Contests and Draws in Quebec: The Rules Demystified
Want to run a contest as part of your marketing efforts in Quebec? Watch out! The Act respecting lotteries, publicity contests and amusement machines regulates such competitions throughout the province.
Here’s what you need to know.
1. Notify the Régie des alcools, des courses et des jeux
If you intend to hold a contest in Quebec with a total value of more than $100, you must notify the Régie des alcools, des courses et des jeux.
2. Sharing information
The information required must be provided by the physical or legal person for whom the competition is being organized.
The following link provides the different forms available:
3. Pay applicable fees
Why do Canadian contests often exclude Quebec? Because Quebec has some unique rules and regulations when it comes to raffles and contests. In addition, when you organize a contest in Quebec, you must pay applicable fees.
Draws, Lotteries and Fundraising Events
For draws, lotteries and fundraising events, you need to pay the equivalent of 6 % of the total value of prizes offered to the Régie des alcools, des courses et des jeux.
Contest for Advertising Purposes
When it comes to a contest for advertising purposes, here are the fees the most be paid:
- Contest targeting Quebec participants only: 10 % of the value of the prizes offered.
- Contest targeting a group of participants from Canada exclusively, when it involves participants from Quebec: 3 % of the value of the prizes offered
- Any other group of participants that may include participants from Quebec: 0.5 % of the value of the prizes offered.
4. Write a Report
Following the contest, you must submit a report to the Régie in the 60 days following the end date of the contest and indicate the winners.
5. Require A Skill-Testing Question
Article 206 of Canada’s Criminal Code becomes applicable when a contest requires the purchase of a good or service. Why? Because the Criminal Code forbids contests, draws and lotteries from taking place when winning the contest relies solely on luck. So how do we hold a contest or a draw without winning relying solely on luck? You require the winner to answer a compulsory skill-testing question in order to claim their prize. When the correct answer to a math problem is required to win, winning doesn’t rely solely on luck, but rather, on a combination of luck and ability. Do this and you do not contravene article 206 of the Criminal Code.
Also, in order to avoid violating this stipulation of the Criminal Code, businesses which hold contests or draws often add the statement “no purchase necessary” to all promotional material relating to the contest.
6. Outline the Contest’s Rules
To guarantee that applicable laws are respected, and if the total value of your contest is over $100, you have to provide rules pertaining to the contest which must be accessible to the public and include the following:
“Any litigation respecting the conduct or organization of a publicity contest may be submitted to the Régie des alcools, des courses et des jeux for a ruling. Any litigation respecting the awarding of a prize may be submitted to the board only for the purpose of helping the parties reach a settlement”.
7. Pay A Security Deposit
The Régie des alcools, des courses et des jeux requires a security deposit from the advertising contest’s organizer in the following circumstances:
- The value of the prizes offered to Quebec residents exceeds $5,000.
- The total value of the prizes offered to Quebec residents is of $20,000 or more.
- The organizer does not have a headquarters nor any offices in Quebec.
- The organizer has been declared guilty of an infraction or was found to have violated the regulations relating to such activities in the year preceding the launch of the contest.
8. Ensure Adequate and Fair Disclosure
Every contest in Canada is subject to the Competition Act which forbids the publication of false or misleading indications. Article 74.06 of this law is particularly pertinent for contests for advertising purposes as it states that all contests must indicate the approximate value of the prizes, the region or Canada or Quebec involved, the chances of winning, and how to participate in the contest.
This federal law is the responsibility of the Competition Bureau and if it transgressed, the competent court can order a person to stop the contest, publish a notice, and/or to pay an administrative fine.
But beware: the consequences can be much more serious!
For a first offense, an individual can be penalized up to $750,000 while a company can be fined up to $10,000,000. If the offense is repeated, the amount can go up to $1,000,000 for individuals and up to $15,000,000 for companies. In the case where a person has made a public material declaration which is false or misleading, the court can also order a restitution, require that the person compensate the consumer who purchased the product and, in certain cases, may freeze its assets through a provisional injunction.