January 10, 2023
A Canadian contest/sweepstakes law law question that we commonly receive from our clients is how the “no purchase required” entry option works for Canadian contests/sweepstakes.
The starting point to understand the requirement for most, but not all, contests/sweepstakes in Canada to include a no purchase required entry option for contest entrants is the federal Criminal Code.
Section 206(1) of the Criminal Code contains a number of illegal lottery offences that must be avoided to legally run a contest in Canada.
One of these requirements is to not require a purchase as the only means of entry into a game of chance or mixed skill and chance (e.g., as prohibited by section 206(1)(f) of the Criminal Code).
As such, contest promoters in Canada commonly include some type of no purchase required entry option to enter into promotional contests.
Contest sponsors have wide latitude to determine how entrants that do not purchase any product or service can enter into a contest, including offering free online entries, free paper ballots or the traditional requirement to handwrite and mail in a short essay (e.g., 50-100 words) on a topic specified by the sponsor.
The Canadian no purchase required entry requirement is, however, slightly more complex, depending on the type of promotion involved.
For example, there is case law that has held that no purchase entrants must be treated substantially the same as purchase entrants (i.e., substantially treated the same as entrants that purchase a product or service in order to enter the contest). This is commonly called the “equal dignity” requirement for contest entries.
For example, in one case, a contest promoter that offered more entry ballots to entrants that paid to enter than were offered to no purchase entrants was prosecuted and convicted for violating the Criminal Code’s illegal lottery offences. In that case, the court held that the purported no purchase required entry option was in fact a sham and that the promotion was an illegal lottery. In this regard, in general, private parties cannot operate lotteries in Canada unless they are charities and provincially licensed in the provinces in which they intend to operate the lottery.
As such, while contest sponsors can make it somewhat more difficult for no purchase entrants to enter into a contest (e.g., by answering a short survey, mailing in an entry ballot or mailing in a handwritten essay with a stamp to enter), the risk increases the more difficult a contest sponsor makes it for no-purchase entrants to enter into a contest.
In this regard, one of the most commonly asked related questions we receive is whether a sponsor can offer entrants that purchase a product or service more entries than no purchase entrants. The short answer is, based on the above, no and this approach risks committing a criminal illegal lottery offence.
In addition to the above, contest sponsors running promotional contests in Canada commonly state in their short (i.e., “mini”) and long contest rules that a purchase is not required to enter or win a prize and set out in the long contest rules how entrants that do not purchase a product or service can enter (i.e., set out the requirements in the contest rules what no purchase entrants must do to enter).
For more information about Canadian contest/sweepstakes law, see: Contests, Contests and CASL, Contest FAQs, Contest Law Tips and Contests and Social Media.
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CONTEST FORMS/PRECEDENTS
Do you need contest rules/precedents
for a Canadian contest?
We offer many types of Canadian contest/sweepstakes law precedents and forms (i.e., Canadian contest/sweepstakes law precedents to run common types of contests in Canada). These include legal precedents for random draw contests (i.e., where winners are chosen by random draw), skill contests (e.g., essay, photo or other types of contests where entrants submit content that is judged to enter the contest or for additional entries), trip contests and more.
Also available are individual Canadian contest/sweepstakes precedents, including short rules (“mini-rules”), long rules, winner releases and a Canadian contest law checklist.
For more information or to order see: Canadian Contest Forms/Precedents.
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SERVICES AND CONTACT
We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.
Our experience includes advising clients in Toronto, Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.
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For more information about our firm, visit our website: Competitionlawyer.ca
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
