The Wilshaws were not shifting their £1m Devon house and garden, so with legal advice offered it as a prize in a £25 a ticket competition. But was this problematic under the Gambling Act 2005? Stephen Groom reports on a case that almost became a cause celebre.
Topic: Promotion marketing
Who: The Wilshaws
When: Summer 2008
Law stated as at: 30 September 2008
On 29 August 2008 the Mid Devon Star reported that an enterprising middle aged couple had tired of trying to sell their Devon farmhouse using estate agents and had instead launched a competition offering the house as the prize.
To qualify for the chance of the prize, entrants had to buy a ticket for £25 and state the price of a full adult 2008/2009 coarse river fishing permit.
Seven weeks on, following enormous "silly season" publicity and sales of no less than 46,000 tickets, the Wilshaws have closed the competition and are arranging to hold the draw to see which of those who correctly stated the permit price will win.
"Illegal lottery" noises off
So far so heart-warming and hardly surprising that in the current property market the case has inspired a rash of similar prize competitions. But noises off have been heard that this competition is actually an illegal lottery and that if this practice goes unchecked, consumers could lose out to unscrupulous operators.
Is this right and if so, what are the Gambling Commission doing about it?
To start with let's look at the law.
The Gambling Act 2005 states that a pay to enter prize competition will actually be an illegal lottery if the level of skill involved in winning cannot reasonably be expected to either:
- prevent a significant proportion of persons from participating who would otherwise wish to participate or
- prevent a significant proportion of those who do participate from winning.
That's all clear then? No wonder the popularity of skill-based pay to enter prize promotions has plummeted since the Gambling Act came into force, especially as free to enter skill competitions can now have any old level of skill and will still be legal.
But of course the Wilshaws needed a pay to enter mechanic and their legal advisers lit upon Gambling Commission ("the Commission") published guidance which stated:
"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."
Lawyers and Commission give green light
This was apparently enough for the Wilshaws' lawyers, who gave the competition the legal green light. And they seemed to be vindicated when, after legality queries were first raised, the Commission emailed an enquiring member of the public stating that the competition was indeed quite legal.
Still doubts were raised. Did the skill needed to win pass the new "deterrent" test? Admittedly the Environment Agency web page you can reach with just one or two clicks on a search engine is not 100% clear on the permit price. It states that a full season "Non-migratory trout and coarse" licence is £25 whilst a "Salmon and Seatrout" licence is £68.
An asterisk against the latter states just below: "Salmon and sea trout licence covers non-migratory trout and coarse fish as well".
£25 or £68 call
So the question is whether the skill involved in the search engine click and the decision to plump for either £25 or £68 would be enough to justify a reasonable expectation on the part of the Wilshaws that a significant proportion of people would be prevented from entering or, once they had entered, from winning. The 46,000 ticket sales certainly suggest a low deterrent effect.
Some pundits did give the skill element the thumbs down and in mid September 2008 the Commission seemed to agree. It performed an extraordinary U turn and publicly retracted its "quite legal" view of a few days before. Since then, however, there have been no further indications of action by the Commission.
Why this matters:
When the Gambling Act 2005 was first published in final form, many expressed scepticism that the new "deterrent" skill test was consistent with the "greater clarity and simplicity for all" claims that had been made for the statute.
What was wrong with the old "substantial degree of skill" test and how on earth was the new test to be applied, with its three slippery elements of "reasonable expectation", "significant proportion" and "prevention"?
This case and the inconsisent reaction to it of the Commission so far only serve to fuel those fears.