As reported on by www.lovemoney,com, whichever team you’re rooting for, there’s likely to be a World Cup sweepstake taking place near you. However, it turns out that if you get involved, you may be breaking the law.
It’s complex
According to the law firm Pinsent Masons, many workplace and club sweepstakes are actually illegal, because they fall foul of the Gambling Act 2005.
Certain types of sweepstake are exempt from these regulations. However, most people aren’t aware of which are legitimate. Technically, you could be committing a criminal offence even if you donate the final ‘pot’ to charity. As with many legal issues, the regulatory framework is very complex and rather difficult to explain. Below is a summary of fundamentals.
The two most popular types of World Cup sweepstakes:
1.) Where an entrant pays a certain amount and is allocated a team completely at random, based on chance; and
2.) Where an entrant pays a certain amount and chooses to back a particular team, guessing the result of the tournament.
Random chance - the rules
Sweepstakes allocating teams purely through the operation of chance are likely to be defined as a ‘lottery’ under the Gambling Act.
Essentially, they will be deemed a ‘lottery’ if there is at least one prize; people have to pay to participate; and the prizes are allocated by chance. So for example, if you all pay £1 to enter, you pull teams out of a hat, and the person with the winning team wins the total ‘pot’ of money. The problem is, it’s a criminal offence to ‘promote’ a lottery unless either the promoter has a lottery operating licence, or it is classed as ‘exempt’.
Random chance - staying legal
Getting a licence for a workplace lottery is generally not an option (licences are only available to local authorities, charities and those operating lotteries on their behalf). In practical terms therefore, you need to make sure your lottery falls into the ‘exempt’ category.
To be on the safe side, this sort of sweepstake should, again, only be open to ‘employees’. And of course, this exemption won’t apply if your employer is actually a betting shop!
Better safe than sorry
Practically speaking, it’s fairly unlikely you’ll be arrested if you do conduct a small scale, low-profile World Cup sweepstake which goes against the letter of the Gambling Act. However, it’s better to be safe than sorry. Do think about which ‘exempt’ category works best for you, and try to stay within the rules. Apart from anything else, this will mean anyone unhappy with the idea of your World Cup sweepstake won’t have any legal ammunition to use against you.
Read the full story at http://www.lovemoney.com/news/make-your-money-go-further/sport/why-world-cup-sweepstakes-can-be-illegal-5010.aspx.
Source and thanks to www.lovemoney.com.
