Why Canadian Prize Draws Ask a Skill-Testing Question

An old drawing drum with a hand crank, the kind used to pick winning entries — Photo: Photograph by Mike Peel ( www.mikepeel.net )., CC BY-SA 4.0, via Wikimedia Commons

Canadian contest fine print typically includes two familiar lines: "No purchase necessary" and "Selected entrants must correctly answer a mathematical skill-testing question." The second can look odd to anyone used to contests elsewhere. It makes more sense once you see the provision it is designed around: section 206 of the Criminal Code, the general offence for lotteries and games of chance.

This article explains that link. It is worth saying at the outset that no Canadian statute contains the words "skill-testing question". The question is a drafting practice that sponsors and their lawyers use to keep a promotional contest outside the lottery offences. What follows is a reading of the law, not legal advice for running a contest.

The lottery offence in section 206

Subsection 206(1) makes it an offence, punishable by up to two years on indictment or on summary conviction, for anyone to do a long list of things connected with lotteries. Several paragraphs speak directly to a prize draw:

(a) making, printing, advertising or publishing any proposal, scheme or plan for giving, selling or in any way disposing of any property "by lots, cards, tickets or any mode of chance whatever";
(b) selling or otherwise disposing of any lot, card or ticket for disposing of property by chance;
(d) conducting or managing any scheme for determining who are the winners of property disposed of in that way;
(f) disposing of any goods, wares or merchandise "by any game of chance or any game of mixed chance and skill in which the contestant or competitor pays money or other valuable consideration".

A promotional sweepstakes, read plainly, looks a lot like paragraph (a): a published plan for giving away property, with the winner picked by a random draw. That is the problem contest sponsors set out to solve.

Chance, skill and consideration

Section 197 defines "game" for Part VII as "a game of chance or mixed chance and skill". Paragraph 206(1)(f) uses the same phrase and adds a third element: the contestant pays money or other valuable consideration. Lawyers who advise on contests often describe the analysis in terms of three ingredients: a prize, chance, and consideration paid by the entrant. The common approach to compliance is to remove at least one of the risky ingredients and weaken another.

Element	Where it appears	Usual contest response
Prize	s.206(1)(a), (b), (d), (f): "property", "goods, wares or merchandise"	Kept; it is the point of the promotion
Chance	s.206(1)(a), (b), (c): "any mode of chance whatever"; s.197 "game"	Random draw kept, but a skill element is added before a prize is awarded
Consideration	s.206(1)(f): "pays money or other valuable consideration"	A no-purchase entry route is offered

The table is a summary of practice, not a rule set out in any one section. Courts decide each case on its facts, and a sponsor who changes the structure of a contest should take its own advice.

Why "no purchase necessary" comes first

Paragraph 206(1)(f) turns on payment. A game of chance, or of mixed chance and skill, is caught where the contestant "pays money or other valuable consideration". For that reason, a Canadian contest tied to a product purchase almost always provides a free way to enter.

Miller Thomson's practical guide for businesses puts it directly: contests should "always provide a 'no purchase necessary' means of entry", and it gives a mail-in essay as an example of such a route. The free route is meant to be real. A sponsor that makes it so hard to use that nobody would choose it invites the argument that, in substance, everyone paid to play.

Where the skill-testing question fits

Removing consideration deals with paragraph (f). The other paragraphs, (a), (b) and (d), are written around disposing of property "by any mode of chance whatever" and do not mention payment at all. Contest practice responds by making sure the prize is not awarded on chance alone. Winners are first selected at random, then must answer a question requiring some skill before they receive anything.

The legal argument is that a prize won by a combination of a random draw and a test of skill is not disposed of purely by chance. Whether that argument holds depends on the question being a genuine test. A question that anyone could answer without thought does little to change the character of the scheme.

What kind of question

Arithmetic is the usual form. The Miller Thomson guide gives as its example "a simple math question involving addition, subtraction, multiplication, and division components": several operations in one problem, rather than a single sum. The skill element also has to be disclosed: the same guide lists the skill question among the items that must appear in the short-form rules.

When it is asked

The question comes after the draw and before the prize is released. What happens after a wrong answer is set by each contest's own rules; many provide for disqualification and a further draw.

The Competition Act layer

The Criminal Code is not the only statute in play. Section 74.06 of the Competition Act makes it reviewable conduct to run a contest, lottery, game of chance or skill, or mixed chance and skill, to promote a product or business interest, unless certain conditions are met. Adequate and fair disclosure must be made of the number and approximate value of prizes, of the area or areas to which they relate, and of any fact that materially affects the chances of winning. Distribution of prizes must not be unduly delayed, and selection of participants or distribution of prizes must be made on the basis of skill or on a random basis.

That is why Canadian contest rules spell out how the chances of winning are determined, the value of each prize in dollars and the regions where the contest is open. The skill-testing question addresses the Criminal Code; the disclosure block addresses the Competition Act.

Quebec

Quebec once ran its own publicity-contest regime; the Miller Thomson guide reports that regime has since been repealed, though contest information offered to Quebec residents must still be published in French under the Charter of the French Language.

Contests are not gambling, and gambling is not a contest

The skill-testing question explains something important about the wider Canadian market. Paid games of chance for prizes are, under section 207, the business of provinces and their licensees. A province can run a lottery or casino without asking anyone a math question, because it operates under the express permission in paragraph 207(1)(a). A private company cannot; it has to design its way outside section 206 instead.

This is also a useful test when a website calls itself a "sweepstakes" or "free-to-play" casino. If entries are effectively bought, prizes are decided by chance and there is no genuine free route, the label does not change what the scheme is. Our page on casino scams covers other red flags, and the overview of gambling regulation in Canada explains who is allowed to run what.

What it means if you enter

Read the short rules for the free entry method and the closing date.
Expect the skill-testing question if you are selected, and answer it as the rules require; an error can cost the prize.
Check the disclosed number and value of prizes and the odds language. If they are missing, that is a warning sign.
Treat any "contest" that requires a deposit or paid credits as a game of chance, with the same caution you would bring to provincial lotteries or a casino.

Real-money gambling in Canada is for adults: 19 and over in most provinces, 18 and over in Alberta, Manitoba and Quebec. If entering draws or playing games has stopped being fun, our responsible gaming page lists support by province.

Questions readers ask

Is the skill-testing question required by law?

No statute uses the phrase. It is a contest-drafting practice used to keep promotional draws outside the lottery offences in s.206 of the Criminal Code, which target disposing of property by any mode of chance.

Why do contests say no purchase necessary?

Paragraph 206(1)(f) catches games of chance, or of mixed chance and skill, where the contestant pays money or other valuable consideration. A genuine free entry route is meant to remove that payment element.

What kind of question is usually asked?

Typically a multi-step arithmetic problem. One law-firm guide gives the example of a simple math question involving addition, subtraction, multiplication and division.

What happens if I get the question wrong?

That depends on the contest rules, but sponsors commonly disqualify the selected entrant and draw another name.

Does the Competition Act also apply to contests?

Yes. Section 74.06 requires adequate and fair disclosure of the number and approximate value of prizes, regional allocation and facts affecting the odds, timely prize distribution, and selection on a skill or random basis.

Why Canadian prize draws ask a skill-testing question