Owners of a £1 million property in Devon recently caused a media frenzy when they decided to sell their home for £25 per ticket. They describe it as a 'prize competition' with an entry question designed to circumnavigate complex gambling laws.
'This isn't a raffle or a lottery. To be eligible to win, you have to answer a skill-based question. Only if you answer the question correctly do you get to enter,' explained owner Wendy Wilshaw.
But there is now controversy over the question as the answer can easily be found on the internet. Lawyers point out that while competitions can be run for profit they must involve an element of skill.
The Wilshaws' lawyers have advised them the competition meets legal requirements, but others disagree. 'How do you choose a winner when almost everyone gets the answer right? You take their name out of a hat. That makes it a game of chance, and therefore an illegal lottery,' said Antoinette Jucker, a gambling law expert with Pinsent Masons.
'When the Gambling Act was going through parliament, the clear intention was that the only legal lotteries would be those operated for good causes. This competition is side-stepping that,' she added.
The latest to try a different approach to selling are Sam and David Donaldson from Essex who want to start a new life in Australia but have struggled to sell their luxury £515,000 home. They ruled-out dropping the price because the credit crunch has caused the market to come to a standstill.
They were advised against raffling their home by lawyers. They are now going to auction it for less than £25,000 via a bid auction service that complies with the guidance set out by the Gambling Commission.
People wishing to bid will be charged £97 to secure a 'seat' to access the auction, which allows them to place up to 220 bids. No money is taken until 15 days before the auction.
On completion of the sale Sam and David will receive the full £515,000 value of the property and won't have any commission or service fee to pay as the £97 'seat' charge is used to make up the difference between the auction costs and the very low amount paid by the winning bidder.
Others who have tried to raffle their home have been charged by the police. Last year, Angela Jones of Oakenholt, Flintshire, was ordered to pay nearly £8,000 compensation after she admitted breaking lottery laws. She sold tickets at £30 for a chance of winning her £150,000 three-bed home.
A York man who tried selling 250 tickets at £1,000 for his £190,000 home backed down after the council wrote to him to tell him it was illegal.
