After waiting several weeks for a response from the payment provider, we finally heard back from PayPal last week. They confirmed to us that at present, their services are not available for raffles or prize competitions in the UK. This is in line with the company's existing Acceptable Use Policy.

Importantly, this policy also affects competitions that require players to use their skill or knowledge to participate - such as multiple choice questions or Spot the Ball; and concerns any type of prize, including properties.

Although PayPal indicated to us that this policy may be reviewed in the future, they advised that they intend to apply it consistently across the board going forward. With continued uncertainty surrounding the Gambling Commission's own stance on property competitions, it is difficult to foresee when PayPal's policy might be reviewed.

In order to avoid facing any complications themselves, we recommend that anyone still using PayPal for their property competition quickly seek an alternative solution.

Based on numerous conversations we have had with organisers of house competitions, it is clear that PayPal isn't the only payment provider that is uncomfortable with offering their services for property competitions, hence this remains an important issue to be resolved.

Have you experienced similar issues with other payment providers? Alternatively, do you feel you have found a reliable solution for your prize competition? Feel free to add a post if you have any interesting information to share with us.

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Comments & Opinions

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Thanks for the heads up

Good to receive confirmation... So hard to get a straight answer on this! From my understanding Google Checkout have the same policy.

Jeff , 01 Apr 2009

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Makes sense

I'm sure paypal will stay away from house competitions at least until the GC has clarified things on their side - after that, who knows? There must be others out there that are able to form their own opinions on this though?! It seems to me some property competitions are absolutely fine vs the GC it's just nobody has obtained clear resolution in court...

Simon , 01 Apr 2009

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What about players?

Does that mean if I come across a competition still using paypal there's a chance they might run into difficulties at some point?

Darren Snowden , 01 Apr 2009

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Re: What about players?

@ Darren

If you come across a property competition that is still using PayPal to process payments (regardless of the type of contest involved), it is probably a good idea to contact the organisers first before you enter to make sure they are satisfied there is no issue.

There may be cases where PayPal have given prior approval to some contest organisers for reasons we are not aware of - but it is worthwhile checking with them to make sure this won't become an issue further down the line.

Team Win House , 01 Apr 2009

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Some more PayPal info

Well finally, after weeks of trying to get a response from PayPal either by email or by phone, we received an explanatory email from them today...

It seems that they intend to hold all entry fees collected for house competitions/draws etc for 180 days (in accordance with their terms and conditions). This is to ensure that they have the funds available should they be required to make a refund by the credit card companies. Credit card companies have the right to request refunds on behalf of their card users up to 180 days after the transaction.

Competition organisers who have had their PayPal account frozen: it looks like you'll have access to it when the 180 days are up - drop PayPal an email and ask them to confirm...

And for players who have paid via PayPal, their entry fee is safe as Paypal will refund them should the competition/draw be cancelled.

For players looking at entering any competitions in the future it's probably best to avoid using PayPal until their policy on competitions/draws etc is resolved/reversed.

Beverly , 15 Apr 2009

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Re: Some more PayPal info

@ Beverly,

Thank you very much for this valuable feedback and for providing clarity on these issues, particularly in terms of the 180 day duration.

This is very useful information for other competition organisers still struggling to understand how to access their funds. I'm sure players will also appreciate this update as many will have been puzzled by how long refunds seem to be taking in some cases.

By sharing your experiences in this way, you will no doubt help others avoid the obstacles you have unfortunately had to face yourselves when running your own house competition.

For those of you interested to find out more about Beverly and Andy's competition, you can find full details in the Competitions Directory under Spain. Just look for the competition entitled "Win A Dream Home In The Sun". You could win a £400K home in the sun for only £25!

Team Win House , 15 Apr 2009

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Re: Some more PayPal info

180 days!!! I'm in the wrong job :) Thanks Beverly for the heads up!

Jean Farmer , 15 Apr 2009

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Re: Some more PayPal info

Happy to help...there's a kind of irony don't you think, that PayPal are clearly nervous about anything to do with lotteries, raffles, draws etc but have no qualms about sequestering money which isn't theirs and ignoring all communications from the affected account-holders!

Beverly , 15 Apr 2009

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Re: Some more PayPal info

@ Beverly,

Ironic indeed! As you would expect, this hasn't helped the company's reputation in the UK at least, based on the number of complaints we have heard and read online in recent months.

A couple of people mentioned to us there may be a possibility of accelerating the process of getting your money back from PayPal. This may involve escalating the complaint to other bodies (or threatening to do so).

We'll investigate this further and post an update here if we manage to clarify exactly how they did this.

Team Win House , 15 Apr 2009

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