The Australian Government is proposing to tighten the rules around online trade promotions.

In early May the Australian Government released an exposure draft bill titled the Interactive Gambling Amendment (Gambling Reform) Bill 2026 (Bill). This followed the Government’s response to the Parliamentary inquiry into online gambling harms, entitled ‘You win some, you lose more’ report (Murphy Report). While most of the Bill focuses on wagering advertising, it also introduces important changes to how online trade promotions are regulated.

In short, the changes are designed to ensure that lottery-style products cannot operate under the guise of trade promotions to avoid regulation under the Interactive Gambling Act 2001 (IGA). Genuine trade promotions are not being banned, but some existing structures may no longer qualify for the current exemption under the IGA.

Depending upon structure, these changes are likely to impact any business offering subscription-based promotions and should be considered as part of broader regulatory risk management.

Author: Ben Daley, Senior Associate / Alexander Norrish, Senior Associate / Julian Hoskins, Principal

WHY THE CHANGE

Many businesses run legitimate trade promotions. However, the Government is concerned that some businesses that don’t appear to be promoting the sale of an underlying good or service are using these models to offer lottery-style products in substance, while presenting them as trade promotions in form.

The products of concern typically share three features:

• Ongoing membership or subscription fees rather than a one-off, incidental purchase;

• Frequent prize draws, often for high-value items such as cars, houses or large cash prizes; and

• A business model that depends on the trade promotion being available rather than treating the promotion as incidental to selling the underlying goods or services.

HOW IT WORKS NOW

Currently, trade promotions are generally carved out of the federal gambling legislation, which is why they can operate online. This means that many trade promotion lotteries sit outside the IGA’s prohibitions.

WHAT THE BILL PROPOSES

The Bill proposes a new test to distinguish between genuine trade promotions and lottery products which appear to be presented as trade promotions.

A promotion will lose the current exemption if all three of the following are present:

• Fee to participate: participants must pay a membership, subscription or other fee; and

• Fee buys entry: that fee gives access to one or more draws (including ongoing or multiple entries); and

• Payment is for the gamble: the payment is not solely for the business’ own goods or services but is effectively for access to the draw itself.

If all three criteria are met, the promotion will no longer qualify as a trade promotion under the IGA.

The changes sit within a broader package of reforms which also targets certain online lottery products (including keno-type lotteries and foreign matched lotteries), which businesses should also consider.

WHAT THIS MEANS IN PRACTICE

If a promotion meets the above criteria, it will be treated as an “interactive gambling service”. This is significant because providing “interactive gambling services” to customers in Australia is generally prohibited unless another exemption applies (most relevantly, a State or Territory licence). Breaches of the IGA carry significant penalties, including fines of up to $12,375,000 per day for corporations.

Two further points are important to note:

• Charities and not-for-profits: the Government materials suggest these are not intended to be captured, but the draft legislation does not currently include an express carve out.

• Consultation still open: the draft legislation is still open for consultation, including in relation to how these services should be regulated going forward. The final position may change.

KEY TAKEAWAYS

• Genuine, incidental trade promotions are not the target and remain permitted.

• Fee-for-entry models that are essentially lotteries will lose the exemption and will be assessed as interactive gambling services under the IGA’s general regime.

• A State or Territory licence may still authorise an otherwise prohibited service.

• Operators relying on the trade promotion exemption should review their existing model now, while consultation remains open.

CONTACT US FOR FURTHER ENQUIRIES

For tailored advice on how the proposed trade promotion lottery reforms affect your business, please contact us to discuss your details.

This information sheet is general in nature and current as at the May 2026 exposure draft Bill overview. It is not legal advice and should not be relied upon as such. Senet would be pleased to provide advice tailored to your circumstances.

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