Is it a Contest or is it Gambling?
Ever wonder why contests have skill testing questions and no purchase entry options? The Criminal Code has several sections that apply to contests, which can make contests an illegal lottery without those elements. The sections are old, yet have uncertain application despite their age. It is rare for contests to get in front of the courts, but the Ontario Court of Appeal recently found that a game machine found in bars was not legal.
The Alcohol and Gaming Commission of Ontario summarizes the case in an Information Bulletin. The Court found that the game was one of mixed skill and chance, not pure skill, and thus was unlawful gambling for the purposes of the Liquor Licence Act.
The decision is highly technical, and shows how fact specific and difficult the analysis can be.
Anyone who runs any kind of contest that has an element of chance – like giving a prize to a random customer – must make sure they comply with the Criminal Code provisions, and the disclosure requirements of the Federal Competition Act. Quebec has contest rules that lead many to make people from Quebec ineligible for their contest, rather than complying with Quebec rules. Specifying eligible jurisdictions is especially important for online contests because of the risk of being offside contest rules around the world.
Hopefully the Criminal Code provisions will be updated someday to make them clearer. And to make them more realistic for a modern online world rather than the world of the late 1800’s when they were first drafted.