There's a lot of this around at the moment. A business or a fundraiser offers a big prize, tells you to buy something to go in the draw, and it feels exactly like a raffle. Sometimes it's genuinely fine. Sometimes it's actually unlicensed gambling wearing a sales promotion's clothes, and that gap has real consequences, both for the people running it and the people buying in.
We covered the basic distinction in our lotteries explained guide, but it's worth spelling out properly, because the difference isn't about branding. It's about a specific set of legal conditions a sales promotion has to meet to avoid being gambling at all.
The test isn't "does it feel like a raffle." It's whether you paid extra to enter.
A genuine sales promotion works like this: you buy a normal product or service, at its normal price, and entry into the draw comes bundled in as a bonus. No extra fee. Nobody pays specifically for a chance to win. That's what keeps it out of gambling law entirely.
The moment someone pays specifically to be in the draw, rather than buying something they'd have bought anyway, it stops being a sales promotion. At that point it's a lottery, and lotteries over $5,000 in prizes need a Class 3 licence from the Department of Internal Affairs. Run one without a licence, and it's an offence.
There's a second trap, and it's the one that catches people out even when the "buy something" part is done right: running it online.
New Zealand has a general ban on what the law calls "remote interactive gambling," which covers most gambling conducted online or by phone — DIA's own guidance confirms this "would include selling lottery tickets on the Internet." Licensed Class 3 lotteries have a specific exemption. Ordinary sales promotions generally don't — as DIA puts it directly, "sales promotions that are not lotteries may fall under the definition of remote interactive gambling." So a promotion that's fine run in-store, at the counter, can tip into illegal territory the moment it moves to a website or a social media giveaway, unless it's been deliberately structured as a licensed lottery instead. The underlying rule sits in Section 9 of the Gambling Act 2003.
A live example, not a hypothetical.
Earlier this year, DIA opened an inquiry into a promotion offering entries into a draw for a set of Shelby GT350s, run in support of a Matamata fundraiser. The promotion was paused while the inquiry continues, and news coverage has described ticket holders having difficulty getting the refunds they were told they'd receive; Waikato Times reported DIA had paused the fundraiser directly. We're not calling that one a scam. Nothing's been proven, and we've said so plainly on our own page about it. But it's a real, current example of exactly this gap: a promotion that leaned into big-ticket prizes and urgency, the pattern DIA has specifically warned looks like gambling dressed up as marketing.
Entry has to ride along with a normal purchase, at the normal price — no separate entry fee, ever. If you want to run it online or by phone, you almost certainly need to structure it as a licensed lottery instead, not a sales promotion. If you're not sure which side of that line you're on, that's the moment to check with DIA directly, not after you've already launched.
If you're the one buying in: the checklist is the same as any raffle. Is there a licence number. Is the organiser who they say they are. Is there a fixed draw date. We've got a fuller checklist on our lotteries explained page if you want to run through it properly before you enter anything.