Most small business giveaways are legally fine and still badly run. No terms, a winner picked by scrolling and pointing, a prize that never gets collected, and a comment section full of people asking “who won?”. None of that will land you in court, but it makes you look sloppy in front of the exact people you were trying to impress.
A few giveaways do need a permit, and NSW is one of the places where a big enough prize triggers it. The rules below are as they stand in late 2026.
First question: is it chance or skill?
The law treats these two very differently.
A game of chance is a draw. “Like, follow and comment to go in the draw” is chance, because the winner is picked at random. In the legislation this is a trade promotion lottery, and that’s where permits come in.
A game of skill is judged. “Tell us in 25 words or less your best memory of this pub” is skill, because someone reads the entries and picks the best one against criteria. Skill competitions don’t need a lottery permit in any state. They do need clear judging criteria, and the judging has to be real. If you announce “best answer wins” and then pull a name from a hat, you’ve misled your entrants.
For most local businesses a draw is simpler. Entrants prefer it too, because nobody has to write anything.
Do you need a permit? State by state
Your giveaway is open to anyone who can see it, so the question isn’t only where your business is. It’s where your entrants are. An Instagram giveaway with no state restriction is open to people in every state.
| Where entrants are | Permit for a random draw? |
|---|---|
| NSW | Only if the total prize value is over $10,000. You then need an authority from NSW Fair Trading. |
| ACT | Yes, unless the total prize value is $3,000 or less. |
| SA | Only if the total prize value is over $5,000 (instant-win tickets need a licence at any value). |
| Vic, Qld, WA, Tas, NT | Not currently required for trade promotion lotteries, though each has conditions you still need to follow. |
Check the regulator’s page before you run anything near those numbers, because thresholds can change and the conditions attached to them differ between states. The current details are on the NSW Government trade promotions page, the ACT Gambling and Racing Commission and SA’s trade promotions page.
The practical answer for most of our clients: keep the total prize pool at $3,000 or under and you’re below every threshold. If you want a bigger prize, either get the permits or limit entry to residents of states where you don’t need one, and say so in the terms.
This is general information rather than legal advice. If you’re planning something large, talk to a lawyer who does trade promotions.
NSW details worth knowing
Even if you’re under the threshold, a few NSW rules apply to every trade promotion. Entry can’t cost anything beyond buying goods at their normal price. People running the promotion can’t enter. And some prizes are off limits entirely, including tobacco and vaping products and certain cosmetic procedures. Alcohol is capped: no more than 20 litres of drinks at 20% alcohol or less, or 5 litres of anything stronger. Pubs and bottle shops, take note.
If you do need an NSW authority, you also have to lodge your rules with NSW Fair Trading at least 10 working days before the promotion starts, and show the authority number in your advertising.
What Instagram requires
Meta’s promotion guidelines for Instagram are short. You’re responsible for running the promotion lawfully, including the rules and eligibility. Your promotion must include a release of Instagram by each entrant and an acknowledgement that the promotion isn’t sponsored, endorsed, administered by or associated with Instagram. And you mustn’t tag content inaccurately or encourage people to (no “tag yourself in this photo” when they aren’t in it).
Two things that aren’t banned but we’d avoid. “Tag five friends” entries fill your comments with spam-flavoured noise and annoy the friends. One tag is plenty. And “share to your story to enter” is hard to verify because Stories vanish in 24 hours and you often can’t see shares from private accounts. Make it a bonus entry at most.
Terms and conditions: what to include
Put your terms somewhere stable, ideally a page on your website, and link to it from your bio and the post. The caption can carry a short version. Your terms should cover:
- Who’s running it (business name, ABN, location).
- Start and end date and time, with the time zone.
- Who can enter (age, states, and who’s excluded, like staff and their immediate families).
- How to enter, and whether multiple entries count.
- How the winner is chosen (random draw, or judged against named criteria).
- When and how the winner is drawn, notified and announced.
- How long the winner has to claim, and what happens if they don’t (a redraw date).
- The prize, its value, and any conditions (expiry, not transferable, not redeemable for cash).
- What you’ll do with entries and personal information.
- The Instagram release and acknowledgement.
On point 9: if entrants post photos, the terms should say whether you can reuse them. Even then, we’d still ask the winner before putting their photo in your feed. Our article on reposting customer content covers how.
On point 7: write the redraw into the rules. If your rules are silent in NSW, you have to hold an unclaimed prize for at least three months before picking someone else.
Picking a winner you can defend
The draw is where small businesses get caught out, usually by being too casual.
- Close entries on time. Screenshot the comment count at closing.
- Export or list every valid entry. A comment-picker tool can pull comments, but remove duplicates and anyone excluded by your terms first.
- Draw randomly and record it. Screen-record the draw, or have someone who isn’t running the promotion do it. Save the recording.
- Contact the winner by DM from your official account, then announce it publicly. Scam accounts copy giveaway posts and DM people pretending to be you, so tell entrants up front that you’ll never ask for card details or a fee.
- Keep the records. NSW Fair Trading says there’s no requirement to keep records for trade promotions, but it recommends doing so, and you’ll want them if anyone questions the result.
A worked example
A Lennox Head cafe wants to give away a $150 voucher. Draw, NSW business, open to anyone in Australia.
No permit needed anywhere: $150 is under every threshold. They write a short terms page, open entries Monday 9am AEST, close Sunday 8pm, draw Monday 10am with the manager’s partner pressing the button on a recorded comment picker, DM the winner, and announce on Stories. The voucher expires in three months and the terms say so. Total admin: about an hour. Total awkwardness: none.
The same cafe running a $5,000 “win a year of coffee and brunch” draw would need an ACT permit unless it excluded ACT residents, and it sits right on SA’s $5,000 line, so one more muffin in the prize description and SA needs a licence too. That’s the point where you get advice first.
Before you hit publish
Check that your prize pool is under the thresholds for every state you’re open to, your terms page is live and linked, the release wording is in, and you’ve decided who draws and how. Then think about what the giveaway is for. Followers who only came for a voucher tend to leave once it’s gone, which is why the giveaways that work for cafes, pubs and restaurants usually reward people who’d come in anyway.
A giveaway planned as part of a wider campaign, with the terms, the draw and the follow-up handled, is the kind of thing our social media management covers. Planning a one-off and unsure whether the prize crosses a permit threshold? Send us the idea with the prize value and the states you’re running it in.