House Competitions / raffles / draws
There is a growing trend to try and sell houses by way of a competition rather than by using a traditional estate agent. Other competitions are being run to sell cars, boats or holidays.
Some of these schemes are very innovative, but can very easily fall foul of the law because they are a form of gambling. Many of these schemes that we have seen so far have flaws which could render the organisers liable to prosecution and the possibility that all entrant's fees have to be repaid in full.
In order to escape the need for a licence and to operate legally, competitions can involve an element of chance but must also require sufficient skill, judgment or knowledge to deter a significant proportion of potential entrants from participating or eliminate a significant proportion of actual entrants from receiving a prize.
Because the law is still relatively new, there is some risk associated with running competitions and differing opinions exist as to whether particular competitions are legal, which will only be resolved once cases are taken to court.
Our view is that competitions to win a house or other items can be run legally, but we advise anyone contemplating to run one should seek expert legal advice first. Should you decide to instruct other solicitors, it is best to check that they are experts in both gambling and conveyancing law, as there are not many law firms who specialise in both areas since the introduction of the Gambling Act. You may wish to ask whether the firm is a member of the Institute of Licensing or has advised on a competition in the last few years.
As experts in both areas of law, our services include the preparation of terms and conditions, advising on appropriate questions and supervising any draw that is needed if more than one entrant answers the question/s successfully. Should you find yourself the subject of enforcement action such as a prosecution, we can also represent you.
