Canadian regulation of contests, prizes and games.

Canadians like to participate in public, advertised contests and games. We compete for prizes. Most often we are unaware that the promoters of these events are governed by specific rules in relation to them.

The law on contests, prizes and games is sometimes classified under marketing law. A level playing field for these activities protects consumers from unfair or deceptive promotional activities relating to the contests and games. The state has an interest in protecting average citizens from wasting their time and energies engaged in what are essentially fraudulent activities. Reducing the incidence of fraudulent activity in commerce is not only fair to honest competitors, but it also increases confidence in, and respect for, our competitive marketplace.

This article identifies and highlights the federal and provincial regulation of contests, games and prizes.

Federal Regulation

Criminal Code

In its simplest form, gambling involves a prize, a chance and a consideration (money or other economic value) exchanged. Business promotions that are a combination of these three elements constitute a form of gambling. Most businesses circumvent the gambling characterization by removing or changing one of these three elements. For example, the business charges nothing (no consideration) for its customers to win a prize. Perhaps skill (as in answering a question) replaces random chance. These contests, prizes and games are technically not gambles. They are legal and unregulated.

In Canada all gambling-related activities--that is, those involving a prize, chance and consideration exchanged--start with the Criminal Code (s. 201-209). Given the substantial consideration that might be exchanged in pursuit of an elusive prize, serious social and moral hazards accompany gambling. Moreover, governments have enjoyed the extraordinary revenue stream that may be harvested from controlled, legalized and regulated gambling. Accordingly, all gambling is generally criminalized in Canada (see section 206).

After initially criminalizing all gambling, the Criminal Code, in the next section (s. 207), sets out exceptions. Activities which are provincially-licensed and regulated are deemed to be legal gambling. Few business promotions involving contests, games and prizes will need to be registered under provincial gambling programs.

The Criminal Code also criminalizes cheating at play and failing to comply with the provincial regulations (s. 208 and 209). The provinces...