In the latest of an occasional series where we take prize promotion operators to task for failure to comply with current UK laws, we look at a crossword competition offering an attractive prize. What could possibly be wrong when such a major financial services brand was responsible?
Topic: Games of chance and skill
Who: A well known financial services provider
Where: England
When: May 2005
What happened:
A prize promotion was operated by a household name in consumer financial services. Unfortunately, and surprisingly given the prominence and repute of the brand and the size of its business, the promotion was not necessarily up to scratch legally.
The prize was worth entering for. The challenge was to show your knowledge of a subject in a "fun crossword competition".
The crossword was not over-taxing. There were four clues across and five clues down. Entry into the competition was open to all holders of a particular account with the financial services provider.
This appeared to leave open the possibility that one might have to pay to enter through opening an account, assuming a balance had to be put into the account in order to open it.
On the other hand, this was irrelevant. Section 14 of the 1976 Lotteries and Amusements Act, which lays down the rules as to the levels of skill required in a prize competition, applies regardless of whether the event is pay to enter.
But there was still another legal requirement to be wary of: free to enter or not, any prize promotion in which some effort or skill is required in order to win, runs a risk of being illegal. Illegality will strike if success does not depend to a substantial degree on the exercise of skill.
So what was the problem with this promotion?
The total number of prizes to be awarded was not crystal clear from the competition rules, but it looked like there were 11 prizes in all and that these would be won by 'the first correct entries drawn on a specified date.'
Given that there were inevitably going to be many more correct entries than the number of prizes available, this was certainly one way of selecting the winners, but did it meet the 'substantial degree of skill' requirement?
We have serious doubts. Selecting the winners by a random draw from what could be substantial numbers of correct entries received by a certain date introduces a level of chance into the equation which erodes the relevance of skill to a degree which might well not pass the 'substantial degree' test. It also creates the possibility that the second stage of the event, given the lack of clarity as to whether there was a genuine, realistic and unlimited alternative free entry route, might classify as an illegal lottery as well.
Why this matters:
We have no reports that this promotion was the subject of any regulatory, action and given that the laws in this area are to be reformed within the next two years, there may well be less of an appetite for enforcement of the rules in the UK.
There can be no guarantees of this, however, and the case shows that where a mix of luck and skill is involved in winning a prize promotion, the compliance alarm bells should ring.
