Setting up an online lottery??

dvdfan

Hello,

Im just wondering of the legal aspect in setting up an online lottery or draw type site. Anotherwards someone pays a fee to enter and then either cash or a prize is given to the winner. The value of the prize would not not exceed the total of the sum of fees taken when people enter the draw so i would not be risking any money. Does this require a license or what are the legal implications of setting this up online. For Example pubs, shops etc have christmas draws, should they also be legally aplying to the local council or not, but this basically applies to online from an irish based company

Thanks

shepthedog

Interesting question, I was wondering about this myself the other day.. I am interested to know the legal issues when it would be operated online so theoretically the winner could come from anywhere in world

BrianD

To operate a lottery in Ireland without a licence is illegal. I think the only licenced operators are the National Lottery and Rehab. You need a licence to operate these draws that you see down your local pub.

Here's how a lottery is defined:

"lottery" includes all competitions for money or money's worth involving guesses or estimates of future events or of past events the results of which are not yet ascertained or not yet generally known;

Technically any draw that does not not want to fall foul of the law needs to have a question of skill.

There are loads of rules contained in the Gaming and Lotteries ACt of 1956.

Advertisement of lotteries.

22.—No person shall print, publish in any newspaper or periodical publication, exhibit on any cinema screen or broadcast by radio any notice or announcement concerning a lottery (other than an announcement of the results of a lottery declared by any provision of this Part not to be unlawful) or cause or procure any such notice or announcement to be so printed, published, exhibited or broadcast or knowingly circulate or cause or procure to be circulated any newspaper or periodical publication containing any such notice or announcement.




Private lotteries.

23.—A lottery shall not be unlawful if—

( a ) the sale of chances is confined to—

(i) the members of one society established and conducted for purposes not connected with gaming, wagering or lotteries, or
(ii) persons all of whom work or reside on the same premises, and
( b ) there is no written notice or announcement relating to the lottery except a notice on the premises of the society or other persons concerned or to members of the society.



24.—A lottery shall not be unlawful if—

( a ) it is promoted as part of a dance, concert or other like event and the persons arranging for the holding of the event derive no personal profit from the event or from the lottery, and

( b ) the total value of the prizes in the lottery is not more than twenty-five pounds and, if more than one lottery is held, the total value of the prizes for the event is not more than twenty-five pounds.

Lotteries at carnivals and other events.

25.—A lottery shall not be unlawful if—

( a ) either—

(i) it is promoted as part of a circus or other travelling show on a day on which under section 6 gaming is permitted, or
(ii) it is promoted as part of a carnival, bazaar, sports meeting, local festival, exhibition or other like event on a day on which under section 7 gaming is permitted and the persons arranging for the holding of the event derive no personal profit from the event or from the lottery, or
(iii) it is promoted by the licensee of a licensed amusement hall or funfair as part of the entertainment therein, and
( b ) the tickets are not sold outside the place or premises where the event is in progress, and

( c ) they are sold only on the same day or night as the draw and announcement of results, and

( d ) the price of each ticket is not more than sixpence, and

( e ) no person may win more than the value of ten shillings in the lottery, and

( f ) neither taking part in nor the result of the lottery entitles the participant to take part in any other lottery or game or otherwise to receive or be eligible to compete for any money or money's worth.


A ticket not more than sixpence! No prize worth more than £25!

I can't understand how your concept will work without risk. To get people to enter surely you are going to have a minimum prize value? If only ten people enter there is a chance that you have to pay out.

I could almost guarantee that the NAtional Lottery will come down on you like a tonne of bricks. They will be ultra protective of their position and much of the legislation post 1956 has been written to protect their monopoly position.

dvdfan

Thanks for the reply, i was wondering if i had the draw online would this be outside irish jurisdiction, like you see online games that involve money such as virtual horseracing, betfair, fantasy games etc, how are they governed is it specific to the country the owners???

As for not taking risks, my idea was something on the lines of 40 people enter the draw at a set prize and the prize money total would not be more than the total of the 40 entry fees so i wouldnt be taking a risk. I know there is some issues with that because there would be an unlimited timeframe for the draw result and/or what if i didnt get the 40 entries but i have taught about how i could make that work and i have some ideas to make it more appealing the closer you get to filling the 40 entries and i think it could work.

pbarry

Similar idea

www.quidster.com

I've been thinking of doing something similar. Work in progress.

dvdfan

This is exactly the concept i was thinking but with a different approach other than the fastest answer and with a few different features to improve the chances of filling the competition quickly. This seems to be under uk legislation and available to uk residents only, i was thinking on the lines of worldwide participation but i dont know how this would work legally. As far as i know anyone in the world can bet on ladbrokes.com, paddypower.com etc (except if your living in a state or country where betting is illegal eg Thailand and/or some american states) but im guessing that ladbrokes etc are not responsible if someone from Thailand or another place places a bet and brakes the law in their country. So do the likes of Ladbrokes only need a license in 1 country and this gives them permission to take bets from anyone online or is there an online license needed too, also is there a country that has lax betting license laws where i could get a cheap betting license and take bets online??

Thanks again

steve-hosting36

Best to host off-shore, in a jurisdiction that allows gambling, lotteries, etc.

ButtermilkJack

I see no reason why you shouldn't be able to pursue this idea. Obviously you will need a license, but make an application to the relevant authority and if they decline, ask for a reason why. If REHAB and National Lottery are allowed then why not someone else. They can't give you an answer along the lines of, "Well there's already a Lottery in Ireland, we don't need another one!", so I think as long as you can show a good plan as to how it will run, you 'should' have a chance (that's if the legislation is not roting with corruption!)

As for your plan... it sounds absolutely fine to me. Anyone can enter, the prize pool is based on the totals received by entrants minus your cut, and is paid out accordingly. You wont have to put up large sums yourself.