Following a raft of new house competitions announced in the last few months, last week the Gambling Commission published a notice on its website urging homeowners to be aware of the rules surrounding games of skill versus illegal lotteries in the UK.

As we reported yesterday, one of the UK’s most visible house competitions, the Devon Oldborough Retreat competition, was forced to postpone its prize draw despite selling all tickets two months in advance. According to this latest statement on its website, it appears that the Gambling Commission is concerned about a number of similar schemes operating in the UK.

"The Commission has become aware of a number of schemes that are intended to operate as prize competitions in line with the Gambling Act 2005. Where the schemes are causing concern, we have taken the step of writing to the scheme operators in order to question whether the skill, judgment or knowledge element of their schemes to win a house is sufficient to meet the requirements of the Act, in particular the test at section 14(5).

The letters request information from the operators in order to assess whether the scheme does amount to a genuine prize competition, or whether it fails to meet the requirements of the Act and is, in reality, a lottery. We have also advised such operators to seek legal advice before commencing or continuing and where they cannot assure themselves of the legality of what they are doing; to cease activity and return monies already taken."

It appears that the emphasis will be placed on competition organisers themselves to demonstrate that their scheme falls in line with the Gambling Act 2005. We expect a number of other house competitions to be cancelled or postponed if they receive a similar letter from the Gambling Commission.

However, those competition organisers that are not contacted themselves may now be faced with the choice of either moving forward with their current scheme (in the hope that it will be considered a game of skill); or carrying out further legal due diligence to dispel any doubts that it may be considered illegal. Given the burden of proof rests on their shoulders, it is likely that some organisers may prefer to voluntarily postpone their competition until they have resolved these questions fully.

On the flipside, after consultation with the Gambling Commission, it may emerge that certain schemes will be given the green light to go ahead. This would offer other competition organisers (or anyone considering running their own house competition in the future) a useful precedent to help define the boundaries of what is permissible in the UK.

If you are unsure whether your house competition satisfies the requirements of the Gambling Act 2005, you may wish to seek legal advice to verify all aspects of the scheme. Alternatively, if you have recently been contacted by the Gambling Commission and would like to share some of your experiences, please let us know.

Click here to read the full statement on the Gambling Commission website.

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Re: Gambling Commission warns homeowners about ‘house competitions’

Seems all very fluffy to me to be frank. What I just don't understand is why they can't provide better guidance? Why not make it easy for people to be in line with their regulations? After all is their role not to provide a clear framework, which in turn will protect consumers, but also those help operators to offer competitions that are compliant? I think it could be so much easier, but it certainly keeps lawyers in business :)

Sarah , 09 Mar 2009

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