The Gambling Commission has issued warnings to home owners amid the renewed trend of house raffles.
The regulator is warning that there are instances where organisers are breaking the law as their scheme has been set up in a way that means it is an illegal lottery.
Unlike a raffle or lottery, which is regulated by the Gambling Commission, the outcome of a genuine prize competition must depend on the exercise of skill, knowledge or judgment by the participant. Lotteries can only be run to raise money for charity.
Last week owner of Melling Manor, in Lancashire, sold his home after raising nearly £900,000 from the sale of some 440,000 tickets at £2 each. It had initially been listed with agents who failed to sell it.
In May, a home owner who hoped to raise £3.75m by raffling her property was told by Greenwich Council to halt the raffle as it could be in breach of Gambling Commission rules.
Cliff Young, the Gambling Commission’s lotteries expert, warns that sellers must seek expert legal advice before proceeding with a raffle of their home to ensure it doesn’t blur the lines between a competition, which doesn’t come under regulations, and a lottery, which is a form of gambling and would be illegal.
He said: “Pay-to-enter raffles, draws and competitions, where a person’s home is the prize, are becoming an increasingly popular alternative for eager home owners that are either struggling to sell their property through traditional means or looking to do something a bit innovative.
“Raffles, or lotteries as they are called in gambling law, are where you pay to enter and the result is purely based on chance – like a tombola or draw – and there is a prize. Under gambling laws, lotteries are a form of gambling and there are rules about how they can be run and who can run them.
“The Gambling Commission regulates all gambling in Great Britain including lotteries, and in some circumstances you may need a licence from us or a registration with your local authority before you can promote a lottery. Other small lotteries, such as those promoted at fundraising events, can operate without specific permission but they are still subject to some basic rules.”
He said lotteries can only be run for good causes, while free draws or prize competitions are not caught as gambling under gambling laws.
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