Controversial house competition is completed as winner is chosen

The Wilshaw family could not sell their house by normal means so set up a competition with £25 tickets and a question whose answer was easily findable on the internet.

The Gambling Commission stopped the competition last autumn amidst suggestions that it was in fact an illegal lottery, but two weeks ago the Wilshaws announced that the Commission had "deemed the matter closed".

The winner of the competition was chosen today at 10am in the offices of an Exeter solicitor's firm and the Wilshaws said that they will announce the name of the winner after completing "some administration".

Separately today, the Gambling Commission published a note on such competitions. It has not identified the target of its investigation or said whether the investigation has concluded or will result in a prosecution. The Commission did not return requests for comment.

It also said that it has written to 50 people to warn them of the potential illegality of prize competitions as a mechanism to sell houses.

In the aftermath of the highly-publicised success of the Wilshaw family in selling 46,000 tickets at £25 each for a draw to win the house they could not sell by traditional means, a rash of similar competitions have sprung up.

They have claimed to be prize competitions, which are legal if there is an element of skill or judgment acting as a barrier to entry and to success for competition entrants. They usually ask a factual question to satisfy the 'skill or judgment' requirement, but at least one gambling law expert has said that they are effectively private lotteries, which are illegal.

The Gambling Commission is the regulator responsible for prosecuting anyone whose competition appears to be a lottery, but it will not publish its opinion on whether or not competitions with questions that can be answered by internet research qualify as prize competitions.

The Commission has just published a note about the house competitions but it does not offer guidance to potential operators of or entrants to prize competitions beyond saying that they must comply with the Gambling Act.

The note did say, though, that the Commission has taken some action in relation to the competitions.

"The Commission has written to over 50 organisers of house competitions and the majority appear to have had significant difficulty in satisfying themselves that their house competition is legal," it said. "Where the Commission considers that a scheme is an illegal lottery, a criminal investigation is likely to be commenced. This has already happened in one case."

The Wilshaws announced two weeks ago that the Gambling Commission had "deemed the matter closed" in their case. The draw for their house will take place today.

Last year the Commission was known to have given advice to another potential competition runner, Asmat Monaghan, saying that competitions which used easily answerable questions as their test of skill or judgment were legal. That advice was later retracted.

The Commission's just-published note did say that it would only be able to pursue prosecutions when it had a strong enough case to win.

"At the conclusion of an investigation the Commission will decide whether to proceed with a prosecution and, in doing so, will have regard to the public interest and the Code for Crown Prosecutors," it said. "This means that a prosecution will not be pursued unless there is a realistic prospect of conviction and if it is considered to be in the public interest."

Antoinette Jucker, a gambling law expert at Pinsent Masons, said that the Wilshaws may have been given the same advice as Monaghan, which would have made it nearly impossible to secure a conviction.

"Given that the Commission may have given guidance to the Wilshaws that their house competition was not a lottery, the Commission may well have come to the view that there was no chance of succeeding in a prosecution against them," she said. "Had they been prosecuted under the Gambling Act for promoting an unlawful lottery, the Wilshaws would have had available to them the defence that they 'reasonably believed' that the arrangement was not a lottery. If they were assured as much by the body with statutory responsibility for regulating lotteries in Great Britain, it's hard to see how any court would have convicted them."