Cash Prizes from Website, Legal Obligations

[b3038]

I've had a brain storm tonight while playing the Xbox and was wondering, if I offered a possible cash prize for say a $1 stake, what sort of legal obligations would I have? Who would I need to talk to and register with in order to keep everything above board as I'm sure I would need to talk to some sort of gambling authority before I could start?

Any help would be much appreciated.

Many Thanks
Baz

[JaneOwen]

I do hope this reply isn't going to make you wish you hadn't asked :lol:

Basically, based on the information you've given, you can't legally do it based in the UK at the moment. The current law requires that the customer must be in the room in which the gaming takes place. Seems daft when UK residents can gamble on sites based overseas, and as long as they don't breach the advertising rules, the overseas sites and breaking the UK law either. Hmmm.

Happily, there is some new legislation on the way in - but it won't be fully in until 2007. When it is, internet gambling based in the UK will be possible as long as you obtain the right licences.

For more information (if you haven't given up already!) check out the Gambling Commission website at www.gamblingcommission.gov.uk

It's gripping stuff - enjoy :D

[Astaroth]

JaneOwen

What is the definition of gambling then?

B3038's post was a little unclear on exactly what their proposal was but my initial reading of it said that it was a competition which you paid to enter and then won a prize (cash) if you won.

Would this actually count as gambling? I would have thought it only would if people not actually involved in the games themselves were able to bet on one of the players to win.

[SmallBizSoftware]

Seems odd that you need to be in the room, how does that work for the plethora of similar premium rate number services then where I choose A, B or C and a two and a half quid call later I am in the competition to be picked at random?

[Stephen]

Those are (believe it or not) skill based! The definition of skill is clearly somewhat subjective.

There was an article on BBC News a while ago...
http://news.bbc.co.uk/1/hi/magazine/4073180.stm

[JaneOwen]

Hi Astaroth

The legal definition of 'gambling' is quite complicated under the current legislation. From the information in the original post, I would say it sounds most likely to be considered a lottery. There is no legal definition of a lottery but it is generally held to be 'a distribution of prizes by lot or chance where entry is secured by the payment of a stake'.

Stephen is quite right about the skill based issue. It's basically not a lottery if the chance of success depends to a 'substantial degree' on the exercise of skill. Asking someone to answer a daft multiple choice question is a common way of getting round this one :)