Short answer: From 1 January 2027, to comply with the requirements of the amended Interactive Gambling Act 2001 (Cth) (IGA), an online prize draw or game of chance must satisfy four cumulative conditions to qualify as a trade promotion gambling service. Genuine promotions in support of non-gambling businesses remain possible, but business models which involve subscription or membership sand automatic or recurring entries require careful review. Failure to meet the updated requirements in the IGA could mean exposure to significant penalties.
Author: Bree Ryan, Senior Associate, Senet / Daniel Lovecek, Principal, Senet
What changes for trade promotions on 1 January 2027?
The amended section 8BB of the IGA narrows the existing trade promotion gambling service exclusion from the relevant prohibitions in the IGA. A lottery or game of chance, or mixed chance and skill, must satisfy all four conditions:
a) its sole or primary purpose must be to promote trade (excluding a “gambling service” as defined in the IGA);
b) the promotion is incidental to the supply of goods or services;
c) entry requires no fee other than a fee for goods or services at fair market value; and
d) participation is not offered on an ongoing or recurring basis as part of a system of continuous or repeated draws.
The fourth condition is a distinct and important change. A promotion may satisfy the first three limbs of the test regarding purpose, incidental promotion and free entry but still fall outside the exclusion if membership provides continuing participation in a standing system of draws.
The legislation also provides the capacity for the Minister to determine that a particular form of service is or is not permissible under the trade promotion gambling service exclusion.
Which promotions are directly at risk?
The reforms target substance, not labels. Whether a promotion falls within the trade promotion exclusion depends on its operation and effect, not on how it is described or characterised by the promoter. Higher-risk features of non-compliance include:
paid memberships or subscriptions that automatically enter customers into regular draws;
entries that accumulate, compound or roll over between promotions;
tiers where fees produce disproportionately more entries without corresponding increases in genuine market value of the goods or services offered for purchase;
goods, services or memberships priced above fair market value because entries are included; and
businesses where the opportunity to win appears to be the main value proposition or revenue driver.
In addition to satisfying the IGA, the existing State and Territory requirements continue to operate and must be satisfied. A State or Territory permit does not, by itself, establish compliance with the IGA.
What happens if a promotion does not meet the IGA requirements?
If any of the conditions are not met, the service will fall outside the trade promotion gambling service exclusion. Depending on how the service operates, it may then constitute a form of prohibited interactive gambling service under the IGA, exposing the provider to significant penalties.
Providing a prohibited interactive gambling service can attract penalties of up to 7,500 penalty units (equivalent toA$2.73 million for an individual and A$13.65 million for a corporation). Separate contraventions may arise for each day the service is provided.
The ACMA has a number of enforcement options available to it including formal warnings, infringement notices, enforceable undertakings, injunctions, civil penalty proceedings and website-blocking measures. State and Territory regulators may separately refuse or cancel authorities, impose prohibitions or prosecute unlawful lotteries.
What are the options if your model is affected?
Businesses whose promotions may be affected should review how their promotional model operates against each of the four conditions in section 8BB of the IGA. The answer will depend on the specific features of each offering, and no single factor is likely to be decisive.
Given the potential penalties and the absence of a transition period, businesses may wish to seek advice on their specific circumstances well before 1 January 2027.
Trade promotion readiness checklist for 1 January 2027
Identify every prize draw intended to operate before and after 1 January 2027.
Test each promotion from 1 January 2027 against all four section 8BB conditions.
Identify automatic, recurring, accumulating or subscription-linked entry mechanics.
Assess whether each customer receives genuine non-lottery value at least commensurate with the price paid.
Review State and Territory permits, terms, draw controls and record-keeping requirements.
Review business and promotional terms and conditions for compliance.
Document the legal and commercial basis for any promotional activities and monitor for any ACMA guidance.
Consider legal advice to support specific compliance review.
Frequently asked questions
Are subscription-linked giveaways banned from 2027?
Not necessarily. Subscription and membership businesses are not prohibited per se. However, using trade promotions to promote such businesses needs to be approached with caution and careful regard to the new requirements. Business models that are reliant on automatically providing subscribers ongoing participation in continuous or repeated draws is at material risk of failing the fourth condition in section 8BB of the IGA.
Can members receive different numbers of entries?
Potentially. The key question is whether customers are genuinely paying fair market value for independently valuable goods or services, rather than paying for additional chances to enter the trade promotion.
Can I still run a free giveaway?
Yes. Genuine trade promotions remain possible if the four Commonwealth conditions and all relevant State and Territory rules are satisfied.
Is there a transition period?
No transition period applies to the trade promotion amendments. A promotion operating from 1 January 2027 must comply from that date.
How Senet can help
Senet advises businesses, promoters and service providers on prize promotions and trade promotion compliance throughout Australia.
If your business uses prize draws as part of a subscription, loyalty or membership offering, now is the time to test whether the commercial model and draw mechanics will withstand scrutiny under the new regime.
This article is general information only and is not legal advice.
About Senet
Senet is a multidisciplinary Australian firm specialising in gambling and gaming law, regulatory compliance, and business advisory services. We are the largest specialist team in Australia and based in Victoria. Recognised globally as experts in our field, we understand Australia’s complex gaming legal and regulatory landscape, enabling us to guide clients through their compliance requirements across each state and territory. Our clients range from start-ups to publicly listed global operators, both nationally and internationally. Our team is deeply immersed in the industry, often sharing insights at public speaking events, and our principals have held executive roles in a global ASX-listed entity and a 'Big Four' advisory firm, giving us a unique perspective on the challenges our clients face.
If you have any questions or would like to discuss the topics covered in this article, please contact the team at Senet.
