Brian and Wendy Wilshaw are selling their Devon house and
grounds, which they say is worth £1m, in a £25-per-entry
competition. They have said that their legal advisors have cleared
the competition, but one gambling law expert has raised questions
about the legality of the plan.
Antoinette Jucker is a gambling law expert with Pinsent Masons,
the law firm behind OUT-LAW.COM, and she thinks the competition is
against the law.
"I think this is an illegal lottery. The Gambling Commission
should take an interest in this," she said. "If they don't do
anything, others will do the same thing, raffling houses or cars or
anything else that they're struggling to sell."
Competitions and lotteries are tightly controlled by law. It is
against the law to run a lottery for personal profit, and only
small numbers of lotteries gain licences to operate. Competitions
can be run for profit but they must involve an element of
skill.
The Wilshaws are asking a question which is intended to satisfy
the condition that the competition involves skill. It is "what is
the cost of an adult full season coarse fishing licence for
2008/2009?".
The Gambling Act says that to avoid being a lottery, a
competition's skill element must be failed by a "significant
proportion" of the people who enter. The answer to the Wilshaws'
question can be found on an internet search engine within
seconds.
"This question falls foul of section 14(5) [of the Gambling
Act]," said Jucker. "It has two tests and this competition fails
both of them. A significant proportion of entrants will 'win' and
the question won't deter people from participating. The prize is
being awarded wholly by chance because the overwhelming majority of
entrants will get the answer right."
"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. When the Gambling Act was
going through Parliament, the clear intention was that the only
legal lotteries would be those that operated for good causes, not
those that operate for personal gain. This competition is
side-stepping that intention," she said.
The Wilshaws did not respond to a request for comment, but they
have said that they believe the competition to be legal. "We know
by the legal advice that we've had that the competition meets all
the rules and regulations," Wendy Wilshaw told BBC News.
The competition raises a fundamental question about gambling
law: is it possible to have a simple question competition in the
age of ubiquitous internet access?
"The current guidance from the Gambling Commission fails to
reflect the fact that any Trivial Pursuit-type question can be
answered by Google," said Jucker. "With most people in the country
having access to the internet, asking a single question that is
answered correctly without any effort whatsoever cannot be an
exercise of skill."
The Gambling Commission said that it did not comment on
individual cases and at the time of going to press could not
comment on the broader issue of what kind of question would be
permissable as the basis of a legitimate competiton.
Jucker said that it might be possible to frame questions so that
they demand more time, skill or knowledge to answer and cannot be
answered by a simple web enquiry. "They could have added an element
of skill – for example by asking the price of a permit in
1808, or something that isn't answered right away by putting the
question into Google. I presume they haven't done that because they
wouldn't get enough participants," she said.
The question of what is a competition and what is a lottery has
been a controversial one in the past. The Gambling Act, which came
into force last year, clamped down on competitions with too-easy
questions that were designed only to get around restrictions on the
operation of lotteries.
Many television competitions have come under intense scrutiny
and been found wanting in the last two years and broadcasters and
production companies have been fined millions of pounds because
their competitions were badly or dishonestly run.
Editor's note, 28/08/2008
Steve Kuncewicz, a solicitor with law firm Ralli who is acting
for the Wilshaws, was contacted by OUT-LAW for comment. He said
today that the Wilshaws have made every effort to comply with the
Gambling Act’s provisions.
He points to the
Gambling Commission's own guidance (8-page / 86KB PDF) on prize
competitions, which discusses the level of skill required to avoid
a competition being classed as an illegal lottery.
The guidance states: "the Commission does not think a particular
question or clue fails to qualify as involving skill or knowledge
just because the answer can be discovered by basic research,
whether on the internet or elsewhere."
Mr Kuncewicz argues that, in an area of law with little
certainty, this makes the Wilshaws' competition compliant wiht the
Act.
Our own view is that section 14(5) of the legislation
contradicts that interpretation. We also consider that when the
Commission's statement is read in the context of the rest of its
guidance on the level of skill required, a competition like the
Wilshaw's is not what the Commission had in mind.
We respectfully disagree with Mr Kuncewicz's interpretation
though we acknowledge that this is an untested area of law and that
the Commission's Guidance is the only current authority on this
area. Only a court can decide whether or not a particular
competition meets the level of skill required and therefore whether
that competition is legal or illegal. The Wilshaws are not guilty
of a criminal offence unless there is a prosecution and a court
finds them guilty.
The main Commission guidance on the level of skill required and
the wording of section 14(5) are reproduced in full below.
From the Commission guidance
3.5 First the intention of the law is clear:
competitions which genuinely rely on skill, judgement or knowledge
are to be permitted to operate free of any regulatory control under
the Act. In many cases, it will be obvious that such competitions
meet that test. A crossword puzzle, where entrants have to solve a
large number of clues and where only fully completed entries are
submitted, is an obvious example. Other types of word and number
puzzles, such as those that feature in competition magazines, are
further examples. The law makes it clear that these qualify as
prize competitions even if those who successfully complete the
puzzle are subsequently entered into a draw to pick the winner.
3.6 At the other extreme, there are many
competitions that ask just one simple question, the answer to which
is widely and commonly known or is blatantly obvious from the
material accompanying the competition. The Commission considers
that these do not meet the test in the Act. It is not easy to say
where the dividing line between the two extremes lies. But the more
questions or clues which have to be solved, the more likely it is
that application of the statutory test leads to the conclusion the
competition is not a lottery. And the Commission does not think a
particular question or clue fails to qualify as involving skill or
knowledge just because the answer can be discovered by basic
research, whether on the internet or elsewhere.
3.7 In cases where it is not self-evident that
the competition involves sufficient skill, judgement or knowledge,
the test which must be applied is that in section 14(5) of the Act.
In other words the test is whether there can have been a reasonable
expectation that the skill, judgement or knowledge requirement
would either deter a significant proportion from entering or
prevent a significant proportion from receiving a prize. In the
Commission’s view, in practical terms, there are two elements to
this test. Did the skill, judgement or knowledge requirement in
fact eliminate a significant proportion and, if it did not, on what
basis did the organisers conclude it was reasonable to expect that
it would have done so?
Section 14(5) of the Gambling Act
A process which requires persons to exercise skill or judgment
or to display knowledge shall be treated for the purposes of this
section as relying wholly on chance if—
(a) the requirement cannot reasonably be
expected to prevent a significant proportion of persons who
participate in the arrangement of which the process forms part from
receiving a prize, and
(b) the requirement cannot reasonably be
expected to prevent a significant proportion of persons who wish to
participate in that arrangement from doing so.
