Reading time: 6 minutes

There is a lot that you need to organise and plan if you want to run a lottery or competition. There are administrative concerns, such as:

  • deciding what kind of game to run;
  • where you will run it;
  • what the prizes are; and
  • how you will sell tickets.

There are also the legal aspects of running a lottery or competition that you have to think about. For most small lotteries, such as raffles, the regulations are relatively straightforward. It is important to make sure that you are following your obligations under the law and not conducting a lottery or competition illegally. This article will highlight important things to know about gambling activity rules in New Zealand, and what you need to do to follow them.

Types of Games You Can Run

The Department of Internal Affairs (DIA) has the specific rules for the different types of gambling activities you can run on their website. You have to follow the rules for the particular kind of game you intend to run, as well as the general laws around gambling. Some of these games are:

Housie

Also known as bingo, only societies can generally run these games, but in some cases, other groups or individuals can. Typically cash prizes.

Instant Games

Where a winning ticket or other winning item is chosen randomly before or during ticket sales.

Examples include scratch and win games or mystery envelopes.

Lottery

A type of gambling that uses a random draw from a pool of participants after they have all entered, for a prize.

Examples include raffles and sweepstakes.

Prize Competitions

Similar to a lottery, here a pool of participants enter to win a prize. Some chance is involved, but there is more of an element of skill as well. 

Examples include tagged fishing contests and sporting competitions where participants enter a draw.

Games of Chance

This is a broad category, but are games that are not a lottery, prize competition, instant games, casino gambling, or do not use a gambling machine.

Examples include parlour derby or filly stakes.

Classes of Gambling

Depending on the class of gambling you are conducting, for example a lottery or competition, you may or may not have to obtain a licence to run the activity. Most of the activities listed above will fall into classes 1 – 3.

When running any of these gambling activities, you need to make sure you clearly tell the people participating all of the conditions that apply. This includes how you will run the competition and any time limits to the competition.

Licence Requirements

Class of Gambling

Activities in This Class

Licence Requirements

Class 1

Under this class, prizes (including cash or retail value of products) or potential turnover are not higher than $500. The gambling can be run by an individual.

This class does not need a licence.

Class 2

Prizes for one session are not higher than $5000. Net proceeds from one session are not higher than $25000. 

This class does not need a licence.

Class 3

Prizes offered are worth more than $5000. 

This class generally applies to larger scale lotteries, such as casino evenings.

These activities can only be run by a society. You also need to satisfy the DIA that this is a financially viable activity and benefits the community. 

Proving this is typically a one-off, and you need to apply for a new licence each time you run a gambling activity of this kind.

Class 4

This class applies to gambling machines that are run outside casinos, such as in a pub or club.

You need a special kind of licence to have these machines on your premises.

Private Gambling

Gambling that happens at a private residence, such as Friday night poker with your friends.

This does not need any kind of licence, as it is primarily a social event.

To apply for a licence, there are forms on the DIA website, or you can contact their Gambling Group. You can generally conduct classes 1 and 2 gambling without needing any formal applications. You should still be aware of your obligations under the Gambling Act, which you can find on the DIA website. Some of these obligations include:

  • clearly describing rules of the and requirements for entry into the competition;
  • telling participants what the prizes are, and how you will draw them;
  • giving prizes to the winners and the winners only; and 
  • for class 1 and 2 gambling, the organiser generally cannot receive any kind of commission or remuneration.

Authorised Purposes

For all of the classes of gambling, you have run the gambling activity in line with the DIA’s authorised purposes. These include:

  • charitable purposes;
  • a non-commercial purpose that benefits the whole or a section of the community;
  • the running of race meetings; and
  • electioneering purposes for classes 1-3.

Key Takeaways

If you want to run a lottery or competition in New Zealand, the rules are reasonably straightforward. However, it gets more complicated the higher the risk and amount of money involved. Different kinds of gambling activities have additional rules, and all gambling falls into classes depending on how much money is being offered. What obligations you have for running such a competition depends on what class it falls into, so it is important to be aware of these rules. If you would like more information or help to run a lottery or competition, contact LegalVision’s regulatory and compliance lawyers on 0800 005 570 or fill out the form on this page.

FAQs

Do I need a licence to run a raffle?

If your raffle offers prizes greater than $5000 or you make over $25000 in profit, then you need a licence. If it is below that, then you do not need a licence.

Can I run a raffle for personal gain?

Gambling activities like raffles need to be run according to the law’s authorised purposes – these generally mean charitable purposes, or they have to benefit the community in some way.

When do I need a licence for my lottery or competition?

The higher the risk and money involved, the more likely you are to need a licence. If you are offering prizes over $5000 or you make over $25000, then you need to apply for a licence from the Department of Internal Affairs.

What can I offer as prizes for a lottery or competition?

You can offer a wide range of things as prizes, such as cash or vouchers. However, there are certain things that you can offer as prizes. These include firearms, liquor, and tobacco products.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. From just $119 per week, get all your contracts sorted, trade marks registered and questions answered by experienced business lawyers.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2020 Excellence in Technology & Innovation – Finalist – Australasian Law Awards 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice – Winner – Australasian Lawyer 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer