Chocolate wheels are where people buy numbered tickets. The organiser spins a wheel that has numbers matching those on the tickets. Once the wheel stops on a specific number, the person holding that numbered ticket wins a prize.
You can only run a chocolate wheel to raise money for a not-for-profit organisation and you must have a permit application. A minimum of 40 percent of the gross proceeds must go to a not-for-profit organisation. You can give away a maximum of $500 as a prize.
This is a game where participants win a prize if they expose a hidden number that is the same as a number displayed on a chart at a point of sale. They are not to be confused with break-open or scratch type lotteries. You can only run a lucky envelope game to raise money for a charity and you must have an application. A minimum of 40 percent of the gross proceeds must go to a charity.
Complete and lodge a game of chance application form PDF, 263.14 KB. The application can be lodged by a promoter and must be authorised by the president, treasurer or secretary of the benefiting organisation signing the application. There are no fees.
How long does a permit last?
If an application is lodged by a ‘new’ applicant, the permit is normally issued for a maximum period of two years. Thereafter permits may be issued for a maximum period of five years.
What types of prizes may be offered?
Prizes may consist of or include anything except a prohibited prize. Prizes can be goods, wares, merchandise, services, vouchers for goods or services that are not redeemable for money, tickets for admission to any entertainment and tickets (with any spending money) for tours or journeys. Spending money can be given as part of a travel prize - e.g. tour or journey - provided the total value does not exceed 20 percent of the total value of the travel prize.
What types of prizes are prohibited?
The following are prohibited prizes:
- tobacco products in any form
- firearms or ammunition
- prohibited weapons
- cosmetic surgery or other procedure designed to improve personal appearance, and
- liquor prizes - more than 20 litres of liquor with an alcohol content not exceeding 20 percent by volume or more than 20 litres of liquor with an alcohol content exceeding 20 percent by volume.
Tickets for liquor prizes cannot be sold by or to a person under 18. Also a person under 18 cannot give or collect a liquor prize.
What is the maximum value of prizes?
For lucky envelopes, the value of the prize varies according to the cost of the ticket.
Cost of ticket:
- Max. value of any prize
- Max. value of all prizes
- $0.20 $4.00 $40.00
- $0.50 $10.00 $100.00
- $1.00 $20.00 $200.00
For chocolate wheels, the maximum prize value that may be offered in a chocolate wheel game is $500.
The offer of perishable items such as green groceries, meat and fish as prizes is regulated under the Food Act 2003. These prizes must follow the same requirements that apply to food sold through normal retail outlets. These include:
- the manner of handling and packaging the food
- the manner of labelling packages of food
- the temperature at which food must be kept.
Contact NSW Health for more information.
Fish prizes must also comply with the Fisheries Management Act 1994 and the Fisheries Act 1935. A special permit is required. Contact the NSW Department of Primary Industries for more information.
Remuneration and expenses
How much should the benefiting organisation receive?
The profits from the games must be at least 40 percent of the gross proceeds. If the game does not achieve the required minimum of 40 percent profit, you must apply in writing to us for approval to accept the reduced percentage. The application must explain the unusual and unexpected circumstances that resulted in the unfavourable outcome.
What expenses can occur?
Reasonable expenses are:
- the purchase of the prize or prizes
- the amount of prize money to be paid to the winners in the game
- the printing or purchase of the tickets
- hiring or operating any device used
- renting premises
- advertising and promoting the game
- salaries, wages and commission.
Payment of commission and remuneration
You cannot pay any commission or remuneration to a person for services in connection with the game unless there is a written agreement between that person and the benefiting organisation. The agreement must specify:
- the service to be rendered
- the remuneration to be provided for the service
- the period of the agreement.
The total expenses cannot exceed 60 percent of the gross proceeds.
Is there a maximum price per ticket?
There is no restriction for chocolate wheels. When deciding the price of a ticket, you must consider the potential number of tickets that may be sold and the requirement to achieve a 40 percent profit. Lucky envelopes have to be sold at 20 cents, 50 cents or $1.00 each.
What is required of the ticket?
Lucky envelopes must be opaque and sealed on all sides; and have a serial number printed on them, the price, and the full name of the benefiting organisation. A procedure should be adopted to make sure that all game material is secure, is distributed on a purely random basis, and is not capable of manipulation.
How should ticket sales be managed?
You must have control over the selling agents, the receipt of money and the receipt of unsold tickets. All tickets must be purchased by and kept in the custody of a representative of the benefiting organisation and issued as required to the manager or the promoter.
Are there any advertising restrictions?
Yes. You must not publish any lottery advertising that:
- encourages a breach of the law, or
- depicts children participating in a lottery activity, or
- is false, misleading or deceptive, or
- suggests that winning will be a definite outcome of entering or participating in the lottery activity, or
- suggests that entering or participating in the lottery activity will definitely improve a person’s financial prospects, or,
- is not conducted in accordance with decency, dignity and good taste.
People under 17 are not allowed to play or assist in the conduct of lucky envelopes or chocolate wheels.
Banking the proceeds
You must ensure that all money received is paid into an account at a bank, building society or credit union being an account belonging to the benefiting organisation as soon as practicable, preferably within two business days. At least two persons must be signatories to the account, one of whom must be a member of the governing body or management committee of the charity.
What records do you need to keep?
You must keep all receipts, invoices and other records concerning costs and outgoings, and payments received and donations. You’re also required to keep a record that details information about the purchase and issue of tickets. In addition, you are required to maintain a register that details information about the conduct of each game including the tickets sold, the income, the prizes awarded and the expenses.
You must keep all records, accounts and other documents, and all computer records relating to the game for seven years. Unsold tickets must be kept for at least three years after the date of the draw.