As the cost of being on-line drops for home users and the proportion of use from the office increases, is there still a need for an off-line prize draw entry route for on-line events?
Topic: Games of chance and skill
Who: Oftel and the British public
When: June 2001
Figures released by the UK telecoms regulator Oftel revealed that for the first time the cost of dial-up internet access has fallen below prices paid by consumers in California. Even heavy home internet users, the report stated, were paying on unmetered packages £18 a month compared with £19 in California..
Why this matters:
California was the first world state to make it law that the cost of internet access should not be regarded as a "contribution" for the purposes of deciding whether a prize promotion was an illegal sweepstake. "Sweepstakes" is the US term for a game of pure chance, in which the winner is randomly selected as opposed to having to compete with other entrants by exercising skill of some sort. Here in the UK, the basic principle is the same. In other words, a game of chance will, in a commercial prize promotion context, invariably be regarded as an illegal lottery if entrants have to purchase a product or make some other payment or "contribution".
So what about an on-line, random draw prize promotion open to UK participants? Cautious UK advisers have for years been advising that the prudent approach is to provide an alternative, off-line method of entry which is either totally free or at most involves a short ordinary rate telephone call or a first or second class stamp. This, although there is no reported case law, enforcement action or learned academic authority which has to date suggested that the cost of getting on-line, including hardware and software as well as the telephone connection, does indeed amount to a "contribution."
Returning to California, (whose economy was recently reported to be larger than that of France) it was evidently felt that owing to the low cost of access for home users and the zero cost for those surfing from their office desk, the position across the board was that access cost was minimal. Accordingly the best policy was to create certainty, reduce expense on lawyers’ fees, and pre-empt needless litigation by introducing legislation on the point.
Following this example, the rest of the US is moving to the same position, with or without state legislation similar to California’s. Have we reached the same position here in the UK? The writer cannot advise categorically one way or the other here on marketinglaw.co.uk. However, depending on the context, reports such as that released recently by Oftel have to indicate that there may be circumstances in which not providing a "free" off-line entry route would be a fair commercial risk.