The Wilshaws claim that the Gambling Commission
previously gave them the go-ahead for their plan.
The Commission did not respond to an OUT-LAW request for comment
before publication. It has rejected every previous OUT-LAW request
for comment on the Wilshaws' case.
"We are so sorry to have to tell all of our entrants that the
Draw has been postponed," said a statement published by the
Wilshaws on their MySpace page. "The Gambling Commission have begun
looking into the concept of House Competitions generally and as
part of that process we have contacted and are in discussions with
them to confirm that the competition meets their requirements."
The Wilshaw family sold £25 tickets to what they claim is a
prize competition, with their house as a prize. They sold 46,000
tickets to the scheme. Questions have been raised, though, about
whether or not the scheme is an illegal lottery.
Antoinette Jucker, a gambling law expert at Pinsent Masons, the
law firm behind OUT-LAW.COM, has said that the scheme is likely to
be an illegal lottery.
It is illegal to run a lottery without a licence, and licences
are only given to schemes which operate in aid of a good cause.
They cannot be run for private profit and even lotteries for good
causes are barred from offering prizes as valuable as the Wilshaws'
house.
Prize competitions can be run for private profit, but to
qualify, a prize competition must involve the exercise of skill or
judgment to a degree that would put off many people from entering
in the first place and would disqualify most of those who did
enter.
The Wilshaws asked a single question of entrants before they
paid for their ticket. The answer to the question could be found
easily online, and no ticket had to be bought prior to the question
being answered correctly. That means that all 46,000 ticket holders
answered the question correctly and all have an equal chance of
winning a draw.
The Gambling Act says that a prize competition involving an
element of skill or judgment will be treated as a lotter if the
skill or judgement can't reasonably be expected to exclude people
from entering in the first place or to prevent a significant
proportion of those who do enter from winning.
The Wilshaws claim that their scheme was cleared by the
Commission months ago. "At this late stage of proceedings, the
Gambling Commission have asked for more information on the
Competition question, despite the fact that we approached them for
guidance before the start of the competition in March of this year,
only to be told that they had no issues with our conduct or the
running of the competition," said their statement.
The Commission did not respond to a request for comment about
whether or not it cleared the scheme earlier this year.
The Gambling Commission has made no clear public statement about
whether such competitions are illegal lotteries or not. Earlier
this week, though, it warned house sellers that such competitions
might not be legal.
It is the Commission's responsibility to regulate lotteries
under the Gambling Act and therefore to monitor the line between
lotteries and prize competitions.
The Wilshaws appeared on television promoting their competition
and are participating in the making of a documentary about their
competition. That publicity has led to a number of similar
competitions being run.
Steve Kuncewicz, a solicitor with law firm Ralli who is acting
for the Wilshaws, previously told OUT-LAW.COM that the scheme was
legal because of Gambling Commission guidance which he said
permitted questions that were answerable online to qualify as tests
of skill or judgment.
"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," said the guidance.
Pinsent Masons' Jucker, though, said that the test is section
14(5) of the Gambling Act, not the Commission's guidance. She said
that the law says that anything which does not deter people from
entering and does not exclude entrants from winning because of the
exercise of skill or judgment cannot qualify.
A Gambling Commission spokesman told OUT-LAW that if there was
any doubt about whether a scheme involved the exercise of skill or
judgment, the two tests listed in section 14(5) of the Gambling Act
should decide the matter.
The Wilshaws said in their MySpace statement that if the
Commission prevents them from making the draw at all they will
return all of entrants' money.
"We are continuing our discussions with the Commission and can
reassure all of you that the entry fund is still in place and still
safe," it said. "The worst case scenario is that all of our
entrants will be issued with a full refund if the draw does not go
ahead."
