Million Pixel £1.00 a go Property Lottery - Advice needed

[Russ]

Morning all

I would appreciate some feedback and advice on this please. I have been trying to raise funds for a business venture and have had meetings with Banks, Angels and VC's. All options so far have either said no, are to expensive or want too big a slice of the cake. I was in between meetings earlier when I had a bit of an idea...

What do you think of the idea of a "million pixel £1.00 a go property lottery"?

I would need to sell at least half the pixels to make it worth while but would be aiming at selling all of them. I think I could also generate some fairly healthy PR for this. The property value would be at least £250k and a percentage of money raised would go to a good cause, probably cancer research.

Please let me know what you think on this...

Cheers

Russ

[Norseman]

Hi,

I think that it's another interesting swing at the pixel selling idea, and in this case people may actually benefit significantly from their £1! For this to work though I would think that you should have to spend some money on marketing - I'm not just talking Google adwords here -.

[Robert]

Like a spot-the-ball competition? :)

[directmarketingadvice]

Hi Russ

The house lottery idea has been done before and I remember reading about it around a decade ago (so it would have been promoted off-line).

Promotion should be easy enough (PR) and you need a location where enough people would want to live that you've a chance to sell enough pixels. The obvious place would be where people are struggling to get on the property ladder.

Steve

[Joanne_UK]

hello,

I don't want to sound negative but it has been done before and did not work !! :?
Remember: www.winahouseforafiver.co.uk ??

They were trying to get enough money equal to the value of the house (because they could not sell for the asking price !) , no profit and they did not manage to sell enough tickets so they just gave the ££ to the winner.

They did quite a lot of publicity, I think it was on the bbc website and in loads of newspaper.
After that someone bought the domain name to do something similar it is now : http://www.yourbigwin.com/
But by the look of it that did not work either.
So you should maybe try to understand why those did not work before trying to do the same.... :?:

The only place I know where is worked was when I was living in Montreal (Canada). The money was entirely for charity and the house was built specifically for the contest...it was really the house of your dream...people could go visit it before the draw and buy some tickets ($10 each). The house was built also with donations (and free work) from different organisations.
There was a huge marketing campaign and the draw was on TV.
There was also a TV show about how they built the house ...etc...
the prize included also free council tax for 5 years and all the other bills too (electric, phone, internet, insurance, etc....)...because it doesn't mean that if you win the house, you earn enough money to pay for the bills !!

I hope this helps !!

[mattk]

Someone tried to do this in Swindon, sell their house at £1 a ticket. They never sold enough tickets to give the house away!

The site was awful though - and they only accepted payment by cheque!

[Russ]

Thanks for all the response so far. As a result of some of your points I have a few more questions...

Do you think people would pay £100 on a minimum purchase basis for 100 pixels?

Has anyone got any ideas as to how I can safeguard against inadequate sales?

What do you think would be a reasonable time period for it to run for?


Cheers again.

Russ

[mattk]

One other thing - surely you'd have to buy the house in advance?

[Top Hat]

Has anyone got any ideas as to how I can safeguard against inadequate sales?


If not enough money is raised winner gets all money raised (less any that goes to charity)

[Norseman]

Or you could try to team up with an estate agent and get a 'voucher' for the winner to use with that estate agent (e.g. letting or buying property). This would generate more publicity I think, as the estate agent would be interested in marketing the concept as well.

[Eagle]

£1 via PayPal and I'd risk it but £100 - no way! :)

[mattk]

£1 via PayPal and I'd risk it but £100 - no way! :)
How much of that £1 would you actually see, after PayPal fees and all?

[fastfences]

£100? Never! I'll be in it for a tenner though.

I think you'd need to run for about 5 months.

Safeguards? One of the legals from 'handson' will be best to help ya!
Cheers, Nigel

[Whistle Ink]

I would never take part in a thing like this unless it was connected to a well know charity, or a big company, TV programme or something. Maybe the lottery.

[Eagle]

£1 via PayPal and I'd risk it but £100 - no way! :)
How much of that £1 would you actually see, after PayPal fees and all?

76.6p... (3.4% + 0.20 fee per transaction).

[bwglaw]

76.6p... (3.4% + 0.20 fee per transaction).

Less applicable bank charges, less income tax = -£0.01

The major problem I see here is now you are going to run the scheme as a bona fide business (liable for all taxes), evading gambling/lottery regulations which requires you to have a licence.

How did the others fail? Not sure but maybe a few complaints to OFT and investigations start. The government will not let you off lightly when dealing with public money.

I am no expert in this area but just putting forward a few possibilities. Maybe worth finding out how companies are doing it but with cars. I am sure you all have seen a large shopping centre offering you to buy a ticket for £10 to enter a prize to win a car. This appears to be legal I think because they own the car and just need a lottery licence.

Getting a charity involved can make it more complex because that charity is governed by the Charities Act. All proceeds will have to go to the charity less the value of the car and expenses. It is certainly not for profit.

A house, more complex because transferring ownership of a house is not as straightforward as a car. I would think you would need to own the house or find someone who is prepared to tender title to the competition. i.e give the house away!

I suggest some live research is done. I would pay £100 for a limited number of people entering in order to increase my chances but I would need to be really convinced the scheme works. I did participate in the Golden Circle at one time and a very good friend said he recieved funds but once someone stops selling certificates the whole scheme breaks down and you lose out.

[Russ]

Hmmm... Some interesting points raised.

At those rates through Paypal it would not be viable, I will check and see what worldpay say. Not all payments will be online, payments could be made by cheque or bacs if required. I imagine we would have to have a minimum pixel order of at least 10, I would prefer 100 but do not wish to alienate any participants.

I have been reading up on the lottery guidlines at http://www.culture.gov.uk/gambling_and_racing/fact_sheets/fact_lotteries.htm but it is a bit vague.

We already own the property so have that part covered... More research on obtaining a lottery licence is required.

Thanks for all the feedback so far.

Russ

[Jayne]

What sort of property is it?

I don't want to win a £1 shed :lol: :lol: :lol:

Jayne

[mattk]

You can avoid the lottery by having some element of skill, such as a multiple choice question.

[Robert]

I think MattK is right.

This is why "Richard and Judy" (and others) have a stupid 3 choice question which is made so easy my dogs could get it right. And I don't even have a dog!

How about offering adverts for £x.xx and a "free" entry into a competition to win a house.

[Altoros]

http://www.milliondollarhomepage.com/

Is that the idea you are talking about?

[Russ]

http://www.milliondollarhomepage.com/

Is that the idea you are talking about?

Yes, along those lines...

[bwglaw]

Looking at the link supplied by Russ. It says:

"Commercial sales promotions
DCMS is often asked by businesses about the legality of running a*lottery (say to win a car) as a commercial sales promotion, where an entry fee is required and*the result determined*by chance.
*
Whilst DCMS is unable to offer legal advice, we would caution against running what may, effectively, be an illegal lottery. The law*does not permit*commercial lotteries. We would always recommend anyone*in this situation to seek independent legal advice."*


This appears to be pretty clear to me and follows what I stated in my previous post.

Someone said you can avoid the regulations by using an element of skill. That appears to be incorrect because it comes under the gaming and lottery regulations. See:

http://www.culture.gov.uk/gambling_and_racing/fact_sheets/fact_prize_competitions.htm.

I think my previous comment is still valid - conduct some live research by asking about the cars entered into competition to see how they got round the regulations because the regulations seem pretty much tight to me.[/i][/b]

[JustOneUK]

Yes, along those lines...

It's been done. :D

No one will be interested as people on the internet want something here and now. I will not pay £1 just to see if in 5 months the site may or may not still be there, or I didn't win.

[Russ]

Yes, along those lines...

It's been done. :D



When you say it's been done, are you saying someone has lotteried of a house already?

[JustOneUK]

i am pretty sure one of the pixel sites is currently doing that, it's not exactly a lottery, but then i am pretty sure you need a license to run a lottery. You can of course give stuff away, (even one of my sites will give away £5,000) I will have a look around later thru my inbox, pretty much all the pixel sites have emailed me.

James

[Russ]

This is an excert from an email I received from the lotteries council. I will double check with them but if i'm reading it correctly I am in the clear (see italic text)
-------------------------------------------------------------------------------------
Dear Russell

Thank you for your email.

Your request is not as simple as it sounds!

The law surrounding lotteries is complex and stringent. A lottery cannot be run for private profit in the UK – apart from the National Lottery.

The Lotteries Council represents charities and societies which raise money by running lotteries to raise funds for good causes – known as Society lotteries.

There are several different types of public lotteries in Great Britain:

Small lotteries: one-off events with prizes up to the value of £250 (non money prizes can be of any value). Small lotteries do not need to register with any statutory body; as a result, there is no official data available.
Private lotteries: not-for-profit lotteries, which may be run within any residential environment, workplace or club. There is also no need for registration with any statutory body.
Societies lotteries: those lotteries with proceeds in a single lottery of over £20,000, or with cumulative annual proceeds of more than £250,000, need to register either with the Gambling Commission or the local authority, depending on the level of their ticket sales.
Local authority lotteries, which are run by and for local authorities, and are required to register with the Gambling Commission.
The National Lottery, which is not regulated by the Gambling Commission.
-------------------------------------------------------------------------------------

What is your interpretation of this?

[directmarketingadvice]

Russ

I'm no lawyer, but it sounds like, if you'd like to run this as a lottery, you'd have to go through the gambling comission and that they might not give their approval for what is, effectively, a profit making scheme.

Steve

[bwglaw]

Russ

As it rightly states that this area of law is complex. The regulations may state one thing but case law may state another. I don't think your scheme will qualify as a "small lottery" using the "non-money" rule.

This kind of scheme requires specialist knowledge and I am reluctant to advise further other than giving my own opinion.

If you would like me to point you to a specialist solicitor let me know and I will search the appropriate person. Your location would be useful also in the event you wish to meet them.

[Russ]

Jonathan

Thanks for taking the time out to look in to this for me. If its not too much trouble, a specialist solicitor would be useful. I'm in Essex.

Thanks again

Russ

[bwglaw]

Jonathan

Thanks for taking the time out to look in to this for me. If its not too much trouble, a specialist solicitor would be useful. I'm in Essex.

Thanks again

Russ

Have found a rather lot. Can you give your nearest town? You can PM me this if you wish

[Russ]

Chelmsford