Advice regarding online giveaways

[adamjc]

Hi there,

I am looking to put together some online giveaways and wondered if anyone was aware of any legal implications.

My site caters for people all over the world, but it is owned and hosted in the UK.

We are looking to run giveaways, the entry methods include, tweeting, following my site on twitter and following our facebook page.

So entry is free (not sure how UK law would view this though).

The plan is to use Rafflecopter.com widget to facilitate the giveaways which will generate a random winner at the end.


I've tried searching Google for information related to this but I haven't found a resource that gives clear information related to these online giveaways.

Can anyone give me any advice or further things to consider with these giveaways? Can I get into any problems with this?

Any help would be greatly appreciated.

Thanks,
Adam

 

[brendan70]

If you are going to give away something, you could try and put this to an advantage. For example, you may want to give away a special dish. You could start a logo competition to at least get something back from the giveaway. This will create a win win situation. This way someone can deserve the giveaway.

 

[The Resolver]

.If it is not truly free and as there is no skill to enter the draw, then it would be an unlawful lottery under the Gambling Act 2005.

Simply not charging an entry fee does not mean it is free, since the Act traps arrangement in which moneys' worth value transfers. So the issue will depend on whether you or anyone else receives value in money' worth from the FB and website visits etc. Do you earn affiliation revenue from the clicks? It is complex where not clear , even when value in money's worth is received, if, nevertheless, no cost is incurred by the entrant.

I have set up a number of these and liaised with the Gambling Commission. Unfortunately they do not commit themselves to give clearance.

 

[brendan70]

I agree with the Resolver..

 

[adamjc]

.If it is not truly free and as there is no skill to enter the draw, then it would be an unlawful lottery under the Gambling Act 2005.

Simply not charging an entry fee does not mean it is free, since the Act traps arrangement in which moneys' worth value transfers. So the issue will depend on whether you or anyone else receives value in money' worth from the FB and website visits etc. Do you earn affiliation revenue from the clicks? It is complex where not clear , even when value in money's worth is received, if, nevertheless, no cost is incurred by the entrant.

I have set up a number of these and liaised with the Gambling Commission. Unfortunately they do not commit themselves to give clearance.

Hi Graham, thanks for your thoughts.

Currently we don't earn money from the website, although we will be adding advertisements in future to contribute to the costs of hosting.

We don't earn any money from our Twitter account or Facebook page though and the page the giveaways appear on won't feature any affiliate links in future.

I'm not sure how a value can be attributed to an action on a social networking site.

My understanding was that the 2005 gambling act was superseeded by a law that looked at all elements of gambling in 2007 which works slightly different - this was the only thing I could find but I have no idea what the law entails of course.

 

[The Resolver]

My understanding was that the 2005 gambling act was superseeded by a law that looked at all elements of gambling in 2007 which works slightly different - this was the only thing I could find but I have no idea what the law entails of course.

I imagine what you are thinking about is that the Gambling Act 2005 came into effect in 2007.

PM me if you want to discuss more privately - i.e. your objectives etc

 

[gholmes724]

This might help. Sorry can't post link (too new) but search for an item called

IS YOUR BLOG GIVEAWAY OR COMPETITION LEGAL?

on cybher dot com

Very useful information for running competition online.

 

[adamjc]

I imagine what you are thinking about is that the Gambling Act 2005 came into effect in 2007.

PM me if you want to discuss more privately - i.e. your objectives etc

Ah yes, that must be where I'm getting confused.

I will do thanks for your help!

 

[Latebloomer]

This sounds like lottery

Check it out with the gambling commission
"Prize competitions and free draws

You do not need a licence to operate prize competitions and free draws. More information is available in our detailed advice Prize competitions and free draws - The requirements of the Gambling Act 2005 - December 2009. You should seek independent legal advice to confirm that your competition is lawful."

 

[adamjc]

This sounds like lottery

Check it out with the gambling commission
"Prize competitions and free draws

You do not need a licence to operate prize competitions and free draws. More information is available in our detailed advice Prize competitions and free draws - The requirements of the Gambling Act 2005 - December 2009. You should seek independent legal advice to confirm that your competition is lawful."

Hi Latebloomer, thanks for the link - very useful thanks.

----------------------------

After a quick read of the relevant section it seems the true question is whether the entry method is considered payment for entry.

I've found section 4.2 and 4.3 from the PDF that discuss this.

4.2 The schedule envisages two circumstances. First, cases where there is only one entry route. Here, ‘free’ will include any method of communication (post, telephone or other) at a ‘normal rate’. ‘Normal rate’ is defined as ‘a rate which does not reflect the opportunity to enter a lottery’ (paragraph 5(2)(a) of Schedule 2). It includes ‘ordinary first-class or second-class post (without special arrangements for delivery)’ (paragraph 5(2)(b)). There can be no additional payment over what it would normally cost to use the particular method of communication. Any competition that fails this test is deemed to require ‘payment to enter’ and will be a lottery if the other two elements (chance and prizes) are also present.

4.3 Secondly, cases where there is a choice of entry. Here, the arrangement will not be treated as requiring payment to participate in the arrangement and so will not be a lottery, if:
• each individual who is eligible to participate has a choice whether to do so by paying or by sending a communication
• that communication is either:
o a letter sent by ordinary post, again whether first or second class post
o or some other method which is neither more expensive nor less convenient than entering by the paid route. Again this method must be charged at the ‘normal rate’; there can be no additional payment over what it would normally cost to use that method of communication
• the choice is publicised so that it is likely to come to the attention of all those intending to participate
• the system for allocating prizes does not distinguish between those using either route.

From reading this it seems that tweeting, following, liking etc would not be considered payment.

Am I interparating this correctly? I'd appreciate anyones thoughts on this.

Thanks!

 

[Latebloomer]

Don't think too much about it.
Just email the gambling commission and they will respond in 3-5 days.

 

[deniser]

There is a lot of guidance on FB as well. Have you looked at that? They have rules which you have to follow if you are referring to a giveaway on FB. For example, it needs to be conducted offsite and certain countries, which do legislate against sweepstakes, are to be expressly excluded. I remember Belgium and India being amongst them.

 

[adamjc]

Don't think too much about it.
Just email the gambling commission and they will respond in 3-5 days.

I've emailed them for clarification, although they do always seem to mention that people should get legal advice, yet they're a governing body aren't they which baffles me.

There is a lot of guidance on FB as well. Have you looked at that? They have rules which you have to follow if you are referring to a giveaway on FB. For example, it needs to be conducted offsite and certain countries, which do legislate against sweepstakes, are to be expressly excluded. I remember Belgium and India being amongst them.

Hi Deniser, thanks! Yes I did have a look.

Actually one rule sort of stumped me especially since Rafflecopter allow FB page likes as an entry method -

"You must not use Facebook features or functionality as a promotion’s registration or entry mechanism. For example, the act of liking a Page or checking in to a Place cannot automatically register or enter a promotion participant."

That sounds to me like it's not not allowed. - I would email Facebook but I've attempted this before and I've always got a generic unhelpful copy n paste reply. I've emailed Rafflecopter as this is something they allow and to see if they have any insight on this.

In regards to countries that don't allow giveaways that you mentioned, does this then mean that any giveaway that is stated as world wide eligability is unlawful?

 

[adamjc]

I just heard back from the Gambling commission, so if anyone else was looking for clarification, here it is -

When I asked them to confirm that methods of entry such as tweeting, liking on Facebook and following on Twitter constitute a free prize draw they replied with the following -

"[FONT=&quot]As you have already surmised, this is indeed a free prize draw and as such falls outside the remit of the Gambling Commission and ergo does not need licensing."[/FONT]

 

[deniser]

Actually one rule sort of stumped me especially since Rafflecopter allow FB page likes as an entry method -

"You must not use Facebook features or functionality as a promotion’s registration or entry mechanism. For example, the act of liking a Page or checking in to a Place cannot automatically register or enter a promotion participant."

In regards to countries that don't allow giveaways that you mentioned, does this then mean that any giveaway that is stated as world wide eligability is unlawful?

As far as I understand it, to qualify as "free to enter" you need to have more than one entry route and take into account the fact that entering via the internet is not necessarily "free" because not everyone can afford the internet. So this is how I interpreted FB's rules (it has been a year or so since I last looked so don't know if things have changed):

1. you can refer to the sweepstake/giveaway etc. on FB but must actually take the entries elsewhere. So you can't let people enter by liking something on the page or liking the page iteself but you could ask people to email you.

2. to make sure entry is "free" within the definition, you must provide an alternative entry method such as sending it by post with a normal prices stamp (not free, but counts as free!)

3. you have to set out the rules and conditions for entry under the sweepstake and you can there write that entries are not accepted from the banned countries (those where sweepstakes are illegal).

 

[adamjc]

As far as I understand it, to qualify as "free to enter" you need to have more than one entry route and take into account the fact that entering via the internet is not necessarily "free" because not everyone can afford the internet. So this is how I interpreted FB's rules (it has been a year or so since I last looked so don't know if things have changed):

1. you can refer to the sweepstake/giveaway etc. on FB but must actually take the entries elsewhere. So you can't let people enter by liking something on the page or liking the page iteself but you could ask people to email you.

2. to make sure entry is "free" within the definition, you must provide an alternative entry method such as sending it by post with a normal prices stamp (not free, but counts as free!)

3. you have to set out the rules and conditions for entry under the sweepstake and you can there write that entries are not accepted from the banned countries (those where sweepstakes are illegal).

Thanks Deniser,

According to the Gambling Commission in the UK, entries via twitter, facebook etc are considered free entry methods, so in the UK at least I know that's not a problem.

You've got a good point there about listing excluded countries .. it's just impossible to police on some of my giveaways as it's for license keys on games that are emailed out but at least I could put it in the rules.

Do you know of any other countries where they are banned or know a resource where I can find out?

Thanks again for your help