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Win A House - Competition or Illegal Lottery

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  • Win A House - Competition or Illegal Lottery

    An insight into the 'Illegal Lottery' issue.

    The two documents that need to be refered to are the 'Gambling Act 2005' and 'Prize competitions and free draws: The requirements of the Gambling Act 2005'. The second being the Gambling Commission's 'opinion', this document is provided so that promoters have some 'guidance' on what the Commission considers is needed to avoid breaches of the Act.

    Vague? Yes it is. The GC will not determine if there is an 'illegal lottery' that is up to a judge in court to determine and one of these competitions has not got that far yet. The GC is waiting for this to happen.

    For a competition to fall outside a lottery:

    "In prize competitions,sucess depends, at least in part, on the exercise of skill,judgement or knowledge by the particiants. This distinguishes them from lotteries, where either success depends wholy on chance or, in a complex lottery, the first stage relies wholly on chance. Section 14(5) of the act addresses this distinction"

    So to comply with these guidelines the entry into the Win A House competitions use a question as the gate entry. Yes weve all seen the easy questions seen on TV to enter competitions. The questions however on the Win A House competitions need to demonstrate skill.judgement or knowledge to answer the question.

    We will have three questions with three multiple choice answers. We asked a representative from the GC to answer one of the questions , he couldnt, but he then used the process of elimination to work out the answer, hence demonstrating skill, judgement or knowledge.

    There are other requirements , but a Win A House Competition is not deemed illegal until a judge has decided, not the commission, not us or anybody else.

  • #2
    I think a lot of people under-estimate how hard it is to sell lots of tickets online. The legality of the competition or raffle is one thing, and sure you have to make sure it complies with UK laws.

    But I think people focus too much on that side of things, without thinking about how much it would cost to do lots of marketing online, or try to appear on TV (like the Devon couple).

    Reading this article, it's clear lots of these competitions were cancelled recently. I personally don't think it's only because so many were probably lotteries, I'm sure some of these simply didn't take off...
    Further property competitions cancelled following the Devon house competition setback - Win a House

    what do you think?
    Last edited by henry_london; 05-02-2009, 08:55 PM.

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    • #3
      I have not seen one House lottery go through successfully yet.....I think eventually someone will find a way but until then Im staying clear.
      Free UK Property Investment Seminar

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      • #4
        You're right, it's difficult for the likes of you and me to know which ones are most likely to go through successfully or not given the uncertainties with the GC... I'm sure lots of people are waiting on the sidelines until they have clarified things

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        • #5
          A Spot of Luxury

          Further to the quote from the Gambling Commission Act 2005, there was a GC Act update in Nov 2007, which also stated that “if operators think there is a risk of their competition being seriously challenged, they will need to consider how they will be able to provide evidence of compliance, for instance by demonstrating from their records that a significant proportion of entrants either in that competition, or previous similar ones, had got the answers wrong.”

          For a year, we have been trying to get the GC to interpret their own Acts, so that British Entrepreneurs can work with the Acts to stay within the law.

          When I asked Mr Clive Young at the GC, what percentage he thought was "a significant proportion" of competition entrants to get a question wrong, he stated in front of witnesses 50%. I asked him how he possibly thought that 50% of the educated adults of our country, given that they have all the time they need, the use of calculators and friends, and are paying £25 to enter the competition, would get any question wrong?

          At a later date, when questioned by our lawyer, Mr Clive Young of the GC, denied stating 50%, and reduced his statement to 20%.

          If my Clive Young can interpret the Acts so haphazardly, and to suite himself, how are we ever going to use the Acts as a legal guide?

          However, as it happens we are averaging 21% of our entrants getting our question wrong.

          We are not one bit concerned that the GC do not like house competitions and are trying to stamp them out. We have done everything within possible to abide by their rules and ask the GC for guidance. We are on the right side of their interpretations, and if we are accused of running an illegal lottery, we will happily see them in court!

          We just hope we can get to the stage where the GC have to make a decission, as we are finding it difficult to get publicity due to the failed house comp schemes.


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          • #6
            Originally posted by Paul_MN View Post
            I have not seen one House lottery go through successfully yet.....I think eventually someone will find a way but until then Im staying clear.
            I feel much the same - for the same reason. I wait to see evidence of house lotteries routinely succeeding. I would like that to happen.
            Renovation opportunity, 3b det., Carmarthenshire
            http://www.webbo.weebly.com

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            • #7
              Looks like these are more common in the US

              Maybe the key with house raffles is to leave them to charities, in the US apparently it's quite a common way for non-profits to raise money:
              Laguna Beach House raffle brings Ocean Institute back into profit

              I think though that in the UK laws are different so charities are more constrained in terms of what they can raffle - and how much it's worth... maybe for a cheaper flat you could do it with a UK charity as long as they can promote it to their members it might work.

              Maybe someone's seen a successful charity raffle for a house in the UK?

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