vTIMEout is a prize competition marketplace based in the UK and legally operated under the UK Gambling Act 2005 (the Act).

Reference: gamblingcommission.gov.uk

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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).

The Act contains provisions designed to make clear the distinction between lotteries, prize competitions and free draws.

LOTTERY

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The Act defines two types of lottery: a simple lottery and a complex lottery.
A simple lottery is where:
• persons are required to pay to participate
• one or more prizes are allocated to the participants in the scheme
• prizes are allocated wholly by chance.

A complex lottery is one where:
• persons are required to pay to participate
• one or more prizes are allocated to the participants in the scheme
• the prizes are allocated by a series of processes
• the first of these processes relies wholly on chance.

Any scheme that falls within either of these definitions needs to operate within the statutory
provisions relating to lotteries in the Act if it is to be organised lawfully. These provisions
are described in the Commission’s publications Promoting society and local authority
lotteries and Organising small lotteries (Gambling Act 2005).

 

FREE DRAW

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An arrangement is a lottery only if the participants are required to pay to enter. Therefore
free draws are not lotteries and are exempt from statutory control. Schedule 2 to the Act
gives details of what is to be treated as amounting to ‘payment to enter’ for the purposes of
distinguishing free draws from lotteries.

 

PRIZE COMPETITION

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In prize competitions, success depends, at least in part, on the exercise of skill, judgment
or knowledge by the participants. This distinguishes them from lotteries, where either
success depends wholly on chance or, in a complex lottery, the first stage relies wholly on
chance. Section 14(5) of the Act addresses this distinction.

 

As stated in paragraph 2.3 above, a prize competition is one where success depends on
the exercise of skill, judgment or knowledge by the participants and does not, as it does in
a lottery, rely wholly on chance.

The below snippet from the Gambling Act 2005 (the Act) makes vTIMEout a legally operated prize competition marketplace.

First the intention of the law is clear: competitions that genuinely rely on skill, judgment or
knowledge are to be permitted to operate free of any regulatory control under the Act. In
many cases, it will be obvious that such competitions meet that test. A crossword puzzle,
where entrants have to solve a large number of clues and where only fully completed
entries are submitted, is an obvious example. Other types of word and number puzzles,
such as those that feature in competition magazines, are further examples. The law makes
it clear that these qualify as prize competitions even if those who successfully complete the
puzzle are subsequently entered into a draw to pick the winner.

 

SECTION 14(5)

Section 14(5) says that ‘a process which requires persons to exercise skill or judgment or
to display knowledge shall be treated for the purposes of this section as relying wholly on
chance if:
(a) the requirement cannot reasonably be expected to prevent a significant proportion
of persons who participate in the arrangement of which the process forms part from
receiving a prize; and
(b) the requirement cannot reasonably be expected to prevent a significant proportion
of persons who wish to participate in that arrangement from doing so.’

It follows from this that a genuine prize competition is one that contains a requirement to
exercise skill or judgment or to display knowledge and where it can reasonably be
expected that the requirement will either:
(a) prevent a significant proportion of people who wish to participate from doing so
(section 14(5)(b) of the 2005 Act); or
(b) prevent a significant proportion of people who participate from receiving a prize
(section14(5)(a)).
If either one of these barriers to entry or success can be shown, the process will not be
deemed to rely wholly upon chance, and the arrangement will not be a lottery.

For further enquiry, please reach out to vTIMEout legal team on legal@vtimeout.com

vTIMEout Legal Office
Office 67, 182-184 High Street, North, East Ham, London, E6 2JA. UK

I so submit.