The Gambling Commission has seen a rise in popularity of so called ‘house raffles’ and competitions. This is where homeowners offer their house as a prize, either through people buying a ticket in a draw, or by paying to enter a competition. Cliff Young, the Gambling Commission’s lotteries expert, explains that while this may sound like a great idea, you must make sure you’re not breaking gambling rules.
Homeowners have been turning to alternative and creative ways to sell their properties, a rising trend we’ve seen, especially given that the latest figures indicate a downward trend in the volume of house sales nationally(1).
Pay to enter raffles, draws and competitions, where a person’s home is the prize, are becoming an increasingly popular alternative for eager homeowners that are either struggling to sell their property through traditional means or looking to do something a bit innovative.
Our concern is that we are seeing instances where organisers are breaking the law as their scheme has been set up in a way that means it is an illegal lottery.
Raffles, or lotteries as they are called in gambling law, are where you pay to enter and the result is purely based on chance - like a tombola or draw - and there is a prize. Under gambling laws lotteries are a form of gambling and there are rules about how they can be run and who can run them. The Gambling Commission regulates all gambling in Great Britain including lotteries, and in some circumstances, you may need a licence from us or a registration with your local authority before you can promote a lottery. Other small lotteries, such as those promoted at fundraising events can operate without specific permission but they are still subject to some basic rules.
Most importantly, lotteries can only be run for good causes – such as charities, hospices, air-ambulance services or other not-for-profit causes, they cannot be run for private or commercial gain. Charities and other non-commercial organisations who run lotteries rely heavily on the income they receive from lotteries to support the important work they do.
Last year alone saw society lotteries licensed by the Commission raise £230million(2) for good causes – and it is important that this area of gambling is preserved for those good causes rather than being used unlawfully for private or commercial gain.
I’m sure many will have seen in the media that some people have ‘raffled’ their home with some success. However, most of the schemes we are aware of have been operated as free draws or prize competitions, which are not caught as gambling under gambling laws. We do not regulate free draws or prize competitions and we don’t provide advice on how they should be organised, however, these type of schemes can look similar to lotteries and we do provide some tips on the difference between lotteries, competitions and free draws.
Our role is to monitor the boundary between lotteries, competitions and free draws to make sure that people who organise lotteries operate lawfully, and if necessary, are properly licensed. We really don’t want to see members of the public unintentionally getting caught out by the law and potentially landing themselves in legal trouble by running an illegal lottery.
We know many people running these kind of schemes will want to be creative to give their prize competition or free draw some appeal, but you must make sure you are following the rules. You should seek expert legal advice before proceeding.
Notes to editors
- HM Land Registry UK House Price Index: reports
- Gambling Industry Statistics: £231.8million - Contributions to good causes from large society lotteries (Oct 2015 – Sep 2016) (9% increase from Apr 2015 – Mar 2016)
- More information about how we regulate the gambling industry.
- Useful statistics on the gambling industry.
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Posted on 18 August 2017