A contest contains an element of performance that allows the contestants to be distinguished from each other (e.g. a slogan or motivation), while a giveaway/lottery is decided by chance. Previously, it was forbidden for companies to organize lotteries created for the purpose of sales promotion, while competitions with performance elements were allowed.
Since the new Swedish Lottery Act was introduced in 2019, it became allowed for companies to organize both competitions and pure lotteries with winnings - as long as the winnings themselves are not money. At the same time, there is still great uncertainty about what applies - which is complicated by the fact that it is not only the Swedish state that has opinions about what you can and cannot do in your contests.
What rules apply to social media contests and lotteries/giveaways in 2024?
We often get questions about what rules apply to social media contests. For a small business owner, it can be tricky to keep track of all the do's and don'ts, not least when platforms such as Facebook and Instagram have their own regulations governing how contests can be designed. If you go against these guidelines, it can not only lead to a lower reach and visibility for you, it can also lead to your page or account being suspended. So there are a number of things to think about:
- Winnings may be awarded both by chance and performance
Its up to you as the contest organizer to decide whether the prize should be drawn or awarded, based on the participants' performance. However, there is one important exception – money is not allowed to be given by chance.
- The contest rules must be clear
To simplify participation - and avoid sad misunderstandings - it must be clear to the participants what applies. A tip if you don't want to make a long post is to collect everything on your website or in Facebook's notes, which you can then link to at the end of the post.
- Tax rules remain
If the prize in the contest is worth more than 3% of the year's current price base amount, the winner must pay tax on the profit. The price base amount, an amount that is adjusted annually to reflect inflation when calculating benefits and fees, is 58,500 SEK in 2024. 3% of the price base amount is therefore 1,755 SEK.
- Inform about the profit tax
You have probably realized by now that much of the Lottery Act is about transparency. If there is any profit tax, the company must inform about this, so add it to the contest conditions. A special form must then be sent to the Swedish Tax Agency, where the winner's social security number and the value of the prize are specified.
- Avoid the "tag your friend" trick to create engagement
Contests where people are tagged are something that Facebook doesn't like, as they don't allow the contests to end up on other people's timelines. Something that is unfortunately seen quite often, but which can therefore lead to problems.
- Always read the current rules for the specific platform
Take a few minutes when creating your contest and read through the latest updated contest terms and conditions for the platform(s) you want to run your contest on. We promise, you'll thank yourself for that investment of time!
5 tips for a successful social media contest in 2024
Following the regulations of the Swedish state and the platforms is an important part of setting up a contest. But of course you also want to get a good result! To maximize the result and engagement, there are a few things to keep in mind. We share a couple of tips:
- Design the contest so that it fits your profile
Sure, it can be tempting to casually run a "like-and-share" contest. But the result is often much greater if you take the time to match the content of the contest, performance points and of course the price with your brand. It becomes both more relevant for users and strengthens your brand.
- Make it easy for people to participate
The lower the threshold to participate in the contest, the more people will want to participate. So avoid complicated contest rules - unless you have a really great prize. See next point!
- Match the value of the prize with the performance (don't skimp!)
The value of the prize should correspond to the contest's performance requirements – lower performance required works with a lower value of the prize and greater performance should be rewarded with a greater value of the prize. If it's a really great prize with a value above 3% of the prize base amount, do not forget the detail of specifying that the profit tax is paid by the winner.
- Be clear about how the contest works
To avoid confusion, its good to have clear instructions. Instructions in bullet form are great!
- Be alert if someone tries to hijack your contest
If you run a contest on Facebook, for instance, where the participants leave comments, we want to raise a warning about a phenomenon that may appear.
On Facebook in particular, it sometimes happens that dishonest people create fake Facebook pages with an almost identical name and image to the page that organized the contest, in order to contact people who participate in the competition via, for example, Messenger. They write that the person has moved on and send a link where the user must register to move on in the contest, often on an external page with suspicious content. As they are often good at copying the page, its unfortunately often successful.
The above is difficult to protect against if you do a public contest, but we advise our clients to be very clear in the contest instructions about how step 2 of the contest will work and how the winner will be contacted.
That's it, now it's just a matter of setting up a contest and go! If you have any questions or want help setting up campaigns that suit your company - get in touch and we'll be happy to help.
