In this, the fourth of our posts on the organisations which regulate the prize promotions industry – the first three covered the ASA, the ICO and Ofcom – we look at an organisation which ups the ante.
Name: The Gambling Commission
Need to know: The Gambling Commission regulates commercial gambling in the UK and issues gambling licences to betting companies and casino operators. It also issues licences to public lottery operators – in the UK lotteries can only be run to benefit good causes, not for commercial or private gain – and regulates the National Lottery.
As defined by the Gambling Act 2005, the crucial distinction between a lottery and a prize draw is that, although in both the prizes are awarded on the basis of chance, participants pay to enter a lottery. That sounds straightforward and the Gambling Commission doesn’t have any regulatory responsibilities in respect of prize draws or indeed competitions, which involve some level of skill or judgement, but it does monitor what it calls ‘the boundary’ between draws and lotteries and has produced a useful document which goes into a lot more detail about the difference between prize draws and lotteries.
Famous cases: In 2016 the Gambling Commission showed its teeth by fining the National Lottery operator Camelot £3 million for breaching the terms of its operating licence. This related to a potentially fraudulent prize claim and Camelot’s decision processes for paying a prize, the way it investigated a prize claim and its database management. Obviously Camelot runs lotteries not prize draws, but this ruling was a salutary reminder for anyone running a prize draw or competition of the importance of winner selection and winner verification.
What’s more, the Gambling Commission recently laid its cards on the table about property raffles. There’s a growing trend for people putting up their home as the prize in a prize draw or competition and the Gambling Commission has expressed its concern that these promotions could inadvertently be illegal lotteries that break the law. The ASA has already upheld a series of complaints against one home raffler, so odds on there could be a high-profile case in this area soon.
Penalties: When the chips are down, the Gambling Commission can and does – see above – issue fines. In autumn 2017 it fined online betting company 888 an eye-watering £7.8 million for failing to protect its ‘vulnerable’ customers, so beware! Don’t mess with the Gambling Commission because if it identifies an activity – and that could potentially be a prize promotion – which, in its view, amounts to an unlicensed and therefore illegal public lottery, it will take action.
And finally: Compliance is the name of the game at Prizeology. We don’t miss a trick and we’re sharp to all the legal aspects of competitions and prize draws. Tip us the wink if you’d like some assistance.