Event Cinemas has landed in hot water with regulators after customers were potentially mislead by the promise of $1 million competition prize.

The Commerce Commission issued a warning to the Sydney-based Amalgamated Holdings, owner of Event Cinemas, not to offer prizes that it did not actually intend to provide.

The competition - advertised on Event Cinemas website, said "Win $1 million - Buy Tickets Online and You Are In The Draw" and also "every finalist will win a year's worth of movies" valued at NZ$4899.

The commission said that this was not the case, as the major prize was an all-expenses paid trip to Sydney valued at NZ$2939.

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A spokesperson from the Commerce Commission said the competition "likely" breached the Fair Trading Act.

"We have reached this view because consumers were not provided sufficient information to understand that winning the headline prize of $1 million would require not only succeeding in being selected as a winner of the draw they had entered, but also required the successful completion of a second tier game of chance."

The Commerce Commission advised Amalgamated Holdings to review its compliance procedures and policies with regards to prize offerings.

The Fair Trading Act 1986 outlines that "no person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive."

Amalgamated Holdings responded to the commission through its solicitor saying it believed the competition complied with the law.

The Commission decided to issue a warning to the company but informed Amalgamated Holdings that this does not prevent other entities from filing court proceedings.

Amalgamated Holdings Ltd has fourteen Event Cinemas across New Zealand and sixty two in Australia.

This is the first time Event Cinemas has been under review.

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