WAS HOUSE SALE COMPETITION APPROVED BY UK GAMBLING COMMISSION?

15 May 2009

No clarification yet on seller's claim that they have the go ahead for innovative selling scheme
 

InfoPowa readers will recall an innovative approach to real estate that surfaced in Austria last year when an enterprising house owner trying to sell his home opted for a prize competition scheme when she could not get the right price through more conventional channels.

In the event, the entries and the draw in the competition were an outstanding success, and sharp observers in the UK followed suit, triggering a UK Gambling Commission enquiry.

This week the publication Out-Law reported that the competition is now going ahead on completion of the Gambling Commission probe, with the Wilshaw family at the centre of the issue announcing that a draw will take place for the house in "the next couple of weeks."

The legal situation was far from clear, however, after the Gambling Commission said that its guidance on such competitions would be the subject of consultation and revision this summer...but little else.

"The competition was investigated by the Gambling Commission, which is the regulatory body given the power to prosecute offences under the Gambling Act. The Commission would not comment on what decision it had made in the Wilshaws' case or the reasoning behind it," Out-Law reports.

However, the Wilshaws used their MySpace page to announce that their competition will conclude as planned and the draw will be going ahead.

"Having considered all the correspondence between the barrister, our solicitor and ourselves, the Gambling Commission have now deemed the matter closed," advises the announcement.

The Wilshaws have apparently sold 46 000 tickets to win their home, each priced at GBP 25. The family claims that the scheme is a prize competition, a legal mechanism differentiated from a lottery as long as it requires the exercise of skill or judgment.

The qualifying element of skill in the Wilshaws' competition was the answering of a single question, the answer to which was available through the Internet.

It is illegal to operate a lottery for commercial profit without a licence, and such lotteries have constraints on financial limits on the value of the prize that can be won, a figure which is currently GBP 400 000. Prize competitions have far more leeway and are not so restricted...and the Wilshaws claimed that their competition and methods had been cleared by the Gambling Commission before they started.

Out-Law informs: "In September last year, the Commission also sent a response to the operator of an auction site in relation to the Wilshaws' competition in which the staff member James Cook wrote: 'It does not matter that the [qualifying question] answer can be found from basic research on the internet. If this was the case then it would rule out virtually every question and answer skill competition. It is clear that a person is not eligible to enter the draw without answering the question properly, which stops it being a lottery'".

The publication goes on to advise that the Gambling Commission subsequently retracted this advice, but when asked to explain would say only that it has never publicly explained its attitude to such competitions except to say that they might be illegal.

Out-Law quotes gambling law expert Antoinette Jucker, who opined that it is vital that the Commission explain its actions.

"We don't know why it is that the Gambling Commission has indicated that the Wilshaws can proceed with impunity," said Jucker. "The fundamental question that other people will be asking is: if they follow the same model will they be permitted to go ahead too?"

"The Gambling Commission are the people primarily responsible for enforcement, which makes it doubly important that people know what is permitted and what is not."

Jucker is on record as saying that she does not believe the Wilshaws' competition involved enough skill or judgment to qualify as a prize competition. She said, though, that any initial Gambling Commission advice to them may have damaged their chances of a successful prosecution.   

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