators are watching.

Need help navigating promotion rules or securing Trade Promotion permits?
SAM has your back - from strategy to compliance.

Contact Peter McKinnon 03 9646 5644 / peter@samsales.com.au

Please note: SAM do not consult on raffles or ‘pay to enter’ style promotions - or promotions seeking to subvert state or federal guidelines. And, due to state government-specific policies and regulations, SAM cannot assist Promoters that plan to offer Bitcoin and other Cryptocurrencies as prizes.