Published 22/06/2021 by Josh Tucker

If you think competitions are something that you can run or enter without knowing the difference between a game of chance and a game of skill then good luck because Australia has some of the most stringent rules for running competitions in the world. 

In Australia, there are two types of competitions that can be run and knowing the difference may seem daunting, but we are here to help explain them.

Game of Skill

Competitions, where the entry process is a little harder than just filling in your personal details are judged by an adjudicator or panel to select a winner, for example, 'Tell us in 25 words or less why you should win'. Because the winner is selected based on the skills displayed during the entry process as opposed to pure chance, they are a little harder for the governments to regulate.

Game of skill competitions are exempt from regulation in Australia, meaning that you do not need a permit or licence to run one. Just make sure that the prize on offer is worth the effort required, as fewer people will enter them because even though 25 words seems easy, most people will avoid the extra effort required.

As a comper, because they are unregulated you should try and arm yourself with as much information as possible before entering (like reading the competitions Terms and Conditions), however, the payoff can be better because a lot fewer people enter these comps.

Game of Chance

Competitions that are considered a game of chance, mean exactly that, everyone who enters has the chance to win. The winner is picked at random (usually by computer) and skill plays no part in determining the winner, an example use is 'Sign up to our newsletter to enter the draw'.

Depending on your prize pool and where you are running the competition in Australia, permits and licenses may be required. 

As a comper, these comps appeal to a broader audience, as they usually have no entry fee and everyone who enters has a chance to win. The competitions Terms and Conditions should contain the permits that they have obtained to run the comp, showing you that they have taken the time to set up the competition and it is less likely to be a scam.

Purchase required competitions

There are competitions that require an entrant to have purchased a promoted product or from the brand to enter the competition. Now consider this, if the purchase is required, that does not affect how the winner is selected, so the type of competition still falls into either a game of chance or a game of skill, based on how you will select the winner/s of the comp.

For example, if you have to buy a promoted drink product, upload a copy of your receipt or you consuming the product to enter, the type of competition is a game of chance if the winner will be selected at random or it could be a game of skill if the winner is selected based on the image that has been entered into the competition.

Are all comps either a game of skill or a game of chance?

This is an excellent question and it is easy to answer, regardless of the details of the competitions. Let's say, for example, your entry method requires skill (e.g. guessing a correct answer about your brand or product) but you pick one winner from the pool of all the entrants who got the correct answer, then your competition is a game of chance.

Because everyone who got the correct answer has an equal chance of winning and the winner is not picked based on their skill from guessing the correct answers. If, however, you award the prize to the first person who guesses correctly, your competition will be considered a game of skill as there can only be one definitive winner (the first person to get the correct answer) and is not chosen at random.

How do you know which competition type is best for you?

Once you know what you want to achieve, you’ll have a good idea of which type of competition will work best for you. So essentially, a game of skill is a competition where the winner is picked based on their skill and a game of chance is where a winner is picked based purely on chance.

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