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Criteria for a non-money lottery
For a lottery to be governed by the Lotteries Act, it must meet three conditions: it must be based on chance, participation must be subject to a charge, and participants must be able to win a prize of monetary value. If any one of these criteria is not met, it is not a lottery subject to a licence.
A lottery can be organised without a charge. In this case, the participants will not pay anything for participation in any form whatsoever. No licence is needed for lotteries that can be entered free of charge. However, the lack of a charge must be genuine. In other words, participants may not be charged indirectly either. For example, an indirect charge refers to situations where in order to participate in a lottery the participant must first pay an admission fee to an event or a venue, even if no actual payment is charged for the lottery. This means that there is a charge for participating in the lottery and it may not be organised without a licence.
Another consideration is whether winning is based on chance. This means that the skills, knowledge or abilities of participants have no effect on their chances of winning. Any ticket can be a winner, and no one can affect the outcome of the draw. If the likelihood of winning depends on participants’ knowledge or skills, the game is not based on chance. This is why quizzes, for example, are not considered lotteries and do not need a lottery licence. For a game to be considered a quiz, answering questions correctly must require knowledge so that winning is based on superior knowledge compared to other contestants. In other words, the questions cannot be so easy that everyone knows the answer.
Prize of monetary value
Lotteries where all tickets win and all prizes are of equal value are not based on chance: all participants are automatically winners, and there is no possibility of getting a prize that is more valuable than others. However, if all tickets win but one or more prizes are more valuable than others, winning is based on chance and the organisers will need a licence.