Is this Competition Legal?

We are running a property prize competition. As there has been some negative publicity in the press we are seeking to provide some clarity regarding the Gambling Commission regulations.

The Gambling Commission's "Prize competitions and free draws: The requirements of the Gambling Act 2005" (November 2007) states:

"Prize competitions and free draws are free of statutory regulatory control under the Gambling Act 2005 (the Act). Such competitions and draws can therefore be organised commercially for private benefit and profit. This contrasts with public lotteries which are the preserve of good causes, and must, unless they qualify in one of the 'exempt' categories, operate under a licence issued by the Gambling Commission (the Commission)."

A lottery is defined as a competition where persons are required to pay to participate and either prizes are allocated wholly by chance or the first of the processes by which a prize is allocated is wholly by chance. Any scheme that operates in this way needs to operate within the regulatory guidelines of the Act to be lawful.

Prize Competitions are distinguished from lotteries as an entrant's success depends:

"… at least in part, on the exercise of skill, judgement or knowledge …"

It does not rely wholly on chance.

A Prize Competition's requirement to exercise skill, knowledge or judgement will be sufficient where that requirement can reasonably be expected to prevent a "significant proportion" of people from entering or prevent a "significant proportion" of people from winning a prize.

We believe our competition is subject to such a sufficient element of skill, judgement or knowledge as to prohibit a "significant proportion" of people from winning a prize, as in order to do so they will have to correctly identify the centre of the Frisbee within 10 pixels, therefore displaying skill or judgment.

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