We have just launched our own competition to win not one but 2 Luxury houses in South Africa for only GBP30.00 a ticket. Our competition is a crossword and then the entrants have to complete the anagram.

Please can you look at http://www.2homes2win.com.

Many thanks
Lorraine

http://blog.myspace.com/index.cfm?fuseaction=blog.ListAll&friendID=405240383

The point is that their legal adviser does not appear to be an expert in gambling law. You can look him up – he works for Ralli, a Manchester law firm.

You may also want to check through a series of articles from a legal expert in Gambling Law on the Out-Law website.

Effectively their are two key tests to assess whether a scheme is a legal prize competition or an illegal lottery. These are detailed in your post above: -

“Section 14(5) says that ‘a process which requires persons to exercise skill or judgment or to display knowledge shall be treated for the purposes of this section as relying wholly on chance if: (a) the requirement cannot reasonably be expected to prevent a significant proportion of persons who participate in the arrangement of which the process forms part from receiving a prize; and (b) the requirement cannot reasonably be expected to prevent a significant proportion of persons who wish to participate in that arrangement from doing so.’”

You only need your scheme to pass one of these tests, the schemes posted here fail both because of the design of their ‘so called’ competitions.

I think you have a valid point regarding the ludicrous simplicity of the GMTV quizzes, but they do not fall foul of the law by providing a free entry route. Also the media is more tightly regulated by Ofcom, so there is less risk (now more so than before) of irregularities.

“Homeowners urged to be aware of rules on ‘house competitions’ ”
http://www.gamblingcommission.gov.uk/Client/mediadetail.asp?mediaid=404&id=4&track=fp

They have also added an FAQ to their website: -

“If I arrange a prize competition that eliminates entrants by way of a question then can I be sure this is not a lottery?”

http://www.gamblingcommission.gov.uk/Client/faq_detail.asp?id=208&sector=21

The answer to this question begins with ‘no’.

As these lotteries are using a question to pass themselves off as prize competitions, it may be worth asking them if they have recently received any communication from the Gambling Commission requesting proof that they comply with Section 14(5) of the Gambling Act, 2005?

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Miss Thrifty says:

Hi Sima – thanks for the update!

For interested readers, the full answer to that FAQ is as follows:
Q. If I arrange a prize competition that eliminates entrants by way of a question then can I be sure this is not a lottery?

No. The test of whether or not a competition is a legitimate prize competition depends on whether it meets the requirements of section 14 (5) of the Gambling Act 2005. That depends on the circumstances of the particular case.

Section 14(5) says that ‘a process which requires persons to exercise skill or judgment or to display knowledge shall be treated for the purposes of this section as relying wholly on chance if: (a) the requirement cannot reasonably be expected to prevent a significant proportion of persons who participate in the arrangement of which the process forms part from receiving a prize; and (b) the requirement cannot reasonably be expected to prevent a significant proportion of persons who wish to participate in that arrangement from doing so.’

We would advise those considering running a scheme of this nature to consult our guidance and to take independent legal advice before proceeding.

I recall from the newspaper reports that the Devon couple and the Cheltenham couple have sought independent legal guidance – I’ll have to check back re. the Teeside couple.

I was watching GMTV the other day and one of their “prize competition” questions was a multiple choice on who Victoria Beckham was married to. The homeowners’ questions seem like University Challenge in comparison!

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Miss Thrifty says:
Hi Pete. The Guardian story has a footnote, which reads:
Ben Steele is producer of a BBC Money Programme report on the Wilshaws to be broadcast in October.

I guess we’ll have to keep our eyes peeled.

If you are thinking of using this format in the UK you will be relying on the Gambling Commission remaining apathetic.

If you try it in the US you will almost certainly be risking prosecution as the US attitude to on-line gambling is far more unforgiving.

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Miss Thrifty says:
Hi Sima – thanks for your comment. Yes, the organisers do seem to be aware of this potential snag. It’s a murky area of English law, but people are opting to get round this by asking entrants to answer general knowledge questions – so that their enterprises are prize competitions, rather than prize lotteries. Some experts have raised eyebrows, but it’s looking good for now. See this Guardian story for more info.

If it does all go pear-shaped, I shall certainly be blogging about it!