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Online Raffle – Legal Issues & a Working Example

Discussion in 'Legal' started by Ducky13, Sep 19, 2011.

  1. Ducky13

    Ducky13 UKBF Newcomer Free Member

    Posts: 31 Likes: 0
    Hi All,

    I am interested in starting up an online raffle. It will be a for-profit venture & I will be a sole owner.

    I am in the process of finalizing the idea & putting down detailed guidelines, information, target audience etc. on paper. The next step for me would be to approach a lawyer for advice on intellectual property rights, NDA, terms & conditions, privacy policy etc. However, I wanted to make sure that I can go through with the next step before actually doing it (hence this post).

    I understand that there are many legal issues behind online raffles. Are they even allowed to exist? I have glanced through the laws regarding gambling / lotteries etc, & the bottom line is that there are many laws & regulations which would deem it as illegal (I hope I am wrong).

    Anyhow, I was about to give up hope, but then came across the website "Best of the Best." They are an online lottery for super-cars & other items & I know for sure that they are a legal business & are making profits (their financial statements are available on their website).

    How have they managed to legally operate?

    I would appreciate any help or advice regarding this. I just want to assure that I am eligible to proceed with my venture before approaching a lawyer & wasting precious pounds only to be told that I cant go through with the idea.

    Cheers & Thanks,
    Ducky
     
    Posted: Sep 19, 2011 By: Ducky13 Member since: Sep 8, 2011
    #1
  2. Podge

    Podge UKBF Newcomer Free Member

    Posts: 1,154 Likes: 367
    You need to make it a competition rather than a lottery, if you look at "best of the best" they use a spot the ball competition.
     
    Posted: Sep 19, 2011 By: Podge Member since: Jan 13, 2011
    #2
  3. Ducky13

    Ducky13 UKBF Newcomer Free Member

    Posts: 31 Likes: 0
    Hi Podge,

    Thank you for your reply & for bringing that to my attention. Much appreciated!

    I just had a look myself & noticed the spot the ball picture, although I am a bit baffled. Is the winner decided based on who successfully spots the ball or is there a lucky draw? When you pay for a ticket, are you effectively paying to play a game of “Spot the ball,” wherein if you successfully spot it, you win, or is there a lucky draw involved & the ball spotting is just a work-around to make the raffle legal?

    Using the same principle, if I were to implement a basic question like “Who is the Prime Minister of the UK” into the website just to get past the “raffle” tag, would it be legal?

    I will obviously seek professional help regarding this, but just wanted to understand the working & principles first.

    Cheers & Thanks,
    Ducky
     
    Posted: Sep 19, 2011 By: Ducky13 Member since: Sep 8, 2011
    #3
  4. Podge

    Podge UKBF Newcomer Free Member

    Posts: 1,154 Likes: 367
    Posted: Sep 19, 2011 By: Podge Member since: Jan 13, 2011
    #4
  5. JackieC

    JackieC UKBF Newcomer Full Member

    Posts: 265 Likes: 38
    As far as I know, you need to turn it away from being a lottery into being a game of "skill and judgement" - so that some level of skill or knowledge is required in order to enter.

    This can be a farily simple question or task.

    Jackie
     
    Posted: Sep 19, 2011 By: JackieC Member since: Aug 28, 2008
    #5
  6. Ducky13

    Ducky13 UKBF Newcomer Free Member

    Posts: 31 Likes: 0
    Thank you so much for all the replies guys! This has given me a lot of insight! Much appreciated!

    I have read into the “spot the ball” competitions on the HMRC website & came across the following –

    If the ‘spot-the-ball’ competition is to determine as nearly as possible the actual position of the ball in the original photograph it is pool betting. However, a competition decided by reference to the decision of a panel of judges is a game of skill. The supply of the right to play games of skill is standard-rated.

    Does this mean that websites such as BOTB employ a panel of judges? Or is the right answer the actual position of the ball in the original picture?

    Lastly, does anyone have any experience with the website rudeball.com?

    Cheers & Thanks,
    Ducky
     
    Posted: Sep 19, 2011 By: Ducky13 Member since: Sep 8, 2011
    #6
  7. -Joe-

    -Joe- UKBF Enthusiast Free Member

    Posts: 599 Likes: 54
    What about "describe in 20 words why you should win"? Very little effort, and it can be randomized, before being "decided by a panel of judges" ;)
     
    Posted: Sep 19, 2011 By: -Joe- Member since: May 18, 2010
    #7
  8. Ducky13

    Ducky13 UKBF Newcomer Free Member

    Posts: 31 Likes: 0
    Seriously? Please elaborate / confirm?

    Sorry if the answer is obvious, but I'm fresh off the boat :)
     
    Posted: Sep 19, 2011 By: Ducky13 Member since: Sep 8, 2011
    #8
  9. -Joe-

    -Joe- UKBF Enthusiast Free Member

    Posts: 599 Likes: 54
    Just an idea tbh, I'm not a lawyer, I'm sure someone on here who is could verify whether that's legal. :)
     
    Posted: Sep 19, 2011 By: -Joe- Member since: May 18, 2010
    #9
  10. Ducky13

    Ducky13 UKBF Newcomer Free Member

    Posts: 31 Likes: 0
    That would be perfect!! But I will wait for someone to confirm before getting my hopes high!
     
    Posted: Sep 19, 2011 By: Ducky13 Member since: Sep 8, 2011
    #10
  11. The Resolver

    The Resolver UKBF Ace Full Member

    Posts: 2,743 Likes: 893
    That would not satisfy the skill requirement as there is no correct answer. Such a question can be used as a tie breaker between two or more correct answers but not as the main question itself.
     
    Posted: Sep 20, 2011 By: The Resolver Member since: Mar 31, 2006
    #11
  12. Ducky13

    Ducky13 UKBF Newcomer Free Member

    Posts: 31 Likes: 0
    Thanks for that Resolver! :)

    Can someone please elaborate on the point below from the HMRC website? Does that mean that I can't use the actual position of the ball as the "correct answer" & would have to employ a panel of judges, lawyers etc, instead to pin-point where they believe the ball is?

    If the ‘spot-the-ball’ competition is to determine as nearly as possible the actual position of the ball in the original photograph it is pool betting. However, a competition decided by reference to the decision of a panel of judges is a game of skill. The supply of the right to play games of skill is standard-rated.

    Are there any websites that provide this service? That is, the spot-the-ball competition & panel of judges (basically a service to determine a rightful winner)?

    Lastly, are there any alternate means to select a winner based on skill, rather than a spot the ball competition which apparently requires a panel of judges / sports experts & a lawyer?

    Cheers & Thanks,
    Ducky
     
    Posted: Sep 20, 2011 By: Ducky13 Member since: Sep 8, 2011
    #12
  13. The Resolver

    The Resolver UKBF Ace Full Member

    Posts: 2,743 Likes: 893
    This does not relate to the 'skill' necessary to avoid having to apply for a gaming licence but to a separate matter of whether a competition becomes liable for a special tax called the Pool Betting Duty, ie 'winner takes all' type of competitions. To qualify, HMRC have to show that the only 'skill' is in prediction of an actual fact ie where the ball is in the original photograph. If, however the winner is the one whose position comes closest to that of the views of a panel of experts, irrespective of where the actual ball was on the original photograph, then its treated as 'skill' and avoids the PBD.

    But this has nothing to do with the original question which I assume is about whether it is lawful to run the competition without a licence. That relies on a different interpretation of the necessary 'skill' and I would say such is satisfied by a Spot The Ball competition that awards by proximity to the actual position in the original photograph. One warning would be not to use a photograph that itself is widely published showing the ball.

    The old joke was that the way to win these competitions was to just use a pin....and wait until you hear a hissing sound.

    Torres should launch a Spot The Goal competition.
     
    Posted: Sep 20, 2011 By: The Resolver Member since: Mar 31, 2006
    #13
  14. Ducky13

    Ducky13 UKBF Newcomer Free Member

    Posts: 31 Likes: 0
    Thanks Resolver, that was really informative. My website would be in the form of a winner takes all raffle. It would be a for-profit website & I would be a sole owner. Players / Bidders would pay to play & a winner would take all.

    My original hope was that I could have a system that would randomly select winners, but as this is illegal, I would be obliged to use a “spot the ball” workaround, similar to websites like “best of the best.”

    Taking what I have mentioned above into account, I just want to summarise what you said in order to confirm that my understanding is correct. As per your explanation, I would NOT have to employ a lawyer or panel of judges & can award the prize to whoever’s estimate is closest to the ball in the original photograph. This is a 100% legal practice & I would not be bending any rules.

    The only benefit of having lawyers / judges / sporting experts chose where they think the ball is & then awarding the prize to whoever comes closest to their estimation would be that I can avoid “Pool Betting Duty.” However this option would NOT be available to me as it is a “winner takes all” competition & I would hence have to pay PBD.

    Regarding the actual photograph, would it be OK for me to take random pictures from, say for example, a local park with people playing football / rugby etc?

    Torres needs to take spot the goal lessons first!:D

    Cheers & Thanks,
    Ducky
     
    Posted: Sep 20, 2011 By: Ducky13 Member since: Sep 8, 2011
    #14
  15. The Resolver

    The Resolver UKBF Ace Full Member

    Posts: 2,743 Likes: 893
    You understand correctly. However do not start without a written legal opinion on the precise detail and an attempt to obtain some clearance from the GC. I know they don't like to be drawn but there are ways of writing to them so they can be drawn to a degree to provide a belt to the braces of legal advice.

    I do not recommend taking random photographs of people that you use for a commercial purpose unless you have their written consent. Its a grey area of privacy. Footballers created their own rules on so called 'image rights' but they do not exist as such in English law. They get round it through 'passing off' and implied endorsement etc. For the rest of us we would be left with trying to push a privacy right square peg into a round hole. The clever marketeer may say it could get you some valuable publicity coverage if anyone took offence.

    The problem with the alternative, using someone else's photo say of a football match, would amount to breach of copyright if you did not have permission. Taking your own photo at a match would not only risk the players paying expensive lawyers to push a slightly rounder peg into the hole, but also would be a breach of the contractual term sunder which you were permitted to enter the ground (ie not use camera for commercial purposes).

    Maybe answer is not use people. Your own dog jumping to head a ball? More seriously why not do a deal with a local cricket team to take pictures of them at the nets? You can offer a percentage of the take. Similarly why not reach agreement with the organisers of a charity football match ?
     
    Posted: Sep 21, 2011 By: The Resolver Member since: Mar 31, 2006
    #15
  16. Podge

    Podge UKBF Newcomer Free Member

    Posts: 1,154 Likes: 367
    Maybe a spot the ball type competition is not best suited to your needs if you want to maintain a draw element to the competition.

    Why not consider a crossword, with this you can still maintain the draw element, it would just be limited to the people who have provided the correct solution to the crossword.
     
    Posted: Sep 21, 2011 By: Podge Member since: Jan 13, 2011
    #16
  17. Ducky13

    Ducky13 UKBF Newcomer Free Member

    Posts: 31 Likes: 0
    Thank you for the wise words Resolver. Duly noted! I think I would be best off taking some pictures of some of my mates kicking a ball around in a park or alternatively, my mates dog running after a ball (as you mentioned). Some friends of mine organize cricket matches now & then. I could capitalize on that as well.

    What about availing of the services of a website like rudeball.com? They claim that it's free & you can use it on your website.

    Podge, thank you for responding! The website would be aimed at conducting a large number of raffles simultaneously. People can bid (play) to win many different items. Hence, I thought that a crossword would be too tedious & time consuming as opposed to a spot the ball game. Would you agree? Are there any alternate routes?

    Just 2 more questions –
    • In a spot the ball game, what if more than one person selects the closest spot to the actual ball, hence generating multiple winners for a ‘winner takes all’ competition? Would I need a disclaimer in place that states that if that were to occur then whoever selected the closest position first wins?
    • Would I need to have a separate spot the ball picture / game in place for each item? For example, say I have 10-items to be raffled / won on a daily basis. It costs £1 to play for each item, that is, select 1-spot on the spot the ball picture. Do I need to have 10-different pictures for each item or can there be just one picture per day & players can pay to play multiple times & place bids on different items by selecting multiple spots on the same picture?
    Cheers & thanks for all the help!
    Ducky
     
    Posted: Sep 21, 2011 By: Ducky13 Member since: Sep 8, 2011
    #17
  18. Ducky13

    Ducky13 UKBF Newcomer Free Member

    Posts: 31 Likes: 0
    Just one more:redface: -

    How does one obtain clearance from the GC? What is the process like & how long does it take?

    Thanks,
    Ducky
     
    Posted: Sep 22, 2011 By: Ducky13 Member since: Sep 8, 2011
    #18
  19. The Resolver

    The Resolver UKBF Ace Full Member

    Posts: 2,743 Likes: 893

    Maybe but you would have to have them checked out -eg do they have the rights to use the photo


    • Yes if you are prepared to stop the competition as soon as someone was right on target- as others then wasting their money. Best to say you will draw out the winner if more than one.

      Sorry can't understand what you are saying here. Simplest to have 10 simultaneous competitions with one prize each. Different picture each time so people have to play for each prize they want to win. If you take a movie then can easily use 10 separate frames. that way each frame gives a clue to the trajectory compared to the others - in fact if they had to pay for further plays perhaps the separate images would only display once paid extra, ie the more they play the more clues and thus the greater the chance of winning on later images.
     
    Last edited: Sep 22, 2011
    Posted: Sep 22, 2011 By: The Resolver Member since: Mar 31, 2006
    #19
  20. The Resolver

    The Resolver UKBF Ace Full Member

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    They won't give a clearance as such. I am referring to having a chat with a named individual for some formal guidance and putting them on notice to protect your back to some degree.
     
    Posted: Sep 22, 2011 By: The Resolver Member since: Mar 31, 2006
    #20